Free Trade and Protectionism



In the mid 19th century, efforts were undertaken to remove barriers to free trade, such as export- and import tariffs (in Germany, the Zollverein removed such barriers in the trade between member states) and river and sound tolls. A conference held in Paris in 1856 established an international agreement for navigation on the Danube, then involving Austria, Serbia, Muntenia-Moldavia (soon Romania) and the Ottoman Empire. International treaties in 1857 resulted in the abolition of the Sound toll, collected by Denmark, in 1863 of the Scheldt toll, collected at Antwerp (Belgium). This was not a minor issue; for centuries, the Øresund (Sound) toll had been the largest source of revenue for the state of Denmark.
The United Kingdom, Italy, the Netherlands pursued a policy of low import/eexport tariffs in order to encourage free trade. In case of recently unified Italy, this policy was in the interest of the urbanized north; the industries of the south - the former Kingdom of Two Sicilies, were accustomed to protective tariffs; once these were withdrawn, a good number of enterprises went out of business. The policy of low tariffs is partially to blame for the imbalanced geographical structure of Italy's economy.
Conflicting opinions over free trade had been a major cause for the break-up of the United Netherlands in 1830, and Belgium pursued a policy of protecting her industry against English competition through protective tariffs, a policy, formulated by economist Friedrich List, which also was adopted by the Zollverein for trade with other countries. Protective tariffs collected by the Russian Empire made possible the emergence of a textile industry in Lodz, Congress Poland. The Union of Norway and Sweden (1814-1905) under one dunasty suffered from different economic interests. Norway supplied the United Kingdom with raw materials such as timber and paper and was interested in free trade; Sweden pursued a policy of protecting her industries against foreign competition through protective tariffs. This structure was one of the causes for the break-up of the union in 1905.

The recession of 1874 weakened the Free Trade Movement. Yet later treaties established the principle of free navigation on the Niger and Benue rivers (General Act of the Berlin Conference, 1885), on Germany's navigable waterways (Treaty of Versailles, 1919).




EXTERNAL
FILES
Danube Commission, Summaric Information
Article Toll, from EB 1911
Article Øresund, from Wikipedia
Article Free Trade, from Wikipedia
DOCUMENTS Convention for the Extinguishment of the Scheldt Dues: July 20, 1863, from Avalon Project at Yale Law School
REFERENCE



This page is part of World History at KMLA
First posted on November 1st 2003, last revised on November 16th 2004

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