The shifting of trade from countries outside a regional trade bloc to nations within a bloc is known as A. a voluntary import expansion. B. a trade agreement. C. trade deflection. D. trade diversion.

D. trade diversion.

Explanation:

Trade diversion -

In this case, the trade is diverted from a more efficient exported to the less efficient exporter, via a customs union or free trade agreement.

The cost of the good reduces, due to lower tariff, in comparison to the trade with the country outside the agreement with lower cost goods but higher tariff.

The trade is created when the formation of the trade agreement between the countries reduces the good's price for more consumers and hence the overall trade increases.