Trade has evolved significantly over centuries in Europe. Before the 16th century, trade faced challenges due to problems with the barter system, such as finding mutual wants and lack of standardization. The invention of coins helped address these issues. From the 16th to 18th century, major powers like Portugal, Spain, the Netherlands and Britain established overseas colonies and monopolies on trade routes, growing powerful through the exchange of goods. After World War 2, institutions like the IMF, World Bank and GATT/WTO promoted global free trade and economic recovery. The EU furthered economic integration through policies eliminating trade barriers.

1. Evolution of Trade
: European History
Prepared by:
Suman BHATTARAI
Yuyan WANG
Sara AR
Marion YON

2. CONTENT
➢ Introduction to Trade
➢ Evolution of Trade
➢ Trade before 16th Century
➢ Trade from 16th to 18th Century
➢ Trade before World War II
➢ After world war II
➢ Conclusion

3. Introduction to Trade
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4. Trade Before 16th Century
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5. Problem related with Barter System
I. Hard to found mutual wants
II. Problem with measurements
III. Impossibility of Subdivision of Goods
IV. Lack of standard of deferred payment

6. Invention of Coin
Lydian Lion. Lydian electrum trite (4.71g, 13x10x4
mm). This coin type, made of a gold and silver
alloy, was in all likelihood the world's first, minted
by King Alyattes in Sardis, Lydia, Asia Minor
(present-day Turkey), c. 610-600 BC.

7. History of Trade
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➢ In 1159 Henry the Lion, duke of Saxony and Bavaria, builds a new
German town on a site which he has captured the previous year. (for
trade center)
➢ Increase in trade goes the development of banking (13th
Century)
➢ The greatest extent of Chinese trade is achieved in the early 15th century
when Zheng He, a Muslim eunuch, sails far and wide with a fleet of large
junks.
➢ The Portuguese expeditions of the 15th century bring European ships for
the first time into regular contact with sub-Saharan Africa.
➢ The age of exploration - economic conditions improve again.

9. The Eastern Coast of North Atlantic
From 16th century to 18 century

10. Background :the Age of Discovery

11. Portugal and Spain
●Portugal's eastern trade:
●Early Monopoly on Spice Trade
●Casa da Índia (House of India)
-in Lisbon in 1434 .
●Spanish silver
●Casa de Contratación (House of Trade)
-in Seville in 1503.
●in 1546 ,silver is found in Mexico .

12. Why Early Leaders Declined ?
Spain and Portugal very wealthy in 16th century from New World gold
Spent money on wars and luxuries
Did not have to make things: could buy them
Did not have to improve agriculture: could buy food
Eventually money ran out
Italy was a renaissance center of trade and manufacture
But no colonies in New World
Old power structures prevented change

13. Netherlands
• In the 17th century the Dutch gained an increasingly dominant position in
world trade .
• Dutch East Indies Company (1602)
the first-ever multinational corporation
• the Bank of Amsterdam (1609)
the first ture centural bank
• Monopoly on spice Islands of Indonesia
Malacca
• Dominate trade between European countries
Transport goods between countries on sea .

14. British Empire
●From the middle of 18 century became the most important trade center in the
world
●American Colonies
●British in India
-Surat become the English headquarters on the west coast from 1613
-By the end of the 17th century the three English presidencies of Bombay, Madras and Calcutta are
securely established.

15. How the goods circulate
• The trangle trade
• From the East to Europe :spices ,coffe ,tea ,silk

16. The Shifting Commercial Revolution
◆ Commercial Revolution (13-18 century)
◆ From around 16 century
● Developments at home->overseas expansion
● The very different goods in European markets
● Gold ,silver
● The way of trade :colonialism

17. The Economic situation

18. The Economic situation
Economic
● War damages
● Great Depression experience
Political
● Europe: strong influence of socialist movement

19. ● Inefficient gold standard – one of possible explanations of Great
Depression (see LVI)
● After the collapse of gold standard – floating of major currencies
◦ Lack of any international coordination
◦ Competitive devaluations,
◦ Protectionism
→ beggar-thy-neighbor policies → prolonged recession
● WWII – exceptional situation, no international coordination, neither in
forex, neither in trade
● But since 1944 - Allied forces started to create a new international
monetary system with the Breton Woods system.

20. ● 3 essential institutions
◦ International Monetary Fund
◦ World Bank
◦ Organization to promote cooperation in international trading
arrangements
● Basic intentions:
◦ Promote stability of the monetary system
◦ Provide financing for the reconstruction after the war and to the
developing countries
◦ Support the free trade

21. Marshall Plan
● Official title: European Recovery Program (ERP)
● June 5, 1947, US Secretary of State, George Marshall,
speech at Harvard University
◦ Offered aid to any nation, did not specify any number, any other
detail
◦ In reality: directed towards Europe (originally including USSR),
under the condition that recipient countries will be able to
organize the rebuilding plan themselves
● Plan rejected by USSR and other countries under its
influence

