Customs union has a common external tariff but a free-trade area does not statement is correct.
What distinguishes a free trade region from a customs union?
The fundamental distinction between a customs union and a free trade agreement is the additional bureaucracy required to benefit from zero (or decreased) tariffs that are included in an FTA.
What does common outside trade mean?
When a collection of nations creates a customs union, a common external tariff (CET) must be implemented. No matter which country within the region the products are entering, the same customs tariffs, import quotas, preferences, or other non-tariff trade obstacles apply to all goods arriving.
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