## TRADE IN WAR: Economic Cooperation across Enemy Lines

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### Overview
- Book: Trade in War: Economic Cooperation across Enemy Lines by Mariya Grinberg; Cornell University Press, Ithaca, NY, 2025, 259 pp., $48.
- Reviewer: Elizabeth Van Heuvelen, senior economist in the IMF’s Strategy, Policy, and Review Department.
- Central question: Why do warring countries trade with each other? Grinberg posits both economic and security imperatives and frames wartime trade as the balance: “countries allow as much wartime trade as makes military sense and prohibit as much militarily dangerous trade as is economically viable.”

### Historical turning point: Neutral rights and the Crimean War
- Prior norm: Trade during wartime was considered a nonstarter because it was seen as contributing to military capability.
- Case detail: During the Crimean War, late-melting ice in the Baltic Sea caused produce already paid for by France to be stuck in Russian ports; this circumstance enabled France to persuade Britain and Russia to allow the shipment through despite the ongoing war.
- Institutional outcome: This episode opened the way to a declaration on the rights of neutrals and eventual adoption of the Declaration of Paris, which codified practices that allowed trade to continue across subsequent conflicts and shifted perceptions of acceptability of trade during conflict.

### Analytical framework: Conversion time and the trade-off
- Key concept: “Conversion time” — the time it takes for traded products to be converted into military capability — is central for assessing wartime trade decisions.
- Decision rule: Wartime commercial decisions weigh immediate military benefits of denying trade against long-term economic costs and revenue generated by trade.
- Implication: States develop more sophisticated frameworks to permit or prohibit trade based on conversion time and revenue considerations rather than absolute bans.

### Case study: World War I commercial policy dynamics
- Britain: Began with a lax trade policy based on anticipation of a short war; policy tightened as the war dragged on.
- Germany: Adopted more prohibitive policies early, predicting dire stakes; later allowed more trade once the conflict was understood to be protracted.
- Interpretation: Both sides adjusted trade policy dynamically in response to changing expectations about duration and stakes of the conflict.

### Modern relevance: Global value chains and decoupling
- Contemporary complication: Strategic calculations are more complex in today’s global economy because of global value chains and economic interdependence of major trading partners.
- Prediction: Grinberg’s analysis suggests decoupling is highly unlikely even amid heightened tension.
- Through line: Economic cooperation can thrive even in the most hostile times.

### Key findings and takeaways
- Wartime trade is governed by a balance between security imperatives and economic imperatives rather than by categorical prohibition.
- Institutional and normative shifts (e.g., neutral rights, Declaration of Paris) enabled continued trade during conflict.
- The conversion time of goods into military capability and revenue considerations are decisive in wartime trade policy.
- Historical cases (Crimean War, World War I) illustrate dynamic, contingent policymaking rather than fixed doctrine.
- In the modern era, interdependence and global value chains make wholesale decoupling unlikely; cooperation persists despite hostility.

*Elizabeth Van Heuvelen is a senior economist in the IMF’s Strategy, Policy, and Review Department.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2025/09/books-van-heuvelen.pdf_