What resulted in exports growing faster than production, is that companies have evolved from domestic development to a multinational, and now many have developed to a global development. The first six GATT trade negotiations had reduced tariffs in industrialized countries to less than half that level by the end of the Kennedy round in 1967, down from an average of 40% after the Second World War. In addition, international communications and transportation had improved considerably (the first commercial jet crossed the Atlantic in 1958 and the first commercial telecommunications satellite was launched in 1965. In Europe, trade negotiations with the United States and Canada have experienced difficulties, reflecting public concern about the impact on employment, the environment and consumer protection.  On 26 May 2010, WTO Deputy Director-General Alejandro Jara delivered an interesting speech in which he described the impact of supply chains on how we think about international trade. His speech is in www.wto.org/english/news_e/news10_e/devel_26may10_e.htm. The second factor that can affect a country`s current account balance is the exchange rate. The exchange rate refers to the amount of currency that can be purchased by a country`s own currency. According to economic theory, if a nation has a persistent trade deficit, its exchange rate is expected to fall against its trading partners – for example, if the United States has a persistent deficit, the dollar should buy fewer currencies like the euro or the yen.
This would mean that imported products would cost more because they would cost more dollars for each unit of foreign currency, resulting in lower imports. In addition, U.S. exports are expected to grow, as foreigners can buy more of their products for any unit of their currency. Western economic theory has also changed in recent years to reflect the fact that, since the early 1970s, world trade has grown much faster than overall economic growth. In 1973, the share of exports to GDP in the United States was 4.9%, up from more than double in 2005 to 10.2%.