Open main menu
This page has been proofread, but needs to be validated.
772
COMMERCIAL TREATIES


durable instead of personal nature; the conversion of permissive into perfect rights; questions as to contraband and neutral trade stated in definite terms. Treaties were at first limited to exclusive and distinct engagements between the contracting states; each treaty differing more or less in its terms from other similar compacts. Afterwards by extending to a third nation privileges granted to particular countries, the most favoured nation article began to be framed, as a unilateral engagement by a particular state. The Turkish capitulations afford the earliest instances; and the treaty of 1641 between the Netherlands and Portugal contains the first European formula. Cromwell continued the commercial treaty policy partly in order to obtain a formal recognition of the commonwealth from foreign powers. His treaty of 1654 with Sweden contains the first reciprocal “most favoured nation clause”:—Article IV. provides that the people, subjects and inhabitants of either confederate “shall have and possess in the countries, lands, dominions and kingdoms of the other as full and ample privileges, and as many exemptions, immunities and liberties, as any foreigner doth or shall possess in the dominions and kingdoms of the said confederate.” The government of the Restoration replaced and enlarged the Protectorate arrangements by fresh agreements. The general policy of the commonwealth was maintained, with further provisions on behalf of colonial trade. In the new treaty of 1661 with Sweden the privileges secured were those which “any foreigner whatsoever doth or shall enjoy in the said dominions and kingdoms on both sides.”

In contemporary treaties France obtained from Spain (1659) that French subjects should enjoy the same liberties as had been granted to the English; and England obtained from Denmark (1661) that the English should not pay more or greater customs than the people of the United Provinces and other foreigners, the Swedes only excepted. The colonial and navigation policy of the 17th century, and the proceedings of Louis XIV., provoked animosities and retaliatory tariffs. During the War of the Spanish Succession the Methuen Treaty of 1703 was concluded. Portugal removed prohibitions against the importation of British woollens; Great Britain engaged that Portuguese wines should pay one-third less duty than the rate levied on French wines. At the peace of Utrecht in 1713 political and commercial treaties were concluded. England agreed to remove prohibitions on the importation of French goods, and to grant most favoured nation treatment in relation to goods and merchandise of the like nature from any other country in Europe; the French general tariff of the 18th of September 1664, was to be again put in force for English trade. The English provision was at variance with the Methuen Treaty. A violent controversy arose as to the relative importance in 1713 of Anglo-Portuguese or Anglo-French trade. In the end the House of Commons, by a majority of 9, rejected the bill to give effect to the commercial treaty of 1713; and trade with France remained on an unsatisfactory footing until 1786. The other commercial treaties of Utrecht were very complete in their provisions, equal to those of the present time; and contained most favoured nation articles—England secured in 1715 reduction of duties on woollens imported into the Austrian Netherlands; and trading privileges in Spanish America. Moderate import duties for woollens were obtained in Russia by the commercial treaty of 1766. In the meanwhile the Bourbon family compact of the 15th of August 1761 assured national treatment for the subjects of France, Spain and the Two Sicilies, and for their trade in the European territories of the other two states; and most favoured nation treatment as regards any special terms granted to any foreign country. The first commercial treaties concluded by the United States with European countries contained most favoured nation clauses: this policy has been continued by the United States, but the wording of the clause has often varied.

In 1786 France began to effect tariff reform by means of commercial treaties. The first was with Great Britain, and it terminated the long-continued tariff warfare. But the wars of the French Revolution swept away these reforms, and brought about a renewal of hostile tariffs. Prohibitions and differential duties were renewed, and prevailed on the continent until the sixth decade of the 19th century. In 1860 a government existed in France sufficiently strong and liberal to revert to the policy of 1786. The bases of the Anglo-French treaty of 1860, beyond its most favoured nation provisions, were in France a general transition from prohibition or high customs duties to a moderate tariff; in the United Kingdom abandonment of all protective imposts, and reduction of duties maintained for fiscal purposes to the lowest rates compatible with these exigencies. Other European countries were obliged to obtain for their trade the benefit of the conventional tariff thus established in France, as an alternative to the high rates inscribed in the general tariff. A series of commercial treaties was accordingly concluded by different European states between 1861 and 1866, which effected further reductions of customs duties in the several countries that came within this treaty system. In 1871 the Republican government sought to terminate the treaties of the empire. The British negotiators nevertheless obtained the relinquishment of the attempt to levy protective duties under the guise of compensation for imposts on raw materials; the duration of the treaty of 1860 was prolonged; and stipulations better worded than those before in force were agreed to for shipping and most favoured nation treatment. In 1882, however, France terminated her existing European tariff treaties. Belgium and some other countries concluded fresh treaties, less liberal than those of the system of 1860, yet much better than anterior arrangements. Great Britain did not formally accept these higher duties; the treaty of the 28th of February 1882, with France, which secured most favoured nation treatment in other matters, provided that customs duties should be “henceforth regulated by the internal legislation of each of the two states.” In 1892 France also fell out of international tariff arrangements; and adopted the system of double columns of customs duties—one, of lower rates, to be applied to the goods of all nations receiving most favoured treatment; and the other, of higher rates, for countries not on this footing. Germany then took up the treaty tariff policy; and between 1891 and 1894 concluded several commercial treaties.

International trade in Europe in 1909 was regulated by a series of tariffs which came into operation, mainly on the initiative of Germany in 1906. Austria-Hungary, Belgium, Bulgaria, Germany, Italy, Rumania, Russia, Servia and Switzerland, were parties to them. Their object and effect was protectionist. The British policy then became one of obtaining modifications to remedy disadvantages to British trade, as was done in the case of Bulgaria and Rumania. An important series of commercial arrangements had been concluded between 1884 and 1900 respecting the territories and spheres of interest of European powers in western, central and eastern Africa. In these regions exclusive privileges were not claimed; most favoured nation treatment was recognized, and there was a disposition to extend national treatment to all Europeans and their trade.

The Turkish Capitulations (q.v.) are grants made by successive sultans to Christian nations, conferring rights and privileges in favour of their subjects resident or trading in the Ottoman dominions, following the policy towards European states of the Eastern empire. In the first instance capitulations were granted separately to each Christian state, beginning with the Genoese in 1453, which entered into pacific relations with Turkey. Afterwards new capitulations were obtained which summed up in one document earlier concessions, and added to them in general terms whatever had been conceded to one or more other states; a stipulation which became a most favoured nation article. The English capitulations date from 1569, and then secured the same treatment as the Venetians, French, Poles and the subjects of the emperor of Germany; they were revised in 1675, and as then settled were confirmed by treaties of subsequent date “now and for ever.” Capitulations signify that which is arranged under distinct “headings”; the Turkish phrase is “ahid nameh,” whereas a treaty is “mouahedé”—the latter does, and the former does not, signify a reciprocal engagement. Thus, although the Turkish capitulations are not in themselves treaties, yet by subsequent confirmation they have acquired the force of commercial