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43-429: Trade is the voluntary exchange of goods, services, or both. Trade or trading may also refer to: Trade Traders generally negotiate through a medium of credit or exchange, such as money. Though some economists characterize barter (i.e. trading things without the use of money ) as an early form of trade, money was invented before written history began. Consequently, any story of how money first developed

86-433: A few circumstances tariffs might be beneficial to the host country; but never for the world at large. The Great Depression 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

129-636: A near-collapse of the trade network in the western world. Trade, however, continued to flourish among the kingdoms of Africa, the Middle East, India, China, and Southeast Asia. Some trade did occur in the west. For instance, Radhanites were a medieval guild or group (the precise meaning of the word is lost to history) of Jewish merchants who traded between the Christians in Europe and the Muslims of

172-463: A positive relationship between how well-connected a coastal location was and the local prevalence of archaeological sites from the Iron Age. This suggests that a location's trade potential was an important determinant of human settlements. The complaint tablet to Ea-nāṣir , dated 1750 BCE, documents the tribulations of a copper merchant at the time. From the beginning of Greek civilization until

215-402: Is also known as laissez-faire policy. This kind of policy does not necessarily imply because a country will then abandon all control and taxation of imports and exports. Free trade advanced further in the late 20th century and early 2000s: History of international trade This is a timeline of the history of international trade which chronicles notable events that have affected

258-575: Is deeply bound up in trade, as a system of clay tokens used for accounting – found in Upper Euphrates valley in Syria dated to the 10th millennium BCE – is one of the earliest versions of writing. Ebla was a prominent trading center during the third millennia BCE, with a network reaching into Anatolia and north Mesopotamia. Materials used for creating jewelry were traded with Egypt since 3000 BCE. Long-range trade routes first appeared in

301-536: Is derived from the Latin commercium , from cum "together" and merx , "merchandise." Trade originated from human communication in prehistoric times. Prehistoric peoples exchanged goods and services with each other in a gift economy before the innovation of modern-day currency. Peter Watson dates the history of long-distance commerce to c.  150,000 years ago. In the Mediterranean region,

344-409: Is mostly based on conjecture and logical inference. Letters of credit , paper money , and non-physical money have greatly simplified and promoted trade as buying can be separated from selling , or earning . Trade between two traders is called bilateral trade , while trade involving more than two traders is called multilateral trade . In one modern view, trade exists due to specialization and

387-744: The Bengal Sultanate was a major trading nation in the world and often referred to by Europeans as the wealthiest country with which to trade. In the 16th and 17th centuries, the Portuguese gained an economic advantage in the Kingdom of Kongo 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 , in Kongo "giving more than receiving

430-684: The Great Depression of the 1930s. Trade openness increased substantially again from the 1950s onward (albeit with a slowdown during the oil crisis of the 1970s ). Economists and economic historians contend that current levels of trade openness are the highest they have ever been. Trade is from Middle English trade ("path, course of conduct"), introduced into English by Hanseatic merchants, from Middle Low German trade ("track, course"), from Old Saxon trada ("spoor, track"), from Proto-Germanic *tradō ("track, way"), and cognate with Old English tredan ("to tread"). Commerce

473-703: The Venetian Republic and the Republic of Genoa 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 Vikings and Varangians traded as they sailed from and to Scandinavia. Vikings sailed to Western Europe, while Varangians to Kyivan Rus' . The Hanseatic League

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516-707: The division of labor , a predominant form of economic activity in which individuals and groups concentrate on a small aspect of production, but use their output in trade for other products and needs. Trade exists between regions because different regions may have a comparative advantage (perceived or real) in the production of some trade-able goods – including the production of scarce or limited natural resources elsewhere. For example, different regions' sizes may encourage mass production . In such circumstances, trading at market price between locations can benefit both locations. Different types of traders may specialize in trading different kinds of goods; for example,

559-490: The 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 , has sometimes harmed third-world markets for local products. Free trade is a policy by which a government does not discriminate against imports or exports by applying tariffs or subsidies. This policy

602-401: The spice trade and grain trade have both historically been important in the development of a global, international economy. Retail trade consists of the sale of goods or merchandise from a very fixed location (such as a department store , boutique , or kiosk ), online or by mail , in small or individual lots for direct consumption or use by the purchaser. Wholesale trade is

