International trade policies: An evolutionary perspective

Cross-border trade has had a long history. It has enriched the lives of trading partners since the rise of ancient civilizations although it was the cause of some conflicts and even wars among trading partners; and between empires, colonies, and nation-states. It has increased cooperation due to harmony of interest between buyers and sellers, but occasionally has intensified rivalry, power-playing, destructive hegemonic impulses and cut- throat competition among neighbors. However, the fact that it has grown steadily through the centuries indicates that its impact on trading partners, near or distant, has been more positive than negative. One indicator of its growth, particularly in recent centuries and decades, is its size as a percentage of total world output. For example, exports, which constituted less than 5% of world GDP until the 1870s, grew to over 17% of world GDP by 1998, according to the World Bank, OECD, and WTO. This paper explores the rise of trade and changes in trade policies from the time of ancient civilizations to the present. It also examines some old and some recent trade disputes/wars. It adds to the literature by providing an overview of the foreign trade environment as well as trade patterns from different perspectives, particularly the perspectives of high versus low wage countries, the North versus the South.