Common external tariff

A common external tariff must be introduced when a group of countries forms a customs union. The same customs duties, import 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; 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.
The main goal of the Custom Unions is to limit external influence, liberalize intra-regional trade, promote economic development and diversification in industrialization in the Community.
Important examples of common external tariff are that of the Mercosur countries, the Common Customs Tariff of the Eurasian Economic Community customs union as well as the European Union Customs Union.
This is related to the internalization of terms-of-trade effects in the Common External Tariff which has the following Structure as adopted by the ECOWAS Council of Ministers at its 70th ordinary session in June 2013 is as follows
CategoryType of GoodsDuty Rate
0Basic Social Goods0%
1Basic Goods, Raw Goods, Capital Goods5%
2Inputs and Semi-Finished Goods10%
3Finished Goods20%
4Specific Goods for Economic Development35%

The goods declared to Customs in the Community, must generally be classified according to the CET. Imported and exported goods must be declared stating under type they fall. This determines which rate of customs duty applies and how the goods are treated for statistical purposes.