An argument in favor of multilateral trade liberalization (multilateralism)over preferential trade agreements (regionalism)is that multilateralism results in less trade diversion.

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Multilateral trade liberalization allows for more countries to participate in free trade, reducing the likelihood of trade diversion, which occurs when preferential trade agreements redirect trade from more efficient producers outside the agreement to less efficient producers within the agreement. Regionalism can lead to trade diversion as it creates competing trade blocs with differing rules and regulations.

An Argument in Favor of Multilateral Trade Liberalization (Multilateralism)over Preferential