Regional Trading Blocs

For most CUs among developing economies, the potential for losses of tariff revenues constitutes an important negotiation issue. These losses may result from the liberalization of intraunion tariffs, from the adoption of the common tariff schedule, or from changes in trade patterns. Given the significance of tariff revenue for most developing countries, at least two issues need to be addressed when establishing a customs union: (a) Who has a claim on the collected customs duties? (b) Where and how should those duties be collected?