WAEC 2018 Economics · Question 24

which of the following forms of economic integration is a member nation free to impose duty against

Options

  1. A.custom union
  2. B.free trade area
  3. C.common market
  4. D.economic community

Answer: B. free trade area

Explanation written with AI and checked against the answer key

Analyze the question: It asks which form of economic integration lets a member nation impose duties (tariffs) against... non-members (or other countries). The key is to identify which arrangement lets each member keep its own tariff policy toward outsiders.

Concept: Levels of economic integration

  1. Free Trade Area (FTA): Members remove tariffs and trade barriers among themselves, but each member keeps its own independent tariffs against non-member countries. Example: ECOWAS trade liberalisation scheme, AfCFTA.
  2. Customs Union: Members remove internal tariffs and adopt a common external tariff against non-members. No member can set its own external duty.
  3. Common Market: A customs union plus free movement of labour and capital.
  4. Economic Community/Union: A common market plus harmonised economic policies, possibly a common currency.

Solution:

  • In a customs union (A), a common external tariff applies, so individual members are not free to impose their own duties.
  • The common market (C) and economic community (D) include the customs union, so they also have a common external tariff.
  • Only in a free trade area (B) is each member free to set its own duties against non-members.

Answer: B. Free trade area

Tip: Remember the progression F-C-C-E (Free trade area → Customs union → Common market → Economic union). The first stage is the loosest, so members keep their own external tariffs. The moment you see "common external tariff," think customs union or higher.

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