Customs union

The General Agreement on Tariffs and Trade, part of the World Trade Organization framework defines a customs union in the following way:[1] (a) A customs union shall be understood to mean the substitution of a single customs territory for two or more customs territories, so that (i) duties and other restrictive regulations of commerce (except, where necessary, those permitted under Articles XI, XII, XIII, XIV, XV and XX) are eliminated with respect to substantially all the trade between the constituent territories of the union or at least with respect to substantially all the trade in products originating in such territories, and,

[3] In 1834, 18 states joined to form the German Customs Union with Prussia as the main leader.

Thereafter, this alliance was further expanded to all German-speaking regions[citation needed] and became the All-German Customs Union.

Free trade within the former was limited to industrial products, and no uniform tariffs were imposed on countries outside the Union.

were viewed as an obstacle as obstacles to economic exchange and growth by the new commercial classes, who argued for the creation of a unified economic territory allowing the unhindered movement of goods, people and capital.

From a worldwide perspective, this kind of production conversion improves the efficiency of resource allocation.

Additionally, the autonomous and dependent territories such as some of the EU member state special territories are sometimes treated as separate customs territories from their mainland states or have varying arrangements of formal or de facto customs union, common market and currency union (or combinations thereof) with the mainland and in regards to third countries through the trade pacts signed by the mainland state.