History of Trade

By BWA Envoy
February 15, 2022
2 Minutes Read

What do we understand by trade? The action of buying and selling in return for consideration is called trade. It is classified into two types – Domestic Trade and International Trade. Trade within the national borders is referred to as Domestic Trade whereas, trade across international borders, between two or more countries, is called International Trade.

Trade traces back to pre-historic times when people traded goods and services in exchange for other goods or services. This system came to be known as the “Barter” system. Barter involved the exchange of goods and services for other goods and services without the need for a medium of exchange – monetary or otherwise.

Peter Watson, a distinguished British historian, found references to long-distance trade almost 150,000 years ago. Trade seems to have begun in Southwest Asia during the Stone Age. Since then, trade has evolved into a robust, ever-changing industry. Eventually, commerce and the introduction of a medium such as currency aided its growth. Freely convertible foreign currency and exchange rates also facilitated global trade.

Today, trade has become an integral part of our lives. It is safe to say that no country across the globe is self-sufficient, and all countries depend on one another for resources, products, raw materials, consumers, etc. The present-day trade revolves around various companies trying to maximize productivity at the lowest costs. Countries have also signed bilateral and multilateral trade agreements to lower tariffs and help assist their citizens.