Global Trade Networks

Global trade networks create cultural and political connections between countries from all over the world and promote the development of higher standards of living, wealth, job opportunities, and more. In the Middle Ages, Europe was transitioning from a medieval agricultural economy to one based on interregional trade, in turn helping to develop large urban centers. Because of this process, a commercial revolution began that would completely change medieval society! 

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Table of contents

    Global Trade Networks Meaning

    The definition of global trade is the exchange of products between international borders. Also known as "international trade", global trade works through a system of supply chains between the countries that source raw materials. Such materials manufacture the raw materials and later the consumer nation. The products involved in international trade can be identified as either imports or exports; imports are products received by the local nation, while exports are products sold to a foreign nation.

    During the Middle Ages, connections between Europe, Africa, Arabia, and Asia promoted the trading of silk, spices, animal skins, ivory, gold, and precious gemstones, as well as encouraging the exchanges of knowledge, religion, and languages!

    Global Trade Networks Map of Medieval Trade Routes StudySmarterFig. 1 - Map of Medieval Trade Routes

    While making civilizations extremely rich, global trade also brought many negative consequences. For example, differences in religious views caused the Crusades between Christians and Muslims from 1096 to 1291 and the outbreak of the Black Plague from 1346 to 1353, both amounting to a massive loss of life.

    Global Trade Networks Importance

    International trade is vital to reducing poverty, as it can create various job opportunities. Countries participating in global trade often grow faster and rapidly improve their productivity and innovation. This is because global trade leads to the developing of new industries to meet other countries' demands.

    Global trade can also lead to developing and establishing peace between countries. Trade can create understanding, cooperation, and cordial relationships among multiple countries because when people come into contact with each other, the commercial mixing between them promotes the exchange of culture and ideas.

    Indian Ocean trade routes were incredibly peaceful before the arrival of Europeans in the late 15th and early 16th centuries. Port cities were tolerant of different religions and languages and could function amongst each other without the routes being controlled by a singular nation. This enabled the growth of healthy business relationships and generated wealth for all those involved.

    Global Trade Networks Austronesian maritime trade network in the Indian Ocean StudySmarterFig. 2 Austronesian maritime trade network in the Indian Ocean

    The Beginning of Global Trade Networks & Effects

    In the early Middle Ages, trade in Europe continued (to a certain extent) as it had under the Roman Empire, shipping products from one end of the Mediterranean to the other through its branching rivers and waterways. The Mediterranean Sea has been essential for exchanging goods, ideas, and people since the 3rd millennium BCE! Using the sea-based routes, it connected Southern Europe, the Levant, North Africa, the Atlantic Ocean (to bring goods around western Europe and into the north), and Turkey in the East, which connected trade to Asia.

    Referred to as the “Mediterranean Sea Trade Complex”, it allowed for the merging and diffusing world cultures, unlike the Silk Roads, which indirectly excluded Africa and Europe. From ancient and medieval times, merchants of the Mediterranean Sea unknowingly lead one of the most critical moments of globalization in history!

    Medieval Trade Fairs

    By 1200, as Europe was moving from agricultural economies into interregional trade, it gradually became impossible to upkeep the previous economic structure (feudalism). Gangs and bandits consistently attacked small, unguarded farms and merchant caravans, aiding in the decline of urban and trade life.

    The Crusades then reintroduced spices, silk, and perfume into European society, allowing them to use the spices to preserve and flavor their foods. This, along with growing population pressure and agricultural output, led to the revitalization of trade in Western Europe.

    By the end of the 13th century, the increase in trade and manufacturing led to a sharp urban population growth, evident in the establishment of trading & manufacturing centers in Northern Italy and Northwest France.

    The implementation of more sea-based trade (specifically in the Baltic and North Seas) led to the “Hanseatic League,” where merchants would establish Trade Fairs along the trade routes. Other business owners would take advantage of these fairs and build inns, stables, and banking institutions for those who attended. New, bustling cities flowered as a result of this economic activity. Most of these cities would boast independent status, as leaders knew it was an advantage to allow significant amounts of freedom to its inhabitants.

    Global Trade Networks Main trading routes of the Hanseatic League in northern Europe StudySmarterFig. 3 - Main trading routes of the Hanseatic League in northern Europe

    This new environment was based solely on talent and initiative, and success was not based on what family you were born into. This structure began to pull apart traditional medieval society and create a flourishing middle class. The political philosophy of Democratic Capitalism would continue to reorder European society and create an environment in which individual talent and initiative could thrive like never before.

    The Hanseatic League was a German commercial and defensive group of merchant guilds and market towns in Central and Northern Europe. It was formed to protect mutual interests, such as preventing piracy and banditry, and created a standard legal system that governed merchants and their goods.

    Trade Fairs could be as expansive as a small city, with shops built in rows and streets. Shops were named either after the region in which their goods came from or the name of the goods they were selling so that it was easy for customers to find exactly what they wanted.

