If Moldova joined the EU customs union, which trade effect would be greater?

Trade creation.
89% (58 votes)
Trade diversion.
11% (7 votes)
Total votes: 65
Question objectives: 
Understanding what a customs union is and its main features.
Understanding the two main effects that joining a customs union produces, namely trade creation and trade diversion, on a country's international trade patterns.
Understanding the welfare effects of trade creation.
Understanding the factors that influence the potential size of trade creation, and in particular gravity models of trade and the current tariff level between the candidate country and the customs union.
Understanding the welfare effects of trade diversion.
Understanding the factors that influence the potential size of trade diversion, and in particular the common external tariff of the customs union.
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