Law Relating To International Trade
Unit I
Historical perspectives of International Trade, Institutions – UNCTAD, UNCITRAL, GATT
(1947-1994); World Trade Organization-Objectives, Structure, Power; Most Favored Nation
Treatment and National Treatment; Tariffs and Safeguard measures.
(Timeline of international trade-Wikipedia)
Historical Perspectives of International Trade
In olden days, the concept of international trade was not prevalent. Instead,
international trade was referred to as trading activities conducted overseas or over
long distances. History of international trade shows us how trade used to take place
between various nations in olden days. It gives us an insight into the evolution of
the concept of international trade.
History of international trade in ancient times-Important happenings:
The important trading activities, which took place in the ancient period can be
summarized as under:
● According to Periplus Maris Erythraei, which is a Greek travel manuscript, written
in the 1st century CE, there used to be extensive trade between Romans and the
Indians.
● The Arabian nomads carried out long distance trading activities with the help of
camels. They traded silk and spices in Far East.
● The Tyrian fleet of ships known as "Ships of Tarshish", sailed back with ivory,
silver, gold and precious stones from the east.
● The Egyptians carried out extensive trading activities in the Red Sea. They
imported spices from Arabia and from the "Land of Punt".
● Ptolemaic dynasty, which is a Greek dynasty, was the first to carry out trade with
India, long before the Romans did.
● People belonging to the Kingdom of Qataban, cultivated and traded aromatics as
well as spices. The Kingdom's economy was dependent on this trade. Spices and
aromatics were exported to Abyssinia, Mediterranean and Arabia.
● Berencie and MyosHormos became important trading ports during the 1st century
BCE.
● There was an increased demand in aromatics with Indian culture being introduced
in Java and Borneo. These places assume importance as reputed trading points.
These were to cater to the Arab as well as Chinese markets, in the years to come.
● Pre Islamic Meccans benefited from demand of Romans for luxury articles. For
this, the Pre Islamic Meccans used the Incense Route.
● MyosHormos, Arsinoe and Berenice were three main Roman ports, where goods
brought in from East Africa were set ashore.
In the above paragraphs, we also get to see some of the important trading ports
during the ancient times. These trading ports served as corridors to other nations.
History of international trade in the middle ages- Important events
● The Song Dynasty created the first paper printed money. Aden, Siraf, Damietta and
Alexandria were used as ports through, which the Abassids entered China and
India.
● Industrial manufacturing, processing and distribution of wine, tea, salt was
nationalized by Wang Anshi of China.
● Market rights as well as trading privileges were secured by Hanseatic League in
England for goods in the year 1157.
● Brocade workshops as well as silk mills were supported by the Song Dynasty in
Kafeing and eastern province.
History of international trade in modern times- some important events:
● Foreign trade licenses were introduced by Japan to prevent piracy and smuggling
in the year 1592.
● Dutch convoys sails back in the year 1599 with products from East India. The
convoy also brings in spices.(600,000 pounds).
● Dutch East India Company is established in the year 1602. The company declares
bankruptcy in 1799 because of a rise in competition in free trade.
● The French constructed military forts during the eighteenth century. These forts
acted as trading and communication ports for trade of fur.
History of international trade in later modern era:
● During the reign of Napoleon III, the Free Trade Agreement(year-1860) was struck
between France and Britain.
● In the year 1815, first nutmeg shipment sailed back from Europe.
● In 1868, Japanese Meiji Restoration opened its doors for industrialization by means
of free trade.
● In the year 1946, the Breton Woods System was introduced. This international
economic model was introduced to stop wars and depressions.
● In 1947, as many as 23 nations give their consent to the implementation of GATT
(General Agreement on Tariffs and Trade).
● Formation of Zangger Committee takes place in 1971. It was set up with a view of
interpreting nuclear goods in perspective of international trade.
● International trade of nuclear goods was moderated by Nuclear Suppliers Group or
NSG, which was established in the year 1974.
● NAFTA was formed on 1st January, 1994.
