Canada's national policy : protection as a development strategy
trade liberalization in 19th c.
1600s, 1500s : period of protective tariffs as a part of mercantilist
liberal ideas spread in mid 1800s, 1840s Britain adopts free trade
Canada and US sign Elgin Treaty : 1854. Adopting lib. ideas, free trade.
American Civil War 1861 : northern govt. needs to raise more money-
implementation of tariffs as a war measure. Popular in northern
states. South largely rural, exports to Europe, northern states. New
England : firms, factories.
Once civil war is over, tariffs are gonna continue. Decisions being made by
norther states, natives unhappy.
First "Great Depression" 1870s : period of overproduction. Many states
industrializing at tame time, introduction of new technologies
improving transportation (railroads penetrating deep into different
continents, steam ships) and communication. Flood of certain
commodities (grain, simple form of iron, steel), also a period of
economic globalization. Leads to lowering of price in certain places -
leads to countries thinking liberal ideas aren't working. Social safety
net stripped off. Many of the countries put tariffs as a way to
counter this problem
Canadian overtures rejected by US : needed a trade agreement with
Americans. two major parties in CA and would work to lower tariffs
with US but would fail.
Election of 1878
John Macdonald as party's real leder in 1878
liberals vs tories : tories had embraced lib. trade policies already, both
governments of early 1870s had approached US govt. to lower
tariffs. No strong idealogical differences
1878 elections : Macdonald - libs. have had their chance and they failed.
So we should have protective tariffs (due to practical politics, used
as a campaign slogan). He would look at what the northern states
have done. He offers protectionism.
strong party allegiances in republican party in US : protectionist policy
Macdonald would copy tho technique : protecting tariffs. Negotiations
won't work. Business interests need high tariffs for guaranteed profit
in the foreign competition. His plan popular with certain groups in
Canada. His party stays in power from 1878-96 due to this policy.
Protectionist tariffs are a part of this policy but they are not all of it.
Most people producing products that can't be exported. By putting in
protectionism, you also need to appeal to rural people.
Selling the national policy
three elements t