Essay On Long Distance Trade

Long-distance trade existed from at least the beginnings of civilization, but, prior to the nineteenth century, it had always been relatively small scale, and largely limited to noncompeting goods. The main types of obstacles were: natural, such as the high cost of transportation, and artificial, such as the tariffs on import and export.

Since trade is based mainly on international price differences, it may be severely limited in situations where transport costs largely offset the price advantage of low-cost producers. In other words, the basis for trade, whether international or interregional, lies in comparative cost differences which are not neutralized by transport costs. (George Kenwood 2002)

These problems during the period of the first

This eliminated exchange rate risk, making the financial integration of advanced economies grow and facilitating international capital flows and transaction costs.

As we have seen, one of the main causes that facilitated the development of international trade was the reduction of transportation cost, but this did not only influence the exchange of goods or factors of production between countries, but also the technological transfer and the intellectual exchange. As transport costs fell, in fact, people were able to leave their homelands more easily and, as a consequence, pervious emigrants could send home remittances or pre-paid tickets, thus directly finance the cost of travel.

In addition, mass migration policies were relatively liberal in that period. Migrations happened both within Europe and transoceanic.

In total some 11–12 million Europeans emigrated before 1880 compared with 32 millions after that date. Of the total gross immigration recorded between 1821 and 1915, about 62 per cent entered the United States, 9 per cent Argentina, 8 per cent Canada, and approximately 7 per cent Brazil. (George Kenwood 2002, pp.