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Published by EH.NET (February 2002) 
 
Peter T. Marsh, _Bargaining on Europe: Britain and the First Common Market, 
1860-1892_. New Haven: Yale University Press, 1999. ix + 246 pp. $30 
(cloth), ISBN: 0-300-08103-0. 
 
Reviewed for EH.NET by Douglas A. Irwin, Department of Economics, Dartmouth 
College. <[log in to unmask]> 
 
 
Those interested in the history of trade policy know the late nineteenth 
century as the period in which Britain pursued a policy of unilateral free 
trade after its repeal of the Corn Laws in 1846. Having tried 
unsuccessfully to negotiate reciprocity treaties in the 1820s, Britain 
foreswore tariff bargaining as counterproductive. With sentiments running 
in favor of laissez faire, Britain chose low tariffs for itself and left 
other countries to decide upon the best policies for themselves. In 
addition, Britain had virtually no tariffs to bargain away by the late 
nineteenth century. 
 
Yet there is an important qualification to this story. Britain succumbed to 
temptation and violated its "no bargaining" policy by signing the 
Anglo-French Treaty of Commerce in 1860. Although Britain never again 
signed a major tariff-reduction agreement with another major power during 
this period, the Anglo-French treaty ushered in a new era in European trade 
relations. As a result of the treaty, a network of bilateral trade 
agreements based on most favored nation (MFN) trading status spread across 
Europe as other countries sought to obtain equal access to the French 
market in the aftermath of the accord. (The British tariff reductions were 
made on an MFN basis, while the French tariff reductions were 
preferential.) This network of treaties was never formalized into a single 
regime, but British policy makers did explore whether a pan-European trade 
agreement would be viable. If pursue, this venture could have been a 
precursor of European Economic Community (formed in 1958) or even the 
General Agreement on Tariffs and Trade (formed in 1947). 
 
Britain's trade policy vis-a-vis Europe from 1860 to 1893 is the main 
subject of Peter Marsh's fine book. He explores this neglected chapter in 
trade policy history through extensive archival research that sheds much 
new light on the views and conflicts among British policy makers, as well 
as the European reaction to the British efforts. 
 
Marsh opens by investigating the (mainly British) politics behind the 
Anglo-French accord. As he notes, "the most remarkable thing about the 
Anglo-French treaty of 1860 was the chain reaction it produced." Within six 
years, France had signed commercial treaties with eleven other countries. 
But Britain faced a serious dilemma: having reduced its own duties, it had 
no leverage with which to induce other countries to reduce their tariffs. 
Britain hoped that equity considerations would persuade other countries to 
treat British products liberally since its own market was open. This was a 
slim reed on which to base policy, since few countries were moved by such 
"equity" considerations. As Marsh puts it, "The example that Britain set in 
scuttling most of its tariff found few continental admirers and all but 
destroyed Britain's bargaining power." Partly as a result of the 1860 
accord, other countries thought about tariff reductions as "concessions" 
and not necessarily a domestic benefit. Britain could never adequately 
resolve the dilemma on how to formulate a trade policy when its tariffs 
were already very low. 
 
The internal politics of trade policy in Britain further complicated 
matters. The Foreign Office was loath to act on behalf of domestic 
commercial interests. The Board of Trade wanted Britain to play a more 
activist role, but the Foreign Office lorded over foreign negotiations and 
the Exchequer fretted about the revenue impact of cutting duties on ine and 
spirits any further. The result was inaction. 
 
By 1866, the treaty network was largely in place. The network survived the 
strains of war (Austro-Prussian in 1866, Franco-Prussian in 1870) and the 
"great depression" (read recession) of the early 1870s. Although it 
suffered a setback with the Bismarck tariff of 1879, the network never 
received a completely fatal blow. Negotiations to renew the Anglo-French 
treaty collapsed in 1882, but this did not significantly change the course 
of trade or European trade policy. (Gladstone was even relieved, dismissing 
commercial discussions as "huckstering.") 
 
Britain remained paralyzed with its quandary through the 1880s. Trade 
became more of a political issue, with the Conservative leader Salisbury by 
criticizing free trade on two grounds: that it prevented Britain from 
retaliating against other high tariff countries, and that Britain was 
unable to give preferences to its colonies. Some in the Board of Trade 
flirted with an attempt to start European negotiations on trade, but this 
never received support at the top of Britain's leadership. And without 
leadership from a major power, any European commercial agreement was 
unlikely to come to fruition. 
 
Marsh ends his book in 1892 with Britain still standing on the sidelines, 
France still ambivalent about free trade, and only Germany attempting to 
revitalize the treaty network in eastern and southern Europe. He concludes 
by noting that Britain's Liberal high-mindedness prevented it from playing 
a more constructive role in European trade negotiations during this period, 
and that this ambivalence is still present today in British attitudes 
toward the European Union. 
 
In all, Marsh sheds new light on an important chapter in the history of 
trade policy. With Marsh having set out the history in great detail, 
economic historians will be in a better position when trying to determine 
the economic consequences of the treaty system. 
 
 
Douglas A. Irwin is professor of economics at Dartmouth College and author 
of _Free Trade under Fire_ (2002) and _Against the Tide: An Intellectual 
History of Free Trade_ (1996), both published by Princeton University 
Press. 
 
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