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

  1. A.free trade
  2. B.custom union
  3. C.common market
  4. 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:

  1. Member countries remove all trade barriers among themselves.
  2. 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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