WhenA '''common external [[tariff]]''' must be introduced when a group of countries formforms a [[customs union]] they must introduce a '''common external [[tariff]]'''. The same customs duties, [[import quota]]s, preferences or other [[non-tariff barriers to trade]] apply to all goods entering the area, regardless of which country within the area they are entering. It is designed to end [[re-exportation]]; but it may also inhibit imports from countries outside the [[customs union]] and thereby diminish consumer choice and support [[protectionism]] of industries based within the [[customs union]].
The common external tariff is a mild form of economic union, but may lead to further types of economic integration. In addition to having the same customs duties, the countries may have other common trade policies, such as having the same quotas, preferences or other non-tariff trade regulations apply to all goods entering the area, regardless of which country within the area they are entering.
Important examples of common external tariff are that of the [[Mercosur]] countries ([[Brazil]], [[Argentina]], [[Venezuela]], [[Paraguay]] and [[Uruguay]]) as well as the Common Customs Tariff of the [[CustomsEurasian UnionEconomic ofCommunity Belarus,customs Kazakhstan and Russiaunion]].
Similar to free trade areas, however external countries have to pay tax on goods and services that are entering.
