1.1 Introduction: Economists have known that international trade is one of the most important ways for societies to raise their standards of living, since the days of Adam Smith and David Ricardo, with their work on specialization and comparative advantage. There is a strong connection between international trade and economic growth, which has been known for a long time. The Roman Empire is a good example; he became rich because he was able to trade over long distances. Another example is the spice trade that took place between Europe and Asia; it was the first and a great example of how trade between the two continents enriched both. The nineteenth century saw a sharp increase in trade, a great reduction in piracy, and enormous improvements in the quality and speed of shipping. This was also the period in which modern economic growth first took hold. However, during the wars, international trade declined, causing misery to millions of people. After the World War, trade increased significantly. International trade has increased the living standards of citizens of both developed and developing countries. The modern world trades more than seven times more goods than it did fifty years ago. If we exclude the effects of inflation, the value of internationally traded goods has increased more than 16-fold over the last half century. The fact that the value of international trade has increased more than the weight of goods traded means that the types of goods traded have now changed. While bulk cargoes such as grain and oil remain important in terms of volume, high value-added goods are key today. The increasing value of goods shipped means that time matters. Trading is no longer about low value…half paper…reliability in exchange for lower costs. In contrast, producers of relatively high-value goods, especially high-tech products or other products with limited shelf lives, will be more willing to pay higher prices for greater reliability. The last 25 years have seen a particular increase in the amount of high-tech goods exported, often over very long distances. For this reason we focus primarily on the effects of logistics quality on trade. It is also worth noting that it is transportation and logistics costs, and not tariffs, that are the main barrier to trade. While tariff reductions would be extremely beneficial for certain products, reductions in transportation costs are more important for trade as a whole. These reductions can be achieved both by governments reducing barriers to trade and by private sector logistics companies becoming more efficient.
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