CUSTOMS UNIONCUSTOMS UNION

A customs union is a is a type of trade bloc which is composed of a free trade area with a common external tariff. The participant countries set up common external trade policy, but in some cases they use different import quotas.

Common competition policy is also helpful to avoid competition deficiency.

Purposes for establishing a customs union normally include increasing economic efficiency and establishing closer political and cultural ties between the member countries.

It is the third stage of economic integration.Customs union is established through trade pac

A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade (tariffs and non-tariff barriers) are reduced or eliminated among the participating states

Trade Bloc

One of the first economic blocs was the German Customs Union (Zollverein) initiated in 1834, formed on the basis of the German Confederation and subsequently German Empire from 1871

A trade pact is a wide ranging tax, tariff and trade pact that often includes investment guarantees. Trade pacts are frequently politically contentious since they may change economic customs and deepen interdependence with trade partners. Increasing efficiency through "free trade" is a common goal. The anti-globalization movement opposes such agreements almost by definition, but some groups normally allied within that movement, e.g. green parties, seek fair trade or safe trade provisions that moderate what they perceive to be the ill effects of globalization.

Trade pact

Preferential trading area

Free trade area Customs union

Common market

Economic and monetary union

Complete economic integration

Economic Integration

Customs union is a trade agreement by which a group of countries charges a common set of tariffs to the rest of the world while granting free trade among themselves.

It is a partial form of economic integration that offers an intermediate step between free-trade zones (which allow mutual free trade but lack a common tariff system) and common markets.

The customs duty is collected once at the port of entry under the Union. The rate of customs duty is same. A part of the duty collected goes to meet expenses of the Customs activity of the Union Staff.

CUSTOMS UNIONCUSTOMS UNION

INDIAINDIA

MALAYSIAMALAYSIA

CHINACHINA

SRILANKA SRILANKA

THE CUSTOM UNION WOULD THE CUSTOM UNION WOULD INCLUDE INDIA, CHINA, MALAYSIA INCLUDE INDIA, CHINA, MALAYSIA AND SRILANKA.AND SRILANKA.

ALL FOUR COUNTRIES ARE ASIA’S ALL FOUR COUNTRIES ARE ASIA’S EMERGING ECONOMIC MARKETS AND EMERGING ECONOMIC MARKETS AND HAVE THE POTENTIAL TO FORM A HAVE THE POTENTIAL TO FORM A POWERFUL ECONOMIC BLOC.POWERFUL ECONOMIC BLOC.

Raw material To Manufactured Raw material To Manufactured goodsgoods

DIAGRAM:-DIAGRAM:-

INDIA

AND

CHINA

MALAYSIA

•CRUDE OIL

•NATURAL GAS

SRILANKA

•METAL AND STEEL

•LEATHER AND RUBBER

ABOUT…ABOUT…

The countries indulging in a custom The countries indulging in a custom union have a free trade area with union have a free trade area with common external tariffs.common external tariffs.

Here china and India being amongst the Here china and India being amongst the biggest producers of goods but lack in biggest producers of goods but lack in natural resources.natural resources.

Srilanka and Malaysia have plenty of Srilanka and Malaysia have plenty of natural resources but they lack in natural resources but they lack in factors of productionfactors of production..

ADVANTAGESADVANTAGES

MAXIMUM UTILISATION OF NATURAL MAXIMUM UTILISATION OF NATURAL RESOURCES.RESOURCES.

INCREASE IN EMPLOYMENT.INCREASE IN EMPLOYMENT. INCREASE IN TRADE.INCREASE IN TRADE. INCREASE IN GDP.INCREASE IN GDP. OVERALL ECONOMIC PROSPERITY.OVERALL ECONOMIC PROSPERITY.

A Custom Union solves which two problems of the Free Trade Area?

The Common Tariff issue and Tariff Evasion. though

The Common Tariff issue and the Joint Custom Revenue is also correct because customs is collected at the entry point irrespective of the country

Agreement   Date (in force)  

Central American Common Market (CACM) 1961-10-12

Andean Community (CAN) 1988-5-25

Caribbean Community (CARICOM) 1973-8-1

Economic and Monetary Community of Central Africa (CEMAC) 1999-6-24

East African Community (EAC) 2000-7-7

Eurasian Economic Community (EAEC) 1997-10-8

European Economic Area (EEA)Needs updating 1958-1-1

- EC — Andorra 1991-7-1

- EC — Turkey 1996-1-1

Gulf Cooperation Council (GCC) 2003-1-1

Southern Common Market (MERCOSUR) 1991-11-29

Southern African Customs Union (SACU) 2004-7-15

West African Economic and Monetary Union (WAEMU) 2000-1-1

ProposedProposed 2007 2007 Economic Community of West African States

(ECOWAS)(ECOWAS) 2008 2008 Common Market for Eastern and Southern Africa

(COMESA)(COMESA) 2010 2010 Arab Customs Union (ACU) (ACU)[1]

2010 2010 Southern African Development Community (SADC)(SADC)

2011 2011 Economic Community of Central African States (ECCAS)(ECCAS)

2015 2015 Arab Common Market (ACM)] (ACM)] 2019 2019 African Economic Community (AEC) (AEC) Closer Economic Relations (FTA between Australia and (FTA between Australia and

New Zealand)New Zealand) North American Free Trade Area (NAFTA) (NAFTA)

common marketcommon market

A A common marketcommon market is a type of is a type of trade bloc which is composed of a which is composed of a customs union with common policies on product with common policies on product regulation, and regulation, and freedom of movement of of the the factors of production ( (capital and and labour) and of ) and of enterprise. The goal is that . The goal is that the movement of capital, labour, goods, the movement of capital, labour, goods, and services between the members is as and services between the members is as easy as within them. easy as within them.

