Global Trade Networks

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.

Fig. 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 3^rd 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 13^th 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.

Fig. 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.

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.

Fig. 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.

Fig. 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.

Fig. 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.