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A customs union is a type of trade bloc which is composed of a free trade area with a common external tariff. The participant countries set up common external trade policy, but in some cases they use different import quotas. Common competition policy is also helpful to avoid competition deficiency.
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Purposes for establishing a customs union normally include increasing economic efficiency and establishing closer political and cultural ties between the member countries.
It is the third stage of economic integration.
Customs unions are established through trade pacts.
List of current customs unions (indicative)
Note: Every Economic union, Customs and monetary union and Economic and monetary union includes a Customs Union.
Additionally the autonomous and dependent territories, such as some of the EU member state special territories, are sometimes treated as separate customs territory from their mainland state 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.