Trade involves the transfer of goods from one person or entity to another, often in exchange for money. Economists refer to a
A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole.
A system, surrounded and influenced by its environment, is described by its boundaries, structure and purpo ...
or network that allows trade as a
Market may refer to:
*Marketplace, a physical marketplace or public market
*Märket, an island shared by Finland and Sweden
Art, entertainment, and media Films
*Market (1965 film), ''Market'' (1965 ...
An early form of trade, the
A gift economy or gift culture is a mode of exchange where valuables are not sold, but rather given without an explicit agreement for immediate or future rewards. Social norms and customs govern giving a gift in a gift culture, gifts are not giv ...
, saw the exchange of goods and services without an explicit agreement for immediate or future rewards. A gift economy involves trading things without the use of money. Modern traders generally negotiate through a medium of exchange, such as money. As a result, buying can be separated from selling, or
Earning can refer to:
*Earnings of a company
*Merit (disambiguation), Merit
The emergence of exchange networks in the Pre-Columbian societies of and near to Mexico are known to have occurred within recent years before and after 1500 BCE.
Trade networks reached north to
Oasisamerica is a term that was coined by Paul Kirchhoff (who also coined that of Mesoamerica) and published in a 1954 article, and is used by some scholars, primarily Mexican anthropologists, for the broad cultural area defining pre-Columbian .... There is evidence of established maritime trade with the cultures of northwestern South America and the Caribbean.
In the history of Europe, the Middle Ages or medieval period lasted approximately from the 5th to the late 15th centuries, similarly to the Post-classical, Post-classical period of global history. It began with the fall of the Western Roma ..., commerce developed in Europe by trading luxury goods at trade fairs. Wealth became converted into movable wealth or capital
Capital most commonly refers to:
* Capital letter
Letter case (or just case) is the distinction between the letters that are in larger uppercase or capitals (or more formally ''majuscule'') and smaller lowercase (or more formally ''minusc .... Banking systems developed where money on account was transferred across national boundaries. Hand to hand markets became a feature of town life, and were regulated by town authorities.
Western Europe established a complex and expansive trade network with cargo ships being the main workhorse for the movement of goods, Cogs and Hulks are two examples of such cargo ships. Many ports would develop their own extensive trade networks. The English port city of Bristol
Bristol () is a City status in the United Kingdom, city, Ceremonial counties of England, ceremonial county and unitary authority in England. Situated on the River Avon, Bristol, River Avon, it is bordered by the ceremonial counties of Gloucest ... traded with peoples from what is modern day Iceland, all along the western coast of France, and down to what is now Spain.
During the Middle Ages, Central Asia was the economic center of the world. [ Beckwith (2011), p. xxiv.] The Sogdians:''This category
Category, plural categories, may refer to:
Philosophy and general uses
*Categorization, categories in cognitive science, information science and generally
*Category of being
*Categories (Aristotle), ''Categories'' (Aristotle)
*C ... dominated the east–west trade route known as the Silk Road
The Silk Road () was and is a network of trade route
A trade route is a logistical network identified as a series of pathways and stoppages used for the commercial transport of cargo. The term can also be used to refer to trade over bodies of ... after the 4th century CE up to the 8th century CE, with Suyab
Suyab ( fa, سوی آب; Middle Chinese
Middle Chinese (formerly known as Ancient Chinese) or the Qieyun system (QYS) is the historical variety of Chinese language, Chinese recorded in the ''Qieyun'', a rime dictionary first published in 601 an ... and Talas ranking among their main centers in the north. They were the main caravan
Caravan or caravans may refer to:
Transport and travel
*Caravan (travellers), a group of travellers journeying together
**Caravanserai, a place where a caravan could stop
*Camel train, a convoy using camels as pack animals
*Convoy, a group of vehi ... merchants of Central Asia.
