1.   In his analysis Viner developed the concepts of trade creation and trade diversion.

2.   This switch from high cost domestic production to lower cost partner production is termed trade creation.

3.   The concepts of trade creation and diversion are concerned with the allocation of resources in a static framework.

4.   These dynamic factors may well have stronger impact on members of a CU than the static effects of trade creation and diversion.

5.   In terms of the allocation of resources the Vinerian concepts of trade creation and diversion are respectively welfare enhancing and welfare reducing.

6.   Trade creation induces a rise in imports and hence induces a deficit in the balance of trade.

7.   Clearly trade creation experienced by union members on the import side results in an equivalent rise in exports of other union members.

8.   There are other effects additional to the Vinerian concepts of trade creation and trade diversion which impinge upon the trade accounts.

9.   In case E the share from the partner declines while that from the rest of the world rises, this indicates that external trade creation has occurred.