The History of International Trade

30/Jun/2023 | Admin

Trade is an activity in which people purchase or sell products or goods with each other. In trade, the main concept is human relationships. Humanity has been the World from past to present. Therefore trade is like that as well. People used the barter system before the invention of Money. Maybe they gave eggs to purchase apples. This event has occurred in local areas. So was there any international trade in the past? If so how was it? And how has international trade evolved throughout history? This essay will examine International Trade throughout history until the present.

History is started by the earliest written records or findings. We know that there was history before the written records and findings. We can see from the archaeological record that there was trade, war, and other exchanges1.  One of the earliest and most innovative civilizations was Summer.  Foreign trade was developed during the Uruk Period. (c. 4100-2900 BCE) Generally, Sumerians had trade communication with Egyptians, Assyrians, and near countries. Some scholars argue that Sumerians traded with regions as far away as China2. How did they control this long-distance trade between countries? They developed Cuneiform, which is a system of writing and alğhabetic script, to communicate between merchants. 

(Clay tablet, a summary account of silver and other commodities for the governor, c. 2500 BCE. By this stage of cuneiform writing, the reed strokes are fully wedge-shaped, and the writing could fully convey the Sumerian language. Probably from Shuruppak (Tell Fara), Iraq. British Museum.)

In ancient Mesopotamia, trade is like diplomatic dialogue. When we look at the Kadesh, which was a city in the region of Syria and an important center of trade in the ancient world. All cities sought to capture these territories but conflicts destroyed trade thus Egyptian and Hittites signed the Kadesh treaty to regulate trade roads and peace in the territory.

(Treaty of Kadesh)

A writing system, which is Cuneiform, developed by trade, some aspects that define civilization such as surplus food, a division of labor, urbanization, and government were enhanced by trade as well. For instance, the Akkadian bureaucracy eliminated the rivalry between city-states and standardized prices moreover improving roads because long-distance, which is international trade, was so important and instability affected this trade very easily. Archaeological evidence indicated that the drop in trade and economic decline during this, mismanaged affairs, drought, famine, and surplus grain could cause trade negatively.

In Mesopotamia, trade had to be safe therefore Hammurabi’s rules are distinguished in this period. Hammurabi regulated all trade conditions. Even the transportation system is saved by the ruler. According to the rule “If a man has hired a boat and boatman, and loaded it with corn, wool, olive oil, or dates, or whatever it be, and the boatman has been careless, and sunk the boat, or lost what is in it, the boatman shall restore the boat which he sank, and whatever he lost that was in it.3”

In Mesopotamia, Baghdad has significant importance. The city served trade routes that extended out into all around the world especially East and Sought East Asia, which is called Silk Road. Between Mesopotamia and the East, the relationship started with Ancient Mesopotamia, and the relationship continued until Medieval times (1400 and 1453). Silk Road is an important way to access the international market because it started in China and ended in West Roma.

Marco Polo is one of the most popular travelers and merchants of the Silk Road. He stayed in the Cathay dynasty and he served Kublai Khan as a foreign affairs and trade emissary.

The Silk Road did not bring only goods besides this some diseases such as Black Death, devastated from the East to the West.

The Silk Road had also some security problems. Merchants sought to cope with it. Thus they were hiring security guards and visiting caravanserai. These local places, which is a caravanserai, had crucial importance for traders. Caravanserai provided not only food and shelter but also an opportunity for merchants and others traveling to exchange goods, access local markets, and meet and interact with people from across the vast regions encompassed by the Silk Roads. By offering such an intercultural environment, caravanserai were important sites for the exchange of material culture, languages, and ideas4. Today, the Silk Road, which is discovered in parts, is listed on UNESCO’s World  Heritage List.

The importance of the Silk Road continued until the 1450s. At this time Ottoman Empire conquered Istanbul, which its old name was Kostantinapole, then the Ottoman captured the road and took some taxes from countries on the countries. These taxes decreased or increased the price of goods. Ottomans were taking these taxes, 5% on the Ottoman border (according to the goods), and finally, a 3% customs tax was paid in Bursa5, to control their regional power. On the other hand, the taxes affected other countries economically. Thus the Western sought to find a new road for International trade.

The 15th between 17th centuries were called the Age of Exploration. Ottoman had closed the world as economically. Europeans did not want to belong to Ottoman power and they need to achieve east to trade. But how to achieve the East? This question developed new rotas. 

