trade: Modern Trade
The theory of commerce as imposed by the national state has varied from the mercantilism of the 17th and 18th cents. and the protective tariff of the 19th and 20th cents. to the free trade that Britain long upheld. Since World War II a realization of the need for commercial expansion has led to the creation of regional trade zones, the prime example being that of the European Union . A trade agreement among the United States, Canada, and Mexico, called the North American Free Trade Agreement (NAFTA), was signed in 1992, Mercosur was established in South America in 1991, and the Central American Free Trade Agreement, which includes the United States and the Dominican Republic, was signed in 2003–4. Although 34 nations committed themselves in 2001 to the development of a free trade area encompassing the Western Hemisphere progressed toward that goal has been hindered by strained relations between the United States and some Latin American nations. Other trade agreements have been signed by regional groupings of Asian and African nations, such as that involving the Association of Southeast Asian Nations . The Trans-Pacific Partnership, signed (2016) by 12 Pacific nations, was renegotiated (2018) as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership after President Trump withdrew the United States from the treaty in 2017. Less geographically restricted trade systems, such as the General Agreement on Tariffs and Trade and its successor, the World Trade Organization , have also arisen.
In modern times international trade has had an important political role. Nations often use trade either to solidify old political relationships or to create new ones. The principles of efficient marketing have been applied to domestic and international trade in the industrialized countries, which has attained enormous volume. Today the world's major trading powers include the United States, the countries of the European Union (especially those in Western Europe), Japan, China, and South Korea.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.
See more Encyclopedia articles on: Economics: Terms and Concepts