These two areas are now gains when the tariff is removed. Trade diversion occurs when member countries are not the most efficient producers of a good. Member countries will still trade with the countries offering the best price, but the economic bloc can distort these prices. Thus, the economic integration results in trade being diverted from external countries to member countries. However, there are still some efficiency losses that are not recovered.
Integration also allows specialisation by member countries.
Rather than all member countries producing a large variety of goods, they can agree to allocate production of certain goods to certain member countries. Again, this means that they can take advantage of economies of scale. It is still debatable whether economic integration is better than free trade. Economic integration inhibits this because it combines countries into groups with their own special privileges. Economic integration reduces this burden by allowing an entire economic bloc to act as a single entity, reducing the volume of negotiations required.