German Customs Union

The Zollverein ([ˈtsɔlfɛɐ̯ˌʔaɪn]) or German Customs Union was a coalition of German states formed to manage tariffs and economic policies within their territories. Organized by the 1833 Zollverein treaties, the Zollverein formally came into existence on 1 January 1834. However, its foundations had been in development from 1818 with the creation of a variety of custom unions among the German states. By 1866, the Zollverein included most of the German states. The foundation of the Zollverein was the first instance in history in which independent states had consummated a full economic union without the simultaneous creation of a political federation or union.

Prussia was the prime motivating force behind the creation of the customs union. Austria was excluded from the Zollverein because of its highly protected industry and also because Prince von Metternich was against the idea. With the founding of the North German Confederation in 1867, the Zollverein included approximately 425,000 square kilometres, and had produced economic agreements with several non-German states, including Sweden-Norway. After the founding of the German Empire in 1871, the Empire assumed the control of the customs union. However, not all states within the Empire were part of the Zollverein until 1888. Conversely, although it was not a state in the German Reich, Luxembourg remained in the Zollverein until 1919.

The splintering of territory and states over generations meant that by the 1790s in the German-speaking Holy Roman Empire in Central Europe, there were approximately 1800 customs barriers. Even within the Prussian state itself there were at the beginning of the 19th century over 67 local customs and tariffs with as many customs borders. To travel from Königsberg in East Prussia to Cologne, for example, a shipment was inspected and taxed 18 times. Each customs inspection at each border slowed the shipment's progress from source to destination and each assessment on the shipment reduced profit and increased the price of goods, dramatically stifling trade.

...
Wikipedia