This increase in labor productivity may occur due to some factors such as specialization which causes workers to focus on similar repetitive tasks to increase production. Another form of increase in labor productivity comes from the new technologies and knowledge that free trade brings to the country of origin. This new knowledge can come in the form of new, faster production processes and better capital, which increases production. Or it may also result from increased foreign competition, which forces domestic producers to improve their production processes in order to make their products cheaper to compete. Experience in European Union (EU) countries shows that a 1% increase in the openness of the economy translates into a 0.6% increase in labor productivity the following year (Luxembourg, 2014). This article shows a definitive connection between openness to trade and increased labor productivity. This is because as the European Union or any country in general becomes more open, with more free trade there is more openness to information and technology flowing through the country. This new knowledge and information can further transform into further innovations and technological advances, which lead to increased labor productivity in the long run.