If the United States and Canada abolish all tariffs on each other's goods and implement a common tariff on goods imported from other countries, there occurs a (an)
A) free trade area.
B) customs union.
C) common market.
D) economic union.

Question

Quizplus · Accepted Answer

A customs union involves the elimination of internal tariffs among its member countries and the establishment of a common external tariff for goods imported from non-member countries. The scenario described in this question involves the establishment of a common tariff on goods imported from non-member countries (Germany and France), which is a characteristic of a customs union.

If the United States and Canada Abolish All Tariffs on Each