题目内容
Trade creation occurs when imports from a low-cost supplier outside of a customs union are replaced by purchases from a higher-cost supplier within the union.
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If a customs union includes the low-cost supplier of the world, there would be no adverse trade-diversion effwct that would counteract the positive trade-creation effect.
The potential for trade diversion is smaller when a custom union's external tariff is lower rather than higher.
If a customs union included all of the countries in the world, there could exist only trade creation, not trade diversion.
The large the size and the greater the number of countries in a customs union, the greater will be the trade-diversion effect.
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