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Does Bilateralism Promote Trade? Nineteenth Century Liberalization Revisited

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  • Accominotti, Olivier
  • Flandreau, Marc

Abstract

Textbook accounts of the Anglo-French trade agreement of 1860 argue that it heralded the beginning of a liberal trading order. This alleged success has much interest from a policy point of view: unlike modern GATT/WTO multilateral agreements, it rested on bilateral negotiations. But, in reality, how great were its effects? With the help of new data on international trade we provide empirical evidence. We find that the Anglo-French treaty and subsequent network of Most Favoured Nation (MFN) trade agreements coincided with the end of a period of unilateral liberalization across the world, and that it did not contribute to expand trade at all. This is contrary to a deeply rooted belief among economists and economic historians. We conclude that, contrary to a popular wisdom, bilateralism did not promote trade in the 19th century.

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  • Accominotti, Olivier & Flandreau, Marc, 2005. "Does Bilateralism Promote Trade? Nineteenth Century Liberalization Revisited," CEPR Discussion Papers 5423, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5423
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    Cited by:

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    2. Kevin H. O'Rourke & Leandro Prados de la Escosura & Guillaume Daudin, 2008. "Trade and Empire, 1700-1870," Trinity Economics Papers tep0208, Trinity College Dublin, Department of Economics, revised May 2008.
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    4. Kris James Mitchener & Marc Weidenmier, 2008. "Trade and Empire," NBER Working Papers 13765, National Bureau of Economic Research, Inc.
    5. Jacks, David S. & Meissner, Christopher M. & Novy, Dennis, 2011. "Trade booms, trade busts, and trade costs," Journal of International Economics, Elsevier, vol. 83(2), pages 185-201, March.
    6. Jacks, David S. & Meissner, Christopher M. & Novy, Dennis, 2010. "Trade costs in the first wave of globalization," Explorations in Economic History, Elsevier, vol. 47(2), pages 127-141, April.
    7. Michel Fouquin & Jules Hugot, 2016. "Back to the Future: International Trade Costs and the Two Globalizations," Vniversitas Económica 015130, Universidad Javeriana - Bogotá.
    8. Gerhard Kling & Joerg Baten & Kirsten Labuske, 2011. "FDI of German Companies During Globalization and Deglobalization," Open Economies Review, Springer, vol. 22(2), pages 247-270, April.
    9. Kris James Mitchener & Marc Weidenmier, 2008. "Trade and Empire," Economic Journal, Royal Economic Society, vol. 118(533), pages 1805-1834, November.
    10. Stéphane Becuwe & Bertrand Blancheton, 2014. "The dispersion of customs tariffs in France between 1850 and 1913: Discrimination in trade policy," Research in Economic History, in: Christopher Hanes & Susan Wolcott (ed.), Research in economic history, volume 30, pages 163-183, Emerald Publishing Ltd.
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    More about this item

    Keywords

    Anglo-French treaty; bilateralism; liberalization; MFN; multilateralism; trade policy;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-

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