NAFTA is a good example of trade diversion.

Name: NAFTA is a good example of trade diversion.
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NAFTA is an example of trade creation, not trade diversion. Trade creation occurs when a free trade agreement leads to increased trade between the member countries, while trade diversion occurs when a free trade agreement leads to decreased trade with non-member countries. NAFTA has led to increased trade between the United States, Canada, and Mexico, so it is an example of trade creation.

NAFTA Is a Good Example of Trade Diversion