Glossary
What is a customs union?
A customs union is a group of countries that remove tariffs on trade between themselves and apply a common external tariff to imports from everywhere else. Goods cleared into one member then circulate freely in the others. |
Customs union or free trade area?
- Free trade area — members drop tariffs between themselves but each keeps its own external tariff, so rules of origin are needed to stop goods entering through the cheapest member.
- Customs union — members also share a common external tariff, so once goods clear anywhere they move freely and origin rules between members fall away.
- The trade-off — members give up an independent trade policy with third countries.
What it means in practice
Inside a customs union, goods in free circulation need no proof of origin to move between members and no duty is charged twice. That removes a substantial compliance burden but no member can negotiate its own tariff deal, because the external tariff is set collectively.
The EU example
The EU customs union applies a common tariff at every external border, which is why goods cleared in Rotterdam travel on to Italy without further duty. The UK left it on 1 January 2021 — and that departure, not Brexit in the abstract, is why GB–EU movements now need declarations and origin proof.
iCustoms handles the declarations and origin evidence that trade outside a customs union now requires. |