    Global Trade Network Examples

    The Silk Roads

    Lasting from the 1st century BC to the 5th century BC and the 13th-14th centuries AD, the Silk Roads transported luxury goods from China into empires of the Eurasian continent. This was the first time trade had become global rather than local or regional.

    The Silk Roads carried silk from China, glass from Egypt, Saffron from Persia, and Sandalwood from India (to name a few) and united many empires through these exchanges. When the empires protected the trade routes, trade and economies flourished. When the empires collapsed, so did the trade routes.

    Global Trade Networks The Spread of Manichaeism along the Silk Road StudySmarterFig. 4 The Spread of Manichaeism along the Silk Road

    After centuries of trade, the Silk Roads closed due to Islamic empires (such as the Ottoman) cutting off trade with the West. However, the Silk Roads were reborn in the 13th-14th centuries with the rise of a new empire; the Mongols.

    The Spice Routes

    Active from the 7th-15th centuries, Islamic merchants are responsible for the next chapter of global trade. By the early 9th century, Muslim merchants dominated the Mediterranean and Indian Ocean trade and could later be found as far East as Indonesia and as far West as Moorish Spain.

    Global Trade Networks Islamic Merchants illustration StudySmarterFig. 5 Islamic Merchants illustration

    The main focus of trade was no longer silk but now spices. Unlike silk, spices were traded mainly by sea rather than by land, as the most desired spices were from the Maluku Islands of Indonesia. However, like silk, spices were considered a luxury goods and not traded in high volumes.

    Though this is still not technically globalized trade, it created solid routes between the East and West, the world they knew it to be at the time.

    Indian Ocean Trade Routes

    The height of the Indian Ocean trade was within the medieval era of 1200-1450 and connected Asia, Southeast Asia, India, Arabia, and the East Coast of Africa. Primarily dominated by Islamic merchants, Indian Ocean trade routes transported ivory, spices, porcelain, timber, gemstones, and multiple cultures and languages.

    Global Trade Networks Ships on the Red Sea StudySmarterFig. 6 Ships on the Red Sea

    Until the arrival of the Portuguese in 1498 under the command of Vasco de Gama, Indian Ocean trade had thrived under the protection of merchant guilds (organizations centered around commerce). However, with the implementation of Portuguese power and the Dutch and English East India Companies, later on, Europe was forcefully brought into the Indian Ocean trade scene.

    Advantages of the Global Trade Network

    • People can exchange products, cultures, and knowledge through global trade.
    • Nations can generate income from their products through global trade.
    • Global trade promotes peace and understanding between nations.
    • Global trade allows access to products that are not indigenous to every part of the world, allowing people to diversify their available goods and services.

    Disadvantages of the Global Trade Network

    • Competitiveness, jealousy, and cultural differences in global trade can lead to violence and misunderstandings between nations.
    • In the past, global trade has occasionally led to the spread of disease and sickness.
    • Global trade can enhance the exploitation of workers due to high demands.

    Global Trade Networks - Key takeaways

    • Also known as "International Trade," Global Trade works through a system between the countries that source raw materials, the ones that manufacture the raw materials, and finally, the consumer nation.
    • Global trade networks promote cultural and political connections, can increase wealth and job opportunities, and can supply products to places that it is not indigenous.
    • By 1200, Europe was moving from agricultural economies into interregional trade.
    • By the end of the 13th century, the increase in trade and manufacturing led to sharp urban population growth and a flourishing middle class. This was the first time success depended on talent and initiative, not what family you were born into.
    Frequently Asked Questions about Global Trade Networks

    What is a trade network?

    Trade is the transferring of goods and services from one entity or person to another. Trade networks consist of a complex of enterprises that participate in the sale of goods and services to the population, as well as ensure the supply of said goods and services to trading organizations. 

    What were the advantages of a global trade network?

    The advantages of global trade networks were 

    1. The discovery of new goods, products, people, and cultures. 
    2. The number of jobs that were available expanded.
    3. It promoted international and domestic investments. 
    4. It could often improve the quality of what was produced, as external forces often demanded high standards. 

    What were the beginnings of global trading networks?

    The Silk Roads, the Spice Routes, and the Age of Discovery could all apply to the foundations of global trade networks. Though not considered by historians to be the true beginning of completely global trade, the people of these time periods traded with the “full globe” as they knew it to be. The official beginning of global trade is considered to be during the First Wave of Globalization from the 19th century – 1914, accompanying the era of the First Industrial Revolution. 

    What is the history of the global trade network?

    The history of global trade (with the globe as people knew it) has lasted for approximately 8,000 years. The desire for goods from distant lands has always driven the development of complex, international trade networks. The official starting point of global trade is during the First Wave of Globalization & First Industrial Revolution of the 19th century – 1914. 

    Test your knowledge with multiple choice flashcards

    In the Middle Ages, Europe was in the process of transitioning from a medieval agricultural economy, to one that was based on interregional trade.

    The definition of global trade is the exchange of products between international borders. 

    The Mediterranean Sea had not been an important aspect for the exchange of goods, ideas, and people. 


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