In the early 18th century, a complex trading network was established by Britain over the North Atlantic Ocean. This trade network was influenced quite heavily by the climatic and economic conditions of Britain. The North Atlantic trade route is an apt example for the comparative cost theory by Heckscher Ohlin where America exported land-intensive commodities and Europe exported labour intensive goods (Roy, 2000).
This trade was practiced by the colonizers to enhance the economic resources of their mother country. The North Atlantic Ocean became the highway that facilitated the trade between Europe, America and Africa; where goods like cotton, tobacco, timber, grains, etc. were traded. Apart from these, Labour and cattle were extensively traded. Mercantilism, followed by the European Union ensured the balance of trade. Triangular Trade was the result of mercantilism.
Triangular trade was a system wherein Europe supplied finished products to America and Africa; and in turn, America provided raw materials to Europe and Africa, and Africa supplied labor to America and Europe. As per the above explanation, it would seem like all three regions now had access to the resources they needed the most, thus making them all better off. But in reality, this was not the case. Ships from Europe made extra stops in the other two regions, which increased the already evident inequalities amongst these three regions.
How did this affect Native Americans?
Native Americans, were heavily affected. Europeans provided guns, knives, kettles, alcohol, and glass beads, which served in religious ceremonies. In turn, the native Americans supplied beaver furs and deerskins which were especially convenient as native Americans did all the hunting. This led to conflict in the native American land, as tribes now began to compete amongst each other to gain control over the English, French and Dutch markets. They fought to ensure that the tools and guns did not reach their rival tribes. Subsequently, Europeans could not to pick a side, as choosing one native American region would lead to enmity with the others. The Natives were forced to encroach upon each other’s hunting territories, and hunt beavers near to extinction. Frequent wars did not help the conditions.
History of Transatlantic trade
Initially, the relationship between Europe and America was based merely on colonialism and mercantilism, and American states today can be traced back to European colonial roots. After the United States became independent one-way migration between the two was prominent. The United States, despite trying to keep a distance from European affairs politically, during the first world war, many Americans were fighting in Europe. The Roosevelt administration wanted to engage in war against Germany, though the majority in America was too disillusioned and terrified after World War 1. In the wake of the Pearl Harbour attack on December 7, 1941, America became an important key to the war effort and ultimately, European politics. After World War 2, the US and Canada both wanted a role in the defence of Europe and Europe wanted protection from the Soviet Union. This resulted in the North Atlantic Treaty organization which became vital to Transatlantic relations, advocating for close cooperation between Europe and North America. (Cătălin et al., 2015)
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Economic benefits of Transatlantic trade
A Transatlantic Trade is one that advances economic freedom and hence could carry generous financial advantages to both the United States and the European Union. Transatlantic trade is part of a wider system of advancing free trade and economic freedom in the United States ,with Europe, and around the globe (Bromund, Coffey and Riley, 2014). Understanding the benefits of free trade, the world has started entering into agreements that take genuine and significant steps toward advancing economic freedom. From an economic standpoint, the United States and the whole European Union will benefit from the destruction of tariffs and non-tariff exchange obstructions between the two regions (Stiftung, 2013). This will lead to an increase in the per capita GDP of the United States and the 27 European Union member nations. Likewise, when one looks at labor markets, the positive effects on business prevail. Two million extra jobs could be made in the Organization for Economic Co-operation and Development (OECD) zone in the long run.
The United States and the European Union are arranging an economic deal—the Transatlantic Trade and Investment Partnership (TTIP). As indicated by the London-based Centre for Economic Policy Research, Transatlantic Trade and Investment Partnership can increase the European Union exports to the United States by 28 percent. This incorporates a 40 percent expansion in motor vehicle exports, metal items, processed foods, and different products. Simultaneously, EU yearly GDP stands to expand by €120 billion, with disposable income of a family of four expanding by €545 every year (Selig. M.2016). TTIP will expand on this framework through completely enforceable labor and environmental protections, as well as insurances to guarantee the free-flow of information while saving each side's unmistakable way to deal with the security of protection. The agreement will put the United States and the European Union in charge of the worldwide trading system and guarantee the high standards that mirror our common values.
Goods traded
Britain and its colonies engaged in triangular trade and shipped natural resources, goods and slaves across the Atlantic Ocean to complement their land. The Atlantic Ocean served as a link between Europe, Africa and the Americas, connecting people, raw materials and finished commodities. In addition to a source for cheap supply of materials like timber, sugar, tobacco, furs etc., the colonies also served as a market for finished goods like furniture, guns and metal. This led to the development of “triangular trade, where Europe supplied Africa and America with finished goods, and the Americas provided raw materials to Europe and Africa, and Africa would then supply America with enslaved laborers.” (Slave Trade, n.d.). Ships carrying mixed goods such as cotton, brass pans and guns would move to Africa to buy slaves. These slaves were then shipped across the ocean to the Caribbean and America. The ships would then load goods like tobacco, sugar, indigo, rice, rum and cotton and take them back to Europe (Trade goods for slave trade, n.d.). However, by the 1700s, as warfare became fiercer and more brutal, both Europeans and Native Americans enriched themselves by seizing and selling their native enemies as slaves bound for the Caribbean.
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