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Trade is buying and selling goods and services. Trade occurs because people need and want things that others produce or services others perform.

People must have such necessities as food, clothing, and shelter. They also want many other things that make life convenient and pleasant. They want such goods as cars, books, and television sets. They want such services as haircuts, motion pictures, and bus rides. As individuals, people cannot produce all the goods and services they want. Instead, they receive money for the goods and services they produce for others. They use the money to buy the things they want but do not produce.

Trade that takes place within a single country is called domestic trade. International trade is the exchange of goods and services between nations. It is also called world trade or foreign trade. For detailed information on international trade. Trade has contributed greatly to the advance of civilization. As merchants traveled from region to region, they helped spread civilized ways of life. These traders carried the ideas and inventions of various cultures over the routes of commerce. The mixing of civilized cultures was an important development in world history.

The development of trade

Early trade. For thousands of years, families produced most of the things they needed themselves. They grew or hunted their own food, made their own simple tools and utensils, built their own houses, and made their own clothes. Later, people learned that they could have more and better goods and services by specializing and trading with others. As civilization advanced, exchanges became so common that some individuals did nothing but conduct trade. This class became known as merchants. The most famous early land merchants were the Babylonians and, later, the Arabs. These traders traveled on foot or rode donkeys or camels. The Phoenicians were the chief sea traders of ancient times.

Trade was very important during the hundreds of years the Roman Empire ruled much of the world. Roman ships brought tin from Britain, and slaves, cloth, and gems from the Orient. For more than 500 years after the fall of the Roman Empire in A.D. 476, little international trade took place.

The expansion of trade began in the 1100’s and 1200’s, largely because of increased contacts between people. The crusades encouraged European trade with the Middle East. Marco Polo and other European merchants made the long trip to the Far East to trade for Chinese goods. Italians in Genoa, Pisa, and Venice built great fleets of ships to carry goods from country to country.

A great period of overseas exploration began in the 1400’s. Trade routes between Europe and Africa, India, and Southeast Asia were established as a result of the explorations. In the 1500’s and 1600’s, private groups formed companies, usually with governmental approval, to trade in new areas.

Trade between Europe and America was carried on by the chartered companies that established the earliest American colonies. The colonists sent sugar, molasses, furs, rice, rum, potatoes, tobacco, timber, and cocoa to Europe. In return, they received manufactured articles, luxuries, and slaves. Trade also pushed American frontiers westward. Trading posts sprang up in the wilderness. Many of these posts later grew into cities.

Trade today affects the lives of most people. Improved transportation permits trade between all parts of the world. Through specialization, more and better goods and services are produced. Increased production has led to higher incomes, enabling people to buy more of these goods and services.