Export Management - Strategy

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CHAPTER 1

THE HISTORICAL OVERVIEW OF EXPORTING

Introduction

The history of exporting is an interesting study to understand the development of the world, as we know it. A journey back through time will create an interest and greater understanding of how exporting has developed into what it is today. The shipping of goods by different countries has been around since before recorded history. A tremendous contributor to our economy today can be attributed to exporting. Many of the goods we use today have been imported from other countries for economic or resource reasons.

Exporting has been a way of life as far back as recorded history. It has been a way of life for centuries as countries have shipped and received good and products. The unique resources to various areas of the world have helped to necessitate trade around the world. Trading has proven to be an avenue to meet the wants and needs of all corners of the world as well as stimulate the economy on a global level.

This chapter will explore the history of exporting and consider significant factors that have helped to shape the world economy to this day. From the early days of free trade in Asia to the twenty first century challenges, exporting has evolved into a global network that spans across all countries.

One of the earliest considerations that will be discussed is the need that developed for major legislation. Government has had to intervene on the issue of exporting to create guidelines and enforce them in order to ensure proper conduct. Ethical issues needed to be addressed to eliminate possibilities of monopolies. Monopolies give certain companies too much control of a good or product that creates the possibility of unfair price hikes. Legislation implemented by the United States will be considered. Much of the legislation that will be discussed is in still in tact today with some revisions to adapt to the changes in society.

Global impacts of exporting will also be introduced. The petroleum industry and the formation of the Organization of the Petroleum Exporting Countries (OPEC) in 1960 are major historical landmarks to be considered as one considers the history of exporting. Petroleum exporting is still a viable part of the world economy today and history can be a great tool to understand the global economy today.

History of Exporting

Countries have been trading goods since there were established political boundaries and concepts of economy. As means were available to facilitate the movement of goods, market expansion has called for the trade of materials that were common in one geography or region to markets in which they were rare, unattainable, or economically difficult to obtain. As transportation methods advanced beyond the carrying of goods by people and animals, the range of trade expanded. Today, goods are traded freely throughout the world subject to local laws and tariffs.

Very early records indicate that prehistoric Britain was engaged in active exports. Tin was being exported from the British Isles as early as 325 B.C. Researchers believe that Ancient Britons traded extensively with continental Europe and thus established cultural links as early as the Neolithic period. Modern European trade was not established until much later however. While Europe is often thought of as the founders of international trade with the Spanish galleons and Dutch traders gaining many of the pages in western history books, the center of trade and commerce was not always in Europe.

The earliest exporters in modern history came from Asia. During the early years of international trade and commerce, Asia was the primary source of economic activity. In fact, European trade did not come about until much later. In fact, some believe that the development European trade was actually late in developing. Between 1450 and 1750, Asian influences, trade, and culture dominated the world. The Chinese, Turkish Indian and Persian empires were powerful economically and politically. In fact, they were the dominant world cultures until the end of the 18th century. Spices, tea, and porcelain were among the products coming from China, India and the other Asian geographies. In the 1800's, tin was being mined in Seangor and exported around the world. In 1874, Seangor came under British occupation. Resultantly, in 1880 the Selangor government was uprooted to and moved from Klang to Kuala Lampur.

Europe and Asia began trading in earnest in the 1700s. The shipping lanes were heavily guarded, as the free exchange of goods was vital to the economies and survival of both regions. Currencies and commodities were freely traded across the Indian and Atlantic Oceans by the 1800's via British, French, and Dutch companies. State power was directly tied to controlling the movement of goods and services. Nations directly sponsored such commercial enterprises using their treasuries. This mercantile practice and expansion in the Indian Ocean reflected the portfolio capitalism of Asia in the 1700's.

With the colonization of the "New World", America made its entrance into the world of global commerce and exports with tobacco. It is said that in 1614, one of the most historic events in western history took place. The first shipment of tobacco from Virginia was sold in London. [1] Despite political wrangling in England, James I allowed the trade of tobacco to Europe to continue. It was vastly successful.

By 1639, Jamestown had exported 750 tons of tobacco. Tobacco was the American colonies' chief export. The Jamestown colonists had not found gold, or a route to the South Seas, nor the Lost Colony of Roanoke Island. But they had found tobacco. Tobacco had brought the settlement from wretched failure to giddying success. Tobacco had created the need for labor at any price (even institutionalized slavery), and--since it wore out the soil every 4-7 years--the mad rush for land all through the waterways of the Chesapeake Bay--or, as the entire area soon became known as the "Tobacco Coast." [1]

The greed and economic viability of the tobacco and other labor-intensive agricultural