Customs Union

Customs Union

A trading area covering two or more countries which agree to abolish tariffs between them as well as restrictions on the amount of trade such as quotas, and have a common external tariff and other common trade controls in relation to third countries outside the customs union. 



- Not to be confused with a free trade area - which has no common customs duties and no common trade policy

The EU is a customs union with a common commercial policy as an exclusive EU competence 

EFTA is a free trade area where member states can have different trade policies 

- The EEA agreement and bilateral agreements with Switzerland have established a joint free trade zone internally between the EU and most EFTA countries