A regional free trade agreement will benefit the world only when the amount of trade it diverts exceeds the amount of trade it creates.

Question

Quizplus · Accepted Answer

A regional free trade agreement can benefit the world by creating new trade opportunities and increasing economic growth, even if it diverts some trade from non-participating countries. The net impact on global trade will depend on a variety of factors, including the size and scope of the agreement, the specific industries involved, and the economic conditions of participating countries. Therefore, it is not necessarily true that a regional free trade agreement must divert more trade than it creates in order to benefit the world.

A Regional Free Trade Agreement Will Benefit the World Only