From the Middle Ages, the maritime republics
The maritime republics ( it, repubbliche marinare) of the Mediterranean Basin were Thalassocracy, thalassocratic city-states in Italy in the Middle Ages, Italy and Dalmatia during the Middle Ages. The best known among them were Republic of Venic ..., in particular Venice
Venice ( ; it, Venezia ; vec, Venesia or ) is a city in northeastern Italy
Italy ( it, Italia ), officially the Italian Republic ( it, Repubblica Italiana, links=no ), is a country consisting of a Northern Italy, continental part, del ..., Pisa
Pisa ( , or ) is a city and ''comune'' in Tuscany, central Italy, straddling the Arno just before it empties into the Ligurian Sea. It is the capital city of the Province of Pisa. Although Pisa is known worldwide for its Leaning Tower of Pisa, ... and Genoa
Genoa ( ; it, Genova ; locally ; lij, Zêna ; English, historically, and la, Genua) is the capital of the Italian region
The regions of Italy ( it, regioni d'Italia) are the first-level constituent entity, constituent entities of the Italia ..., played a key role in trade along the Mediterranean. From the 11th to the late 15th centuries, the Venetian Republic
The Republic of Venice ( it, Repubblica di Venezia; vec, Repùblega de Venèsia) or Venetian Republic ( it, Repubblica Veneta; vec, Repùblega Vèneta), traditionally known as La Serenissima ( en, Most Serene Republic of Venice, italics=yes; ... and the Republic of Genoa
A republic ( la, res publica, links=yes, meaning "public affair") is a form of government in which "power is held by the people and their elected representatives". In republics, the country is considered a "public matter", not the private co ... were major trade centers. They dominated trade in the Mediterranean and the Black Sea, having the monopoly between Europe and the Near East for centuries.
From the 8th to the 11th century, the Viking
Vikings—"pirate", non, víkingr is the modern name given to seafaring people primarily from Scandinavia (present-day Denmark, Norway and Sweden),
who from the late 8th century, 8th to the late 11th century, 11th centur ...s and Varangians
The Varangians (; non, Væringjar; gkm, Βάραγγοι, ''Várangoi''; traded as they sailed from and to Scandinavia. Vikings sailed to Western Europe, while Varangians to Russia. The [Varangian]
" Online Etymolog ...
The Hanseatic League (; gml, Hanse, , ; german: label=German language, Modern German, Deutsche Hanse; nl, label=Dutch language, Dutch, De Hanze; la, Hansa Teutonica) was a Middle Ages, medieval commercial and defensive confederation of merchan ... was an alliance of trading cities that maintained a trade monopoly
A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none) is as described by Irving Fisher, a market with the "absence of competition", creating a situation where a specific ... over most of Northern Europe
Northern Europe is a loosely defined Geography, geographical and cultural region in Europe. Narrower definitions may describe Northern Europe as being roughly north of the southern coast of the Baltic Sea, which is about 54°N, or may be based o ... and the Baltic
Baltic may refer to:
* Baltic Sea, a sea in Europe
* Baltic region, an ambiguous term referring to the general area surrounding the Baltic Sea
* Baltic states (also Baltics, Baltic nations, Baltic countries or Baltic rep ..., between the 13th and 17th centuries.
The Age of Sail and the Industrial Revolution
Portuguese explorer pioneered the European
The spice trade involved historical civilizations in Asia, Northeast Africa and Europe. Spices such as cinnamon, Cinnamomum aromaticum, cassia, cardamom, ginger, Black pepper, pepper, and turmeric were known and Spice use in Antiquity, used in ant ... in 1498 when he reached Calicut
Kozhikode (), also known as Calicut, is an Indian city, second-largest urban agglomeration in the State of Kerala in India and 19th largest in the country with a population of two million according to 2011 census. Kozhikode is classified as ... after sailing around the Cape of Good Hope
The Cape of Good Hope ( af, Kaap die Goeie Hoop ; nl, Kaap de Goede Hoop ; pt, Cabo da Boa Esperança ) is a rocky headland on the Atlantic coast of the Cape Peninsula
The Cape Peninsula ( af, Kaapse Skiereiland) is a generally rocky penin ... at the southern tip of the African continent. Prior to this, the flow of spice into Europe from India was controlled by Islamic powers, especially Egypt. The spice trade was of major economic importance and helped spur the Age of Discovery
The Age of Discovery, or the Age of Exploration (sometimes also, particularly regionally, Age of Contact or Contact Period), is an informal and loosely defined term for the early modern period approximately from the 15th century to the 18th century ... in Europe. Spices brought to Europe from the Eastern world were some of the most valuable commodities for their weight, sometimes rivaling gold
Gold is a chemical element with the Symbol (chemistry), symbol Au (from la, aurum) and atomic number 79, making it one of the higher atomic number elements that occur naturally. In a pure form, it is a brightness, bright, slightly reddish yel ....