22. 22
Six founding countries ( Belgium, Federal Republic of Germany,
France, Italy, Luxembourg, the Netherlands) signed a treaty
to run heavy industries (coal and steel) under common management in 1951:
The European Coal and Steel Community was born, precursor of the EU.
The Plan for a Peaceful Europe After WWII: Coal and Steel
1951

23. 23
Six founding countries expanded cooperation to other economic sectors, creating the European Economic
Community (EEC) ─ or “common market“.
Elimination of tariffs* on trade between the six
original members achieved by 1968.
The Rome Treaties Set the Stage for Further Widening and Deepening
1957
[The signatories are] "determined to lay the
foundations of an ever closer union among the
peoples of Europe, resolved to ensure the economic and
social progress of their countries by common action to
eliminate the barriers which divide Europe (…)”
Preamble of the EEC Treaty
* A tariff is a tax on imports or exports

24. 24
Widening the Union - EU Enlargements
Future
Candidates:
* under UNSCR 1244
Bulgaria
Romania
Cyprus
Czech
Republic
Estonia
Hungary
Latvia
Lithuania
Malta
Poland
Slovakia
Slovenia
Austria
Finland
Sweden
Portugal
Spain
GreeceDenmark
Ireland
United
Kingdom
200720041995198619811973
Map: Wikimedia Commons
Accession:
Croatia
Iceland
FYR
Macedonia
Turkey
Serbia
Montenegro
Albania
Bosnia &
Herzegovina
Kosovo*
Potential
candidates:

25. The Euro and the Economic and Monetary Union (EMU)
25
1986 Single European Act
Sets objective of establishing
an internal market
1999 Introduction of the euro
2002 Banknotes and coins
Introduction of euro banknotes and coins, replacing
national currencies
The euro is officially introduced as a virtual currency in Austria,
Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg,
the Netherlands, Portugal and Spain.
1992 Maastricht Treaty
Sets out how to achieve EMU, lays down
convergence criteria

26. 26
Treaty
Economic integration is the cornerstone of the EU
Economic and Monetary Union (EMU) enshrined
as an objective in the EU Treaties
The euro area – Countries share the euro as their currency, ECB
sets interest rates.
The single market – elimination of trade and competition
barriers; free movement of goods, services, capital and people
Enhanced policy coordination – countries maintain control over economic
policy, but have to coordinate at EU level
27
member states
27 member
states
17 member
states

27. The boom ended with a number of events in the
early 1970s
● The collapse of the Bretton Woods system in 1971
● The growing international trade in manufactured goods, such as
automobiles and electronics
● The 1973 oil crisis,
● The 1973–1974 stock market crash,
● The ensuing 1973–75 recession, and
● The ensuing displacement of Keynesian economics by monetarist
economics.

28. Trade and Globalization

30. Globalization often leads to or promotes free trade, the exchange of goods among nations without trade
barriers such as tariffs. This can lead to consumers purchasing higher-quality goods at lower prices.
• Many of these groups work to
promote, regulate free trade
• 1948, General Agreement on
Tariffs and Trade (GATT)
• Worked to limit trade barriers,
settle disputes
International Trade
Organizations
• 1995, GATT replaced by
World Trade Organization
(WTO)
• Monitors national trade
policies
• Organization of Petroleum
Exporting Countries (OPEC)
works to control oil production,
price
GATT, WTO, OPEC
• Regional trade blocs promote
free trade, deal with economic
issues of neighboring nations
• European Union (EU), North
American Free Trade
Agreement (NAFTA), others
Regional Trade
Global Trade

31. 31
EU Trade policy - basic features
Multilateral Bilateral/
Regional
Unilateral
3 DIMENSIONS
The three dimensions do not
conflict

32. The EU’s first priority: multilateralism
● The WTO is the most effective means of managing trade (e.g. it covers 95%
of world trade) = effective global governance
● The EU wishes to maintain the WTO at the centre of the international
trading system
● The WTO’s rules enforcement mechanism is the most important feature
(dispute settlement body)
● The EU has a strong interest in open markets and a clear regulatory
framework
● A failure of multilateralism would present a wider risk of increased
protectionism and economic nationalism around the world

33. 33
The European Union and the United States
“The relationship between the United States and
Europe is the world’s strongest, most
comprehensive, and strategically important
partnership. The United States, and a united
Europe – this is really the indispensable
partnership.”
“America has no better partner than Europe. Now
is the time to build new bridges across the globe as
strong as the one that bound us across the
Atlantic. Now is the time to join together, through
constant cooperation, strong institutions, shared
sacrifice, and a global commitment to progress, to
meet the challenges of the 21st century.”
José Manuel Barroso
President of the
European Commission
Barack Obama
President of the United States
of America

34. • Opponents argue process benefits wealthy
developed nations at expense of
developing nations
• Free trade encourages practices that
exploit workers, destroy environment
• Some promote fair trade, like fair trade
coffee movement guaranteeing fair prices
to coffee bean farmers
Anti-Globalization
• Global trade has clear benefits
• Developing countries can provide new,
valuable markets for goods, services
produced by developed countries
• Technology, services, money from
developed nations can improve public
services, raise standard of living of
developing countries
Benefits
Effects of Global Trade