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19. Starting from a situation of non-preferential trade, the creation of a Customs Union (CU) between two countries is more likely to generate benefits for

19. Starting from a situation of non-preferential trade, the creation of a Customs Union (CU) between two countries is more likely to generate benefits for both countries if:

(a) both had trade surpluses before the formation of the CU

(b) both had trade deficits before the formation of the CU

(c) the common external tariff which they adopt after the formation of the CU is much lower than the non-preferential tariff which they applied before

(d) the common external tariff which they adopt after the formation of the CU is much higher than the non-preferential tariff which they applied before

(e) none of the above

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