From 1070 onward, kingdoms in West Africa became significant members of global trade. This came initially through the movement of gold and other resources sent out by Muslim traders on the Trans-Saharan trading network. Beginning in the 16th century, European merchants would purchase gold, spices, cloth, timber and slaves
Slavery and enslavement are both the state and the condition of being a slave, who is someone forbidden to quit their service for another person (a slaver), while treated as property
Property (''latin: Res Privata'') in the Abstract and co ... from West African states as part of the triangular trade
350px, Depiction of the triangular trade of slaves, sugar, and rum with New England instead of Europe as the third corner
Triangular trade or triangle trade is trade
Trade involves the transfer of goods or services from one person or entit .... This was often in exchange for cloth, iron, or cowrie shells
Cowrie or cowry (plural cowries) is the common name
Common may refer to:
* Common, a townland in County Tyrone, Northern Ireland
* Boston Common
Boston Common (also known as the Common) is a central public park in downtown Boston, ... which were used locally as currency.
Founded in 1352, the Bengal Sultanate
The Sultanate of Bengal ( bn, শাহী বাংলা, fa, ''Shāhī Bangālah''), was an empire based in Bengal for much of the 14th, 15th and 16th centuries. It was the dominant power of the Ganges–Brahmaputra Delta, with a network ... was a major trading nation
Trade involves the transfer of goods from one person or entity to another, often in exchange for money. Economists refer to a system
A system is a group of Interaction, interacting or interrelated elements that act according to a set of ru ... in the world and often referred to by Europeans as the wealthiest country to trade with.
In the 16th and 17th centuries, the Portuguese gained an economic advantage in the Kingdom of Kongo
Kingdom may refer to:
* A type of monarchy
A monarchy is a form of government in which a person, the monarch
A monarch is a head of stateWebster's II New College DictionarMonarch Houghton Mifflin. Boston. 2001. p. 707. Li ... due to different philosophies of trade. Whereas Portuguese traders concentrated on the accumulation of capital, in Kongo spiritual meaning was attached to many objects of trade. According to economic historian Toby Green
Toby Green is a British historian who is a Professor of Precolonial and Lusophone African History and Culture at King's College London. He obtained his Doctor of Philosophy
A Doctor of Philosophy (PhD, Ph.D., or DPhil; Latin or ''doctor p ..., in Kongo "giving more than receiving was a symbol of spiritual and political power and privilege."
In the 16th century, the Seventeen Provinces
The Seventeen Provinces were the Imperial state
An Imperial State or Imperial Estate ( la, Status Imperii; german: Reichsstand, plural: ') was a part of the Holy Roman Empire
The Holy Roman Empire ( la, Sacrum Imperium Romanum; german: Heil ... were the center of free trade, imposing no exchange control
Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents, on the purchase/sale of local currency by nonresidents, or the transfers of any currency across national bor ...s, and advocating the free movement of goods. Trade in the East Indies
The East Indies, and the Indies, are Archaism, archaic terms referring to the lands, as the names suggest, east of the Indian subcontinent, most particularly Maritime Southeast Asia and parts of East Asia.Oxford D ... was dominated by Portugal in the 16th century, the Dutch Republic
The United Provinces of the Netherlands, or United Provinces (officially the Republic of the Seven United Netherlands), commonly referred to in historiography as the Dutch Republic, was a federal republic which existed from 1588 (during the Du ... in the 17th century, and the British
British may refer to:
Peoples, culture, and language
* British people
The British people, or Britons, are the citizens of the United Kingdom of Great Britain and Northern Ireland, the British Overseas Territories, and the Crown dependenc ... in the 18th century. The Spanish Empire
The Spanish Empire ( es, link=no, Imperio Español), also known as the Hispanic Monarchy ( es, link=no, Monarquía Hispánica) or the Catholic Monarchy ( es, link=no, Monarquía Católica) during the Early Modern period, was a colonial empire
... developed regular trade links across both the Atlantic and the Pacific Oceans.
