Customs union

In economics, a customs union is a form of economic integration . It is an association of states that form a common customs area.

structure

A customs union consists on the one hand of a free trade area (i.e. the abolition of internal tariffs and other trade restrictions). This u. a. Goods that are moved from one Member State to the other are no longer subject to customs duties when declaring. Evidence is provided in the internal joint transit procedure by means of a T2 paper . However, this proof is only required if the transport involves the territory of a third country (e.g. from Italy to Germany via Switzerland).

On the other hand, a customs union is characterized by a common external tariff between the member states vis-à-vis third countries. The formation of customs unions is associated with trade-creating and trade-diverting effects. Trade creation arises from the fact that the elimination of customs duties makes foreign goods cheaper, which stimulates foreign trade. To trade diversion occurs in that trading partners, which remain outside the tariff Union be at a disadvantage compared to those formed within the customs union economical. Producers from a partner country are no longer burdened by customs and can therefore U. offer cheaper than more efficient producers from a third country, who are therefore displaced.

A customs union is therefore only rated as economically efficient if the creation of trade overcompensates for the effects of trade diversion.