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Distinguish between a Free Trade Area and a Customs Union. - Leaving Cert Economics - Question 6 - 2019
Question 6
Distinguish between a Free Trade Area and a Customs Union.
Worked Solution & Example Answer:Distinguish between a Free Trade Area and a Customs Union. - Leaving Cert Economics - Question 6 - 2019
Step 1
Free Trade Area
Answer
A Free Trade Area means that member countries can trade freely without tariffs or barriers imposed on one another. This arrangement allows for the elimination of customs duties and trade quotas among members, fostering greater economic cooperation and trade efficiency.
Step 2
Customs Union
Answer
A Customs Union is more advanced than a Free Trade Area. In a Customs Union, member countries not only trade freely among themselves but also impose common tariffs on countries that are outside the union. This collective approach strengthens trade relations and provides a unified front in trade negotiations.