When a goup of countries form a customs union they must introduce a common external tariff. The same customs duties, quotas, 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. A customs union is a free trade zone with a Common External Tariff. ... A tariff is a tax placed on imported and/or exported goods, sometimes called a customs duty. ... A quota is a prescribed number or share of something. ...
The net result is that the existing tariff structure is highly variable and complex, and therefore lends itself well to the machinations of those who would seek to subvert the system to their advantage.
The implication of all of this is that were we to reform the tariff regime such that there was a uniform tax rate of five per cent, with no exceptions of any sort, we would collect approximately the same amount of revenue as we do today.
Thirdly, we subjected the tariff regime to the same experiment that was conducted in respect of GCT by modelling an increase equivalent to one per cent of GDP in revenues from this source, firstly via the existing rate structure, and then via a uniform rate structure.
A customs union requires the elimination of import tariffs (and non-tariff barriers) for trade among the member countries and the adoption of a commonexternaltariff on imports of goods from the rest of the world.
In the new MCN a commonexternaltariff was established for imports from non-Mercosur countries.
In most cases the initial tariffs are lower (zero, 2%, 6%, 8%, 12%) than the commonexternaltariff on which they converge; the initial tariff is higher than the commonexternaltariff only in some cases (18%, 25%, 30%).
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