Contextualising the drivers for trade: Some lessons from historical case studies

Abstract

This paper uses three historical trade case studies, oil trade, bulk commodities and containers, to explore and better understand the drivers of shipped trade. This qualitative work explores the relevance of established drivers, such as economic growth, and identifies additional factors which have shaped trade patterns. This work adds a new dimension to quantitative approaches, such as cross-country regression analyses, which although are often used to ascertain the importance of potential drivers for trade may face difficulties, particularly when drivers are complex or interlinked. Our analysis considers inter-related economic and political factors which have influenced changes in trade patterns. The results confirm the importance of elements such as economic growth, openness (such as a lack of tariffs), geography and transport costs and for each of the case studies explains the context which gave rise to these drivers. This analysis affords three main conclusions, firstly distinct trading regions may react differently to similar circumstances, secondly, policies which can influence both supply and demand can have a significant impact on established trade patterns and finally initially isolated elements can (with the benefit of hindsight) prove to have had a significant impact on trade.