In 1776, Adam Smith
Adam Smith ( 1723 – 17 July 1790) was a Scottish economist, philosopher as well as a Ethics, moral philosopher, a pioneer of political economy, and a key figure during the Scottish Enlightenment, also known as ''The Father of Economics''
* ... published the paper '' An Inquiry into the Nature and Causes of the Wealth of Nations''. It criticized Mercantilism
Mercantilism is an economic policy
The economic policy of governments covers the systems for setting levels of taxation, government budgets, the money supply and interest rates as well as the labour market, nationalization, national owner ..., and argued that economic
An economy (; ) is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services by different a ... specialization could benefit nations just as much as firms. Since the division of labour
The division of labour is the separation of tasks in any economic system
An economic system, or economic order, is a system of Production (economics), production, allocation of resources, resource allocation and Distribution (economics), distri ... was restricted by the size of the market, he said that countries having access to larger markets would be able to divide labour more efficiently and thereby become more productive
Productivity describes various measures of the efficiency
Efficiency is the (often measurable) ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, i .... Smith said that he considered all rationalizations of import
An import in the receiving country is an export
An export in international trade is a goods, good or Service (business), service produced in one country that is sold into another country. The seller of such goods and services is an ''exporter'' ... and export
An export in international trade
International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services.
In most countries, such trade rep ... controls "dupery", which hurt the trading nation as a whole for the benefit of specific industries.
In 1799, the Dutch East India Company
The Dutch East India Company, officially the United East India Company ( nl, Vereenigde Oost Indische Compagnie; VOC), was a multinational corporation
A multinational company (MNC) is a corporate organization that owns or controls the pro ..., formerly the world's largest company, became bankrupt
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. ..., partly due to the rise of competitive free trade.
David Ricardo (18 April 1772 – 11 September 1823) was a British political economist, one of the most influential of the classical economists along with Thomas Malthus
Thomas Robert Malthus (; 13/14 February 1766 – 23 December 1834) w ..., James Mill
James Mill (born James Milne; 6 April 1773 – 23 June 1836) was a Scottish historian
( 484– 425 BC) was a Greek historian who lived in the 5th century BC and one of the earliest historians whose work survives.
A historian is a person who stu ... and Robert TorrensRobert Torrens may refer to:
* Robert Torrens (judge)
Robert Torrens (1775 – 1856) was an Irish judge. He enjoyed, on the whole, a high reputation for impartiality and decency. While his critics called him "the notorious hanging Judge Torren ... showed that free trade would benefit the industrially weak as well as the strong, in the famous theory of comparative advantageThe law of comparative advantage describes how, under free trade, an agent will produce more of and consume less of a good for which they have a comparative advantage.
In an economic model
In economics, a model is a theory, theoretical construct .... In Principles of Political Economy and Taxation Ricardo advanced the doctrine still considered the most counterintuitive in economics
Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services.
: ''When an inefficient producer sends the merchandise it produces best to a country able to produce it more efficiently, both countries benefit.''
The ascendancy of free trade was primarily based on national advantage in the mid 19th century. That is, the calculation made was whether it was in any particular country's self-interest to open its borders to imports.
