<snip>
The Myth of Free-Trade Britain
by John V.C. Nye*
"Free trade should mean just that: free trade, with all goods admitted without duties, quotas, or restrictions. That was not British policy. They removed most tariffs but mostly on items in which they had a comparative advantage."
March 3, 2003
In the two and a half centuries since Adam Smith first articulated the basic case for free trade, no event has been more significant than the British conversion to open markets in the nineteenth century. In the fable that is now conventional wisdom, nineteenth century Britain turned its back on protection and chose to open its markets to the world. A reform-minded British leadership, preaching the new gospel of free trade pushed their European confreres to open up their own markets, eventually ushering in an age of expansive commerce the likes of which the world had never seen—a precursor of late twentieth century globalization that was in many ways more open than anything before or since.
As the story is usually told, British free trade came in the 1840s after a bitter political struggle to repeal the Corn Laws—a name given to a series of agricultural tariffs and quotas designed to keep farm prices high. This was quickly followed by rapid and dramatic reductions in duties on hundreds of imports. By the 1850s, all but a handful of commodities were admitted to Britain free of all duties. Sounds good, until you look closely at what products remained subject to high duties: those handful of items were the most contentious and some of the most highly taxed items that historically had been at the core of the mercantile debate in British history. In previous centuries they formed a large and significant fraction of British trade. <snip>
Indeed, it was not British unilateral tariff reduction that moved the world to freer trade. Despite the belief that is still common today that British exhortation opened the doors to European free trade in the late 19th century, it was the 1860 Treaty of Commerce, promoted by the Napoleon III and concluded between Britain and France, that really ushered in the age of nineteenth century "globalization". British demands for unilateral tariff reduction usually fell on deaf ears.
Doctrinaire free traders and economic theorists opposed the use of commercial treaties since they felt that unilateral reductions were the most efficient policies for all countries. While correct in the abstract, such claims did little to overcome political resistance to trade liberalization in most countries. On the other hand, unwillingness on the part of the British to lower wine tariffs killed early trade negotiations with both France and Spain. When the British finally decided to moderate their wine tariffs, Britain and France successfully concluded a treaty in 1860 which dramatically changed the landscape of European commerce. Politicians throughout Europe—who had till then resisted all pressure to liberalize trade—suddenly became fearful of being left out of a trade pact that united the two great European powers. The result was that the other major European powers quickly signed bilateral treaties with Britain and France as well. <MORE>
http://www.econlib.org/library/Columns/y2003/Nyefreetrade.html<other links>
http://www.thecornerhouse.org.uk/item.shtml?x=51960http://www.christian-aid.org.uk/news/media/pressrel/040923p.htmhttp://www.irregulartimes.com/freemarketsystem.html
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