645-405: The terms of trade through maintaining tariffs , and that the response to this might be 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

688-715: The 3rd millennium BCE, when Sumerians in Mesopotamia traded with the Harappan civilization of the Indus Valley . The Phoenicians were noted sea traders, traveling across the Mediterranean Sea , and as far north as Britain for sources of tin to manufacture bronze . For this purpose they established trade colonies the Greeks called emporia . Along the coast of the Mediterranean, researchers have found

731-811: The Atlantic and the Pacific Oceans. In 1776, Adam Smith published the paper An Inquiry into the Nature and Causes of the Wealth of Nations . It criticized Mercantilism , and argued that economic specialization could benefit nations just as much as firms. Since the division of labour 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 . Smith said that he considered all rationalizations of import and export controls "dupery", which hurt

774-560: The Caribbean. During the Middle Ages , commerce developed in Europe by trading luxury goods at trade fairs. Wealth became converted into movable wealth or capital . 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

817-741: The Near East. The first true maritime trade network in the Indian Ocean was by the Austronesian peoples of Island Southeast Asia . Initiated by the indigenous peoples of Taiwan and the Philippines , the Maritime Jade Road was an extensive trading network connecting multiple areas in Southeast and East Asia. Its primary products were made of jade mined from Taiwan by Taiwanese indigenous peoples and processed mostly in

860-575: The Philippines by indigenous Filipinos, especially in Batanes , Luzon , and Palawan . Some were also processed in Vietnam , while the peoples of Malaysia , Brunei , Singapore , Thailand , Indonesia , and Cambodia also participated in the massive trading network. The maritime road is one of the most extensive sea-based trade networks of a single geological material in the prehistoric world. It

903-476: The Stone Age by excavations in 1901. The first clear archaeological evidence of trade in manufactured goods is found in south west Asia. Archaeological evidence of obsidian use provides data on how this material was increasingly the preferred choice rather than chert from the late Mesolithic to Neolithic, requiring exchange as deposits of obsidian are rare in the Mediterranean region. Obsidian provided

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946-479: 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 companies which try to maximize their profits by offering products and services to

989-410: The doctrine still considered the most counterintuitive in economics : 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 proved that a country with monopoly pricing power on the international market could manipulate

1032-695: The earliest contact between cultures involved members of the species Homo sapiens , principally using the Danube river, at a time beginning 35,000–30,000 BP . There is evidence of the exchange of obsidian and flint during the Stone Age . Trade in obsidian is believed to have taken place in New Guinea from 17,000 BCE. The earliest use of obsidian in the Near East dates to the Lower and Middle paleolithic. Robert Carr Bosanquet investigated trade in

1075-533: The east–west trade route known as the Silk Road after the 4th century CE up to the 8th century CE, with Suyab and Talas ranking among their main centers in the north. They were the main caravan merchants of Central Asia. From the Middle Ages, the maritime republics , in particular Venice , Pisa and Genoa , played a key role in trade along the Mediterranean. From the 11th to the late 15th centuries,

1118-608: The fall of the Roman Empire in the 5th century, a financially lucrative trade brought valuable spice to Europe from the far east, including India and China. Roman commerce allowed its empire to flourish and endure. The latter Roman Republic and the Pax Romana of the Roman empire produced a stable and secure transportation network that enabled the shipment of trade goods without fear of significant piracy , as Rome had become

1161-550: The first millennium AD. It continued up to historic times, later becoming the Maritime Silk Road. 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 . There is evidence of established maritime trade with the cultures of northwestern South America and

1204-406: The main carrier 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 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. The Sogdians dominated

1247-601: The material cultures of India and China. Indonesians , in particular were trading in spices (mainly cinnamon and cassia ) with East Africa using catamaran and outrigger boats and sailing with the help of the Westerlies in the Indian Ocean. This trade network expanded to reach as far as Africa and the Arabian Peninsula , resulting in the Austronesian colonization of Madagascar by the first half of

1290-461: The material to make cutting utensils or tools, although since other more easily obtainable materials were available, use was exclusive to the higher status of the tribe using "the rich man's flint". Obsidian has held its value relative to flint. Early traders traded Obsidian at distances of 900 kilometres within the Mediterranean region. Trade in the Mediterranean during the Neolithic of Europe

