A customs union is different from a freetrade area, in that:
A)the latter allows for free movement of factors, whereas the former does not.
B)the latter allows for uniform tariffs, whereas the former does not.
C)the latter removes trade barriers between member countries, whereas the former adopts identical tariffs with the rest of the world.
D)the former removes trade barriers between member countries, whereas the latter adopts identical tariffs with the rest of the world.

Question

A customs union is different from a free­trade area, in that:
A)the latter allows for free movement of factors, whereas the former does not.
B)the latter allows for uniform tariffs, whereas the former does not.
C)the latter removes trade barriers between member countries, whereas the former adopts identical tariffs with the rest of the world.
D)the former removes trade barriers between member countries, whereas the latter adopts identical tariffs with the rest of the world.

Quizplus · Accepted Answer

A customs union removes trade barriers between member countries and adopts a common external tariff with non-members, whereas a free-trade area removes trade barriers between member countries but allows each country to set its own external tariffs.

A Customs Union Is Different from a Free­trade Area, in That

A Customs Union Is Different from a Freetrade Area, in That