The customs union could lead to losses for the home country if:

Question

Quizplus · Accepted Answer

A customs union involves the removal of trade barriers between member countries and the adoption of a common external tariff against non-members. If another country within the union is not the most efficient producer, the home country might end up importing goods from this less efficient member instead of buying cheaper or better-quality goods from more efficient producers outside the union. This can lead to losses for the home country as it may pay more for goods or receive lower quality goods than it would have if it were able to trade freely with the most efficient producers worldwide.

The Customs Union Could Lead to Losses for the Home