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So far as I'm aware, the only example of a Customs Union between the EU and a non-EU country is the one with Turkey. It basically means that trade
between
the 2 parties is free from protective tariffs (I say 'basically' because there are exceptions). The 2 parties also share a common protective tariff on their imports from other countries (from the USA for example), so basically Turkey cannot strike deals on its own. But...
- you still need Customs clearance of imports from and exports to Turkey
- you still have to pay import VAT up-front
- you still need certificates of origin and
- (only spotted this today) Turkey is not covered by Free Trade Agreements that the EU has concluded; in other words, imports into Turkey from country A are free of duty if the EU says so, but exports from Turkey to country A still face the latter's protective tariffs.
When advocating a Customs Union, then, the key word is 'bespoke'!
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