“Peace is the natural effect of trade. Two nations who traffic with each other become reciprocally dependent; for if one has an interest in buying, the other has an interest in selling; and thus their union is founded on their mutual necessities.”

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Image credit: Flickr, flickr.com

The famous French political philosopher Montesquieu penned these words over 250 years ago and they continue to ring true today. We may not always realize it, but it’s quite likely that we’re living in the most peaceful time in human history and it’s no coincidence that it’s the most globalized time as well.

Following World War II, global trade increased in the most rapid pace of the twentieth century. To prevent a third World War and correct the errors following the First World War, the world powers of the 20th century understood that the rebuilding process needed to be an international cooperative effort. In the last 25 years, trade has outpaced world population growth by about 5 percent, with over $18 trillion dollars in goods traded each year, according to the World Trade Organization’s International Trade Statistics 2013 Report.

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Source: World Trade Organization, wto.org

Trade creates the blueprint for a peaceful coexistence between states.  As historian William Lytle Schurz once said, “Borders frequented by trade seldom need soldiers.” The World Trade Organization cites peace as the top benefit of global trade. Trade helps people all over the world achieve prosperity, making them less likely to fight. Cooperation in trade policy between nations, which has resulted in a number of international organs including the European Union, provides a peaceful and diplomatic channels for solving disagreements.  With all eyes on Asia over the recent disputes in the South China Sea it’s difficult to imagine a world without conflict, yet the disincentive for violence exists within trade. In a nutshell, the wars of antiquity were fought for land because more land equaled more resources which equaled more wealth. In today’s world, wealth is derived from trade, economic opportunity, and the exchange or resources, all of which are threatened by the prospect of war. In this way, economic interdependence creates a disincentive for conflict.

Dag Hammarskjöld, Professor of Peace and Conflict Research at Uppsala University, predicts the trend of global peacefulness will continue. According to Hammarskjöld, by 2050, conflicts causing 1,000 or more deaths per year will decrease to just two.

The benefits of trade exist in every fiber of our modern world, from the clothes we wear, the cars we drive, the food we eat, to the technology you’re using to read this. Trade enables and even creates – as with the Bretton Woods System following World War II and lasting until the early 70s – technological innovations in virtually every field.

The distribution and supply chains in our global economy are sometimes the best international connections in our world. It’s why The Global Fund, the largest financier of AIDS, tuberculosis, and malaria programs has improved the availability of lifesaving medication for all three in the most remote villages in the world by using Coca Cola’s supply chain, reducing stock replenishment lead times for the medications by up to two-thirds.

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Source: The World Bank, econ.worldbank.org

Accounting for over 42% of world merchandise trade, developing countries now play an increasingly vibrant role in shaping our world economy – . The results of this has been not only a remarkable decline in global poverty and hunger, but decreasing world conflict over the last 20 years as well. Poverty and conflict are inextricably linked. Over half of the world’s conflicts during 2012 occurred in the poorest quarter of the world. When poverty declines, conflict loses one of its most powerful generators. Crime, violence, poverty and conflict exist when there is a vacuum of economic opportunity.

More powerful than poverty however, are the consequences of trade: peace, prosperity, and international cooperation.

By Steven Dikowitz. Steven wrote this article while engaged as a Princeton in Asia Fellow with the Hinrich Foundation

Works Cited

10 benefits – 1. Peace. (n.d.). Retrieved from World Trade Organization: http://www.wto.org/english/thewto_e/whatis_e/10ben_e/10b01_e.htm

Bornstein, S. (2011, October 22). World Becoming Less Violent: Despite Global Conflict, Statistics Show Violence In Steady Decline. Retrieved from The Huffington Post: http://www.huffingtonpost.com/2011/10/22/world-less-violent-stats_n_1026723.html

Coca-Cola – sharing skills, saving lives. (n.d.). Retrieved from The Global Fund to Fight AIDS, Tuberculosis and Malaria: http://www.theglobalfund.org/en/partners/privatesector/cocacola/

Dadush, U. (2010, July 14). The Future of the World Trading System. Retrieved from Carnegie Endowment for International Peace: http://carnegieendowment.org/2010/07/14/future-of-world-trading-system/4rxx

Hulth, A. (2014, January 13). Our world – an increasingly peaceful place. Retrieved from Uppsala University: http://www.uu.se/en/media/news/article/?id=3135&area=10,16&typ=artikel&na=&lang=en