The whole notion of international trade is primarily centered on the free trading of goods and services between countries in the world. The idea was to bring 3rd world countries of Asia, Africa and Latin America into a fair competition with the western countries. This fair competition enhanced good relations and communication between the developed and developing countries. The idea of free trade has since acted as a binding chord that holds economies together, whether developed or still developing. Free trade has also become a source of economic growth, hence why so many economies have benefited from it. The link between free trade and development, and the kind of policies required to strengthen the contribution of one to the other, have been the subject for many years.
It is important to understand how countries traded with one another historically, in order to get a better understanding on how modern global trade has evolved. Over time, economists have developed theories to explain the mechanisms of global trade. These economists found a huge link between the concepts of international trade and globalization, in fact according to them, you cannot talk about one and not talk about the other. Globalization refers to the growing interdependence ofcountries resulting from theincreasing integration of trade, finance, people, and ideas in one global marketplace.International trade and cross-border investment flows arethe main elements of this integration.
Mainstream research