19th Century International Trade: Trends and Transformations
18. International Trade in the Nineteenth Century: Transformations and Trends
International trade expanded throughout the 19th century, driven by the globalization of primary products, minerals, and agricultural goods. Europe remained the hub of global commerce, with Britain holding a dominant, albeit declining, position. The growth of trade mirrored its geographical expansion, as more countries and territories joined global trade networks.
Trade Routes: Trade routes largely followed established patterns. Exchanges between European nations predominated. Around 1880-1890, approximately 80% of global trade occurred among industrialized countries. After 1880, a geographical redistribution of trade emerged, with an increase in European exports to developing nations. Despite this shift, global trade remained largely a European phenomenon, reflecting the continent’s advanced economies and the protectionist policies of the United States. This European dominance reveals an asymmetry in globalization.
Trade Composition: The composition of trade underwent significant changes. From 1870 onward, primary products outweighed manufactured goods. This contrasted sharply with the pre-industrial era, where luxury goods and spices dominated trade. This shift was a historical novelty, driven by changes in non-European agriculture and advancements in both sea and land transportation. This pattern evolved between the late 19th century and the eve of World War I: the proportion of primary products declined while manufactured goods, particularly capital goods and intermediate products like chemicals, increased. This reflected changes in the industrial sector, demonstrating that trade was a vehicle for industrialization.
Tariff Policies: The 19th century witnessed a vigorous debate on protectionism versus free trade. The period from 1814 to 1914 saw alternating phases of liberal and protectionist policies. Except for England and smaller nations like Belgium, Holland, Switzerland, and Denmark, free trade was generally short-lived.
Key Phases:
- 1815-1846: Gradual adoption of free trade in the UK, met with neo-mercantilist reactions in continental Europe.
- 1846-1860: UK and continental groups promoted liberalism. The UK abolished the Navigation Acts in 1849, but major powers largely maintained protectionist policies.
- 1860-1879: Free trade spread across much of Europe, facilitated by the Cobden-Chevalier treaty of 1860. The US returned to protectionism, and Russia did not sign a treaty with France until 1874.
- 1879-1892: Resurgence of protectionism in continental Europe, led by Germany’s 1879 tariff. Only a few countries (the Low Tariff Club) and Britain remained committed to liberalism.
- 1892-1914: Nominal strengthening of protective tariffs but a reduction in effective protection in continental Europe. Protectionist pressures emerged in the UK, while developing nations favored free trade. The UK remained a bastion of free trade until 1932.
Despite challenges, free trade made significant strides throughout the 19th century. While its dominance was not absolute, trade between nations became considerably less restricted than in the early 1800s.