If a regional trading agreement causes products from member
Countries to replace imports from nonmember countries, then the
Regional trading agreement will experience:
A)economic gains.
B)trade creation gains.
C)trade diversion losses.
D)trade perversion.

Question

Quizplus · Accepted Answer

Trade diversion occurs when lower-cost imports from nonmember countries are replaced by higher-cost imports from member countries, leading to potential economic inefficiencies and losses.

If a Regional Trading Agreement Causes Products from Member