Dictionary:

trade

  (trād)

1. The business of buying and selling commodities; commerce. See synonyms at business.
2. The people working in or associated with a business or industry: a textile-exporting publication for the trade.
3. The customers of a specified business or industry; clientele.
4. The act or an instance of buying or selling; transaction.
5. An exchange of one thing for another.
6. An occupation, especially one requiring skilled labor; craft: the building trades, including carpentry, masonry, plumbing, and electrical installation.
7. The trade winds. Often used in the plural with the.

1. To engage in buying and selling for profit.
2. To make an exchange of one thing for another.
3. To be offered for sale: Stocks traded at lower prices this morning.
4. To shop or buy regularly: trades at the local supermarket.

1. To give in exchange for something else: trade farm products for manufactured goods; will trade my ticket for yours.
2. To buy and sell (stock, for example).
3. To pass back and forth: We traded jokes.

1. Of or relating to trade or commerce.
2. Relating to, used by, or serving a particular trade: a trade magazine.
3. Of or relating to books that are primarily published to be sold commercially, as in bookstores.

trade down

1. To trade something in for something else of lower value or price: bought a new, smaller car, trading the old one down for economy.

1. To surrender or sell (an old or used item), using the proceeds as partial payment on a new purchase.

1. To put to calculated and often unscrupulous advantage; exploit: children of celebrities who trade on their family names.

1. To trade something in for something else of greater value or price: The value of our house soared, enabling us to trade up to a larger place.

[Middle English, course, from Middle Low German.]

A basic economic concept that involves multiple parties participating in the voluntary negotiation and then the exchange of one's goods and services for desired goods and services that someone else possesses. The advent of money as a medium of exchange has allowed trade to be conducted in a manner that is much simpler and effective compared to earlier forms of trade, such as bartering.

In financial markets, trading also can mean performing a transaction that involves the selling and purchasing of a security.

Investopedia Says:
Trading is not a new phenomenon - we've been doing it for centuries! The trade that occurred among the most primitive humans has evolved considerably over time, and the word "trade" has come to include the complex trading that occurs on the floor of the New York Stock Exchange (NYSE).

However, the basic elements of buying and selling in some form of a market haven't changed a bit, because ultimately, trade still involves giving one thing in exchange for another.

Related Links:
The WTO sets the global rules of trade. But what exactly does it do and why do so many oppose it? What Is The World Trade Organization?
It's impossible to avoid disaster without trading rules - make sure you know how to devise them for yourself. Ten Steps to Building a Winning Trading Plan
Everyone's talking about globalization, but what is it and why do some oppose it? What Is International Trade?
Determine your own trading style, and the versatile currency market will accommodate it. Trade To Your Taste

In general:

1. buying or selling of goods and services among companies, states, or countries, called commerce. The amount of goods and services imported minus the amount exported makes up a country's Balance of Trade. See also Tariff; Trade Deficit.

2. those in the business of selling products are called members of the trade. As such, they receive Discounts from the price the public has to pay.

3. Group of manufacturers who compete in the same market. These companies form trade associations and publish trade journals.

4. commercial companies that do business with each other. For example, Accounts Payable to suppliers are called trade accounts payable; the term Trade Credit is used to describe accounts payable as a source of Working Capital financing. Companies paying their bills promptly receive trade discounts when available.

5. synonymous with Barter, the exchange of goods and services without the use of money.

Securities: to carry out a transaction of buying or selling a stock, a bond, or a commodity future contract. A trade is consummated when a buyer and seller agree on a price at which the trade will be executed. A Trader frequently buys and sells for his or her own account securities for short-term profits, as contrasted with an investor who holds his positions in hopes of long-term gains.

noun

1. Commercial, industrial, or professional activity in general: business, commerce, industry, trading, traffic. See action/inaction.
2. The commercial transactions of customers with a supplier: business, custom, patronage, traffic. See transactions.
3. The act of exchanging or substituting: change, commutation, exchange, interchange, shift, substitution, switch, transposition. Informal swap. See change/persist, substitute.
4. Activity pursued as a livelihood: art, business, calling, career, craft, employment, job, line, métier, occupation, profession, pursuit, vocation, work. Slang racket. Archaic employ. See action/inaction.

verb

1. To give up in return for something else: change, commute, exchange, interchange, shift, substitute, switch. Informal swap. See change/persist, substitute.
2. To offer for sale. deal (in), handle, market, merchandise, merchant, peddle, retail, sell, vend. See transactions.

