Distinguish between a free trade area and a customs union?

already exists.

Would you like to merge this question into it?

already exists as an alternate of this question.

Would you like to make it the primary and merge this question into it?

exists and is an alternate of .

  1. Free Trade Areas


    • A free trade area eliminates most, if not all, trade barriers such as tariffs, quotas and preferences on the flow of goods and services between its member countries. However, member countries negotiate trade agreements separately with external countries. The 1994 North American Free Trade Agreement between the U.S., Canada and Mexico, also known as NAFTA, formed the largest free trade area at that time.
     Customs Unions


    • A customs union, in contrast to a free trade area, is a trade agreement in which a group of countries charges a common set of tariffs to external countries, while granting free trade among member countries. It is a higher level of economic integration over a free trade area, but less than a common market, which also allows free movement of resources such as capital and labor between member countries. The European Union, for example, evolved from a customs union to a common market. The addition of common tariffs imposed on external countries differentiates a customs union agreement from a free trade area.

     Significance


    • Regional economic agreements reflect the level of political cooperation of the countries involved and serve to affirm their political relations. Whether such trade agreements are beneficial to member countries depends on the level of trade creation versus trade diversion. The impact of economic integration on political ties, however, remains unquestionable.


2 people found this useful

What is the effects of custom union and how it is different from a Free Trade Area?

A free trade area is where there are no tariffs between member nations. A customs union goes a step farther and requires all members to have the same external tariff policy

How you can distinguish between the concepts of value and customer satisfaction?

the offering will be successful if it delivers value and satisfaction to the buyer. The value reflects the sum of the advantages and costs to the customer. It's a combination

Distinguish between a regulation and a directive in European union law?

Regulations are Directly Applicable under EC Law, which means that they automatically become part of National law of the 27 Member States. Directives on the other hand are not

What does a free trade area mean?

Free trade means that two or more countries have opened their borders to each others goods free of duties and charges that would otherwise apply.

Distinguish between International marketing and Foreign Trade?

When a country crosses its national frontiers to market its products it is indulging in international marketing. The vast domestic markets have provided the firms an opportuni

What is the difference between a trade organization and a trade professional's union?

A trade association is an organization which is founded bybusinesses that operate in a particular industry. A trade union isan organization of workers who have united on a sin

What is the difference between Free trade area and common market?

free trade area A group of countries that invoke little or no price control in the form of tariffs or quotas between each other. Free trade areas allow the agreeing nations t

What is the difference between trade unionism and ideology?

Ideology is the pattern or cluster of ideas accepted by a political party or other voluntary group. Trade unionism is the preference among some workers for organizing or joi

Distinguish between trade promotion and consumer promotion?

Consumer promotions are targeted towards end consumers. Tools include samples, coupons, cash refunds, price packs, premiums, advertising specialties, patronage rewards, point-