Trade and Growth: Theory and Evidence The starting point for understanding the link between trade and growth is the realization that international trade theory suggests that there can be both static and dynamic effects from trade. Traditional arguments about why countries gain from trade are typically static in nature. If a country moves from autarky to trade, theory tells us that production and consumption will change in such a way as to raise overall GNP. These gains are static in the sense that once a country has opened to trade, the country will obtain all of the benefits from trade upon liberalization. While traditional trade theory provides strong arguments for reducing trade barriers, these are essentially seen as one-time gains. Once these gains have been achieved, this theory has little to tell us about future performance.