International Trade and Political Institutions

International Trade and Political Institutions

Instituting Trade in the Long Nineteenth Century

Fiona McGillivay, Iain McLean, Robert Pahre and Cheryl Schonhardt-Bailey

International Trade and Political Institutions broadens the public choice theory of trade politics to allow for the study of ideas and institutions within a longer time horizon. The authors use theoretically rigorous historical analysis of international political economy and four important case studies to help untangle the role of ideology, institutions and interests. This illuminating book connects the fields of economics, political economy and history to shed new light on trade theory.

Chapter 2: Agreeable Duties: The Tariff Treaty Regime in the Nineteenth Century

Fiona McGillivay, Iain McLean, Robert Pahre and Cheryl Schonhardt-Bailey

Subjects: politics and public policy, international politics


2. Agreeable duties: the tariff treaty regime in the nineteenth century Robert Pahre The nineteenth century saw an unprecedented expansion of international trade. Railroad networks expanded dramatically, steamships grew in importance, and new sea routes through the Suez and Panama Canals reduced shipping times. As transportation and communication costs fell, trade became possible between hitherto isolated regions. For the first time, food staples such as wheat and beef were traded over long distances. Interdependence in trade also led to increased financial and monetary ties between countries. Politicians apparently helped these changes along. States reformed their fiscal systems in ways that reduced or eliminated arbitrary restrictions on trade. Most European states lowered tariffs as part of this fiscal reform, making tariffs decreasingly important as an obstacle to trade. Many countries also signed trade, navigation and tariff treaties intended to increase the economic ties between them. The secondary literature generally finds that these treaties increased trade significantly. For example, trade treaties led to unprecedented prosperity for French farmers in the 1860s, in part because of greater food exports to Britain (Smith, 1980: 165). By the early 1880s, 1200 items in the French tariff were covered by treaties, while only 300 were subject to the general tariff (Ashley, 1926: 317). Italy’s treaties with Austria, Germany and Switzerland secured important export markets for southern agricultural produce, which prospered as a result (Coppa, 1970). Friedrich List argued that the reciprocal tariff elimination of the German Customs Union (Zollverein), alongside the railroad building...

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