In the modern world of contemporary economics, trade liberalization and globalization are constantly debated topics. On one side is the argument that free trade and globalization will ultimately lead to poverty reduction in developing countries and an increase in GDP in developed countries that would otherwise be unattainable. The other side of the argument, however, claims that there is already contrary evidence that the introduction of free trade unfairly favors developed countries and cripples infant industries. Below we will develop globalization and trade liberalization, as well as the relationship with the international trade theories of David Ricardo, David Ricardo and the Heckscher-Ohlin theorem. Globalization is a worldwide movement toward economic, trade, financial, and communications integration (“Business Dictionary,” 2013). ). This would allow businesses to operate on a multinational scale, whereas previously they were limited to local communities as their target market. Take advantage of different production abundance factors in several countries. An important aspect of globalization is trade liberalization, which is the removal or reduction of trade barriers to the free exchange of goods between nations (“Investopedia,” n.d.). These barriers can include tariffs and quotas as well as non-tariff barriers such as licensing rules (“Investopedia,” nd). Removing these barriers facilitates international trade and allows countries to practice comparative advantage over other economies. In Adam Smith's article, "The Wealth of Nations", Adam Smith's article considers that international trade is not a zero. a sum equation that ends up being beneficial for all parties involved. By e...... middle of paper ......country. One of the main arguments against globalization is that big companies take advantage of poorer countries. Opponents argue that corporations take advantage of workers by providing unfair working conditions and disregarding the environment (“Economist,” 2001). Although this may have been the case in the past, most multinational companies are working to clean up their practices in developing countries. Regardless of how living standards are measured, it is clear that economies that adopt free trade policies perform better than their counterparts. that maintain protective trade barriers. This economic performance has led to a marked increase in living standards in these countries, providing clear examples of how free trade can be used to help underdeveloped economies catch up with more developed countries...