The economics and political economy of international trade cooperation

The rise and decline of free trade in the 19th century and the attendant economic and political consequences of these trends have always intrigued historians and economists. In the difficult times following World War I, when international trade relations had to be rebuilt, the free trade episode among European countries in the second half of the 19th century was perceived as a golden age. During that latter period, widespread economic development, driven by industrialization and technological change, went together with trade expansion supported by a network of bilateral trade treaties. This network started with the Anglo-French (Cobden-Chevalier) treaty of 1860 and triggered a series of other treaties among European countries. Bilaterally agreed reciprocal tariff reductions, together with the application of the unconditional mostfavoured-nation (MFN) clause contained in the treaties, led to historically low tariff levels, in particular for agricultural products. This period of largely unfettered trade across Europe lasted for nearly two decades up to 1879, faltering gradually thereafter and collapsing with World War I.