Chapter 1.3: Colonial Economy Flashcards
Colonial protectionism vs economic liberalism
CP: lower duties for UK’s colonies, protecting them from foreign competition
EL: freedom of enterprise and trade
What was free trade? Why was it put in place?
Free movements of products by eliminating custom duties, put in place because the UK was mid-economic boom and did not want to pay more for European products from their colonies
What was the problem with free trade?
No taxes on imports and exports, Canada was losing money so they had to charge more for their products in order to cover the cost of shipping, resulting in a decrease of exports
What was the Reciprocity Treaty?
10 year free trade agreement eliminating customs on raw materials (US was looking for timber and agricultural products). Americans could also fish in Canadian waters and vise versa.
Why was the Reciprocity Treaty not renewed?
Due to the British supporting the losing side of the American Civil War (the South), causing Canada to form an alliance with the British maritime provinces.
