Answer:
Trade diversion custom union
Explanation:
Free trade area refers to the economic integration in which some of the countries come together and form a custom union, PFA, etc. In this type of economic integration, there are certain benefits or lower tariff rates given to the member nation.
Suppose there is a custom union. Trade diversion refers to a situation in which the trade is diverted from the cost efficient producer outside the custom union to a cost inefficient producer inside the custom union.
Therefore, this is an example of trade diversion custom union.
