Daily Archives: August 13, 2014

On The Subject of Historical Trade Treaties

Today is the 200th anniversary of the Anglo-Dutch Treaty of 1814!

This historic treaty, also known as the Convention of London, was signed between Great Britain and the Netherlands 200 years ago today and it returned to the Dutch the colonial possessions that they controlled in the Americas, Africa, and Asia (with the exceptions of the Cape of Good Hope and British Guiana, where they still retained trading rights) before the outbreak of the Napoleonic Wars.

During the Napoleonic Wars, which pitted France against a series of coalition forces, France, under the leadership of Napoleon, conquered a significant amount of mainland Western Europe. By 1811, after the defeat of three consecutive coalition forces (in the Wars of the Third, Fourth, and Fifth Coalitions), the French Empire occupied much of what is modern France, Beligum, and the Netherlands and controlled, or occupied, satellite states that included large territories that are now part of Germany, Italy, Poland, Spain, and Portugal. (Check out this Wikipedia Map to see how far Napoleon’s armies were able to advance in a mere eight years.) As Napoleon conquered states and countries, he also took control of their territories and colonial possessions around the globe. The third coalition saw France defeat aligned British, Russian, Austrian, and Swedish forces and the withdraw of Austria from the coalition. The fourth coalition saw France defeat aligned British, Prussian, Russian, Saxon, and Swedish forces and the withdrawal of Saxony. The fifth coalition saw France defeat aligned British and Austrian forces. And then, in 1810, Napoleon married Marie Louise, an Austrian Archduchess, and formed a stable alliance with Austria. At this point, in addition to the French Empire, France controlled the Swiss Confederation, the confederation of the Rhine, the Duchy of Warsaw, and the Kingdom of Italy and its allies included the Kingdom of Spain (ruled by Joseph Bonaparte, Napoleon’s brother), the Kindgom of Westphalia (ruled by Jerome Bonaparte, Napoleon’s brother), the Kingdom of Naples (ruled by Joachim Murat, Napoleon’s brother in law), the Principality of Lucca and Piombino (under Elisa Bonaparte, Napoleon’s sister), Prussia and Austria.

At this point France effectively controlled most of mainland Europe, a number of it’s colonies (including those that Britain restored to the Dutch under the treaty of 1814), and the majority of trade in and out of mainland Europe, which it regulated under the Berlin Decree of 1806 that ushered in the Continental System. Under this decree, the importation of British goods into European countries allied with or dependent upon France was forbidden and required all connections with Britain to be cut, including mail! In addition, the French Empire, under the leadership of Napoleon, threatened Russia with invasion if they did not comply.

This was an early example of large-scale economic warfare, undertaken because France didn’t have the resources to invade the United Kingdom or to take on the Royal Navy at sea. Since Great Britain was emerging as Europe’s manufacturing and industrial center, Napoleon believed the trade embargo would result in inflation and great debt in the UK.

However, even though Britain took a hit to its trade, especially in 1808 and 1811, the effects of the embargo were mitigated by Britain’s control of the oceans, as Britain could pretty much sail where it wanted and trade with who it wanted. Moreover, the embargo ended up hurting France more in the end than it hurt Britain. It hit the economies of France’s allies hard and these allies were eventually forced to ignore the Continental System. This ended up weakening France’s coalition, as the French and Dutch economies were hit hard, Portugal and Sweden refused to comply with the demands, and Russia, chafed under the embargo, eventually re-opened trade with Britain in 1810. (Then Napoleon kept his word, invaded Russia, and this was the undoing of Napoleon and the last great French empire.)

So what’s the lesson here?