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The French (Trade) Revolution of 1860: Intra-Industry Trade and Smooth Adjustment

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  • Stéphane Becuwe
  • Bertrand Blancheton
  • Christopher M. Meissner

Abstract

The Cobden-Chevalier treaty of 1860 eliminated many French import prohibitions and lowered tariffs between France and Britain. Policy change was largely unexpected and unusually free from direct lobbying. A series of commercial treaties with other nations followed because of the use of the unconditional-MFN clause. Post-1860 in France, we find a significant rise in intra-industry trade. On average, rising imports did not prejudice exports. Liberalization allowed for an expansion of two-way trade in differentiated products. The findings are consistent with the “smooth adjustment” hypothesis. Anti-competitive, protectionist lobbying apparent from 1878 was not necessarily a backlash to enhanced international competition.

Suggested Citation

  • Stéphane Becuwe & Bertrand Blancheton & Christopher M. Meissner, 2018. "The French (Trade) Revolution of 1860: Intra-Industry Trade and Smooth Adjustment," NBER Working Papers 25173, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25173
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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services

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