Idioms beginning with trade:
trade up
trade in
trade off
trade on

See also tricks of the trade.

Definition: profession, work
Antonyms: entertainment, fun, pastime

n. (usually trades) a trade wind: the north-east trades.

See the Introduction, Abbreviations and Pronunciation for further details.

The movements of goods from producers to consumers. The classic explanation for trade is expressed in terms of comparative advantage. In spite of the effects of globalization, the majority of international trade flows were still very proximate in 1995.

One of the reasons for trade is specialization of production. Some examples are obvious. European countries are not very successful in growing bananas. Similarly, the distribution of natural resources like coal, iron ore, and oil has always been unequal. Thus each country specializes in producing those commodities in which it has a comparative advantage. Specialization allows economies of scale because it is more efficient to produce for a large world market than for a much smaller national market. The commodities imported rather than produced at home will always require less productive inputs than would be required under home production. Trade is thus an unqualified benefit to all parties, irrespective of whether trade is fair or a country is competitive.

But the fact that trade is universally advantageous does not mean that the benefits are equally distributed. The impact of imperial free trade policies on 19th-cent. India boosted the export of raw cotton to Britain but had a devastating impact on Indian cotton manufactures. Variations in natural resources, in which some countries are rich (Russia) and some are relatively very poor (Japan), and in technology, barriers to trade, and historical experience of development have maintained and augmented these differences.

There is little doubt that international trade and specialized production played a major part in the growth of the industrial economies in the 18th and especially the 19th cent. But the less developed countries have argued that trade has not been beneficial for them since they have been peripheral to those with greater comparative advantage. Indeed it has become a radical criticism of the free market system that it prospered through the exploitation of the less developed countries by the industrial nations. Hence the support for import substitution policies and attempts to persuade the developed world to help by allowing trade on terms favourable to the less developed.

1. A person’s occupation or craft, usually involving manual skill.
2. In building construction, the classifications of work, such as masonry, carpentry, plastering, etc.

The geographical position of the Middle East has made the region part of far-flung trade networks, as both market and supplier, since antiquity.

The Middle East is the cradle of civilization, the place where agriculture and urban life are thought to have originated. The region was economically vibrant and a center of trade in early antiquity, and it connected far-flung markets across the Eastern Hemisphere during Roman times. The collapse of the Roman Empire fragmented governing institutions in northwestern Europe, dividing its markets from the rest of the world. The rise of Islam during the seventh century C.E. and its subsequent diffusion spread Arabic and a common legal system (shariʿa) across the southern Mediterranean and as far east as what now is Indonesia. Trade was rein-vigorated and, following the Mongol conquest and consolidation in east and west Asia, overland trade between the Middle East and China along the Silk Road also thrived.

Trade before the Modern Period

Before the modern period, the Middle East exported mainly high-quality manufactured products to Europe and Africa, with which it generally enjoyed a trade surplus. Raw materials and manufactured products went to Asia but, like others trading with this region, Middle Eastern merchants often ran deficits with their east Asian partners.

The area around the Indian Ocean was a main market and supplier of goods to the Middle East. Pepper and spices came from the East Indies and were re-exported as well as consumed locally. Teak for ship construction and other tropical woods were imported from India; porcelain and silk came from China. After silkworms were smuggled out of China during the sixth century C.E., the Middle East also became a producer and exporter of silk cloth. Arab and Iranian shipping dominated the Indian Ocean as far as the Straits of Malacca, where Chinese junks took over, sailing to Guangzhou (Canton) and other Chinese ports to sell carpets, linens, cotton and wool fabrics, metalwork, iron ore, pearls, and ivory.

