International trade and exploration have captivated the human imagination for millennia. From Alexander the Great to Marco Polo, from the Silk Road to the East India Company, history is filled with examples of commerce redrawing the map of the known world. But for much of history, trade was shaped more by power than by fairness.
This began to change after Adam Smith and David Ricardo showed that tariffs are economically harmful: they raise costs for importers, divert production to higher-cost countries, discourage innovation and foster monopolies and corruption. Gradually, Smith’s insights into the dangers of protectionism, the importance of predictable economic policy and the rule of law prevailed.
The governance of international trade shifted dramatically after World War II, when the United States emerged as a dominant economic and military power. Instead of seeking economic concessions from defeated countries, American leaders championed the creation of an open, rules-based trading system.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.