Third, Ricardo and other early economists based their theories on trade in goods, and they did not take into account trade with factors of production. Today, however, basic production factors such as labour, capital and technology are being negotiated. The consequence of trade in factors of production is that factor compensation will be complete in a shorter period than in the commodity trade alone. The effect of trade on GDP is therefore the net volume of exports, higher or lower than imports. However, this is a static measure. As has already been said, expanded exports also have a dynamic effect, as firms become more efficient with rising sales. A second extremely important reserve is the so-called factor price adjustment rate, which states that international trade will compensate for relative factors of production. B such as unskilled labour, between countries under free trade conditions. This would mean that for a high-wage country such as the United States, wages for unskilled workers would fall, while wages would rise in labour countries. However, factor prices will not tend to offset in sectors where production costs are falling. The comparative advantage theory starts from a world where trade between countries is balanced or, at the very least, where countries have a trade surplus or trade deficit, whether cyclical and temporary. [29] The easing of the assumption that “international trade between nations is balanced could lead a loss-making nation to import certain raw materials in which it would have a comparative advantage and which would in fact export with balanced trade,” says Dominic Salvatore. But he doesn`t see it as a major problem, “because most trade imbalances in relation to GNP are generally not very large.” [30] While removing trade barriers is generally a step towards free trade, there are situations where a reduction in tariffs can effectively increase the effective protection rate for a domestic industry.

Jacob Viner cites an example: “Suppose there are import duties on both wool and wool, but despite duty no wool is produced at home. The abolition of the obligation of wool on the wool shroud without this being important for wool farming. [11] CGE models can be used to assess the impact of a trade agreement on trade flows, labour, production, economic well-being or even the environment. They can examine the impact of the agreement on all the countries concerned and are ex ante; that is, they are trying to predict the changes that would result from a trade agreement. General equilibrium models are based on input-exit models that follow how sector production is a source of input for other sectors. General equilibrium models use huge data inputs that reflect all the elements to consider. [15] At the time of Smith, Ricardo and Hecksher-Ohlin, enterprises were generally small and international trade was generally with agricultural or mineral products or in small production. However, until 1947, the large industry had evolved and much of the trade was manufactured. In fact, there are, of course, other reasons than trade barriers, why factors of production such as capital or labour cannot cross borders, even if there are no barriers and higher yields could be achieved in other markets.