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overseas trade

overseas trade. Overseas, as opposed to internal trade, played a modest but expanding role in the pre-industrial economy. Primary products such as wool, tin, and lead were the mainstays of the English export trade, but the expansion of manufacturing is reflected in the growing proportion of wool exported as cloth, which had reached 50 per cent by the mid-15th cent. and was over 85 per cent by 1540. The major market for these products was north-western Europe, though there was also some trade to the Mediterranean. The main imports were textiles, wine, salt, and a wide range of luxury goods. The principal exports of Scotland and Ireland were wool, hides, fish, and grain, destined either for English or nearby European markets.

The concentration on the Low Countries began to weaken during the latter half of the 16th cent. when English merchants began to exploit more distant markets in Russia and the Levant. As exploration proceeded, trading was extended during the 17th cent. to Africa, India, the Caribbean, and North America. However, the development of overseas trade during the late 16th and 17th cents. provoked conflict with other European trading powers, notably the Dutch, Spanish, and French.

By the end of the 17th cent., when exports were roughly 5 per cent of the national income of England and Wales, the composition of trade was beginning to reflect an advancing economy. Imports consisted mostly of raw materials and food, and exports of manufactures. There was both a substantial increase in overseas trade and a change in direction, which set the pattern for subsequent growth during the 18th and much of the 19th cents., with India, Africa, and the North American colonies becoming significant. The East India Company, packed with Scots, secured a virtual monopoly over the trade to India and the East Indies via the Cape of Good Hope. At the same time the Navigation Acts were designed to give England a monopoly in the shipment of goods to and from the colonies. Though evasion was widespread, this legislation proved a major cause of friction with the Scots, who attempted their own colonial schemes in Nova Scotia and at Darien, until the Union in 1707 brought legitimate access to colonial markets. Irish merchants were also excluded until the free trade concessions of 1780. More critically, the restrictions contributed to rebellion in the North American colonies themselves.

Overseas markets for manufactures and as sources of supply of raw materials were central factors in British industrialization. By 1800, exports represented 13 per cent of the national income of England and Wales, and with the abandonment of protection in the 1840s expanded still more, reaching their peak in the 1870s at around 22 per cent. Trade cycles brought periodic booms and slumps, but the British economy was becoming more dependent on overseas trade, including ‘invisible’ earnings from finance, insurance, and shipping. Though the volume of international trade had expanded, Britain's share began to contract in the face of foreign competition from the USA, Germany, France, and other industrializing countries. The empire took a growing proportion of exports, but imperial trade, rather than a benefit, is increasingly regarded as having been a burden. This was obvious to contemporaries as early as the 18th cent. when Jamaican sugar sold for a higher price in Britain than on the world market, thanks primarily to the West Indian sugar lobby.

Uncompetitive imperial preference was less of a problem than the underlying weaknesses of an export economy heavily dependent on traditional industries, the disruption caused by two world wars and the depression, and the painful adjustments of modernization after 1945. In the face of continuing international competition, the industrialization of the Third World, and the loss of empire, Britain was forced into the European Community, with which a growing proportion of trade was conducted.

Ian Donnachie

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