gE Blog Series: Global Trade Agreements Part 2 – Trade Agreements Around the World

Few things are more for the global economy than world trade. Ever since Adam Smith laid out the economics of comparative advantage in his magnum opus, The Wealth of Nations, countries have understood the importance of specialization and trade. The importance of trade remains the same today - if not more important.

It appears as if there is no better time to discuss the impact of global trade than now. The unrest in the Ukraine was influenced by its leaders to retain the trade relationship they have had with Russia, over the more popular route of aligning with the European Union on trade. Also, just last December, the World Trade Organization agreed to a deal valued at over one trillion dollars. The structure of the deal allows some of the poorest economies to receive the greatest benefit. More advanced economies have agreed to cut tariffs on products from some of the poorest nations, allowing these countries to move their goods around the world more easily.

It should be no surprise that trade plays the role it does both in society and in economics. It is vital to the way we live life today. As the world continues to develop, trade will only become more important as a tool to lift countries out of poverty.