An increase in trade leads to peace

 

Globalization is one of the most significant aspects of the global economy and over the last century, has been able to bring a diversity of countries together. Developing countries and emerging markets have continued to integrate into the global trade network to such an extent that they have become an integral part of the way that nations interact with one another on a global scale.[1] World trade has increase rapidly since the middle of the 20^th century, and this is to such an extent that numerous countries have been brought together as a means of not only profiting from it, but also creating an environment that it predictable in order not to disrupt trade. There is a tradition among scholars, specifically in the social sciences, to attempt to understand the political, social, and economic consequences of globalization.[2] It is a topic that has been hotly debated over the decades to such an extent that it has come to involve both the general public as well as academia. This debate is one that considers the impact that globalization has had on income inequality, national identity, and economic growth, among other issues. The significance of this debate is based on the manner that globalization, and global trade, has come to change the lives of individuals across the world. This paper focuses on the way that trade integration plays a pivotal role in international relations, especially when one considers the way that it influences interstate conflict.

Military conflict can be extremely disruptive to trade and in the long term can end up impeding economic growth. This is especially the case when one considers the impact that conflict tends to have on international trade.[3] Conflict between countries has a tendency to reduce international trade because most of the resources of the nations in conflict will be diverted to the war effort rather than regular trade. A consequence of this situation is that there is significant damage to the economic welfare of not only the nations involved in the conflict, but other nations within the international system. It therefore becomes essential to consider that trade and conflict take on opposite roles because while trade ensures that there is a level of prosperity for the parties involved in it, conflict, on the other hand, creates an environment within which it becomes quite difficult for economic growth to take place. Instead, there is a scenario where the nations involved end up seeking to cripple one another at a military and economic level to such an extent that rather than having peace between them, there is a level of animosity which prevents them from undertaking joint economic activities. Therefore, trade at the international level seems to have some impact on conflict because it allows for the avoidance of conflict in order to ensure that there is the maintenance of economic ties that are deemed more beneficial.

One of the most important beliefs concerning trade is that an increase in international trade has the potential of reducing military conflict between nations. This is especially considering that most of the countries likely to get involved in conflict will have developed bilateral trade interdependence.[4] However, in a situation where there is the establishment of a level of control over the bilateral trade relations between nations, it becomes more difficult to determine whether or not they are likely to get involved in bilateral conflict. It becomes necessary to consider that global trade openness has to be done in a manner that is in the interests of all parties involved to such an extent that they are not willing to disrupt the status quo through conflict. Instead, trade openness has the potential of making sure that there is a level of trust between the parties involved since they do not seek to take advantage of one another but are rather in a bilateral relationship that is mutually beneficial. The importance of this scenario can be seen through the finding that trade openness has an impact that can be viewed negatively in respect to military conflict because the latter will often take place between nations that do not have a mutually beneficial trade relationship. However, if the relationship is beneficial, it becomes essential for them to maintain their economic interdependence because to do otherwise would mean significant losses.

The potential of an increase in trade costs due to bilateral conflicts leads to the avoidance of such conflicts. Trade costs that come about because of bilateral conflicts not only affect bilateral trade, but also multilateral trade. Thus, nations that are more dependent on the global economy are less inclined to become involved in war because to do so could potentially result in disruptions to their economies.[5] In this way, states that are economically open to others are more peaceful because they will often seek to avoid conflict through international institutions as well as the use of international law. In the process, these nations will also seek to apply good governance in such a way that provides them with a bureaucracy that is focused more on seeking to maintain trade openness while at the same time safeguarding the security interests of the nation involved through the enforcement of international law. These circumstances make is less likely for military actions to be taken; the latter being applied only as a last resort. However, there are instances where because of multilateral trade, there is a reduction in bilateral dependence, meaning that the potential of military conflict is increased because the nation involved could potentially trade with others even after disrupting its relationship with another due to military conflict. Therefore, an increase in trade can be seen as a double-edged sword because while on one hand, it promotes peace, on the other, it ends up creating an environment within which there is a lowering of the opportunity cost of getting involved in military conflict.

An increase in trade interdependence at a bilateral level in addition to global trade openness ensures that there is a reduction of the probability of military conflict. In this way, trade is a critical factor when it comes to the promotion of peace between states because there is a reduction of military conflict between trade partners.[6] Instead, other avenues for the resolution of conflicts between them are used to such an extent that there is little incentive to get into war. Additionally, bilateral trade interdependence between states has the potential of ensuring that they have open avenues of communication that they can exploit for the purposes of bringing about peace-promotion between them. Trade is therefore essential for peace promotion, especially among neighboring countries because of its ability to bring together individuals from these countries who share mutual interests. In this way, it becomes possible to make sure that there is the advancement of shared economic interests between states to such an extent that the incentive for them to get into open conflict is minimized. Thus, while bilateral trade plays an important role in promoting peace between neighboring countries, greater global trade ensures that there is peace between distant countries with trade connections. Trade, in general, ensures that there is the attainment of peace at both the regional and international levels; creating an environment of trust and openness that prevents war as a first option to the resolution of conflict.

