The Belgium-Luxembourg economic union was established in 1921 to create a customs union between the two countries. This means that they treat their territories as one for customs, excise duties, and economic transactions. The union allows for free and unrestricted trade between the two countries, with no limitations, duties, or charges on imports, exports, or transit. The goal was to promote economic cooperation and remove barriers to trade, making it easier for businesses in Belgium and Luxembourg to exchange goods and services.