trade diversion
English
Etymology
- Credited to Jacob Viner in his 1950 book The Customs Union Issue.
Noun
trade diversion (countable and uncountable, plural trade diversions)
- (economics, usually negative) The changing of import sources as a result of political agreeements, rather than to increase mutual benefit.
- 1987, Robert Mitchell Stern, Philip H. Trezise, John Whalley, University of Michigan, University of Western Ontario. Centre for the Study of International Economic Relations, Perspectives on a U.S.-Canadian free trade agreement:
- Even if trade diversion is not important in aggregate terms or in relation to trade creation between the bilateral partners, it still represents an inefficient use of global resources […]
- 1992, Gerhard Pohl, Piritta Sorsa, European integration and trade with the developing world:
- First, the lowering of trade barriers among members leads to trade diversion from outside suppliers to firms in member countries […]
- 1997, Riccardo Faini, Enzo R. Grilli, Multilateralism and regionalism after the Uruguay Round:
- An excessive increase in the share of intraregional flows is typically taken as an indication that trade diversion has been predominant and the regional integration programme has been welfare-reducing.
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See also
- trade creation