Free Trade is Ending, but Not the First Time in History
world is now a battlefield of fierce multilateral and bilateral trade wars. An
increasingly obvious example is that the multilateral trade pattern which was previously
considered logical and unchallenged is gradually being replaced by bilateral
trade waves. Some main powers in the world now have to swallow their pride, put
aside those classic economic theories, and witness the revised version of
global free trade.
this is not the first instance where global free trade has ended.
the world's first industrialized country, Britain once had the power of the
entire world’s raw materials at its disposal, as well as having the rest of the
world as the export market of its industrial products. However, with the
industrialization of other countries, this situation gradually changed in the
19thcentury. More and more countries sought to protect their raw
material supply and export markets. Sometime in the 1870s, British industrial
products began to face stiff competition from other countries.
too, advanced rapidly for Germany and the United States, allowing them to
quickly overtake Britain and France, the two powerful and traditional Western
European countries. By 1870, the German textile and metal industry had
surpassed that of the British in terms of organizational structure and
technical efficiency. Germany had also beaten similar British products in its
domestic market. By the end of the 19thcentury, Germany even began
to be the "world factory" of the time as it produced these products
and exported them in large quantities.
Britain, the world's hegemon at the time, did not experience trade deficit
thanks to its intangible exports such as banking services, insurance, and
shipping, its trade volume as a proportion of the world's total fell from 1/4
in 1880 to 1/6 in 1913. Not only did Britain lose in the competition in the
markets of industrialized countries, its products also did not have advantage
in the markets of less developed countries. It even lost its once dominant
position in trade with India, China, Central and South America, as well as the
inland and coastal areas of Africa.
predicament in trade was exacerbated by the economic depression from 1873 to
1896. The deflation caused by the recession further increased the pressure on the
governments of the world, forcing them to support their domestic industries,
which eventually led to the gradual abandonment of the free trade principle globally,
especially by the European powers. Germany specifically gave up free trade in
1879 and France in 1881. Britain followed soon after, while the United States
gave up free trade as early as the 1860s, during the Civil War.
result of this was a double shrinkage of domestic and export markets.
Short-sighted policies would naturally have short-sighted results, but the laws
of international economy and trade had never made people fully aware of this,
especially politicians. Under the tremendous pressure of the double economic
contraction, government and business leaders in Europe and North America,
Canada, and the United States began to use overseas colonies as their new
markets. These overseas colonies became the export markets of the sovereign country
almost without exception. The battles for market space during this period
provided theoretical explanations for today's "spatial determinism".
colonial market during this period was very different from the world's free
trade. They were placed under the protection of the violent trade barriers of
the navies of various countries, making it impossible for the products of other
countries to compete with the products of the suzerain country. At the same
time, they were still a cheap source of raw materials. Although Britain claimed
to uphold the principle of free trade until 1932, it actually competed with
other industrialized countries for overseas colonies to prevent areas that were
originally in its sphere of influence from falling into the hands of other
countries. On the other hand, Britain implemented a preferential trade system
for commodities from its colonies and dominions, with the aim of consolidating
the trading system within the empire. It was not until Britain joined the
European Community in 1973 that these preferential foreign trade policies were
suspended and trade barriers were imposed on colonial commodities.
the current world, free trade has once again reached a critical point, and it
is also due to the role of the "crisis triangle". Of course, the battles
of free trade continue, because the changes in the trade pattern are related to
the status and influence of many vested interests. It is also related to the sustainability
of many powerful parties. The so-called "new multilateralism",
"removal of all forms of trade protectionism" and the benefits of
"sharing" can actually become the swan song of free trade.
world continues to operate, but sometimes not in the way people imagine.
Under the anti-globalization trend,
free trade and multilateralism has been severely impacted. It is not the first
time that free trade has ended in history. After each end, the world continues
to operate in a new way.
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