Trade integration has a significant effect on conflict between nations. Thus, while bilateral trade has the potential of creating an environment within which conflict is avoided, the same cannot be said of multilateral trade because an increase in such trade will often lead to a situation where countries could get into military conflict. The case of the American invasion of Iraq in 2003 is important because it shows the manner through which the advent of multilateral trade created an environment within which a stronger power sought to take advantage of a weaker one in order to gain access to its resources.[7] However, despite the latter finding, it is important to consider that trade in general is a force for peace since it provides an avenue through which different states are able to work together to not only facilitate, but also expand it to their advantage. It further ensures that there is the creation of an environment within which shared economic interests are made use of as a means of attaining integration, as seen in the case of the EU, which was established on the basis of trade, and common values of its members. Increasing trade ensures that there is the establishment of bilateral and multilateral relationships that play an important role in bringing about greater global stability and peace since the parties involved are often not interested in disrupting trade.

An increase in trade, which has resulted in globalization, has created numerous avenues through which to promote peace. An example of such an avenue is through the way that bilateral trade interdependence has become one of the most significant aspects of the modern world.[8] This interdependence is an advantage because it allows for the promotion of peace between a diversity of nations. Trade ensures that there is the establishment of strong relationships between nations in such a way that there is greater cultural and political understanding at a level that would have otherwise not have been achieved without trade. Furthermore, neighboring countries that have a strong trade relationship are unlikely to get into conflict because of their mutual interest in maintaining their economic integration. The interconnectedness of nations through trade ensures that they are able to enhance their cooperation to such an extent that they are more willing to work together in the resolution of issues between them rather than resorting to hostilities, which end up being seen as unnecessary due to their potential to disrupt trade. However, it is noteworthy that while bilateral trade will promote peace between neighboring countries in an effective manner, the same cannot be said of distant countries. Instead, distant countries are more likely to enhance peace between them through participation in global trade, which involves greater trade openness.

The findings of the analysis above suggest that trade integration not only bring about economic, but political gains as well. This is to such an extent that trading partners will most often end up becoming political partners as well as they seek to make sure that they create avenues through which to enhance their economic cooperation. Economic cooperation inevitably leads to a level of political cooperation which plays a significant role in international politics, especially when one considers that there is less likelihood of conflict between these states because of the diversity of avenues open for their cooperation. Economic integration at both a regional and global level will often be initiated as a means of attaining both security and political goals. Under such circumstances, the economy becomes a security issue which is protected through the encouragement of cooperation between trading partners. An example of such a project, as seen above, is that of the EU, which was formed following the end of the Second World War with the aim of not only securing the European economy, but also prevent conflicts on such a large scale from happening again. It is therefore essential to ensure that there is the promotion of a greater understanding of the connection between an increase in trade and peace in future research.

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[1] Jong‐Wha Lee and Ju Hyun Pyun, "Does Trade Integration Contribute to Peace?," Review of Development Economics 20, no. 1 (2016): 327.

[2] Lang Ping, "How Trade Promotes Peace: A Case Study of Sino-Us Relations [J]," World Economics and Politics 11 (2006): 1; Charles H Anderton and John R Carter, "The Impact of War on Trade: An Interrupted Times-Series Study," Journal of Peace Research 38, no. 4 (2001): 445; Katherine Barbieri and Gerald Schneider, "Globalization and Peace: Assessing New Directions in the Study of Trade and Conflict," ibid.36 (1999): 388.

[3] Philippe Martin, Thierry Mayer, and Mathias Thoenig, "Make Trade Not War?," The Review of Economic Studies 75, no. 3 (2008): 865; Charles H Anderton et al., Globalization and Armed Conflict (Rowman & Littlefield Publishers, 2003), 31.

[4] Dale C Copeland, "Economic Interdependence and War: A Theory of Trade Expectations," International security 20, no. 4 (1996): 5.

[5] Massimo Morelli and Tommaso Sonno, "On Economic Interdependence and War," Journal of Economic Literature 55, no. 3 (2017): 1085.

[6] Johann Park, "Economic Interdependence, Polity Type, Conflict and Peace: When Does Interdependence Cause Peace and Cause War?," Journal of International and Area Studies 25, no. 1 (2018): 21.

[7] Gearóid Ó Tuathail, "“Just out Looking for a Fight”: American Affect and the Invasion of Iraq," Antipode 35, no. 5 (2003): 856.

[8] Saul B Cohen, "Global Geopolitical Change in the Post-Cold War Era," Global Geopolitical Change  (1991): 551; Rafael Reuveny and Heejoon Kang, "Bilateral Trade and Political Conflict/Cooperation: Do Goods Matter?," Journal of Peace Research 35, no. 5 (1998): 581.