Four large trends have facilitated the growth of international trade:
- Income growth. Economic development has generated income growth, leading the global population why expanded capabilities to consume goods and services. Because a share of goods and services is imported, this is also associated with greater trade.
- Transport costs. Lower transportation costs, particularly those associated with the more extensive shipping networks enabled by containerization, have created greater opportunities for trade. This is evident in the low ratios of goods value to transport costs, implying that transportation is less important in the sourcing and procurement of a wide range of goods, parts, and materials.
- Economic integration. The transactional facilitation, particularly the decline in tariffs, has provided a strong impetus to international trade. This particularly takes the form of trade agreements where a group of countries agrees to a common set of tariffs and rules governing their commerce.
- Supply chains. Supply chains have become complex and extended in their geography, which has been facilitated by outsourcing and offshoring. This implies that, on average, more parts and components are carried across stages of the supply chain.
These trends are not necessarily permanent, as economic and political conditions could change.