Dictionary

trade diversion en · NOUN

Etymology

* Credited to Jacob Viner in his 1950 book The Customs Union Issue.

Meanings

1. (countable, negative, uncountable, usually) The changing of import sources as a result of political agreements, rather than to increase mutual benefit.
   • First, the lowering of trade barriers among members leads to trade diversion from outside suppliers to firms in member countries[…] 1992, Gerhard Pohl, Piritta Sorsa, European integration and trade with the developing world:
   • 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[…] 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:
   • 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. 1997, Riccardo Faini, Enzo R. Grilli, Multilateralism and regionalism after the Uruguay Round:

Forms

Relateds

trade creation