An economic union is characterized by the following:

• No trade barriers between the members, free movement of goods, services, capital and workers between the members
• Harmonized trade policy for outside members
• Common policies regarding regulations of goods and services

The main advantage for international trade within the union is the fact that there are no barriers of trade (both protectionist measures as well as artificial barriers to trade such as different regulations have been eliminated).

The main advantage for international trade between the union and outside countries is the fact that, as soon an outside country has imported into one country of the union, the good can move freely within all countries. There is no need to meet x different regulations.

Take for example the EU (technically it’s a monetary union but a monetary union is more or less an economic union with the same currency). As soon as an outside country, say the US, has imported a good into one country (e.g. Germany), the good can be sold anywhere within the EU without having to meet additional requirements. This eliminates a significant artificial barrier to trade as the US producer does not have to create 28 different versions of its good to meet the individual standards but can create just 1.