Overland trade with the Baltic region went via the Volga and other Russian rivers. Along these routes, Middle Eastern traders exchanged manufactured goods for furs, wax, amber, and slaves. The ancient sea trade with East Africa expanded greatly with the spread of Islam and with the establishment of branches of family trading concerns by Arabs and Iranians down the East African coast. Middle Eastern traders exchanged cloth, glassware, weapons, and trinkets for Africa's wood, ivory, palm oil, and gold. Slaves were sent from Africa to the Middle East in large numbers, most remaining in the countries bordering the Red Sea and Persian Gulf, but some going as far as India and China. The trans-Sahara trade blossomed following the introduction of caravans between Egypt, North African ports, and tropical Africa, exchanging African gold, ivory, pepper, and slaves for salt, weapons, copper, textiles, glass-ware, and trinkets.

Trade with Europe eventually would come to dominate Middle Eastern exchange relations, but Europe's lagging development following the sack of Rome confined most European exports to the Middle East to raw materials such as wood, iron, furs, and slaves. In exchange, Europeans received the high-quality manufactures for which the Middle East had long been famous: glassware, metal goods, and fabrics. As corruption eroded Egypt's competitive position during the fourteenth century, manufactures brought by Venetian traders began to displace local products. During the first half of the sixteenth century, Portugal invaded and took control of the Indian Ocean trade, constructing fortifications in ports like Bahrain and charging protection rents to merchants for allowing their goods to pass. The Dutch then displaced the Portuguese from much of their empire, and Portuguese interference with
local shipping waned. Shipbuilding thrived in the Persian Gulf during the eighteenth century, and merchant families grew rich from pearling and long-distance trade. Gulf-based merchants carried a wide variety of goods - including live horses - east to South Asia and west to the African coast. Their predominance in their own region was challenged and gradually eroded during the nineteenth century. In mid-century, competition from British steam-powered ships began taking business from Arab shippers who relied on wind-powered dhows and boums. Near the end of the century, the British navy established protectorates over the smaller emi-rates near the mouth of the Gulf and soon dominated that sea.

During the nineteenth century, the terms of trade between the Middle East and Europe gradually shifted as Europeans penetrated Middle Eastern markets and pressed governments for changes favoring imports over articles produced locally. High value-added products (i.e., manufactured or processed goods rather than raw materials) increasingly came from Europe rather than being produced at home. For example, Morocco had been famous for its refined sugar, but its Middle Eastern markets were overtaken by sugar from southern Europe and by sugar from the New World that had been refined in Europe. A similar displacement occurred later with respect to coffee. Manufactured goods were similarly displaced as fine silk and woolen fabrics, high-quality paper, and glass, which formerly had gone from the Middle East to Europe, began to flow from Europe to the Middle East. New European products, such as clocks, spectacles, and weapons, entered Middle Eastern markets without local competition. Although yarn exports to Europe continued until the end of the eighteenth century, it was clear by the time of the industrial revolution that the Middle East was becoming a peripheral actor in world trade, exporting mostly primary products and importing mostly manufactured and processed goods from the industrializing European core.

Shifting trade patterns accelerated during the nineteenth-century era of globalization, which ended with World War I. Total world trade rose from some $1.7 billion in 1800 to $42 billion in 1913. During this period, the share of world trade going to the Middle East was halved, falling from about 3 percent in 1800 to 1.5 percent in 1913. The slope of the upsurge in trade reflected European investment in steamships and railroads, and what economists like John Gallagher and Ronald Robinson called "the imperialism of free trade": in the name of open markets, Britain forced weaker trading partners to abolish monopolies and local trade regulations and to adopt low uniform tariffs on imports. Referred to as capitulations, these institutional changes ensured that the market effects of competition from an industrializing Europe on artisan production in the Middle East (and elsewhere) would not be moderated by the state. This virtually guaranteed that the region would be incorporated into the global trading system as a dependent exporter of raw materials: tobacco, dried fruits, and cotton from Turkey; silk and opium from Iran; wheat, barley, and dates from Syria and Iraq; silk from Lebanon; oranges from Palestine; and coffee beans from Yemen.

