Our subject this evening is the relationship between trade and peace, and more specifically, the use of trade to promote peace. This topic has long been a subject of academic and public debate.
Trade and peace are closely linked. History has many examples of the need to create peace in order to have trade. Plutarch, writing around 100 AD, tells us that Pericles in the 5th century B.C. took a fleet into the Black Sea to demonstrate Athenian power and secure the grain route from the Crimean Peninsula. He then called together all Greeks, in Europe and in Asia, to a general assembly to discuss recovery from war and “the navigation of the sea, that they might henceforward pass to and from and trade securely and be at peace among themselves”.
Peace enables trade. If we needed a lesson on this, we received it in February of this year, when Russia invaded Ukraine. We in the developed world had grown unused to war between nation-states. The Russia-Ukraine war is the first between WTO Members, or for that matter GATT Contracting Parties. This war is now on the television news each evening. It is a major factor in both geopolitics as well as global economics. Trade did not cause this war; nor did trade prevent it. Territorial ambitions of a large state adjacent to a smaller state started the conflict, not for the purpose of seizing productive assets – as was the case in the August 2, 1990, Iraqi invasion of Kuwait, an invasion which gave Iraq 20% of the world’s oil reserves.
Ukraine accounts for merely 3% of Russia’s exports and would not have been a significant factor in Russia’s decision to invade. However, the implications for global trade are profound, felt far beyond the borders of the Black Sea. The Allies (led by the United States and the EU) have limited imports from and exports to Russia as sanctions seek to halt the conflict or at least weaken Russia’s resolve. The Black Sea becoming a war zone has blocked food and fertilizer exports from both Ukraine and Russia, with serious adverse consequences particularly for a number of countries in Africa, with the possibility of reducing domestic peace in the region if hunger is widespread. Russia has limited its gas exports to Europe, a substantial disruption of the EU’s consumption of energy. Trade is clearly both a weapon of this war as well as a casualty of it.
