Image source: LOM Financial

 

It is no doubt that economic integration has created a healthy environment for international trade to thrive and expand. As these expansions mark their own transformations all over the world especially among economically competitive countries, trade agreements have also grown more complex.

Ever since the beginning of the history of international trade, there has always been a struggle between free trade and perfectionism, but the differences between these trade policies have relatively given more opportunities than drawbacks.

Just recently, two powerful regions, the European Union and Japan agreed to sign one of the largest free trade deals in the 21st century, a move that will eliminate tariffs of almost every good traded among the community’s member countries. The said trade agreement will benefit over 600 million consumers – and that is over 30 percent of the world’s economy.

Japan is not new to world-changing trade partnerships. In 1854, the Convention of Kanagawa opened the once economically and culturally isolated country to the United States. What made this agreement historically significant was not because of its direct economic impact but because of its enduring effect on the region. For one, the convention led to other bigger trade treaties that connected Japan to other Western Powers, leading to this Asian nation’s rise to modernization.

For Europe, the early half of the 20th century was a turning point in the continent’s united economy. As the world watched the Western power tearing itself apart, their leaders found security in a historic trade deal, the European Coal and Steel Community (ECSC) – an agreement that created a common market for goods such as iron, coal, ore and other scrap metals.

With several participating countries like France, Belgium, Italy, Luxembourg and the Netherlands, it dramatically empowered economic cooperation among its members, increasing trade output ten folds.