As a result of the formation of BERPHO,a free trade area consisting of six member countries,higher cost external fabric producers were replaced by lower-cost external fabric producers within the free trade area.This is known as
A)trade creation.
B)strategic pricing.
C)synergy.
D)trade diversion.
E)protectionism.

Question

Quizplus · Accepted Answer

This is an example of trade creation, which refers to the substitution of higher-cost domestic production with lower-cost imports from within the free trade area.

As a Result of the Formation of BERPHO,a Free Trade