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A New Way of Understanding Customs Unions

A New Way of Understanding Customs Unions

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Traditional economic integration theory justifies the formation of preferential trading arrangements on political and economic grounds; but the real importance of economic interdependence has yet to be considered. This is precisely what this paper sets out to achieve: a new way of understanding customs unions which traditional theory overlooks. Specifically, this paper justifies the formation of a customs union made up of two countries as the best way of achieving those countries` economic objectives. Customs unions may be understood from this perspective alone, without having to consider them as constituting strategic commercial policies. Regionalism and multilateralism therefore, can be considered as complementary processes. (IEL F15, F02, F13)

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