Regionalism refers to preferential trade agreements that violate the nondiscrimination principle of the WTO by discriminating in favor of other member countries. There are several types of regional trade agreements including free trade areas where members eliminate barriers between each other but maintain independent policies for non-members, and customs unions where members adopt common trade policies and external tariffs for non-members. Regional trade agreements can result in both trade creation when imports switch to more efficient low-cost partners, and trade diversion when imports switch from lower-cost non-members to higher-cost partners.