Emergence of Modern Foreign Trade

Although foreign trade was an important part of ancient and medieval economies, it acquired new significance after about 1500.

As empires and colonies were established by European countries, trade became an arm of governmental policy.

The wealth of a country was measured in terms of the goods it possessed, particularly gold and precious metals.

The objective of an empire was to acquire as much wealth as possible in return for as little expense as possible.

This form of international trade, called mercantilism, was commonplace in the 16th and 17th centuries.

International trade began to assume its present form with the establishment of nation-states in the 17th and 18th centuries.

Heads of state discovered that by promoting foreign trade they could mutually increase the wealth, and thus the power, of their nations.

During this period new theories of economics, in particular of international trade, also emerged.