WAEC 2015 Economics · Question 28
The abolition of all forms of trade barriers among member countries while maintaining common external tariffs against non members is a feature of a
Options
- A.free trade
- B.custom union
- C.common market
- D.economic union
Answer: B. custom union
Explanation written with AI and checked against the answer key
Step 1: Analyze the question The question describes an arrangement with two features:
- Member countries remove all trade barriers among themselves.
- Members apply a common external tariff (CET) against non-members.
Step 2: Explain the concept Levels of economic integration, from least to most integrated:
- Free trade area: Members remove trade barriers among themselves, but each keeps its own tariffs against non-members (e.g., ECOWAS trade liberalisation scheme in its basic form).
- Customs union: A free trade area plus a common external tariff against non-members.
- Common market: A customs union plus free movement of factors of production (labour and capital).
- Economic union: A common market plus harmonised economic policies, often a common currency (e.g., the Eurozone).
Step 3: Apply to the question The key phrase is "maintaining common external tariffs against non members." This is what distinguishes a customs union from a plain free trade area. Nothing is said about free movement of labour and capital (which would point to a common market) or harmonised monetary and fiscal policies (which would point to an economic union).
Step 4: Answer The description matches a customs union, which is option B.
Tip: Remember the ladder with the mnemonic "F-C-C-E": Free trade → Customs union → Common market → Economic union. Each step adds one thing:
- Customs union = free trade + common external tariff
- Common market = customs union + free movement of factors
- Economic union = common market + common policies
Whenever you see "common external tariff" as the main feature, think customs union.
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