Case Study C

Question 1

Reasons for tariff policy liberalisation in 19th century? (4)

Answer 1

New ideas (Smith and Ricardo)
Political and power reasons
Moral crusade
Food supply

Question 2

What were Ricardo’s ideas in 1817?

Answer 2

Published book staying theory of comparative advantage showing it makes sense for countries to trade even if one is better at everything, as long as the other has a lower OC of producing

Question 3

What were smiths ideas in 1776?

Answer 3

Published findings on absolute advantage showing that practising free trade leads to higher GDP

Question 4

What were the 2 reasons leading to the repealing of the navigation laws (politics and power)?

Answer 4

Britain strong in shipping tf liberalisation -> increased services exports

Also strongest in financial and commercial sector tf FT made sense

Question 5

What was the ‘moral crusade’ that helped liberalise policy in the 19th century?

Answer 5

Radical liberals believed mercantilism led to conflict tf this led to freer trade and increased international co-operation

Question 6

What was the Cobden-Chevalier treaty of 1860 and why was it significant?

Answer 6

Between Britain and France:
Reduced duties on British manufactured goods to below 30%
Reduced duties on French wines

Led to successive inter-European agreements

Question 7

Why was the worry of food supply a reason for trade liberalisation in the 19th century?

Answer 7

Increasing British urban population, ruling aristocracy afraid Britain wouldn’t be able to feed it tf FT -> increase cheap food imports

Question 8

What are 4 examples of trade liberalisation in the 1800s?

Answer 8

20s - import duties cut
40s - shift in taxes to income from tariffs
‘46 - corn laws repealed tf wheat enters country for free
50s - navigation laws repealed tf no longer have to carry British trade in British ships

Question 9

3 branches off ‘post British liberalisation of 19th century’?

Answer 9

1903 political response
Countries that followed suit
Resistance to liberalisation

Question 10

2 points regarding the 1903 political response to other countries not liberalising?

Answer 10

‘Fair trade’ (retaliation tariffs) of 1880s but very little political support tf flops

Concerns are mainly expressed by media and not MPs

Question 11

What countries followed suit? Why?

Answer 11

Colonies (India and aus. Etc) had it forced upon them

Informal empire - China, turkey, Argentina had it semi imposed on them

Question 12

EV regarding informal empire free trade imposition?

Answer 12

Britain tried to steer Argentina towards free trade policy but doesn’t work that well tf by 1914 Britain is losing trade with them to the USA

Question 13

Explain the main resistance towards free trade and why?

Answer 13

USA and Germany wanted to industrialise but needed to protect their industries to do this

Resistance from USA and Europe (bar France)

Question 14

In 1914 both USA and Germany overtake Britain, attacking their home market as well as their export market

Answer 14

.

Question 15

Change in Canadian import manufactured goods market from 1870 to 1900?

Answer 15

From Britain: 57% down to 24%

From USA: 32% up to 60%

Question 16

Branches off Joseph Chamerlain and Tariff Reform?

Answer 16

Vision for Britain
Geo-Politics
Launch of Campaign

Question 17

What was JC’s vision for Britain and why?

Answer 17

Customs union in empire (FT within and CET for external trade)
Why?
Believed tariffs would create finance for social improvements (OAPS)

Question 18

What was the rationale behind JC’s vision? (2) (where he prioritises and other)

Answer 18

Prioritised ‘white’ empire since most potential for RM + food markets + migration

Assumed industry would remain big economic driver tf thought dependence on services was a weakness, by cementing the block he believed this would ensure definite buyers of British manufacturing exports

Question 19

2 points regarding geo politics and JC’s view?

Answer 19

Believed future belonged to large land masses and populations and resources

Worried that fair trade would fragment empire tf reduce britain’s power

Question 20

2 points about launch of JC’s TR campaign up to the changes?

Answer 20

JC leads til 1906 when he has a stroke

After this the TR is still prominent in politics til WW1 but it begins to change to gain popularity

Question 21

3 changes to JC’s TR campaign?

Answer 21

• argues could become bargaining weapon to get other countries to reduce tariffs
• argued could protect domestic agriculture (tf gets farmer votes)
• increased emphasis on tariffs as a source for social reform (OAPS, unemployment benefits etc)

Question 22

3 overview reasons for pro FT liberals being defeated by conservatives in ‘06 and ‘10 elections?

Answer 22

Contradictions on the campaign
Business view that imports hurt them very little
Consumer view on food

Question 23

Explain the consumer view on food?

Answer 23

Protectionism would lead to increased food prices tf eventually conservatives dropped talk of ‘food tax’

Question 24

What 3 areas of the campaign had contradictions?

Answer 24

Food
Revenue
Treaty bargaining

Question 25

Why were there contradictions regarding food?

Answer 25

If you protect British farmers then Britain becomes less attractive place to export to for empire farmers tf can’t please both farmers and those concerned about food levels wrt population

Question 26

Why were there contradictions regarding tariff revenue? (2)

Answer 26

Trade off between using tariffs to protect domestic markets and using them to raise revenue since at high tariffs levels revenue will fall

Also tariffs had incidence on the consumer tf revenue for social reforms may just come from their own pockets

Question 27

Why were there contradictions regarding treaty bargaining?

Answer 27

Using treaties to bargain other countries’ tariffs down means willingness to compromise on tariff protectionism

Question 28

Explain two industries that were against tariff reform?

Answer 28

Cotton - nearly have of exports go outside empire tf worried GB tariffs -> retaliation (v. Little imports too)

Shipbuilding - Britain builds 60% of war tonnage pre war tf benefits from free trade, also benefits from cheap imports used in production process

Question 29

Explain two industries with mixed views regarding tariff reform?

Answer 29

Iron+steel:
Firms producing semi finished steel face import competition tf favour tariffs, but those producing finished steel benefits from cheap imports of semi finished steel tf against

Agriculture:
Wheat farmers benefit from protectionism but milk farmers benefit from cheap imports of cereals

Question 30

5 reasons why it is unlikely that tariff reform was a missed opportunity?

Answer 30

• rising living costs effects were played down
• ignored the fact that protectionism would featherbed inefficient industries
• solution ignored desire of white dominions to develop an industrial base
• revenue of potential tariffs exaggerated
• economic potential of white dominions exaggerated