CUSTOMS UNION. The idea denoted by the term is almost more familiar in its German form of "Zollverein." Strictly speaking, it means any agreement or union of a number of separate states affecting their arrangements with regard to tariffs, either among themselves or against the outside world. The classic instance was the treaty of March 1833, under which the Prussians agreed with various independent German states (at first Hesse Cassel, Hesse Darmstadt, Bavaria and Wurttemberg) to impose no tariffs whatever against each other and to adopt I a uniform tariff against the rest of the world. This became later the germ of the idea of the Federation of the German States.
In other cases the customs union has been the means by which a small state has brought itself within the tariff system of a larger adjoining state while theoretically retaining its political inde pendence in other ways, e.g. San Marino with Italy by the treaty of 1862, Monaco with France, 1865, Liechtenstein with Austria, 1875, and Portuguese India with British India, 1878. The union in this case may be very unequal, and is practically a recognition of the dominance of the adjoining greater power in commercial affairs, making the preservation of fiscal independence really not feasible.
In 1889 Cape Colony entered into a customs union with the Orange Free State, and this was afterwards extended by the adhesion of British Bechuanaland, Basutoland, the British Bechu analand Protectorate, Natal and, after the Boer War, the Trans vaal. Southern Rhodesia also joined in 1903, Swaziland in 1904 and Northern Rhodesia in 1905. The formation of the Union of South Africa in I 91O of course superseded this arrangement for the most part, but the Union does not include Rhodesia.
In the British fiscal controversy begun by Joseph Chamber lain in 1903 the idea of the Zollverein was frequently put f or ward as the ideal for the British empire, but any real customs union throughout the empire as a whole was never seriously dis cussed, because most of the constituent colonies were already committed to a system of protective tariffs, and while they were prepared to discuss preferential treatment with Great Britain, few went so far as to suggest that they should adopt free trade within the empire. (See IMPERIAL PREFERENCE.) See T. E. Gregory, Tariffs; a study in method, i9si. (J. A. T.)