On the free trade agreement between England and France 1786 – Version 2.1


On September 29 1786 the treaty was signed, which established the terms of trade between these nations. This is a surprisingly modern treaty. While the atmosphere was involved in the benefits of Free Trade, the English negotiators calculated in detail the advantages it could bring every branch of production and taxes that could withstand. On the French side there was not the same care. The result is that there was an invasion of English goods that brought uprisings in France due to the craftsmen who were left without a job. Most of them occurred in February 1789, weeks before the fall of the Bastille [1] .

Background of the treaty.

Adam Smith, in 1776 published “The Wealth of Nations”, this work was translated into French and to the date of the FTA, and had been published a French version of that work, in 1781. One feature of this work is the praise of free trade and the criticism of the same limitations that exist both within countries and at the borders between countries. Smith sees the only result in a trade between two countries excluding others is that it creates a monopoly of goods produced in each country excluding similar goods from other countries.

“As they swapped goods of equal value are assumed, the two capitals employed in that trade will also, in most, cases the same or very nearly the same and for both the production and preparation of a national or own goods in both countries respectively, rents, utilities and maintenance that the distribution of which was to facilitate the inhabitants of each, the same should be either equal, or nearly equal. In whose assumption that income and these emoluments reciprocally given these countries are more or less in proportion to the extent of their negotiations and trades. ” [2]

As Adam Smith so there is an exchange of equivalents, so the increase in trade between two countries results in increased commercial activity in each of the countries without other consequences.

Adam Smith does not take into account the history of how it formed the British textile industry which at the time was the most important. For example in 1390, establishing the “Employment Act” that forced foreign merchants to use the money from their sales to buy British goods. There is also the first Navigation Act requiring that imported goods were transported in British ships [3] . In 1331 in England were installed Flemish weavers came to start the manufacture of such fabrics [4] , promoted by King. In 1721 Britain imposed conditions to increase trade tariffs on manufactured imports and facilitating exports [5] . Another fact which reflects the importance given to the development of the industry itself is shown when in India, British soldiers cut off the thumb to the weavers Hindu way of eliminating competition for English goods. References (lnks are broken probably due to web pages promoting england tourism or for nationalistic wave) here [6] , here [7] and here [8]

This reveals the zeal of the British to protect their industry. Alongside France and other countries took similar measures to promote theirs. However after the painting trade in pink colors masterfully described by Adam Smith, were lowered in France preventions with regard to international trade.

Smith attributed the causes of trade restrictions to envy and “mercantile jealousy.”

“As neighboring nations could not but be regarded as enemies and therefore the wealth and power of a formidable mind had the other and thus that which was to strengthen the friendship has only served to inflame national hatred and envy .

They are both rich and industrious nations, and the merchants and manufacturers of each dread the competition of the skill and activity of the other. They practice every day and inflamed the envy and jealousy commercial, and therefore also has to increase national animosity. ” [9]

Interestingly, the translator of Smith’s work into Spanish, completed in 1794, lic. Josef Alonso Ortiz, includes a footnote stating this speech from a review that is far deeper than the happy reasoning of Smith. Then the note:

“Please note that all this free trade is advantageous when it serves a positive obstacle to the progress of industry in a backward nation itself, because in this case will be indispensable in trade restrictions on foreign manufactures to certain terms and deadlines: manufacture industry that is an object that should be attended first  than commercial, which only has an influence over that side in wealth of a nation ” [10]

Most historians of the French Revolution narrate the events of the purchase of a diamond by the Queen and other financial scandals that were attributed to the kings as the cause of the Revolution. One thing this shows is that the highest levels of French politics were at that time besieged by disreputable elements for the sale of luxury items. If you had access to the King, and bribe their employees and friends, it is also difficult to influence British diplomacy was being given to the signing of free trade.

Negotiating the treaty

British research says that Eden [11] , when he was commissioned to negotiate the treaty England, is dedicated to interview each of the industrial sectors form an important record of each trade, if reciprocity with France was desired, that tax levels were the most appropriate; which was the highest level that could handle trade for export to France, if France could withstand competition and other considerations.

British researchers explanation given as to which France signed a treaty so disadvantageous for it, two reasons, the 1st to nominate an official, who did not investigate in detail the requirements of French industrialists, 2nd The influence of the Physiocrats, which only will recognize value to agriculture, and could influence the King and his Foreign Minister Vergennes.

For the French government seems that what mattered most was exports of wine and related products, to compete with Portugal which had preferential treatment in England to date (manipulated envy). Then sign the treaty agree with the following features: Prohibits trade silk items, this is the only branch that France surpassed British industry. The only benefit France  got was a downgrade in tariffs for export of wines, these tariffs were put on par for the wines of Portugal, so that the English had not altered its balance. Finally got a general tariff of 10 or 15% of the other products, this gave the advantage to British industry that produced better quality and better prices than the French producers.

When the deal was already arranged, a French industrial sent a letter to the French negotiator protesting the agreement, the English negotiator feared that British industry association gave jubilation and sent them a letter asking them not to express their joy at the agreement reasons not to give the protesters in France.

