Conversely, a trading bloc is likely to be harmful if it generates a shift of resources from efficient external producers to inefficient producers within the region. This is a consequence of trade discrimination, which economists call ‘trade diversion
Conversely, a trading bloc is likely tobe harmful if it generates a shift ofresources from efficient externalproducers to inefficient producers withinthe region. This is a consequence of tradediscrimination, which economists call‘trade diversion.