Foreign investment and loans were key elements changing the terms of trade and fostering trade dependency. Egyptian overinvestment in cotton production during the U.S. Civil War displaced local food production and, when cotton prices collapsed, increased Egypt's foreign debt. The protection of foreign creditors served as a justification for imposing on the Egyptian government a joint British-French commission in 1876. Britain used this
opportunity to take control of the Suez Canal and, in 1882, of Egypt itself. Trade deficits combined with heavy foreign borrowing caused the Ottoman Empire to declare bankruptcy in 1875 and, six years later, led to the establishment of the Ottoman Debt Commission. This essentially parallel ministry of finance represented the interests of the Ottoman Empire's creditors, and imposed an early version of conditionality (i.e., the surrender of control over fiscal policy to an agent of foreign creditors) to ensure that they would be repaid.

The Modern Period

The discovery of oil in Iran at the turn of the twentieth century confirmed the position of the Middle East as a supplier of raw materials, defining its position in world trade for the next century. Competition between France and Britain for control of Iraqi oil influenced the way the defeated Ottoman Empire was divided into mandates governed by these two victors after World War I. During the interwar period, oil was found in Bahrain, Kuwait, and Saudi Arabia, while the Iraqi oil industry became the balance wheel regulating the development of production capacity in the region via the Red Line Agreement of 1928. During World War II, trade volume declined regionally and globally owing to blockades, dangers to shipping, and shut-in oil production. Afterward, the production and sale of petroleum came to dominate interregional trade. Starting in 1960, the Organization of Petroleum

Exporting Countries (OPEC) struggled to reverse the unfavorable terms of trade that had beset its Middle Eastern members since the nineteenth century by halting and then reversing the incipient decline in real oil prices that threatened to erode oil-exporter income.

Oil exports altered economic positions intra-regionally. Until 1948, Egypt and Turkey accounted for the majority of Middle Eastern trade. After that, the oil-producing countries captured an enormous proportion of total regional trade, especially exports. Attempts to foster intraregional trade through common markets and regional organizations such as the Gulf Cooperation Council mostly foundered on the shoals of economies deformed by dependent development - that is, development strategies emphasizing oil and gas production rather than goods and services aimed primarily at domestic and regional markets. Local industrial development also was affected by what is sometimes called "Dutch disease" (because the same situation affected Holland during the heyday of its exploitation of the riches of the East Indies), oil export - induced monetary inflation that decreased the competitiveness of local goods as compared to imports. Dutch disease makes domestic production uncompetitive, even at home, further discouraging economic diversification.

The Arab League trade boycott, imposed against Israel after its creation in 1948 and still in effect in a number of Arab countries, was another factor retarding the development of local industries in Arab countries; it also deprived Israeli farms and factories of a nearby market for their products and increased Israel's already massive dependence on foreign assistance. Together, these outcomes increased the power of government over civil society, both in Israel and in the Arab states, by diminishing the capacity of domestic business interests to exercise checks on the state. The boycott also aggravated a conflict that all the region's governments used to their advantage to discourage if not repress domestic dissent.

Middle Eastern trade oscillates in response to political crises and wars, many connected to the Arab - Israeli conflict. In general, crises tend to depress Middle Eastern oil exports, either through oil embargoes or as a result of war-induced oil price increases. For example, the global position of Arab oil exporters was gravely damaged by consumer efforts to find other sources of hydrocarbon imports following the 1973 Arab-Israel war and the Arab oil embargo, which enabled OPEC to raise crude oil prices to what then were unheard-of levels. Ten years later, the volume of oil exports from OPEC countries was half what it had been in 1973. (Oil income did not fall in proportion because of further oil price increases during that period.) Other conflicts, such as the revolution in Iran and the subsequent U.S. trade sanctions against it, and the three Gulf Wars in which Iraq was a major belligerent (1980 - 1988; 1990 - 1991; and 2003), also affected regional trade. The first Gulf War, between Iran and Iraq, was fought in part with oil exports. Iraqi exports were occasionally halted by Iranian attacks but Iraq continued to receive oil income from Saudi and Kuwaiti sales of oil from the former Neutral Zone. Meanwhile, Iran suffered under U.S. trade sanctions, which depressed its export income.

