NCERT Class 12 Geography International Trade

International Trade

You are already familiar with the term “trade” as a tertiary activity which you have studied in Chapter 7 of this book. You know that trade means the voluntary exchange of goods and services. Two parties are required to trade. One person sells and the other purchases. In certain places, people barter their goods. For both the parties trade is mutually beneficial.

Trade may be conducted at two levels: international and national. International trade is the exchange of goods and services among countries across national boundaries. Countries need to trade to obtain commodities, they cannot produce themselves or they can purchase elsewhere at a lower price.

The initial form of trade in primitivesocieties was the barter system, where direct exchange of goods took place. In this system if you were a potter and were in need of a plumber, you would have to look for a plumber who would be in need of pots and you could exchange your pots for his plumbing service. Every January after the harvest season Jon Beel Mela takes place in Jagirod, 35 km away from Guwahati and it is possibly the only fair In India, where barter system is still alive. A big market is organised during this fair and people from various tribes and communities exchange their products.

The difficulties of barter system were overcome by the introduction of money. In the olden times, before paper and coin currency came into being, rare objects with very high intrinsic value served as money, like, flintstones, obsidian, cowrie shells, tiger’s paws, whale’s teeth, dogs teeth, skins, furs, cattle, rice, peppercorns, salt, small tools, copper, silver and gold.

HISTORY OF INTERNATIONAL TRADE

In ancient times, transporting goods over long distances was risky, hence trade was restricted to local markets. People then spent most of their resources on basic necessities – food and clothes. Only the rich people bought jewellery, costly dresses and this resulted in trade ofluxury items. The Silk Route is an early example of long distance trade connecting Rome to China – along the 6,000 km route. The traders transported Chinese silk, Roman wool and precious metals and many other high value commodities from intermediate points in India, Persia and Central Asia. 

After the disintegration of the Roman Empire, European commerce grew during twelfth and thirteenth century with the development of ocean going warships trade between Europe and Asia grew and the Americas were discovered.

Fifteenth century onwards, the European colonialism began and along with trade of exotic commodities, a new form of trade emergedwhich was called slave trade. The Portuguese, Dutch, Spaniards, and British captured African natives and forcefully transported them to the newly discovered Americas for their labour in the plantations. Slave trade was a lucrative business for more than two hundred years till it was abolished in Denmark in 1792, Great Britain in 1807 and United States in 1808.

After the Industrial Revolution the demand for raw materials like grains, meat, wool also expanded, but their monetary value declined in relation to the manufactured goods. The industrialised nations imported primary products as raw materials and exported the value added finished products back to the non-industrialised nations. In the later half of the nineteenth century, regions producing primary goods were no more important, and industrial nations became each other’s principle customers.

During the World Wars I and II, countriesimposed trade taxes and quantitative restrictions for the first time. During the postwar period, organisations like General Agreement for Tariffs and Trade (which later became the World Trade Organisation), helped in reducing tariff.

EXERCISES

1. Choose the right answer from the four alternatives given below.

    (i) Most of the world’s great ports are classified as:

         (a) Naval Ports                      (c) Comprehensive Ports

         (b) Oil Ports                          (d) Industrial Ports

    (ii) Which one of the following continents has the maximum flow of global trade?

         (a) Asia                                (c) Europe

         (b) North America                   (d) Africa

    (iii) Which one of the following South American nation, is a part of OPEC?

         (a) Brazil                               (c) Venezuela

         (b) Chile                                (d) Peru

    (iv) In which of the following trade blocs, is India an associate member?

         (a) SAFTA                               (c) ASEAN  

         (b) OECD                                (d) OPEC

2. Answer the following questions in about 30 words:

    (i) What is the basic function of the World Trade Organisation?

    (ii) Why is it detrimental for a nation to have negative balance of payments?

    (iii) What benefits do nations get by forming trading blocs?

3. Answer the following questions in not more than 150 words:

    (i) How are ports helpful for trade? Give a classification of ports on the basis of their location.

    (ii) How do nations gain from International Trade?

Please refer to attached file for NCERT Class 12 Geography International Trade