Occurrence
When a country applies the same tariff to all nations, it will always import from the most efficient producer, since the more efficient nation will provide the goods at a lower price. With the establishment of a bilateral or regional free trade agreement, that may not be the case. If the agreement is signed with a less-efficient nation, it may well be that their products become cheaper in the importing market than those from the more-efficient nation, since there are taxes for only one of them. Consequently, after the establishment of the agreement, the importing country would acquire products from a higher-cost producer, instead of the low-cost producer from which it was importing until then. In other words, this would cause a trade diversion.
Read more about this topic: Trade Diversion
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“One is absolutely sickened, not by the crimes that the wicked have committed, but by the punishments that the good have inflicted; and a community is infinitely more brutalised by the habitual employment of punishment than it is by the occasional occurrence of crime.”
—Oscar Wilde (1854–1900)