Final answer:
True, members of a customs union not only engage in free trade internally but also establish common external tariffs, which is different from a free trade association with independent external policies and less integrated than an economic union like the EU.
Step-by-step explanation:
True. Members of a customs union not only commit to eliminating internal barriers to trade within their group but also agree on the establishment of common external tariffs. This contrasts with a free trade association, where countries enjoy free trade amongst themselves but maintain individual trade policies with non-member countries. Moreover, a common market extends beyond a customs union by requiring a common external trade policy and allows the free movement of goods, labor, and capital.
An economic union encompasses all features of a common market and further includes coordinated fiscal and monetary policies among member states. The European Union (EU) is a prime example of an economic union where countries have adopted a common currency and centralized monetary authority, in addition to harmonized trade policies.