Question: two foreign nations decided to impose tariffs on imports from all countries. They set up a free trade area, removing all trade barriers between themselves

two foreign nations decided to impose tariffs on imports from all countries. They set up a free trade area, removing all trade barriers between themselves but maintaining tariffs on imports from the rest of the world. Country A now beings to import sugar from country B. Prior to this, country A was producing sugar at a higher cost so it now benefits from this transaction. This is an example of

A) trade creation

B) protectionism

C) strategic pricing

D) trade diversion

E) synergy

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