It is a history of increasing trade between nations based on stable institutions that allow firms in different nations to exchange goods with minimal friction.

The term «liberalization» means the combination of laissez-faire economic theory with the removal of barriers to the movement of goods. This led to specialization of nations in exports, and the pressure to end protective tariffs and other barriers to trade. The period of the gold standard and liberalization of the 19th century is often called «The First Era of Globalization». Based on the Pax Britannica and the exchange of goods in currencies pegged to specie, this era grew along with industrialization.

The «First Era of Globalization» has broken down in stages beginning with the World War I, and then collapsed with the crisis of the gold standard in the late 1920s and early 1930s’s. Countries that engaged in that era of globalization prospered and goods, capital and labour flowed remarkably freely between nations.

Globalization in the era since World War II has been driven by Trade Negotiation Rounds, originally under the auspices of GATT, which led to a series of agreements to remove restrictions on «free trade». The Uruguay Round led to a treaty to create the World Trade Organization to mediate trade disputes. Other bilateral trade agreements, including Europe’s Maastricht Treaty and the North American Free Trade Agreement, have also been signed aimed at reducing tariffs and barriers to trade.