When a number of countries agree to remove all trade barriers among themselves and at the same time charge a…

Step 1: Analyze the question The question describes countries that:

1. Remove all trade barriers among themselves.
2. Charge a common external tariff against non-members.

The second feature is the key clue.

Step 2: Explain the concepts (levels of economic integration)

| Type | Key feature | |---|---| | Free trade area | Members remove trade barriers among themselves, but each keeps its own tariffs against non-members (e.g. AfCFTA). | | Customs union | Free trade among members plus a common external tariff against non-members. | | Common market | A customs union plus free movement of factors of production (labour and capital). | | Economic community / union | A common market plus harmonised economic policies, often a common currency (e.g. the EU). |

Step 3: Match the description The description has free internal trade and a common tariff against outsiders, with no mention of free movement of labour and capital or policy harmonisation. This is exactly the definition of a customs union.

• A is wrong because a free trade area has no common external tariff.
• B is wrong because a common market goes further by allowing free movement of labour and capital.
• D is wrong because an economic community involves even deeper integration.

Answer: C. Customs union

Exam tip: Remember the ladder of integration as F-C-C-E: Free trade area → Customs union → Common market → Economic union. The phrase "common tariff" or "common external tariff" always points to a customs union.