In economics, social, and politics, the human experience an increasingly important role of International trade presented throughout much of history from the first images of East-West trade (so-called The Silk Road and Amber Road) to current globalization. In the new item, globalization often goes hand in hand with world trade, international investments, and currency exchanges and their adverse consequences on common people. Economic internationalists favour free trade which is a trade policy where international economies interact, import and export goods with minimal intervention by the government. Advocates typically argue that mutually beneficial trade relationships are established thanks to freer trade. Actually, the debate about how free a trading system should be is an old one, with positions and arguments evolving over time.
Tracing back the evolution of what today is recognized as the standard theory of international trade, one goes back to the years between 1776 and 1826, which respectively mark the publications of Adam Smith's Wealth of Nations and David Ricardo's Principles of Economics  . The two studies alert the formulation of a theory of free trade, based on the unprecedented success of England in the respective fields of industry and trade. The classical economist Adam Smith, who developed the theory of absolute advantage, was the first to explain why unrestricted free trade is beneficial to a country. Smith argued that 'the invisible hand' of the market mechanism, rather than government policy, should determine what a country imports and what it exports. Although Smith never fully developed the argument of free trade, later economists were able to find out it from the Wealth of Nations. Two theories inspired from Adam Smith's absolute advantage theory include the English neoclassical economist David Ricardo's comparative advantage and Hecksher-Ohlin's factor abundance model.The Heckscher-Ohlin theory is preferred on theoretical grounds, but in real-world international trade pattern it turned out not to be easily transferred, referred to as the Leontief paradox. Another theory trying to explain the failure of the Hecksher-Ohlin theory of international trade was the product life cycle theory developed by Raymond Vernon. Central to trade theory was the concept of opportunity cost, that is, the loss of alternative returns if resources had been used in some other way. This theorizing constituted the supply side explanation of trade and, to a greater degree, represented actual trade patterns of the early 19th century.
This session provides a survey of the literature concerning theories on free trade and protection from the classical example of comparative advantage to the New Trade theories currently used by many advanced countries to direct industrial policy and trade. It is to clarify reasons when and why these issues have been raised in world politics.
2.1.1. Free trade
220.127.116.11. Classical trade theories
The classical trade theory, which forms the basis for economic integration theory, has its origins in the literature on political economy from over two centuries ago. These theories gave the early logic that free trade could be advantageous for countries and was rest on the concept of absolute advantages in production. The line of thinking was further developed to encompass the concept of comparative advantage as a basis for specialized production. Economics still admit so far the law of comparative advantage which means that free trade and exchange goods based on specialization was more beneficial to trade partners than protectionism. Also, it is noteworthy that the classical theory explicitly dealt with protection, i.e taxes and tariffs, hence demonstrates a connection between trade policy and tr