Imperial Preference facts for kids
Imperial Preference was a special system of trade rules used by the British Empire and later the Commonwealth of Nations. It meant that countries within the Empire gave each other better trade deals, like lower taxes (called tariffs) on goods they bought from each other. This system was formally agreed upon at a big meeting called the Ottawa Conference in 1932.
The idea was to make trade easier and cheaper between countries in the British Empire. This would help them sell more goods to each other and keep the Empire strong. A famous politician named Joseph Chamberlain strongly believed in this idea. He thought it would help Britain compete with other powerful industrial countries like the United States and Germany. He wanted to boost trade especially with places like Australia, Canada, New Zealand, and South Africa, where many British people had settled.
Some parts of the Empire, like Canada (in 1897), New Zealand (in 1903), South Africa (in 1903), and Australia (in 1907), started giving special trade deals to Britain and other Empire countries quite early. However, Britain itself didn't offer these special deals back until 1932. This was because Britain had a policy of "free trade," which meant it preferred not to have special taxes or rules for any country's goods. But during the Great Depression, a very tough economic time, Britain changed its mind.
The agreements made at the Ottawa Conference in 1932 didn't actually change trade within the Empire very much.
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Early Ideas for Special Trade
Even long before the 20th century, there were some early forms of special trade rules. For example, in 1660, a system called "Old Subsidy" gave certain products from the colonies a special advantage in England. This was like a very early version of "colonial preference" for things like sugar. By 1840, more than 80 different goods had some form of protection. The Corn Laws also protected some farm products from the colonies.
In the late 1800s, countries in the British Empire held meetings to discuss closer economic ties. The Dominions (like Canada and Australia) often gave special trade deals to Britain. In return, Britain sometimes promised to help with defense or agreed on common rules for trade, patents, immigration, and shipping.
The 20th Century and Imperial Preference
In the late 1800s and early 1900s, many people thought Imperial Preference could help unite the British Empire. It was also seen as a way to keep Britain powerful, especially as countries like Germany and the United States became stronger and used their own trade protection policies.
As mentioned, Dominions like Canada (1897), New Zealand (1903), South Africa (1903), and Australia (1907) started giving special trade deals to Britain first. But Britain, sticking to its free trade policy, didn't offer the same deals back to the Dominions until the Great Depression hit.
The idea of Imperial Preference was strongly supported by Joseph Chamberlain. He even left the government in 1903 so he could freely campaign for these trade changes. However, not everyone agreed with him. The Chancellor of the Exchequer, Charles Thomson Ritchie, was a strong supporter of free trade. This disagreement caused problems within the government and even contributed to the ruling party losing the 1906 elections.
During the 1920s, the idea of Imperial Preference became popular again. This was partly thanks to Lord Beaverbrook and his newspaper, the Daily Express. However, there were still challenges. For example, it was hard to give Dominions an advantage unless their food products could enter Britain without taxes. At that time, Britain imported more than half of its food.
In 1931, a new government called the National Government came to power in Britain. Many of its members, especially the Conservatives, supported Imperial Preference as a way to deal with the Great Depression.
The Big Change in 1932
In 1932, representatives from Britain, the Dominions, and the Colonies met in Ottawa, Ontario, Canada. This meeting was called the Commonwealth Conference on Economic Consultation and Co-operation. At this conference, they all agreed to start using policies of Imperial Preference for five years.
The main idea behind this new policy was simple: "home producers first, empire producers second, and foreign producers last." This meant that goods made in Britain would be favored most, followed by goods from other parts of the Empire, and finally, goods from outside the Empire.
In 1935, the Canadian Prime Minister, R. B. Bennett, who was a Conservative, also supported Imperial Preference.
What Happened Next?
After World War II, many countries signed a new agreement called the General Agreement on Tariffs and Trade (GATT) in 1947. This agreement generally discouraged special trade deals between specific countries and aimed for more open trade worldwide. Because of this, and also due to rising prices, the formal system of Imperial Preference slowly came to an end.
Today's Trade Ideas
In recent years, especially after Brexit (Britain leaving the European Union), there has been new interest in forming trade agreements between the United Kingdom and the Commonwealth. This is a bit like a modern look back at the old ideas of Imperial Preference.
Special Trade in Other Countries
It wasn't just the British Empire that had these kinds of special trade rules. Other countries with colonies, like the Italian Empire, Spain, Portugal, France, Japan, and the United States, also had different levels of special trade between their main country and their colonies.
See also
- Commonwealth free trade
- CANZUK
- Imperial Federation
- Import Duties Act 1932
- Tariff Reform League
