History of
International Trade
LESSON 1
Let’s guess…
 FORM
 GET
GROUPS OF THREE MEMBERS.
A PIECE OF PAPER.
 LIST
DOWN FIVE COUNTRIES WHICH YOU
THINK ARE TRADE PARTNERS OF THE
PHILIPPINES.
 LIST
DOWN FIVE EXPORT COMMODITIES OF
THE PHILIPPINES.
LET’S CHECK…
Top Trading Partners of the
Philippines
1.
United States
2. Japan
3. Hong Kong
4. China
5. Germany
6. Holland
7. Singapore
8. South Korea
Major Export Commodities of the Philippines
 Transport Equipment
 Garments
 Fruits
 Coconut Oil
 Petroleum Products
 Copper Products
 Electronic Products
Learning Outcomes
1)
Explain how international business and
trade started and progressed
2)
Determine the importance of
International business and trade to
entrepreneurship
OUTLINE:

HISTORY OF INTERNATIONAL TRADE
 ANCIENT
TRADE ROUTES
 CLASSICAL
 MEDIEVAL
TRADE ROUTES
 COLONIAL
 MODERN
TRADE ROUTES
TRADE ROUTES
INTERNATIONAL TRADE
What is Trade?
Trade means exchange of goods,
services, or both.
 Trade is also called commerce.

Trading is greatly important to the
global economy.
 Trade is a boon for human
interaction, bringing cross-cultural
contact to a whole new level.

What is International Trade?
 THE
EXCHANGE
OF GOODS &
SERVICES
BETWEEN
COUNTRIES.
+ JOBS
+ CONSUMPTION
+ THE FIGHT AGAINST POVERTY
+ ENVIRONMENTAL ISSUES
+ NATURAL RESOURCES
+ FASHION
Origin of Trade
 Trade
originated in
prehistoric times.
 It
was the main facility of
prehistoric people, who
bartered goods and
services from each other.
Ancient Trade
There
is evidence
of the exchange
of obsidian and
flint during the
Stone Age.
Ancient Trade Routes

Materials used for creating
jewelry were traded with
Egypt since 3000 BCE.

Historians believe, the first
long-distance trade occurred
between Mesopotamia and
the Harappan civilization of
Indus Valley around 3000 BC.
Ancient Trade Routes

In the absence of proper roads, the most
efficient way to transport goods from one
place to another was by sea.

The first and most extensive trade networks
were actually waterways like the Nile, the
Tigris and the Euphrates in present-day Iraq
and the Yellow River in China.

Cities grew up in the fertile basins on the
borders of those rivers and then expanded
by using their watery highways to import and
export goods.
Ancient Trade Routes
 The
domestication of camels
around 1000 BC helped
encourage trade routes over
land, called caravans, and
linked India with the
Mediterranean.
Classical Age Trade Routes
THE SILK ROAD

From the very beginning of Greek
civilization to the fall of the Roman Empire
in the 5th century, a financially worthwhile
trade brought valuable spice to Europe
from the Far East, including China.

The Sogdians ruled the East-West trade
route known as the Silk Road from the
end 4th century AD to the 8th century AD.

The Silk Road was originally opened up by
Zhang Qian, and it gradually formed in
the Han Dynasty (206 BC-220 AD).
Trade Routes of the Middle Ages

The fall of the Roman Empire, and the
succeeding Dark Ages brought insecurity to
Western Europe and a near end of the trade
network.
VIKING AND VARANGIAN TRADE ROUTES

The Vikings and Varangians traded from the
8th to the 11th century as they sailed from
and to Scandinavia.
 Vikings
sailed to Western Europe.
 Varangians
sailed to Russia.
VARANGIAN TRADE ROUTES
Trade Routes of the Middle Ages
SRI VIJAYAN TRADE ROUTES

Srivijaya empire was
a maritime and commercial
kingdom that flourished between
the 7th and the 13th centuries,
largely in what is now Indonesia.

Srivijaya’s power was based on its
control of international sea trade. It
established trade relations not only
with the states in the Malay
Archipelago but also
with China and India.
Trade Routes of the Middle Ages
OTTOMAN EMPIRE TRADE ROUTES

The Ottoman Empire trade
routes grew from the narrow
streets of Anatolia (Turkey) to the
Silk Road.

The Ottomans most famously
traded silk, furs, cotton, spices
and tobacco. They also imported
glassware, gunpowder and
medicines.
Colonial Trade Routes
SPICE TRADE ROUTE

Vasco da Gama restarted the
European Spice trade in 1498.

Earlier to his sailing around Africa,
the flow of spice into Europe was
controlled by Islamic powers,
especially Egypt.

It was monopolized by Spain and
Portugal from 15th to 17th century.
Colonial Trade Routes
MANILA TO ACAPULCO GALLEON TRADE
 Manila galleon, Spanish sailing vessel that made an annual round
trip (one vessel per year) across the Pacific between Manila
and Acapulco, in present Mexico, during the period 1565–1815.
 The galleon brought porcelain, silk, ivory, spices, and myriad other
exotic goods from China to Mexico in exchange for New World
silver.
Colonial Trade Routes
BRITISH EAST INDIA COMPANY

The British East India
Company was a private
corporation formed in
December 1600 to establish a
British presence in the lucrative
Indian spice trade.
Colonial Trade Routes
DUTCH EAST INDIA COMPANY

Dutch East India Company (Vereenigde
Oost-Indische Compagnie) was a trading
company founded in the Dutch
Republic (present-day Netherlands) in 1602
to protect that state’s trade in the Indian
Ocean and to assist in the Dutch war of
independence from Spain.

The company prospered through most of the
17th century as the instrument of the
powerful Dutch commercial empire in
the East Indies (present-day Indonesia).

It was dissolved in 1799.
Colonial Trade Routes
FREE TRADE AGREEMENT BETWEEN
FRANCE AND BRITAIN

When he became emperor in 1852,
Napoléon III found that leading industrialists
staunchly defended protectionist trade
laws, fearing that without them they would
lose market share to foreign competition.

After consolidating power, he assigned
Michel Chevalier to undertake secret
negotiations with the British to dramatically
reduce trade barriers.

The result, the Cobden-Chevalier Treaty of
1860, was "a watershed in the history of
modern international trade."
MODERN INTERNATIONAL TRADE

GATT was designed by the
UN in 1946 aimed to
increase trade by tariff
reduction.

Later, World Trade
Organization (WTO) was
established in 1995, (global
international organization
dealing with the rules of
trade between nations).
Developments in Trade

The invention of money has
made trade simpler.

Today traders generally
negotiate through the
medium of exchange, like
money, which then makes
buying separate from selling,
or earning.
Developments in Trade
 As
transportation has
become increasingly
less expensive and
telecommunications
have improved, hence
international trade has
flourished.
References:

Dominick Salvatore, International Economics,
John Wiley & Sons Inc., 2004.

Krugman,Paul R. and Obstfeld, Maurice
(2005).International Economics: Theory and
Policy,7th edition, Boston: Addison-Wesley.