So the treaty was signed on September 27, 1786 and entered into force on March 10, 1787.

One issue that is strange is the fact that France bowed to British demands in the treaty. Being France a country with diplomatic tradition is of interest to understand how agrees to English interests above their own. This is for a researcher who has to reach other materials that we can not know for now.

Results of the treaty

Public opinion was unanimous in attributing the severe industrial crisis of 1788 the treaty of Eden which was called death sentence of French industry[12]

This is the view of a European analyst who writes in 1922, also other reports tell of riots in several cities in France, caused the closure of businesses and artisans protests left without a job. Also reports that in the minutes prior to the General Meeting on Paris section was recommended to rule on the trade agreement.

“The calico (calico) French, wool, ceramics, steel, and leather industries complained bitterly of British competition and the overall unemployment rate which was held responsible. Even the silk industry of Lyon worked with great difficulty, that could not be attributed to British competition, no doubt, but that in any case, were not as diminished by the treaty with Britain bans retention. Bitterest of all were the complaints emanating from textile towns in northern France, Amiens, Abbeville, Sedan, Rouen, Reims, Chalons-sur-Marne. Their protests were also included in the notebooks he wrote each city and region as part of its requests to the States General, in which the French people in 1789 gave expression to his feelings in all industries. ” [13]

The English traveler Arthur Young, wrote on a trip right in the years following the FTA and conducted its own survey of the various regions of France who was visiting. There are reports that in Abbeville extremely violent attitude against the treaty’s rejection in Amiens in Normandy presents the writings of the manufacturing company, where there are complaints of producers of textiles and leather industry state. Only in Bordeaux get people to approve the treaty. Another result that is due to the treaty indirectly is that some manufactures were machined to increase their competitiveness with the English, but by the end of 1789 there were popular uprisings that destroyed the machines.

A British researcher reports that French trade did not recover even in the period of the Directory;

“As far as industry is concerned, it is a fact that even the flourishing period of the Consulate (1799-1804) amounts to something like the level it had reached under the old regime.” [14]

However highly regarded French historians and political participants as Guizot were not long afterwards and were not aware of the damage that caused the treaty to that country [15] . In his History of France, speaks of the end of the feud between France and England and the good offices of the Prime Minister at the time Mr. Pitt. Historian poses a problem of “passions” and how it was handled publicly by British diplomacy: show treated as the start of a friendship and the end of wars, as proposed by Adam Smith. Of course you realize that after the treaty resurfaced with more force fighting between the two countries, but does not make the connection between the treaty and the war began.

Free trade has always been a greenhouse crop established by the state between its borders. For neighboring states and trade policy are extensions of the war. In domestic trade free trade is common, but international trades are always dependent on intimidation and plunder other countries, even under globalization. The capitalist system developed in England with colonial oppression, the slave trade, procurement of raw materials and Brazilian and American slaves. Once acquired a level of productive superiority and mastery of maritime traffic, England had the luxury of signing treaties equitable trade that still were more favorable to colonial domination. Have different levels of development, the nation’s lowest level of development is ruined. This considering that France still had a productive career of over two hundred years. An additional point to this is the emergence of riots due to shortages caused on the most impoverished. And to round the most profound revolution is known in history: the French Revolution [16] .

Adam Smith said that as equivalent in value are exchanged, nothing strange should not occur in the free trade between France and England. A first approximation, we see that British goods were sold and moved to French products in France, were of higher quality and lower price. This resulted primarily from lower sales and unemployment of the industries that could not sell. We can also see that, with the increase in UK sales is a second consequence: money that was circulating in France to buy French products was brought to England which created a void in local circulation. There is a decrease in sales of all other products that somehow had occurred in view of a general level of trade. This expands the crisis to all sectors of society.

Some theoretical economic issues

The scientific system of ages xviii and xix talks about the objectivity of the physical parameters: a material object has a mass, is located in a space and that in a certain moment. The three measures of mass, space and time.

The science of the 20th century makes these parameters depend on the observer’s position relative to the object observed. If you scroll to a certain constant speed, these parameters will be different than for an observer at rest. The mass will be greater, the object will see other dimensions and lapses will differ with respect to the observer who is at rest.

Classical economics defines the value relative to the amount of work that has a built object. In two different regions climatic or cultural reasons, the duration of the day is not the same, the intensity with which you work is not the same and different materials are available. It is more reasonable to think that the value will depend on the observer that quantifies your way to work, natural schedules, in order to local parameters.

In this sense, it is entirely correct to say that the same good has two different values ​​if they are produced in two markets or regions associated with different cultures.

Thus can be understood, from a theoretical point of view, the differences in the value of the same commodity in two different places or countries creates a spread for the trader, who draws him to get that extra benefit is in addition to the gain in the pay zone, pressured by local competition, transnational capital gains are the result of amending these FTAs.

The result produces a very important conclusion: This value can be obtained free of charge, creates the phenomenon of seeking carrion or gain obtained easily. From this it might produce predatory attitudes for achieving these gains.

This concept deserves elaboration, so here we will only note that this international goodwill is why the states of wakefulness, traders and industrial partners or require state support for these negotiations.

