What does triangular trade have to do with the modern global economy? Could the current level of complexity in interdependencies have been reached without the planning of these transoceanic routes?
Although trade between countries was already important before the triangular trade began , even when they were located on different continents, it can be said that the world economy we know today is essentially a consequence of the European voyages of discovery in the 15th and 16th centuries.
Triangular trade: the three journey routes to power
China had been trading with Europe along the famous Silk Road through Central Asia since Roman times. Africa, for its part, had been connected to Europe for years through the gold trade, which relied on frequent exchanges with countries in the north of the continent. But one piece was still missing to complete the triangle.
The expedition of Columbus, Vasco da Gama, and Magellan, which culminated in the discovery of America, laid the foundations for the current global economic system. The triangular trade that would emerge a few years later already had its three points.
The pattern of transatlantic trade that prevailed from shortly after the discovery of the Americas until the outbreak of the American Civil War was called the triangular trade. This arrangement involved:
- Exporting slaves from Africa to the New World . Once on American soil, they were forced to work in fields where sugar, cotton, and other basic products were produced.
- Exporting these basic products and raw materials to Western Europe. The goods arrived on our continent either to be consumed or to be incorporated into various manufacturing processes.
- Exporting part of the production of these manufactured goods to Africa . There, they were traded and slaves were paid for.
In triangular trade, logistics and its pursuit of efficiency stand out, inspiring the current way of operating for international trade players.
Centuries ago, at that time, a single ship could complete the entire circuit from Liverpool or Nantes carrying textiles, firearms, and liquors to strategic points on the West African coast.
It was the first stop. Then the second part of their journey began, crossing the Atlantic Ocean with the hold full of slaves towards Kingston or Port-au-Prince.
Once the ship docked, without wasting a moment, the slave trade in the Americas began, while the first goods were already being loaded onto the deck. These included sugar, tobacco, and cotton. The ship then returned to its original port with these cargoes.
However, although this was the foundation of the triangular trade, it is now known that, once the first voyages were completed, specialization became the preferred approach . The volume of trade was large enough to make it worthwhile to build ships designed to cover each leg of the journey.
Although each of the three routes had its own ships, the term triangular trade could still be applied , since it is the expression that best represents the tripartite exchange of slaves, raw materials and manufactured goods, regardless of the mode of transport.
Interesting facts about triangular trade
The pressure to reduce costs while simultaneously increasing quality is not a concern unique to our time. While today it forms part of the strategy of most companies, along with a focus on the customer, in the era of triangular trade, this pursuit influenced some important decisions.
Proof of this is that intercontinental trade routes were actually even more extensive than those typically represented by the three sides of a triangle. Trading expeditions even included a fourth continent: Asia.
For most of the 18th century, the textiles traded for slaves on the west coast of Africa originated on that continent. Specifically, they were manufactured in India and exported from there by British and French companies based in the region.
Once again, the connection between triangular trade and current practices is evident. Today, many of the most successful and internationally renowned entrepreneurs in the textile sector are turning to Asian countries to establish their production facilities.
There, they benefit from:
- Lower labor costs.
- Less stringent regulations than in Western countries.
- Proximity to sources of raw materials.
- Higher quality raw materials.
Even then, European-owned manufacturers decided to focus on Indian fabrics, which were better suited to the African climate and taste, since that was where a significant part of the production was traded.
The complexity of today’s global economy, which characterizes our time, is reflected in those early major exchanges fostered by triangular trade . However, if there is one aspect where comparisons are impossible, it is in the flow of information.
Currently, the internet and big data, along with advances in new technological tools, empower international trade actors with the power of knowledge to make the best decisions and minimize risk . Errors are reduced while precision increases. New problems arise, and solving them offers us a unique opportunity to change the course of history and shape the future of trade. What transformation will lay the foundation for a new model of trade?