Economic integration can result in increased trade with a less efficient producer within the trading bloc and reduced trade with a more efficient nonmember producer.

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Economic integration can lead to trade creation and trade diversion effects. Trade creation occurs when members of the trading bloc increase trade among themselves, often resulting in lower prices and increased efficiency. However, trade diversion occurs when members shift their trade from a more efficient nonmember producer to a less efficient producer within the bloc, often due to political or preferential treatment. This can result in decreased trade with nonmember producers who may have better prices or quality.

Economic Integration Can Result in Increased Trade with a Less