COMMON MARKETCOMMON MARKET AngolaAngola TanzaniaTanzania    ZimbabweZimbabwe    NamibiaNamibia    South AfricaSouth Africa   

All 5 countries mentioned here, i.e., All 5 countries mentioned here, i.e., Angola, Tanzania, Zimbabwe, Namibia, Angola, Tanzania, Zimbabwe, Namibia, South Africa southern African developing South Africa southern African developing countries.countries.

Each country has a developing economy.Each country has a developing economy.

ABOUT…. Common marketABOUT…. Common market

It is a customs union with common policies It is a customs union with common policies on product regulation.on product regulation.

Makes freedom of movement of all the 3 Makes freedom of movement of all the 3 factors of production (land, capital and factors of production (land, capital and labour) and services between the labour) and services between the members as easy as within them. members as easy as within them.

ADVANTAGESADVANTAGES

INCREASE IN EMPLOYMENT INCREASE IN EMPLOYMENT OPPORTUNITIES.OPPORTUNITIES.

INCREASE IN TRADE OPPORTUNITIES.INCREASE IN TRADE OPPORTUNITIES. LEAD TO HEALTH AND EDUCATION LEAD TO HEALTH AND EDUCATION

SECURITY.SECURITY. OVERALL GROWTH OF GDP.OVERALL GROWTH OF GDP.

Single MarketSingle Market

Sometimes a Sometimes a single marketsingle market is differentiated as a more is differentiated as a more advanced form of advanced form of common marketcommon market. In comparison to a . In comparison to a common market a single market envisions more efforts common market a single market envisions more efforts geared towards removing the physical (borders), geared towards removing the physical (borders), technical (standards) and fiscal (taxes) barriers among technical (standards) and fiscal (taxes) barriers among the member states. the member states.

These barriers obstruct the freedom of movement of the These barriers obstruct the freedom of movement of the four factors of production. four factors of production.

To remove these barriers the member states need To remove these barriers the member states need political will and they have to formulate common political will and they have to formulate common economic policies.economic policies.

List of single marketList of single market

Andean Community (CAN) - 31 December 2005 (CAN) - 31 December 2005[1] Caribbean Community single market (CARICOM) (CARICOM) Central American Common Market (CACM) (CACM) Economic and Monetary Community of Central Africa

(CEMAC) (CEMAC) European Economic Area (EEA) between the (EEA) between the EC, ,

Norway, , Iceland and and Liechtenstein

FREE TRADE AREAFREE TRADE AREA

UNITED STATES OF AMERICAUNITED STATES OF AMERICA

NEW ZEALANDNEW ZEALAND

INTRODUTIONINTRODUTION

New Zealand and the United States are old New Zealand and the United States are old friends.friends.

NEW ZEALAND IS A VERY SMALL ECONOMY NEW ZEALAND IS A VERY SMALL ECONOMY AS COMPARED TO U.S. YET IT HAS AS COMPARED TO U.S. YET IT HAS ENOUGH SCOPE.ENOUGH SCOPE.

BOTH COUNTRIES SHARE GOOD WORKING BOTH COUNTRIES SHARE GOOD WORKING RELATIONS AND SHARE AN EXCELLENT RELATIONS AND SHARE AN EXCELLENT SYSTEM OF COMMUNICATION.SYSTEM OF COMMUNICATION.

BOTH COUNTRIES WILL BE BENEFICIAL.BOTH COUNTRIES WILL BE BENEFICIAL.

ADVANTAGES TO NEW ADVANTAGES TO NEW ZEALANDZEALAND

IT’LL SUSTANTIALLY INCREASE THE IT’LL SUSTANTIALLY INCREASE THE EXPORT OF ITS WELL RENOWNED DAIRY EXPORT OF ITS WELL RENOWNED DAIRY PRODUCTS.PRODUCTS.

MORE TRADE MEANS MORE EMPLOYMENT.MORE TRADE MEANS MORE EMPLOYMENT.

ADVANTAGES TO U.S.ADVANTAGES TO U.S.

US merchandise exports to New Zealand US merchandise exports to New Zealand would rise by about 25% and virtually would rise by about 25% and virtually every US sector would benefit.every US sector would benefit.

NEW ZEALAND HAS FTA AGREEMENT WITH NEW ZEALAND HAS FTA AGREEMENT WITH AUSTRALIA FROM THE PAST 20 YEARS.AUSTRALIA FROM THE PAST 20 YEARS.

IT’LL HELP MERGE U.S. WITH AUSTRALIA IT’LL HELP MERGE U.S. WITH AUSTRALIA FUTURE GIVING THEM LARGER MARKET FUTURE GIVING THEM LARGER MARKET SHARE.SHARE.

economic and monetary economic and monetary unionunion

An An economic and monetary unioneconomic and monetary union is a type of is a type of trade bloc which is composed of a which is composed of a single market with a common currency. It is to be distinguished with a common currency. It is to be distinguished from a mere from a mere currency union (e.g. the Latin (e.g. the Latin Monetary Union in the 1800s), which does not Monetary Union in the 1800s), which does not involve a single market. This is the fifth stage of involve a single market. This is the fifth stage of economic integration. EMU is established through economic integration. EMU is established through a currency-related trade pacta currency-related trade pact

Complete economic Complete economic integrationintegration

Complete economic integrationComplete economic integration is the final is the final stage of economic integration. After complete stage of economic integration. After complete economic integration, the integrated units have economic integration, the integrated units have no or negligible control of economic policy, no or negligible control of economic policy, including full monetary union and complete or including full monetary union and complete or near-complete fiscal policy harmonisation.near-complete fiscal policy harmonisation.

Complete economic integration is most common Complete economic integration is most common within countries, rather than within supranational within countries, rather than within supranational institutions.institutions.