Economics WAEC

When a number of countries agree to remove all trade barriers among themselves and at the same time charge a common tariff against non-member countries, it’s known as?

A. free trade area
B. common market
C. custom union
D. economic community

Correct Answer: Option C

C. custom union

Explanation

A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff. Customs unions are established through trade pacts where the participant countries set up common external trade policy (in some cases they use different import quotas).

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