ABSTRACT
The earliest trade theory was developed by the advocates of mercantilism.1 It may be summed up briefly: The state should strive to promote the creation of as large a trade surplus as possible, in order to increase the accumulation of gold and other precious metals, and thereby stimulate trade and commerce at home. On this premise, it was logical to promote exports and to keep imports as low as possible. The theory, in other words, endorsed trade protection, not free trade.
