Why do countries trade?

Trade is as old as civilization itself. Before the advent of money, people bartered goods with one another to secure what they could not produce themselves. In trade, one side brings goods or services that it can produce more readily than their trading partner. Pottery, jewelry, metal items and other durable goods are evidence that archaeologists rely on to document the existence of trade among prehistoric peoples. 

Influence and Consequences of Trade

The control of trade can be a very significant economic and political factor in the history of a nation. In the late 1200s, Marco Polo traveled over land to Persia (now Iran), then through the Pamir Mountains and the Gobi Desert, to Beijing, China. The book he wrote of his adventures stimulated European interest in trade. Venice merchants became wealthy and used the navy of the city to protect its superiority. Spanish and Portuguese ships set sail for the New World in search of gold and spices but came back with new products like potatoes, sugar and corn that greatly improved European diets. In exchange, they took metal tools and horses that impacted indigenous societies.

For the past several centuries, nations with highly developed manufacturing bases have looked to less developed countries to supply raw materials and to become markets for their products. In the 1700s, Britain and France adopted a policy of mercantilism that sought to protect domestic industries, often at the expense of their colonies. They instituted tariffs on foreign products coming into the country and restricted their colonies from trading with any other nations. This led to global competition for empires. In North America, Britain and France competed for the fur trade along the Great Lakes and the Ohio River valley. In 1763, the British defeated French forces in the battle for Canada and eliminated French influence on the continent. In the United States, the demands for slave labor in the 19th century and in recent times for oil, rubber, foods and metals have greatly influence American foreign policy.

Fair Trade Practices

Sometimes the policies are enforced by military intervention or the support of dictators or the wealthy who permit the practices for the own benefit. Not everyone supports trading practices that put one side at a disadvantage. "Fair trade" rules try to insure that the interests of the producers of the natural resources, often small farmers or factory workers, are protected. Fair trade practices may include demands that the workers who produce the goods receive decent wages and have safe working conditions. The elimination of child labor or sweat shops is often a goal of fair trade negotiations. Those products that follow fair trade practices are allowed to publicize their compliance in the hope the consumers will support their efforts, even if it means the product may cost more than competitors. It is often difficult to enforce fair trade provisions when the source of products is hard to determine. Sometimes consumers prefer the less expensive products despite the manner in which they were produced

Trade in Iowa

Since its first days in the Union, Iowa has been a major exporter of agriculture products. Because of the expense of shipping corn, 19th century farmers converted corn into hogs and shipped meat first by rivers and then by rails. Corn and soybeans are major U.S. exports, especially to Asia. In recent times, disputes over tariffs have been a source of growing tension between the United States and China.

Supporting Questions

Why do countries import and export goods?

• English Map of the Island of Grenada Updated from the 1763 French Survey, 1780 (Map)
• Letter from Thomas Jefferson to Charles Thomson Estimating Imports to the United States, April 22, 1786 (Document)
• Tax Rates on Common Imports to United States, May 16, 1789 (Document)
• Statement of the Quantity of Spirits, Molasses, Coffee, Cocoa and Sugar from the United States, 1818 (Document)
• Trinidadians Sorting Cocoa Pods, 1900 (Image)
• Drying Cocoa on the Island of Dominica in the West Indies, ca. 1906 (Image)

How has the North American Free Trade Agreement (NAFTA) impacted the U.S. and Mexico?

• "Did NAFTA Help Mexico? An Assessment After 20 Years," February 2014 (Document)
• "NAFTA's 'Broken Promises': These Farmers Say They Got The Raw End Of Trade Deal," August 7, 2017 (Document)
• "Why Des Moines and Iowa business leaders support NAFTA," February 7, 2018 (Document)
• "NAFTA Pros and Cons: Why Its Six Advantages Outweigh Its Six Disadvantages" June 25, 2019 (Document)
• "Six Problems with NAFTA," June 25, 2019 (Document)

What are fair trade products?

• Côte d’Ivoire Law Enforcement Rescues Children in Chocolate Industry Forced Labor, June 22, 2015 (Image)
• "Child Labor and Slavery in the Chocolate Industry," 2017 (Document)
• Fair Trade Certified Article about an Indian Factory and Their Use of Community Development Funds, 2018 (Document)
• "Brick by Brick: Rebuilding Public Schools in Côte d’Ivoire," January 23, 2019 (Document)
• Open Letter from a Certified Fair Trade Farm in Amado, Arizona, Date Unknown (Document)