John Stuart Mill
John Stuart Mill (20 May 1806 – 7 May 1873), usually cited as J. S. Mill, was an List of British philosophers, English philosopher, Political economy, political economist, Parliament of the United Kingdom, Member of Parliament, and civil ser ... proved that a country with monopoly pricing power
Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods a ... on the international market could manipulate the terms of trade
The terms of trade (TOT) is the relative price of export
An export in international trade is a goods, good or Service (business), service produced in one country that is sold into another country. The seller of such goods and services is an ''expo ... through maintaining tariffs, and that the response to this might be Reciprocity (international relations), reciprocity in trade policy. Ricardo and others had suggested this earlier. This was taken as evidence against the universal doctrine of free trade, as it was believed that more of the economic surplus of trade would accrue to a country following ''reciprocal'', rather than completely free, trade policies. This was followed within a few years by the infant industry scenario developed by Mill promoting the theory that the government had the duty to protectionism, protect young industries, although only for a time necessary for them to develop full capacity. This became the policy in many countries attempting to industrialize and out-compete English exporters. Milton Friedman later continued this vein of thought, showing that in a few circumstances tariffs might be beneficial to the host country; but never for the world at large.
The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning Great Depression in the United States, in the United States. The timing of the Great Depression varied around the world; in mos ... was a major economic recession that ran from 1929 to the late 1930s. During this period, there was a great drop in trade and other economic indicators.
The lack of free trade was considered by many as a principal cause of the depression causing stagnation and inflation. Only during World War II did the recession end in the United States. Also during the war, in 1944, 44 countries signed the Bretton Woods Agreement, intended to prevent national trade barriers, to avoid depressions. It set up rules and institutions to regulate the international political economy: the International Monetary Fund and the International Bank for Reconstruction and Development (later divided into the World Bank $ Bank for International Settlements). These organizations became operational in 1946 after enough countries ratified the agreement. In 1947, 23 countries agreed to the General Agreement on Tariffs and Trade to promote free trade.
The European Union became the world's largest exporter of manufactured goods and services, the biggest export market for around 80 countries.
Today, trade is merely a subset within a complex system of Corporation, companies which try to maximize their profits by offering Product (business), products and Service (economics), services to the Market (economics), market (which consists both of individuals and other companies) at the lowest production cost. A system of international trade has helped to develop the world economy but, in combination with bilateral or multilateral agreements to lower tariffs or to achieve
Free trade is a trade policy
A commercial policy (also referred to as a trade policy or international trade policy) is a government's policy governing international trade
International trade is the exchange of capital, goods, and service ..., has sometimes harmed Third World, third-world markets for local products.
Free trade advanced further in the late 20th century and early 2000s:
* 1992 European Union lifted barriers to internal trade in good (economics), goods and labour (economics), labour.
* January 1, 1994 the North American Free Trade Agreement (NAFTA) took effect.
* 1994 The GATT Marrakech Agreement specified formation of the WTO.
* January 1, 1995 World Trade Organization was created to facilitate
Free trade is a trade policy
A commercial policy (also referred to as a trade policy or international trade policy) is a government's policy governing international trade
International trade is the exchange of capital, goods, and service ..., by mandating mutual most favored nation trading status between all signatories.
* EC was transformed into the European Union, which accomplished the Economic and Monetary Union (EMU) in 2002, through introducing the Euro, and creating this way a real single market between 13 member states as of January 1, 2007.
* 2005, the Central American Free Trade Agreement was signed; It includes the United States and the Dominican Republic.
Protectionism is the policy of restraining and discouraging trade between states and contrasts with the policy of free trade. This policy often takes the form of tariffs and restrictive Import quota, quotas. Protectionist policies were particularly prevalent in the 1930s, between the
The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning Great Depression in the United States, in the United States. The timing of the Great Depression varied around the world; in mos ... and the onset of World War II.
Islamic teachings encourage trading (and condemn usury or interest).
Judeao-Christian teachings not have a problem with trade, prohibit fraud and dishonest measures, and historically also forbade the charging of interest on loans.
Development of money
The first instances of money were objects with intrinsic value. This is called commodity money and includes any commonly available commodity that has intrinsic value; historical examples include pigs, rare seashells, whale's teeth, and (often) cattle. In medieval Iraq, bread was used as an early form of money. In the Aztec Empire, under the rule of Moctezuma II, Montezuma cocoa beans became legitimate currency.
Currency was introduced as standardised money to facilitate a wider exchange of goods and services. This first stage of currency, where metals were used to represent stored value, and symbols to represent commodities, formed the basis of trade in the Fertile Crescent for over 1500 years.
