Customs Unions

Customs unions like free trade areas may impose customs duties on imports from non-member countries. While in a free trade area each member independently selects its own external tariffs (eg European Economic Area [EEA]; Association of Southeast Asian Nations [ASEAN]), in a customs union a common external tariff policy is adopted by all its members (eg  European [Economic] Community [EC]; Andean Community of Nations [CAN]; Caribbean Community [CARICOM];  Central American Integration System [SICA]; Economic Community of West African States [ECOWAS]; MERCOSUR). Preferential trade agreements often take the form of a customs union or a free trade area.