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International Trade In The 20th Century Till Now Based on The International Economic Relation Course by David Menival By: Haidir A...

International Trade In The 20th Century Till Now

International Trade In The 20th Century Till Now

Based on The International Economic Relation Course by David Menival
By: Haidir Aulia Reizaputra


English: Uncle Sam recruiting poster.
English: Uncle Sam recruiting poster. (Photo credit: Wikipedia)

The international trade have collapsed in the begining of 20th century because the consecutive world war happened (world war one and world war two)  and the increasing amount of protectionism policies. It resulted in the decline of international trade growth which lower than the world production rates. One example of protectionism policy can be seen on the Meline tariff in 1892 devoted by the french. The tariff aim is to respond the competition of the new countries ( The United States, Argentina, Australia, etc) by using tax policies on agricultural food with averge increase of 25 percent. The fact is all the countries at that time establish a trade barriers with the average tariff barriers established to 28% for Rusia, 19% for the United States, 10% for France and Germany. The stagnant condition of protectionism was the main rule until the First World War and the inter – war period, with the trade gap caused by the war 1914 – 1918 and the crisis of 1930s. This also resulting in the declining shares  of western europe in the world trade which was 60% in the 1880 to only 35% in the 1948. The intra – european trade was also declined from 40% to only 29% in the 1938, and with this condition the United States have profited with their increasing shares in the world trade  and represent 22% before the World War Two.

The Starting of The Crisis Cycle

"Gas stations abandoned during the fuel crisis in the winter of 1973-74 were sometimes used for other purposes. This station at Potlatch, Washington, west of Olympia was turned into a religious meeting hall. Signs painted on the gas pumps proclaim 'fill up with the Holy Ghost . . . and Salvation.'" (Photo credit: Wikipedia)
After the period of world war two, the 1945 – 1973 was  characterized  by significant development in the international trade. At this times the growth of world trade are quadruppled the amount of world production until 1970s. The 1974 – 1979  were the begining of another decline in the world trade caused by the oil crises, the rises of macro economic imbalances (inflation, unemployment, deficits of payments) and the dislocation of the International Monetary System with the fall of the Bretton Woods system followed by a recession and declaration of international exchanges. Also during 1970s the competition are increased in the world trade ecosistem between the New Industrialized Countries and The Old European Countries. The situation of national policy also reversed to the state of protectionism with the new shapes of nontariff barriers . The condition were stagnated until the 1980 and the cycle begin to repeat during the 1990 – 2008. As a comparison to the oldest development of international trade the undeniable truth is the form is always adopt to the ondition  and strongly shifted with the appearance of new elements

Present Condition

1999 -  2006
World Trade Growth
World GDP Growth
Source: World Trade Organization

            The present condition are characterized by the increasing interdependence between the markets for goods and services in international level and the rise of international competition with the emrence of new competitor (China, India, Brazil). There are some revolution within the NTIC which change the dynamics of productive system. The increasing amount of Multinational Firms and their shares in the world trade  with the main role as the Foreign Direct Investment Source and Followed by the Financial Globalisation. Today we can assured the international trade in this era are directly related with the global macroeconomics and microeconics condition.One interesting thing from the history is that the sudden growth or the boom phase of the international trade are always followed by the declining growth of the international trade

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