Lecture 17 - February 27th, 2019
Canada’s National Policy
Protection as a Development Strategy
*In this lecture, we are thinking about how the Canadian government has used trade policy for
political purposes.
, Trade Liberalization in the Nineteenth Century
- What were the consequences of Britain repealing the Corn Laws?
- Opened up their economy to international competition
- Britain's economy would do very well in the 1850s/60s
- Other countries saw this, and wanted to replicate it.
- As a result, we saw classical liberalism spread from Britain other areas
- ^this is a Constructivist explanation for why free trade was adopted elsewhere.
Classical liberalism spreads in the mid-1800s
- Free trade
- James and Lake: discussed how the U.S. reacted to Britain opening up its market.
- The U.S. was not alone in that response; Belgium and Denmark also saw an
opportunity to export goods to Britain
Elgin Treaty (1854)
- Treaty between the United States and Canada (the British were still involved in
negotiating these sorts of things, so it is not a surprise that the treaty stresses free trade, as
Britain was pursuing free trade at home)
- Builds off Repeal of the Corn Laws
- Resolved some issues between the two countries
- However, the United States would go down a different path (this was a function of the
Civil War)
American Civil War: U.S. introduces tariffs
- The Northern states needed money to help prosecute the war effort, so they imposed
tariffs primarily to collect taxes.
- In the 1800s, governments were not particularly capable of monitoring
economies/economic activity. It was much easier for countries to watch the border or
monitor the amount of goods coming into harbours, so tariffs were the primary way of
collecting tax.
- The tariffs imposed by the Northern States proved to be very popular
- James and Lake: In their American response to Britain’s decision to Repeal the
Corn Laws, there was a debate in the U.S. about whether it is actually wise to
adopt free trade.
- Who is exporting to Britain in the 1840s/50s? Two regions: the South (exporting
cotton to be turned into textiles), and the farmers in the midwest (exporting grain
→ they will benefit directly from Britain repealing the Corn Laws)
- The group that did not want free trade with Britain was the urbanized population
in New England (the beginnings of industrialization in the United States)
Canada’s National Policy
Protection as a Development Strategy
*In this lecture, we are thinking about how the Canadian government has used trade policy for
political purposes.
, Trade Liberalization in the Nineteenth Century
- What were the consequences of Britain repealing the Corn Laws?
- Opened up their economy to international competition
- Britain's economy would do very well in the 1850s/60s
- Other countries saw this, and wanted to replicate it.
- As a result, we saw classical liberalism spread from Britain other areas
- ^this is a Constructivist explanation for why free trade was adopted elsewhere.
Classical liberalism spreads in the mid-1800s
- Free trade
- James and Lake: discussed how the U.S. reacted to Britain opening up its market.
- The U.S. was not alone in that response; Belgium and Denmark also saw an
opportunity to export goods to Britain
Elgin Treaty (1854)
- Treaty between the United States and Canada (the British were still involved in
negotiating these sorts of things, so it is not a surprise that the treaty stresses free trade, as
Britain was pursuing free trade at home)
- Builds off Repeal of the Corn Laws
- Resolved some issues between the two countries
- However, the United States would go down a different path (this was a function of the
Civil War)
American Civil War: U.S. introduces tariffs
- The Northern states needed money to help prosecute the war effort, so they imposed
tariffs primarily to collect taxes.
- In the 1800s, governments were not particularly capable of monitoring
economies/economic activity. It was much easier for countries to watch the border or
monitor the amount of goods coming into harbours, so tariffs were the primary way of
collecting tax.
- The tariffs imposed by the Northern States proved to be very popular
- James and Lake: In their American response to Britain’s decision to Repeal the
Corn Laws, there was a debate in the U.S. about whether it is actually wise to
adopt free trade.
- Who is exporting to Britain in the 1840s/50s? Two regions: the South (exporting
cotton to be turned into textiles), and the farmers in the midwest (exporting grain
→ they will benefit directly from Britain repealing the Corn Laws)
- The group that did not want free trade with Britain was the urbanized population
in New England (the beginnings of industrialization in the United States)
