The evolution of trade policy and protection

Protection has a long history: the medieval city-states, the first nation – states protected their industry and trade with every means, including violence. In the nineteenth century England, the first industrial nation, became the first to embrace free trade. The Continent followed England and also liberalized trade both with unilateral tariff cuts and with treaties that guaranteed the contracting parties the lowest duties, those granted “the most favored nation” by other, even later, treaties.

This liberalization had its intellectual support in the new “political economy” that proclaimed the advantages of untrammeled exchange in external trade as in domestic markets. It had its practical, political support in the natural complementarity between England, the “workshop of the world,” and the still traditional, agricultural Continent.

That political support would disappear, on the Continent, after just a few decades. Continental industry grew, despite its increased exposure to English competition; it was always protectionist, and that lobby became progressively stronger. In the 1880s, with the growing competition of overseas agriculture and the collapse of grain prices in European markets, significant agricultural interests also became protectionist. England would not abandon free trade; on the Continent industry and cereal-growing joined forces to push through a wave of tariff increases, and by the end of the century protection was again the rule.

Italy followed these Continent-wide shifts. Cavour's Piedmont had taken part in the first liberalization of trade.