Working Paper: NBER ID: w25173
Authors: Stphane 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.
Keywords: trade liberalization; intra-industry trade; Cobden-Chevalier treaty; France; economic adjustment
JEL Codes: F13; F14; N7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Cobden-Chevalier treaty (F13) | intra-industry trade (F14) |
| trade liberalization (F13) | intra-industry trade (F14) |
| trade liberalization (F13) | two-way trade (F10) |
| adjustment loans (G51) | mitigate negative impacts of liberalization (F69) |
| smooth adjustment hypothesis (F32) | effective competition through product differentiation (L13) |
| absence of backlash against liberalization (F69) | competitive economic environment (L13) |