As regards the balance of trade overall, oil-exporting-country revenues usually have exceeded the cost of imported goods and services. Non-oil exporters, such as Egypt, Israel, Syria, Jordan, Yemen, and Turkey, ran trade deficits, some incurred to pay for oil imports. The deficits were covered by foreign aid and loans, leading to large foreign debts. These macro-level effects mask significant changes in non-oil-exporting economies. For most, the composition of exports has changed. Traditional raw-material exports like cotton and grain have declined owing to greater processing and consumption at home. A growing export trade in manufactured goods, such as high-tech equipment and finished textiles, is bringing new trade income to Israel, Turkey, Egypt, Syria, and Lebanon. On the import side, rising incomes from oil exports have trickled down to non-oil-exporting neighbors via labor migration and, prior to the collapse in oil prices in 1986, through intraregional foreign aid. This allowed imports of foodstuffs, durable consumer goods, industrial and transport machinery, and raw materials to rise.

The most disturbing component of Middle Eastern trade is armaments. Higher oil prices in the 1970s were offset by the aggressive marketing of weapons to Middle Eastern Muslim countries. The motives of arms buyers were diverse. Some, such as Iran, Iraq, and Saudi Arabia, sought arms from external patrons as a way to assert their political and religious authority in the region. Others felt themselves to be at a disadvantage as compared to their neighbors, especially Israel, with its virtually First World military industries and its ability to acquire weapons and advanced military technologies, mostly free, from the United States. The overall decline in the world economy following the 1973 Arab-Israeli war made trade-surplus oil exporters attractive targets of marketing efforts by arms exporters from throughout the world. Britain, France, China, and Russia joined the United States in building arms export markets in the Middle East. Beginning in the 1980s, when U.S. policy shifted toward greater marketization of supporting strategic industries by encouraging them to market weapons abroad, then expanding during the 1990s, following the collapse of the Soviet Union, even materials for so-called weapons of mass destruction became widely available for import into the Middle East and elsewhere.

Bibliography

Gallagher, John, and Robinson, Ronald. "The Imperialism of Free Trade." Economic History Review, 2d series, no. 6 (1953): 1 - 15.

Issawi, Charles. An Economic History of the Middle East and NorthAfrica. New York: Columbia University Press, 1982.

Nitzan, Jonathan, and Bichler, Shimshon. The Global Political Economy of Israel. Sterling, VA; London: Pluto Press, 2002.

Schwartz, Herman M. States Versus Markets: The Emergence of aGlobal Economy. 2d edition. New York and Basingstoke, U.K.: Palgrave, 2000.

— CHARLES ISSAWI
UPDATED BY MARY ANN TÉTREAULT

Business or commerce; economic activity.

Quotes:

"This instinctive repulsion which tradespeople inspire in men of sensitive feeling is one of the very rare consolations for being so impoverished which are given to those of us who don't sell anything to anybody." - Louis-Ferdinand Celine

"Is there something in trade that desiccates and flattens out, that turns men into dried leaves at the age of forty? Certainly there is. It is not due to trade but to intensity of self-seeking, combined with narrowness of occupation. Business has destroyed the very knowledge in us of all other natural forces except business." - John Jay Chapman

"Protection is not a principle but an expedient." - Benjamin Disraeli

"The greatest meliorator of the world is selfish, huckstering Trade." - Ralph Waldo Emerson

"We rail at trade, but the historian of the world will see that it was the principle of liberty; that it settled America, and destroyed feudalism, and made peace and keeps peace; that it will abolish slavery." - Ralph Waldo Emerson

"Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains." - Thomas Jefferson

See more famous quotes about Trade