what is the difference between a customs union and a free trade agreement?
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The difference between the two is that in a customs union, the participating countries set a common customs tariff (a single external tariff applied by all members) against third countries, while in an FTA, they do not.
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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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Bound tariffs are specific commitments made by individual WTO member governments. ... Members have the flexibility increase or decrease their tariffs (on a non-discriminatory basis) so long as they didn't raise them above their bound levels.
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The EU is not only a single market - it is also a customs union. ... The countries club together and agree to apply the same tariffs to goods from outside the union. Once goods have cleared customs in one country, they can be shipped to others in the union without further tariffs being imposed.
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World Customs Organization profile: The WCO calls itself the voice of the customs community and is the sole international organisation with competence in Customs matters. This makes it a key force in helping to grow legitimate international trade, as well as developing measures to deal with fraud and theft.
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What is the difference between anti-dumping duty and countervailing duty? ... ADD is chargeable in addition to, and independent of, any other duty to which the imported goods are liable. Countervailing duty is a customs duty on goods that have received government subsidies in the originating or exporting country.
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The main difference is that quotas restrict quantity while tariff works through prices. Thus, quota is a quantitative limit through imports. If an import quota of EC (Fig. 5.3) amount is imposed then price would rise to Pt because the total supply (domestic output plus imports) equals total demand at that price.
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in a free trade area, barriers to trade among member countries are removed, but each country determines its own external trade policy. In a customs union, barriers to trade among member countries are removed, and a common external trade policy is adopted.
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As you can see, the biggest differences between a foreign-trade zone and free-trade zone are the manufacturing element and location. If you need to manufacture merchandise further, the foreign-trade zone is the route to take. If you want only to relabel products, a free-trade zone is your best option.
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What is the difference between free economy shipping and standard shipping? ... Economy is a first class or parcel post shipping, and standard is either first class or priority depending on the size of the package.
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The main difference is that quotas restrict quantity while tariff works through prices. Thus, quota is a quantitative limit through imports.
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While GATT is a simple agreement, there is no institutional existence, but have a small secretariat. Conversely, WTO is a permanent institution along with a secretariat. The participating nations are called as contracting parties in GATT, whereas for WTO, they are called as member nations.
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A free-trade area arises when a group of countries come together and agree not to impose tariffs or quotas on trade in goods between them. ... In a customs union (a more advanced form of free trade area), the members also agree to impose a common tariff on imports coming from the outside world.
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The European Free Trade Association (EFTA) is an intergovernmental organisation set up for the promotion of free trade and economic integration to the benefit of its four Member States – Iceland, Liechtenstein, Norway and Switzerland – and the benefit of their trading partners around the globe.
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The European Economic Area (EEA) agreement leaves three countries (Norway, Iceland and Liechtenstein) in such a position. They are not part of EU customs union and thus free to strike their own deals (but, remember, they need to abide by complicated “rules of origin” regulations).
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The key difference between the North America Free Trade Agreement and the European Union is their scope. NAFTA remains a purely economic agreement among three countries, while the EU has developed into a political, social and territorial union between 28 countries.
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WTO and free trade agreements. A key rule of the multilateral trade system is that reductions in trade barriers should be applied, on a most-favoured nation basis, to all WTO members. ... There are two major types of regional trade agreements under the WTO - customs unions and free trade areas.