Reciprocity Treaty (1854) Introduction

The 1854 Reciprocity Treaty is one of the most famous economic treaties in Canadian history. The Reciprocity Treaty was a trade treaty that was signed between the economy of the United States and what was then known as the Province of Canada (Quebec and Ontario) and other smaller provinces of the then British North America. The treaty was a forerunner of the Canada-United States trade agreement of 1989. It was primarily intended to facilitate free trade in primary products such as coal, fish, timber, barley, oats, and wheat. The parties signed it on 5th June 1854, and it went into effect as soon as it was ratified by the lawmaking bodies of the parties to the treaty. The legislatures in the Canadian provinces approved it before the end of 1854, while the United States approved it in 1855 (Haynes, 1892, p. 18; Hinton, 2013). This work looks at the Reciprocity Treaty, its history, and the related history of Canada and the United States.

Origins of the treaty

The idea of drafting a reciprocity city was first conceived in the mid -the 1840s. It was a very popular idea, especially in export-oriented Canada West (Ontario) and in New Brunswick and other Maritime colonies. The Maritime colonies and the American fishermen fishing off the coast of Canada are the two parties that particularly felt that there was a need for a treaty (Gerriets & Gwyn, 1996; Officer & Smith, 1968). This is what led to discussions and a treaty being drafted and approved by the then United States Secretary of State, Mr. William Marcy, and the then Governor-General of British North America, Lord Elgin, in June 1854. Upon the signing of the treaty and its approval by the legislatures of the parties to the treaty, it was to remain in effect for ten years. After the ten years, any party to the treaty could give the notice to terminate it.

The Treaty was approved by American and Canadian legislatures between late 1854 and early 1855. Upon its approval, it led to the removal of duties on multiple primary goods including wool, turpentine, trees, tow, unmanufactured tobacco, timber, tar, tallow, stone, slate, shrubs, rice, rags, poultry, plants, pitch, metal ores, marble, manures, all kinds of lumber, livestock, lard, skins, hides, hemp, unground gypsum, grindstones, grains, pelts, furs, fruits, flour, flax, seafood, seafood products, fish, fish products, firewood, eggs, dyestuff, coal, cheese, butter, and breadstuffs (Hinton, 2013; Gerriets & Gwyn, 1996). In other words, the treaty allowed Canadian Provinces to export the above goods without paying American duties and allowed Americans to export their products to Canadian Provinces without also paying duties.

According to historians, the treaty was highly beneficial to both the United States and Canadian provinces and colonies. For instance, Nova Scotia exported vegetables, potatoes, salmon, shad, mackerel, herring, firewood, and coal to the United States. And while it exported large quantities of these goods, the quantities were relatively small when compared to how big the United States market was (Gerriets & Gwyn, 1996). So they did not significantly affect the price of the same commodities in the United States. This means that the exporters of the products could get more money for their products because they could sell their goods for the same prices as American goods and take all the money home without paying duties.

According to historians, the Reciprocity Treaty also significantly increased the trade between Canadian regions and the United States. As per official statistics, trade between Canadian regions and the United States increased by more than 100 percent in the ten years the treaty was in effect. However, the treaty was not the only factor that increased trade between Canada and the United States. Other factors that also increased trade between the United States and Canadian provinces and regions included the building of railroads to increase connectivity between various important towns and regions; the significant development witnessed in the border Great Lakes region and the Civil War. The main exports of the Canadian colonies included coal, livestock, meat, flour, and grain (Gerriets & Gwyn, 1996).

History of Canada-US relations around the treaty

The call for a reciprocity treaty began in earnest in the year 1848 after Britain repealed the Corn Laws. The Corn Laws were protectionist laws that imposed high duties on corn imports into Great Britain and its territories. The repeal of Corn Laws was the first step Britain took towards free trade. It was what made the United States try and reach an agreement with the country over fishing rights off the Canadian colonies....

The United States was desperate to reach an agreement with Great Britain to ensure American fishermen could continue fishing in the fish-rich Canadian Atlantic fisheries. After comprehensive negotiations, several favorable factors including less opposition from protectionists and the formation of a pro-slavery and pro-export party allowed the Secretary of State of the United States and the Governor-General of British North America to start negotiating a trade treaty (Haynes, 1892; Hinton, 2013)
The treaty was finalized and signed in 1854. As per this treaty, the British North American colonies, including Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, and Old Canada and the United States, eliminated duties imposed on many primary products. Among the primary products that could no longer attract duties included lumber, timber, coal, tallow, poultry, fish, fruit, meats, animals, breadstuffs, flour, and grain. The treaty also allowed American fishermen to fish in British colonial fisheries and granted British people the right to fish in American fisheries. Americans and British ships were also allowed equal access to Lake Michigan, Canadian Canals, and St. Lawrence under the treaty (Haynes, 1892).

While the treaty was largely welcomed, some American protectionists were not impressed by it. And less than two years after its signing, they started calling for its abolishment. The American protectionists who did not want the treaty were those with shipping and manufacturing interests. The protectionists cited Canadian tariff increases between 1858 and 1859 as a violation of...…to encourage increased sales and trade (Gerriets & Gwyn, 1996).

After the signing of the agreement, it was time to implement its provisions. This was to occur from the date of ratification by respective legislative bodies. The Home Government tried as much as possible with little success to reconcile the Reciprocity Treaty with the economic policy of free trade that had been adopted by Great Britain. However, this was near-impossible because the treaty was much popular than the universal free trade that was being championed by the Empire. In America, the popularity of the treaty was informed by the fact that it stopped the fishing controversy and, therefore, allowed American fishermen to become more prosperous by fishing in seafood-rich Canadian waters. It also allowed businesses in the United States to get cheap raw materials for manufacturing other products. By the year 1855, because of its popularity in the colonies, the Imperial parliament, and in the United States, the treaty had been approved in all the legislative bodies where it needed approval (Masters, 1963). However, while the treaty was approved relatively quickly, it did not last as long as its proponents and advocates envisioned. This is because several events including the outbreak of the American Civil War (which worsened the relationship between the United States and Britain), the 1857 economic depression (which reduced Canada's economic power), and the championing of protectionism in Canada by politicians led to its downfall about 12 years after it was ratified (Gerriets & Gwyn, 1996; Masters, 1963). The political animosity between the United States and Great Britain was ultimately the reason why the United States opted to end the treaty (Ankli, 1971).

Conclusion

The interplay between political and economic forces during the treaty makes it difficult to establish if the treaty alone contributed to the sharp rise in trade between the United States and the colonies. This is because there were many significant political and economic events during the period the treaty was in effect that certainly contributed to the increase in trade. Examples include the American Civil War, the rapid development in both territories, the building up of railroads in both Canada and the United States, and the removal of political and physical barriers for easier transport in the Great Lakes waterways system. The increase in production of timber, lumber, and grain in Canada and grain in the United States also contributed to the increase in trade. However, there was a feeling in Canada that the strength of the United States economy could increase and that this could lead to calls for the annexation of the colonies. This made Canadians apprehensive about the treaty. The political fallout between the United States and Great Britain after the American Civil War also made the Americans negative about the reciprocity agreement. This is what led to the Americans ending the agreement. After the end of this agreement, it took many years for the two countries to sit on the table again and draft a new trade agreement.



…