FRANCE AND GREAT BRITAIN CONCLUDE A TREATY OF COMMERCE

VERSAILLES, 1786-09-26. — A treaty of navigation and commerce between France and Great Britain has been signed here this day, opening the prospect of a considerable alteration in the business conducted between the two kingdoms. Goods long burdened with heavy duties, or discouraged by prohibitions, are to receive admission upon agreed terms. French wine and British manufactures stand conspicuously among the interests concerned. The instrument does not abolish the customs establishments of either Crown, nor does its signature immediately alter every charge at the ports. It nevertheless offers merchants something of substantial value: a stated rule by which lawful commerce may replace a portion of the costly and uncertain traffic now carried on.

The settlement follows negotiations in which Mr. William Eden has acted for the British government, while the direction of French foreign affairs remains with the Comte de Vergennes. Behind their commercial discussions stands the peace concluded in 1783, after a war in which France assisted the American cause against Great Britain. That peace provided for further arrangements respecting trade. The present agreement therefore undertakes to give practical commercial substance to the reconciliation of the two Crowns. A political peace may silence the guns; it requires a different labour to determine what a merchant shall pay upon a bale of cloth or a pipe of wine.

The principal bargain is readily understood, though its execution will depend upon the several articles and schedules. France obtains improved access for her wines and other productions to the British market. British manufacturers obtain admission upon moderated duties for important classes of goods, including cotton and woollen manufactures and hardware. These are not trifling concessions. The French grower has a direct interest in the purchasing power of Britain, while the British manufacturer seeks customers across a narrow sea rather than solely in distant settlements. Each government has thus treated the appetite and industry of its neighbour as a possible source of revenue and employment, instead of merely an object of restriction.

The duties stipulated for merchandise are only part of the undertaking. A commercial treaty must also govern the treatment of merchants, vessels and cargoes, for a favourable rate is of little service if the goods encounter uncertain rules when they arrive. The agreement addresses navigation and commercial intercourse as well as particular products. Its European scope is important: readers should not suppose that every colonial possession or reserved branch of overseas commerce has thereby been thrown open. Nor should freedom of trade, as employed in discussion of this settlement, be mistaken for the disappearance of all duties. The bargain substitutes specified conditions for a portion of the former restraints.

For the wine districts of France, the British market presents an evident attraction. High charges have stood between the producer and many customers who might otherwise purchase his wine. Yet the British wine trade is already bound closely to Portugal, and the obligations and preferences belonging to that connexion cannot be dismissed as though they were a private inconvenience. The adjustment of French access must consequently be considered alongside existing engagements. At Bordeaux, the commercial question will be not merely whether a duty is reduced, but whether the reduction permits an enlarged sale after freight, insurance, merchants’ charges and the other expenses of bringing the wine to the consumer.

On the French manufacturing side, the prospect is more difficult. A lower barrier against British goods offers the purchaser a wider choice, but exposes the domestic maker to a formidable competitor. British workshops possess particular strength in several branches of manufacture, and their goods cannot be admitted more freely without altering the conditions under which French establishments conduct their business. The interests of the wine grower and the cloth manufacturer are therefore not identical, though both are subjects of the same King. Whether increased exports and cheaper supplies will compensate for the pressure upon particular employments is a question that the signature of a treaty cannot of itself resolve.

The reasoning favourable to a larger commerce has long been before the public. Mr. Adam Smith, in his work upon the wealth of nations, wrote that ‘consumption is the sole end and purpose of all production’; his argument directs attention to the purchaser’s interest, which prohibitions may sacrifice to that of the producer. Such reasoning gives intellectual support to a bargain intended to enlarge markets and reduce impediments. It does not, however, provide a reckoning for every town and occupation. A principle applicable to the wealth of a kingdom may still encounter the strongest resistance from men whose machinery, skill and capital have been committed to a particular trade.

There is likewise a political argument. Montesquieu’s observation, ‘L’effet naturel du commerce est de porter à la paix,’ expresses the hope that commerce naturally inclines nations towards peace. The present settlement gives that proposition a substantial trial between two powers whose rivalry has repeatedly disturbed Europe and the seas beyond it. Greater intercourse may furnish both countries with interests opposed to a renewal of hostilities. Yet a merchant must distinguish a hope from a security. The treaty does not extinguish the separate ambitions of the two governments, and no prudent house will calculate its engagements upon the supposition that commercial advantage alone can settle every dispute between sovereigns.

For the British administration of Mr. Pitt, the agreement offers a means of extending lawful business and strengthening the revenues without depending solely upon increased charges. Excessive duties may enrich the clandestine trader while disappointing the treasury; more moderate duties may bring a larger quantity of goods through the lawful channels. That is the calculation to be tested, not a result already established. There is as yet no completed season of trade under the new arrangement from which to judge its effect upon customs receipts, prices or employment. The figures that will matter are those entered in merchants’ books and customs accounts after the stipulated changes take effect.

The immediate business is accordingly one of ratification, legislative provision where required, and preparation by the officers and merchants concerned. British parliamentary proceedings will be of particular consequence, since the treaty’s commercial promises must be reconciled with the laws governing duties and imports. Houses contemplating new orders must examine the commencement and application of the several concessions rather than treat today’s signature as permission to disregard existing charges. The achievement at Versailles is substantial but bounded: the two governments have agreed upon a less obstructed commerce. Whether that agreement yields durable advantage to their revenues and subjects now depends upon its faithful execution and the business it can actually sustain.