The classical Western business model was based on the economic realities of the 18th century. The factors of production were relatively fixed: the land was immobile (although its fertility or use may change) and labour mobility was severely constrained by political constraints. For most of the century, cross-border capital movements have been constrained by political barriers and lack of knowledge in other markets. (However, by the middle of the 19th century, capital and labour were freer between Europe and America. The technology in the 18th century was relatively simple by current standards and was relatively similar in all countries. In addition, production of most products was exposed to declining yields at that time, which meant that with the increase in production, the production costs of each additional unit increased. Gomory and Baumol note that, to the extent that countries can create a comparative advantage for products with lower production costs, there are many possible outcomes for business models: “These results differ in their impact on the economic well-being of the countries concerned. Some of these results are good for one country, some are good for the other, some are good for both. But it is often true that the results that are best for a country tend to be bad results for its trading partner.  Opponents of economic partnership agreements argue that agreements can benefit more developed countries than their less developed partners. Stronger economies may be more likely to exploit their weaker partners, leading to unequal benefits. In the view odi.org, economic partnership agreements must provide for reciprocity in order to be taken into account under World Trade Organization rules. This means that any action taken in favour of a given economy must be replicated by that economy, which in theory brings equal benefits for each country. Most economists today consider the law of comparative advantage to be one of the fundamental principles of the economy.
However, some very important reservations about the comparative advantage law are often overlooked or embellished. From a static point of view, the Comparative Advantage Act provides that all nations can benefit from free trade because of the increase in production available to consumers because of more efficient production. James Jackson of the Congressional Research Service describes the benefits of trade liberalization, “by removing foreign barriers to U.S. exports and removing U.S. barriers to foreign goods and services, helps strengthen the most competitive and productive industries and increase the relocation of labour and capital from less productive efforts to more productive economic activities.”  Bertil Ohlin published this theory in 1933. A brief explanation of the Heckscher-Ohlin theory can be nobelprize.org/educational_games/economics/trade/ohlin.html. A current account surplus or deficit may be affected by the economic cycle. Therefore, if our economy grows rapidly, the demand for imports will increase, as consumers can afford to buy more and businesses will need parts and stocks to grow. Similarly, U.S. exports are influenced by the economic growth of its trading partners. In short, if it grows faster than its trading partners, it will have a negative impact on the United States.