A trade-diverting customs union results in:

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A trade-diverting customs union occurs when a group of countries form a customs union and impose a common external tariff on goods imported from countries outside the union. If the common external tariff is higher than the individual tariffs previously imposed, it can redirect trade flows away from more efficient suppliers outside the union to less efficient suppliers within the union, resulting in trade diversion. However, the customs union may also create new trade within the union due to the removal of internal tariffs and other barriers to trade. Therefore, a trade-diverting customs union results in both trade creation and trade diversion.

A Trade-Diverting Customs Union Results In