One of the great strengths of these models is that they can show how the impact on sectors is made across the economy as a whole. One of their drawbacks is that because of their complexity, the assumptions behind their projections are not always transparent. Business models are useful for giving an idea of what might happen as a result of a trade agreement. They give the impression of being authoritarian, but users should be aware that business models do not predict what will actually happen and that they have significant weaknesses. This happens for some products as a result of multilateral trade negotiations. For example, a country often reduces tariffs on products that are not sensitive to imports – often because they are not produced in that country – to a greater extent than it reduces tariffs on import-sensitive products. In the case of a free trade agreement where the end result is a zero duty, this would have no effect if the agreement were fully implemented. However, during the transition period, it could be very relevant for some products. However, beyond this exception, the removal of tariffs or other barriers to trade increases trade in the product, and this is the intention of the trade agreement. However, the global economy began to transform in the twentieth century, with some products being able to be manufactured under conditions of increasing economies of scale. In addition, the production of most products at that time was subject to a decrease in yields, which meant that the increase in production increased the production costs of each additional unit.
The world has changed since the days of Smith and Ricardo. Today, trade is no longer mainly between small producers and farmers, but between huge global groups that buy parts and materials from all over the world and sell them all over the world. These huge supply chains have been made possible by trade liberalization and technological change and explain the fact that international trade has grown much faster than global economic growth since 1970. These global supply chains also have implications for developing countries` strategies to stimulate economic growth.