Trade deflection is most likely to occur in which of the following?
A)Preferential trade agreement
B)Customs union
C)Free trade area
D)Monetary union

Question

Quizplus · Accepted Answer

In a free trade area, member countries remove tariffs among themselves but maintain individual external tariffs, leading to trade deflection where goods enter through the country with the lowest external tariff.

Trade Deflection Is Most Likely to Occur in Which of the Following