Numismatists have examples of coins from the earliest large-scale societies, although these were initially unmarked lumps of precious metal.
[Gold was an especially common form of early money, as described in #Davies2002, Davies (2002).]
The Doha round of World Trade Organization negotiations aimed to lower trade barrier, barriers to trade around the world, with a focus on making fair trade, trade fairer for developing countries. Talks have been hung over a divide between the rich developed countries, represented by the G20, and the major developing countries. Agricultural subsidies are the most significant issue upon which agreement has been the hardest to negotiate. By contrast, there was much agreement on trade facilitation and capacity building. The Doha round began in Doha, Qatar, and negotiations were continued in: Cancún, Mexico; Geneva, Switzerland; and Paris, France, and Hong Kong.
Beginning around 1978, the government of the People's Republic of China (PRC) began an experiment in economic reforms in China, economic reform. In contrast to the previous USSR, Soviet-style centrally planned economy, the new measures progressively relaxed restrictions on farming, agricultural distribution and, several years later, urban enterprises and labor. The more market-oriented approach reduced inefficiencies and stimulated private investment, particularly by farmers, which led to increased productivity and output. One feature was the establishment of four (later five) Special Economic Zones located along the South-east coast.
The reforms proved spectacularly successful in terms of increased output, variety, quality, price and demand. In real terms, the economy doubled in size between 1978 and 1986, doubled again by 1994, and again by 2003. On a real per capita basis, doubling from the 1978 base took place in 1987, 1996 and 2006. By 2008, the economy was 16.7 times the size it was in 1978, and 12.1 times its previous per capita levels. International trade progressed even more rapidly, doubling on average every 4.5 years. Total two-way trade in January 1998 exceeded that for all of 1978; in the first quarter of 2009, trade exceeded the full-year 1998 level. In 2008, China's two-way trade totaled US$2.56 trillion.
In 1991 China joined the Asia-Pacific Economic Cooperation group, a trade-promotion forum.
In 2001, it also joined the World Trade Organization.
International trade is the exchange of goods and services across national borders. In most countries, it represents a significant part of Gross Domestic Product, GDP. While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance have increased in recent centuries, mainly because of Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing.
Empirical evidence for the success of trade can be seen in the contrast between countries such as South Korea, which adopted a policy of export-oriented industrialization, and India, which historically had a more closed policy. South Korea has done much better by economic criteria than India over the past fifty years, though its success also has to do with effective state institutions.
Trade sanctions against a specific country are sometimes imposed, in order to punish that country for some action. An embargo, a severe form of externally imposed isolation, is a blockade of all trade by one country on another. For example, the United States has had an United States embargo against Cuba, embargo against Cuba for over 40 years. Embargoes are usually on a temporary basis. For example, Armenia put a temporary embargo on Turkish products and bans any imports from Turkey on December 31, 2020. The situation is prompted by food security concerns given Turkey's hostile attitude towards Armenia.
The "fair trade" movement, also known as the "trade justice" movement, promotes the use of Manual labour, labour, environmental movement, environmental and Social issues, social standards for the production of Commodity, commodities, particularly those exported from the Third World, Third and Second Worlds to the First World. Such ideas have also sparked a debate on whether trade itself should be codified as a human right.
Importing firms voluntarily adhere to fair trade standards or governments may enforce them through a combination of employment law, employment and commercial law. Proposed and practiced fair trade policies vary widely, ranging from the common prohibition of good (economics), goods made using slave labour to minimum price support schemes such as those for coffee in the 1980s. Non-governmental organizations also play a role in promoting fair trade standards by serving as independent monitors of compliance with labeling requirements.
As such, it is a form of Protectionism.
* (Covers sea-trading over the whole world from ancient times.)
* Rössner, Philipp
''Economy / Trade''
EGO - European History Online
Institute of European History
2017, retrieved: March 8, 2021
Resource material on trade by ACP countries
World Integrated Trade Solution provides summary trade statistics and custom query features
Preferential Trade Agreement Database