What is meant by the concept of "trade diversion"?

Question

Quizplus · Accepted Answer

Trade diversion refers to a situation where a member country of a trade agreement replaces a low-cost foreign supplier outside the agreement with a high-cost supplier located within the agreement. This is because the high-cost supplier is now more competitive due to the preferential treatment and lower trade barriers offered within the agreement, leading to a diversion of trade away from the more efficient foreign supplier.

What Is Meant by the Concept of "Trade Diversion