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Trade Background and Theories

By Poou0911
  • 3500 BCE

    END OF NEOLITHIC

    END OF NEOLITHIC
    Beginning of the trade with the discovery of the agriculture. This was a subsistence agriculture which means that the harvests obtained were enough for the agricultural population. The harvests surplus started to be exchanged for others products like: defensive weapons, amphoras, mirrors, jewelry; but also scientific and technological innovations.
  • 1800 BCE

    Century XVII- XVIII

    Century XVII- XVIII
    • The rulers discovered that by promoting foreign trade they could increase wealth and, therefore, the power of their country.
    • New economic theories related to international trade appeared.
    . In the 90s there was a great boom with the incorporation of the Latin American and Eastern European economies.
  • 1700 BCE

    Century XVI

    Century XVI
    Trade became an instrument of imperialist politic. The wealth of a country was measured by the amount of precious metals it had, especially: gold and silver.
  • 1700 BCE

    Stages of international Trade

    Stages of international Trade
    Tanames in his book "International Economic Structure" points out that from the sixteenth century to present times, four stages are distinguished: 1) Mercantilism
    2) Free Trade
    3) Bilateralism
    4) Multilateralism
  • 1700 BCE

    Mercantilism

    Mercantilism
    It was the first stream of thought that dealt with international trade during the transition from feudal economy to the commercial capitalist economy. Ideas:
    1)The prosperity of a nation or state depends on the capital it may have.
    2)Nationalist doctrine.
    3) The state plays an important role in directing and implementing economic policy.
    4)It favors the export and put at disadvantage to the importation, mainly by the imposition of taxes.
    5) Numerous population: cheap labor

  • Free Trade

    Free Trade
    Industrial Revolution: stage of decreasing trade restrictions. Economic relations lead to unhindered and unimpeded international trade in the movement of goods and productive resources such as capital and labor.

  • Bilateralism

    Bilateralism
    Trade is covered by agreements or conventions that establish restrictions and rights to the exchange of products between one country and other, excluding the others.
    - Restricts the trade of the nations involved, preventing the free flow of goods and, therefore, the benefits of international specialization.
    - Contrary to multilateralism or free trade.
    - It has prevailed ultil now, although in recent years the negotiations have manifested themselves in a phenomenon known as Globalization.

  • Multiteralism

    Multiteralism
    Trade among many countries, not restricted by bilateral preference agreements.
    It allows the comparative advantages of international trade to operatebecause buyers can choose the suppliers that offer the lowest prices or better quality, and export their products where there is demand for them.

  • GATT

    It arises from the need to establish a set of trade rules and tariff concessions. The GATT was part of the plan for regulating the world economy after the Second World War, which included reducing tariffs and other barriers to international trade.
    It is considered as the precursor of the World Trade Organization.