Suppose Canada entered into a free- trade arrangement with China and,as a result,Canadian imports from India were replaced with imports from China.This would be an example of

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Trade diversion occurs when trade arrangements divert trade from lower-cost sources outside the trading bloc to higher-cost sources inside the bloc. In this case, Canada's imports from India are being replaced by imports from China, which may not have been the most efficient or cost-effective option for Canada. This is an example of trade diversion.

Suppose Canada Entered into a Free- Trade Arrangement with China