Final answer:
A free trade agreement plus a common set of tariffs toward nonmembers is called a customs union. It allows for free trade among members while adopting a uniform trade policy towards non-member countries.
Step-by-step explanation:
A free trade agreement plus a common set of tariffs toward nonmembers is referred to as a customs union. This type of trade agreement involves member countries removing barriers to trade between themselves while also establishing a unified approach to trade policies regarding non-member countries. One of the most well-known examples of such an agreement is the European Union's customs union.
These trade policies have significant implications, from the General Agreement on Tariffs and Trade (GATT) to the operations of the World Trade Organization (WTO). A customs union, while promoting free trade within its members, can also protect domestic industries from competition by imposing tariffs on imports from non-member countries, a concept also known as protectionism.
It is important to understand the different levels of economic integration, such as a free trade association, common market, and economic union. These arrangements vary in terms of common policy requirements and the degree of integration among member nations.