Isolation in the inter-war period
The political consequences of the first world war on international trade were much graver than the destruction of the actual infrastructure. Markets also reflected sentiments of nationalist isolation, and the abandonment of the gold standard unsettled foreign trade, even more. The annual export growth of the developed countries fell from 4 percent prior to 1913 to 1 percent for the period up until 1950.
The trade boom of the modern era
The introduction of fixed exchange rates at the Bretton Woods conference in 1944 and the 1947 General Agreement on Tariffs and Trade (GATT) heralded the start of the era of free trade as we know it. Annual export growth in developed countries in the West rose to over 8 percent on average between 1950 and 1973. Only when the Bretton Woods system collapsed and the first oil crisis took place at the start of the 1970s did export growth fall back to 5 percent. The controversial issue of the “Americanisation” of the world is simply one of the cultural consequences of these developments. In Germany, these cleared the way for the Wirtschaftswunder, or economic miracle, and created the foundations of our affluent multicultural society. Since the fall of the Iron Curtain, Eastern Europe has also been benefitting from multilateral trade relationships.
Today and tomorrow
Virtual trade is becoming more and more important in the 21st century. Thanks to the Internet, anyone can order goods from the other side of the globe to be delivered straight to their home. Bonds and foreign currency, as well as goods such as raw materials, property and precious metals, are no longer physically transferred. Rather, they are bought and sold without ever actually changing hands. The transition of goods from physical to abstract elements contrasts with consumers’ demands for more responsibility in international trade. Companies that trade internationally now offer an increasing number of sustainably produced goods. They train local suppliers to reduce wastage and crop failure. Nowadays, companies are seeking a competitive advantage in the cultural and knowledge-based integration of their partners.
Source: METRO GROUP
More details: „A shift in relationships“