[1] We Latin Americans, we must visualize developed to England with their commercial interests in the free trade game manages to bring down French artisans and industrialists, and all occurred at a time so remote to us, when Simon Bolivar was only three years of age. This reveals the poverty of our craftsmen emerging against the free trade agreements with England signed by almost all Latin American republics. This could be one explanation of underdevelopment in Latin America compared with European countries and the United States. Latin America lost the nineteenth century England. Twentieth century, the United States was responsible.

[2] Adam Smith, The Wealth of Nations, Book IV Chapter IV, page 3, Ed Santander, Valladolid, 1794

[3] http://www.worldportsource.com/ports/GBR_Port_of_London_243.php

[4] http://www.sheepcentre.co.uk/wool.htm

[5] http://www.socialismo-o-barbarie.org/calamidades_capitalistas/041107_historia_libre_comercio.pdf

[6] http://lewebpedagogique.com/valeriemorisson/tudor-england/the-east-india-company/

[7] http://india_resource.tripod.com/eastindia.html

[8] http://www.opendemocracy.net/theme_7-corporations/article_904.jsp

[9] Adam Smith, Ob said., page 17

[10] Ob. Cited, page 17

[11] Ward, AW, MA Gooch, The Cambridge History of British Foreign Policy

[12] Eli F. Heckscher, The Continental System: An Economic Interpretation , Oxford: Clarendon Press, 1922

“Public opinion, indeed, was unanimous in attributing the Industrial severe crises of 1788 to the Eden Treaty, Which was called the death-warrant of French industry.”

[13] Ibid., page 10

[14] Work cited.

“Severe as was the crisis to which it gave rise, there can be little doubt that precisely the last years of the ancient régime were characterized by exceptional prosperity especially, but by no means exclusively, for French trade, and that during the following ten or fifteen years frenchmen looked back to this period as the zenith of their country’s economic development. Even as regards industry, it is a fact that not even the flourishing period of the Consulate (1799-1804) elevated it to anything like the same height it had attained that under the ancient regime. ”

[15] Guizot, History of France , P394

“There was a lively discussion upon it in the English Parliament Mr, Fox, then in opposition, violently attacked the provisions of the treaty, Mr. Pitt, as yet quite young, but already established in that foremost rank amongst orators and statesmen which I was to occupy to his last hour, maintained the great principles of European policy. “It is a very false maxim,” said he, “to assert that France and England are not to cease to be hostile because they have been so heretofore. My mind revolts at so monstrous a principle, which is an outrage upon the constitution of societies as well as upon the two nations. Situated as we are in respect of France, it is expedient, it is a matter of urgency for the welfare of the two countries, to terminate this constant enmity has been falsely which said to be the basis of the true sentiments felt by the two nations towards each other. This treaty Tends to augment the means of making war and to retard its coming, “Generous and sound maxims, too often only destined to be strikingly belied by human passions!”

[16] Following the end of the war of independence, as expected, the Gran Colombia signed a trade treaty with England. This had been the ally in the liberation struggle. The difficult situation that lived Venezuela since the proclamation of independence and its causes said former Secretary of Simón Bolívar, Mr. Don Antonio Leocadio Guzman. In its analysis, notes Guzman, the cartel that traders were importing Venezuelan monopolized foreign trade. Guzman said, “Be the causes which were, is the fact that one hundred foreign traders is one in the country and 99 are transported to the accumulation they did. Amazed to see in a box formed the sum of capital in our ports for import and export and have been transplanted to settle down and not come back. ”

It also criticizes the proponents of free trade:

“But back to the topic of this argument (free trade). Determined to come from outside everything we can not produce more cheaply, and can produce almost anything cheaper than everyone, it turns out from the socket and topaz, to soap and broom, we buy abroad. . . Yes, the broom to sweep the floors of this mother torrid zone of vegetation, that broom is brought to those lands that cover the ice during the third and even half of the year. Neither these economists believe in anything occupation of women, half the population weak, and clothing is made, and shoes, and all embroidery and with absolute lack lucky to run the country’s poor. Neither candles or soap or straw hats, neither ordinary nor paintings socks or caps, or artificial flowers, nothing, nothing can be done, other than begging or living men. According to these economists, women must earn their bread and clothing taming bulls in the plains or coffee and cocoa founding coasts. ”

Here we see what caused riots in France and launched the revolution, had to have a decisive influence on the economic development of Venezuela and the countries of Latin America. The nineteenth century in Venezuela is a century of wars and revolutions, often for no apparent reason, he blames the lust for power and perhaps as Adam Smith did envy blaming behavior issues and socio-economic facts with clear economic and political root .

[17] Acosta, Vladimir, “primitive accumulation and liberal reforms in Latin America”, Universidad Central de Venezuela, 1989, p117 et seq. The situation in Ibero America is driven by this large gap productive with England by a situation of continued misery. Vladimir Acosta makes a narrative of how they were disappearing textile crafts, hat or more or less stagnant quickly and disappears in different regions of Colombia and led by the weight of foreign competition. All under the influence of a trade treaty with England


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