Signed 1994-05-16, but implemented in 1999. Formulate unified protective measures, such as import, It makes the 'national sovereignty' of the member countries to be transferred to the, The first dynamic effect of the customs union is the large market effect (or economies of, The establishment of the Customs Union has promoted competition among enterprises among member countries. They combat trafficking of people, drugs, weapons and counterfeited goods, and verify that travellers with large amounts of cash are not laundering money, evading tax or even financing criminal organisations. For goods imported from outside the alliance, common different tariffs are levied, such as preferential tax rates, agreed national tax rates, most-favored nation tax rates, ordinary preferential tax rates, and ordinary tax rates, according to the types of commodities and the provider countries. The EU is a Customs Union - its 27 member countries form a single territory for customs purposes. Common competition policy is also helpful to avoid competition deficiency.[2]. There are trade creation effects and trade diversion effects. On 28 September 2020, the European Commission launched a new Customs Union Action Plan, setting out a series of measures to make EU customs smarter, more innovative and more efficient over the next four years. In addition, there are the French and Monaco Customs Union established in 1865. In practice, the Customs Union means that the customs authorities of all 27 EU countries work together as if they were one. The contents of the alliance convention include: abolishing internal tariffs, unifying external tariffs, raising import tax rates, and allocating tariff income to all states in the alliance in proportion. Definition of customs union: Agreement between two or more (usually neighboring) countries to remove trade barriers, and reduce or eliminate customs duty on mutual trade. This is of significant benefit for customs union … At that time, the European Free Trade Association was different from the European Economic Community Customs Union. [4][5], The main feature of the Customs Union is that the member countries have not only eliminated trade barriers and implemented free trade, but also established a common external tariff. New Action Plan to further support EU customs in their vital role of protecting EU revenues, prosperity and security. (i) duties and other restrictive regulations of commerce (except, where necessary, those permitted under Articles XI, XII, XIII, XIV, XV and XX) are eliminated with respect to substantially all the trade between the constituent territories of the union or at least with respect to substantially all the trade in products originating in such territories, and. In the case of the EU, this means that there are no customs duties to be paid when goods are transported from one EU country to another. In 1818, Prussia took the lead in abolishing the customs duties in the Mainland; it was followed by the establishment of the North German Customs Union in 1826; two years later, two customs unions were established in the states of China and South Germany.[3].