When members of a free trade area add common external tariffs to the provisions of the free trade agreement, the free trade area becomes a:
A)cartel.
B)common market.
C)monetary union.
D)political union.
E)customs union.

Question

Quizplus · Accepted Answer

When members of a free trade area agree to impose common external tariffs on goods coming from non-member countries, they transition from a free trade area to a customs union. This means they not only allow free trade among themselves but also adopt a unified trade policy towards the rest of the world.

When Members of a Free Trade Area Add Common External