Because It Is Difficult to Negotiate Multilateral Trade Agreements

question 16

Multiple Choice

Because it is difficult to negotiate multilateral trade agreements,
Some economists argue that preferential trade agreements are
Always beneficial since they represent a movement toward freer
Trade, which is better than no movement at all.Is this argument
Always correct?

• A)Yes; any movement toward freer trade is better than no movement at all.
• B)No; some preferential trade agreements may have higher trade diversion costs than trade creation gains.
• C)Yes; all preferential trade agreements have higher trade creation gains than trade diversion losses.
• D)No; all preferential trade agreements have higher trade diversion losses than trade creation gains.

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