Colonial Trade

trade between the imperialist states and the colonial and dependent countries; one of the forms of exploitation of the latter. Colonial trade originated in the period of great geographic discoveries (the mid-15th through the mid-17th century).

During the 17th and 18th centuries trade was usually regulated by noneconomic, administrative methods. Outright robbery coexisted with normative enactments that restricted the colonies’ commercial dealings with the outside world and consolidated the colonial companies’ monopoly rights over trade with the colonies. Colonial trade was one of the sources of the primitive accumulation of capital. Under these conditions, the chief components of colonial trade were the slave trade and the sale of poor-quality wares at high prices in the colonies. The outright pillage of the colonies, as well as the exploitation of the colonial countries by means of colonial trade, through which unequal exchange was effected, played a greater and greater role as large-scale capitalist industry developed. The colonies were gradually drawn into the world capitalist economy and turned into agricultural and raw material appendages of the capitalist countries, that is, into markets for their products and sources of raw materials for capitalist industry. Thus, 65 times more cotton cloth was exported to India in 1835 than in 1814. In 1860, British weavers exported twice as much cloth to India than to Europe and the USA.

During the period of imperialism, the conditions for colonial trade were secured primarily by the military-political suppression of the colonial and dependent countries. Administrative methods of regulating colonial trade were combined with such economic methods as imperial preferences, minimum customs duties or complete exemption from them, and favorable prices that often exceeded the world average. Quantitative restrictions (quotas) on imports from third countries and currency restrictions were applied, particularly after World War II (1939–15), for the purpose of isolating colonies from world trade. Unequal exchange and the less-than-equal status of the colonial and dependent countries in the international capitalist division of labor remained characteristic features of colonial trade. During the period of imperialism colonial trade became one of the chief means by which the monopolies obtained monopolistic superprofits through the exploitation of colonial peoples. Colonial trade strengthened the customs union (an outgrowth of the colonial empires), ensured the leading role of the metropolitan country in the commercial turnover of its colonial possessions, and consolidated the backwardness and monocultural specialization of the colonies. The exports of the colonies were dominated by two or three goods essential to the imperialist countries, whereas their imports were dominated by a broad range of industrial goods and even foodstuffs. This retarded the development of local production in the colonies.

Since the collapse of the colonial system of imperialism, colonial trade has been transformed. The newly independent countries are seeking the abolition of the most one-sided conditions of colonial trade, expanding their mutual trade, and developing mutually advantageous, equal ties with socialist states. They are creating national firms for foreign trade and instituting state monopolies on the import of certain goods, in order to protect the national economy against foreign competition. There has been a noticeable decline in trade preferences favoring the former metropolitan country. In their struggle for equal status in foreign trade the developing countries meet the resistance of the imperialist states, which, applying neocolonialist methods, attempt to keep the former colonies within their spheres of influence. This is the purpose of state-monopoly regulation of foreign trade with the developing countries. In adapting to the new situation, the imperialist countries have been forced to make certain trade concessions in order to strengthen their position in the economies of the newly independent states. The principle of privileges carried over from the colonial period is an obstacle to the elimination of the colonial structure of the foreign trade of the new states. As long as they remain in the world capitalist economic system, the newly independent countries continue to be subject to exploitation by foreign monopoly capital in trade.