Trade Creation

Trade creation in Global Commerce Policy

In this regard, trade creation is: a criterion used for the assessment of the impact of free- trade areas and customs unions on others. Trade theory holds that the reduction or elimination of barriers to trade will lead to increased trade between members and non-members if external barriers are not raised at the same time. The experience of the GATT system and the expansion of trade under it would indicate that this theory is underpinned by evidence. The entries on trade policy are here. In practice, the validity of the argument is quite difficult to demonstrate for any given area because of the interplay of other factors, particularly secular changes such as technological advances, changing investment patterns, etc. See also trade diversion.[1]

Trade creationin the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “Trade creation” entry (OAS)

See Also