A Custom Union solves which two problems of the Free Trade Area?

Question

a) The Common Tariff issue and the Joint Custom Revenue.

b) Tariff Evasion and Rules of a Common Tariff.

c) Joint Cusom Revenue and Industrial Distribution.

d) The Common Tariff issue and Tariff Evasion.

e) Tariff Ebasion and Industrial Distribution.

Answer 1

Best answer is: d) The Common Tariff issue and Tariff Evasion. though a) The Common Tariff issue and the Joint Custom Revenue is also correct because customs is collected at the entry point irrespective of the country.

Note;

Customs union is a trade agreement by which a group of countries charges a common set of tariffs to the rest of the world while granting free trade among themselves. It is a partial form of economic integration that offers an intermediate step between free-trade zones (which allow mutual free trade but lack a common tariff system) and common markets. The customs duty is collected once at the port of entry under the Union. The rate of customs duty is same. A part of the duty collected goes to meet expenses of the Customs activity of the Union Staff.