The union between Belgium and Luxembourg on the one hand and the Netherlands on the other, agreed in principle before the end of the Second World War and set up in 1948. The union abolished internal tariffs, reduced import quotas between the three countries and adopted a common external tariff. The aim of the union is the eventual merging of the fiscal and monetary systems of the member countries. There is free movement of labour and capital within the union and a common policy with other countries. In 1958 Benelux joined the European Economic Community.
Reference: Oxford Press Dictonary of Economics, 3rd edt.