1333-463: 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 from West African states as part of the triangular trade . This was often in exchange for cloth , iron , or cowrie shells which were used locally as currency. Founded in 1352,

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1376-866: 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

1419-468: The sole effective sea power in the Mediterranean with the conquest of Egypt and the near east. In ancient Greece Hermes was the god of trade (commerce) and weights and measures. In ancient Rome, Mercurius was the god of merchants, whose festival was celebrated by traders on the 25th day of the fifth month. The concept of free trade was an antithesis to the will and economic direction of

1462-428: The sovereigns of the ancient Greek states. Free trade between states was stifled by the need for strict internal controls (via taxation) to maintain security within the treasury of the sovereign, which nevertheless enabled the maintenance of a modicum of civility within the structures of functional community life. The fall of the Roman empire and the succeeding Dark Ages brought instability to Western Europe and

1505-555: The trading nation as a whole for the benefit of specific industries. In 1799, the Dutch East India Company , formerly the world's largest company, became bankrupt , partly due to the rise of competitive free trade. In 1817, David Ricardo , James Mill and Robert Torrens showed that free trade would benefit the industrially weak as well as the strong, in the famous theory of comparative advantage . In Principles of Political Economy and Taxation Ricardo advanced

1548-448: The traffic in goods that are sold as merchandise to retailers , industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services. Historically, openness to free trade substantially increased in some areas from 1815 until the outbreak of World War I in 1914. Trade openness increased again during the 1920s but collapsed (in particular in Europe and North America) during

1591-682: Was a symbol of spiritual and political power and privilege." In the 16th century, the Seventeen Provinces were the center of free trade, imposing no exchange controls , and advocating the free movement of goods. Trade in the East Indies was dominated by Portugal in the 16th century, the Dutch Republic in the 17th century, and the British in the 18th century. The Spanish Empire developed regular trade links across both

1634-623: Was an alliance of trading cities that maintained a trade monopoly over most of Northern Europe and the Baltic , between the 13th and 17th centuries. Portuguese explorer Vasco da Gama pioneered the European spice trade in 1498 when he reached Calicut after sailing around the Cape of Good Hope at the southern tip of the African continent. Prior to this, the flow of spice into Europe from India

1677-570: Was controlled by Islamic powers, especially Egypt. The spice trade was of major economic importance and helped spur the Age of Discovery in Europe. Spices brought to Europe from the Eastern world were some of the most valuable commodities for their weight, sometimes rivaling gold . From 1070 onward, kingdoms in West Africa became significant members of global trade . This came initially through

1720-416: Was followed within a few years by the infant industry scenario developed by Mill promoting the theory that the government had the duty to 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

1763-498: Was greatest in this material. Networks were in existence at around 12,000 BCE Anatolia was the source primarily for trade with the Levant, Iran and Egypt according to Zarins study of 1990. Melos and Lipari sources produced among the most widespread trading in the Mediterranean region as known to archaeology. The Sari-i-Sang mine in the mountains of Afghanistan was the largest source for trade of lapis lazuli . The material

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1806-692: Was in existence for at least 3,000 years, where its peak production was from 2000 BCE to 500 CE, older than the Silk Road in mainland Eurasia and the later Maritime Silk Road . The Maritime Jade Road began to wane during its final centuries from 500 CE until 1000 CE. The entire period of the network was a golden age for the diverse societies of the region. Sea-faring Southeast Asians also established trade routes with Southern India and Sri Lanka as early as 1500 BC, ushering an exchange of material culture (like catamarans , outrigger boats , sewn-plank boats, and paan) and cultigens (like coconuts , sandalwood , bananas , and sugarcane ); as well as connecting

1849-560: Was most largely traded during the Kassite period of Babylonia beginning 1595 BCE. Adam Smith traces the origins of commerce to the very start of transactions in prehistoric times. Apart from traditional self-sufficiency , trading became a principal faculty for prehistoric people, who bartered what they had for goods and services from each other. Anthropologists have found no evidence of barter systems that did not exist alongside systems of credit. The earliest evidence of writing in

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