Apr 21 2012

Trade diversion

Published by at 8:31 pm under

When a free trade agreement diverts trade from a low-cost that is not involved in the agreement country to a higher cost country that is involved. If trade diversion occurs, a free trade agreement may lead to an overall loss of efficiency in resource allocation in the world.


About the author:  Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author

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