Trade Is Also Called Commerce

Category: Finance.

International organizations.

GATT= General Agreement on Tariffs and Trade. European Common Market. G8. OPEC= Organization of the Petroleum Exporting Countries. IMF= International Monetary Fund. Basically trade means exchange of goods, or both, services.

The actual face of trade was barter, which was the direct exchange of goods and services. Trade is also called commerce. Today traders generally negotiate through a medium of exchange, which then makes, like money buying separate from selling, or earning. Trade between two traders is called bilateral trade, while trade between more than two traders is called multilateral trade. The invention of money has made trade simpler. Trade exists for many reasons.

Trade exists between regions because different regions have a comparative advantage in the production of some tradable commodity, or because different regions size helps getting benefits of mass production. It can be due to specialization and division of labor. History of Trade: Trade originated in prehistoric times. Peter Watson dates the history of long- distance commerce from circa 150, 000 years ago. It was the main facility of prehistoric people, who bartered goods and services from each other when modern money was never even thought of. Trade is believed to have taken place throughout much of recorded human history. Long- distance trade routes first appeared in the 3rd millennium BC, by the Sumerians in Mesopotamia when they traded with the Harappan civilization of the Indus Valley.

Materials used for the creation of jewelry were traded with Egypt since 3000 BC. Trading is greatly important to the global economy. The fall of the Roman Empire, and the succeeding Dark Ages brought insecurity to Western Europe and a near end of the trade network. 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. However some trade did occur, the Radhanites were a medieval group of Jewish merchants who traded between the Christians in Europe and the Muslims of the Near East. The Vikings and Varangians also traded from the 8th to the 11th century as they sailed from and to Scandinavia.

The Sogdians ruled the East- West trade route known as the Silk Road from the end 4th century AD to the 8th century AD. Vikings sailed to Western Europe, while Varangians to Russia. The spice trade was of major economic importance and helped encourage the Age of Exploration. Vasco da Gama restarted the European Spice trade in 149Earlier to his sailing around Africa, the flow of spice into Europe was controlled by Islamic powers, especially Egypt. Spices brought to Europe from distant lands were some of the most valuable commodities for their weight, sometimes rivaling gold. In 1776, Adam Smith published the paper" An Inquiry into the Nature and Causes of the Wealth of Nations" . In the 16th century, Holland was the centre of free trade, imposing no exchange controls, and advocating the free movement of goods.

This paper criticized Mercantilism, and argued that economic specialization could benefit nations just as much as firms. The Great Depression was a major economic collapse that ran from 1929 to the late 1930s. Since that time the division of labor was restricted by the size of the market, he said that countries having access to larger markets would be able to divide labor more efficiently and thereby become more productive. There was a great setback in trade and other economic indicators during this period. Only during the World War II the recession ended in United States. The lack of free trade was considered by many as a root cause of the depression. History of Money: The first instances of money were objects with fundamental value are called commodity money and includes any commonly- available commodity that has intrinsic value.

In medieval Iraq, bread was used as an early form of money. Historical examples include rare seashells, whale s teeth, and cattle. Roman denarius Currency was introduced as a standardized money to facilitate a wider exchange of goods and services. As the system of commodity money evolved in many instances it then became representative money. This first stage of currency metals were used to represent stored value. Current Trends: Doha round. Talks have been hung over a divide between the rich, and the major, developed countries developing countries.

The Doha round of World Trade Organization negotiations aims to lower barriers to trade around the world, focusing on making trade fairer for developing countries. Agricultural subsidies are the most significant issue upon which agreement has been hardest to negotiate. The Doha round began in Doha, and negotiations has, Qatar subsequently continued in: Canc�n, Mexico. By contrast, there was much agreement on trade facilitation and capacity building. Geneva, Switzerland. And Paris, France and Hong Kong.