● On 1st January, 1995, the World Trade Organization or the WTO came into being
to promote free trade between various nations.
The journey from the "Land of Punt" to the WTO has been a long one and in each
step, people have responded to situations depending on the needs of the time.
History of Indian Trade
India is looked upon as a country with immense resources available through its
length and breadth. The objective of this brief paper is to go through the timeline of
history of Indian Trade right from ancient times till today, when it has a foothold in
the major and the not so major economies of the world.
India was famed for her fabulous wealth ever since the ancient times till the
establishment of the British Empire. Indian trade history reflects that despite the
frequent political upheavals during the 12th to the 16th centuries, the country was
still prosperous. The political and economic policies followed by the Muslim rulers
propagated the growth of towns in various parts of the country. These towns grew
into trade and industrial centers which in turn led to the general prosperity. From
the 16th to the 18th centuries, covering the two hundred years of Mughal rule,
Indian urbanization saw further growth.
Descriptions of the wide variety of excellent goods sold in the Indian markets of
those days are found in the records of foreign travelers. India was well known for
its textiles one of the chief items of export. Textiles from Gujarat were sent to the
Arab countries and to South-east Asia. Trade history of India also shows hardwood
furniture, embellished with inlay work was a very popular item for expert.
Although the expensive carvings and inlays were inspired by the ornate Mughal
style, the furniture was modeled on the European design. Carpets were used both in
ancient and medieval India. But the skill of carpet weaving touched new heights
only during the Mughal era in the 16th century. A larger variety of ornamental
work in cut stones, ivory, pearl and tortoise shells were produced in South India.
Pearl fishing was a major industry here. Indian arts and crafts patronized by Indian
rulers, were unmatched for their beauty and skill and were very popular in the
European countries.
History of Indian trade has extensive accounts about domestic trade in medieval
India by the foreign travelers. With Delhi as a major trade centre, well-maintained
roads linking various parts of the country facilitated domestic trade has been
mentioned. River routes also promoted trade between different parts of the country.
Different communities were known to dominate trade in various parts of the
country. India’s exports were seen to far exceed her imports both in the number of
items as well as in volume. Arab traders shipped Indian goods to European
countries through the Red Sea and the Mediterranean ports.
Foreign trade was in the hands of both local and foreign merchants, as revealed by
the Indian trade history. The magnitude of India’s foreign trade during the
medieval period can only be imagined. But India was always able to enjoy a
favorable balance in her trade relations with other countries. With huge earnings
from her exports of various commodities, the state coffers were amply stocked
with gold and silver.
However in the 18th century, when we peep in the trade history of India, the
political conditions then brought about a drastic change in the situation. This
period was marked by decline of the Mughal Power. The rise of the British power
in the mid 18th century dealt a fatal blow to the prosperity of the country. The
British imposed heavy duties on both imports and exports in order to disrupt the
foreign trade relations of India with the other countries.
By the time India gained Independence from the British in 1947, the economy was
entirely geared to only trade. There were hardly any manufacturing facilities to
suffice the needs of the growing Indian population. The past couple of decades in
the history of Indian Trade have seen the country struggle to create manufacturing
capacities across the board to be self sufficient. The government has been focusing
on the same to enable broad basing the development to move the economy from an
underdeveloped status to being a developed nation.
India today stands at a over a trillion economy. Darjeeling tea, Indian khadi cotton,
Bombay Duck, Kashmiri carpets, Indian spices and dry fruit are just a few of the
famous gifts India has given to the world. The economic levels have improved in
the urban and semi-urban areas. Literacy is penetrating deep in to even the far
reach areas, thus creating awareness and to higher consumption patterns for all
kinds of goods across all sections of the society. Promoting the availability of
goods from different parts of the world has seen a rise in more trade with other
countries.
Indian trade history is remarkable. Indian trade has benefited and so has the world.
The country has realized that at the end of the day, maximizing use of one’s own
resources is what makes all the difference.
Read-Anil Arora from library