The first exploration has started by the Portuguese. The first exploration was the Madeira Islands in 1419. Then they discovered the Azores in 1427. “Over the coming decades, they would push farther south along the African coast, reaching the coast of present-day Senegal by the 1440s and the Cape of Good Hope by 1490. Less than a decade later, in 1498, Vasco da Gama would follow this route to India.6”

The first aim was to find India to break Ottoman’s effects but these explorations brought Europeans to another world. This world is called the new world…

Spanish sailors prioritized discovering this world. They intended to find new trade routes to the Far East. Thus Christopher Columbus, who is an Italian working for the Spanish monarchy, started his first journey in 1492. His target was discovering India. According to historians, when he arrived on the island of San Salvador in what is known today as the Bahamas, he thought that this place is India. Moreover, he discovered the island of Hispaniola, home to modern-day Haiti and the Dominican Republic. His exploration started to open a door for the Spanish conquest of native Americas. These conquests brought some wealth, and knowledge to Europe. Thus Europeans broke Ottoman effects thanks to the new trade route.  

The Age of Exploration has crucial importance in today’s international trade. On the other hand, the Exploration abused the new world because the global slave trade had started at this time. After technological developments, permanent settlement, network communication, increased knowledge, and trade Europeans to travel easily across the globe by sea. Therefore these ended the age of exploration.

The most important things are that crops like maize, potatoes, tomatoes, and tobacco were introduced to the old world. Besides, new goods, such as cocoa, coffee, tea, and spices, were brought to Europe from colonies in Asia and the Americas. These new international trade routes increased wealth within Europe.

The world was discovered completely and new trade routes were discovered by explorations. Therefore, international trade needed to transform immediately. The new products occured therefore the new international trade should be considered as transportation and production.

Over time, the Industrial Revolution broke out. Because products and goods were not enough. In the 1780s, Manufacturers preferred to employ machines instead of human power thus, the shackles of the productive power of humans have been lifted. Economists called this the “take-off into self-sustained growth7”

At this time, there were plenty of advantages and advances in industrial and commercial. Some people argue that the British pioneered the revolution thanks to scientific and technological superiority. But that is wrong because, In the natural sciences, the French were ahead of the British.

In fact, According to Eric Hobsbawm, English education was a joke in poor taste and there was no system of primary education besides this, only rich people’s children could take education. The British were using practical information, for instance, even James Watt’s rotary steam engine did not require physics.  

So Why the Industrial Revolution is started in Britain? Because there are several reasons. Such as the protection of property and individual rights, the advance of bank and stock market sectors, strong ship transportation, and the distance of civil war (such as feudalism, wars, and sectarian fights.)

After the revolution, technology spread entire of the world. Thus Globalization has started. Globalization is becoming day by day. In Today’s world, you can communicate all around the world by phone. International trade is changed thanks to this growing up. In the 20th century, the internet occured. Firstly people could not trust to purchase something online but some companies such as Amazon or Alibaba changed this situation positively. Especially the B2B system, which means trade between two businesses, increased international trade. Although you do not have goods or products, you can trade to make dropshipping, which means providing goods or products by direct delivery from the manufacturer to the retailer or customer.

Trade is a liberal phenomenon. It should be free everywhere. Especially in the 20th and 21st centuries, some trade rules are regulated by countries such as duties, taxes, etc. Moreover, in the 21st century, data gained importance thus if you want to trade internationally, you should have some data about the target market.

Nowadays, this liberal phenomenon has trouble with realist words such as “strategy”, “intelligence”, etc. Because there is rivalry among companies, therefore, they need “strategy”, “intelligence”, or “data” to sell their goods or products. They called this concept “Foreign Trade Intelligence8”

As Uceconsult, we enhance our website in light of this information. We provide Strategy & Planning, Company Intelligence, Market Competition, Finance & Restructuring, and Insurance to our customers. We believe that historical and futuristic knowledge gives us some clues about our future. Throughout history, as you read, international trade is developed through technology, innovation, and communication therefore we are focusing on these three keywords.

Thank you for reading.

Muhammed Furkan UCE 

 

Notes:

1.   Adam Watson, The Evolution of International Society, the Taylor & Francis e-Library, 2002, p24.
2. Trade in Ancient Mesopotamia by Joshua J. Mark published on 22 November 2022
3. Hammurabi's Code of Laws (circa 1780 B.C.)
4. UNESCO - Caravanserai along the Silk Roads in the North of the Indian Subcontinent
5. CARAVANS ON THE SILK ROAD IN IRAN IN THE 15TH AND 16TH CENTURIES, Nilufer ALKAN 2006/2
6. A Brief History of the Age of Exploration by Amanda Briney
7. The Age of Revolution 1789-1848 by Eric Hobsbawm p28.
8. Foreign Trade Intelligence Channels by Yaman Koc