trade diversion

Definition

Trade that occurs between members of a preferential trading arrangement that replaces what would have been imports from a country outside in the PTA. Associated with welfare reduction for the importing country since it increases the cost of the imported good. Concept due to Viner (1950).

Use trade diversion in a sentence

You may want to try and figure out a way to use a trade diversion in your favor if that is possible.

​ Was this Helpful? YES  NO 4 people found this helpful.

The trade diversion was going well, except for the fact that we were unsure of what the outcome would be.

​ Was this Helpful? YES  NO 7 people found this helpful.

The trade diversion was an unexpected scenario for the trading nations, only one nation contended the new terms of trade.

​ Was this Helpful? YES  NO 2 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
trade discount trade fixture