Reciprocity

Reciprocity Agreement

Reciprocity, a term commonly used in Canada in reference to an agreement with the United States involving mutual reductions in customs duties. The agitation for reciprocity became of political importance in Canada in 1846 during the period of discontent that followed the repeal of the Corn Laws by Great Britain . The British government was accordingly induced to open negotiations at Washington for a reciprocal agree­ment including the five North American colonies. The dispute over the rights of Great Britain and of the United States in the North Atlantic fisheries com­plicated the negotiation for reciprocity, but increased the anxiety of both governments to reach a general settle­ment. At length in June, 1854, a for­tuitous combination of circumstances, including the decline in the opposition of the northern protectionists and of the southern pro-slavery party, enabled Lord Elgin, and W. L. Marcy, the American secretary of state, to negotiate the treaty.

Under the terms of the Elgin-Marcy treaty [more commonly known as the Reciprocity Treaty of 1854], the United States and the British North American colonies (Canada, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland) each removed the duties upon a considerable list of natural products. The most important were grain, flour and breadstuffs, animals, meats, fruit, fish, poultry, tallow, coal, timber, and lumber. American fishermen were admitted to the colonial fisheries on the Atlantic coast, while British subjects received a similar privilege in eastern American coastal fisheries north of the thirty-sixth parallel. British and American shipping had access, upon equal terms, to the St. Lawrence, the Canadian canals, and lake Michigan. The treaty undoubtedly imparted a considerable impetus to trade between the United States and the colonies, which more than doubled between 1854 and 1865. The prosperity of the period was, however, to a large extent, the result of other factors, including the rapid development of the area around the Great lakes and of the American middle west, the construction of railways, and the American Civil War. The trade developed under the treaty has been described as a “commerce of convenience” : the principal articles of importation into Canada – grain, flour, meat, livestock, coal, etc. – were largely the articles which the colonies chiefly exported to the United States.

As early as 1856, American protectionists, particularly the manufacturing and shipping interests of the state of New York, began an agitation against the treaty. Canadian tariff increases, in 1858-9, upon dutiable importations from the United States enabled opponents of reciprocity to claim that Canada had violated the spirit of the treaty. During the Civil War, the allegedly pro-southern sympathies of Great Britain and of the colonies increased northern opposition to the reciprocity agreement. Economic and political forces, therefore, combined to bring about the abrogation of the treaty by the United States in March, 1866.

Between 1866 and 1900 Canada made repeated but abortive efforts to secure another reciprocity treaty. In the period after Confederation the Macdonald government attempted to negotiate an agreement, and in 1869 Sir John Rose, then minister of finance, made an unsuccessful visit to Washington . Hope of securing a reciprocity agreement was temporarily destroyed by the Treaty of Washington of 1871, in which important fishery and navigation privileges were conceded to the United States, without the provision for reductions in duty, except upon fish. In 1874, George Brown and Sir Edward Thornton, the British minister at Washington, negotiated a draft treaty, with Hamilton Fish, the American secretary of state. The treaty, which was to operate for twenty-one years, provided for tariff reductions upon natural products, agricultural implements, and manufactures; but it was rejected by the United States Senate. During the eighties the Liberal party, through the influence of Erastus Wiman and Goldwin Smith, was committed to the policy of unrestricted reciprocity with the United States. In the election of 1891, Sir John Macdonald made telling use of the argument that the Liberal policy would lead to the annexation of Canada. Commissioners were despatched to Washington by the Conservatives in 1892-3, and by the Liberals in 1898-9, but were alike unsuccessful in securing a treaty.

During the following decade there was little discussion of reciprocity. In 1911 negotiations between President Taft and W. S. Fielding, the Canadian minister of finance, resulted in a reciprocal arrangement which was to be enacted by concurrent legislation in the two countries. The agreement provided for free trade in the natural products of the farm (grain, fruits, vegetables, and farm animals), low rates of duty upon natural products in secondary form (meats, canned goods, flour, etc.) and upon a variety of articles including agricultural implements and engines, building material, and partly finished lumber. Pulpwood was to be admitted free by the United States when the provinces withdrew the embargo upon the exportation of pulpwood from government-owned lands. The necessary legislation was passed by the United States Congress; but the Laurier government, which fought a Dominion election chiefly upon the issue of reciprocity, was defeated.

No further negotiations for reciprocity occurred between the two countries for over twenty years. After passage of the Reciprocal Trade Agreements Act in the United States , negotiations were opened between the Canadian and American governments in the latter part of 1934. The accession to power of the Liberals in Canada in the autumn of 1935 was followed by the King-Hull agreement at Washington on November 15. The treaty was to be in operation until December 31, 1938. According to its provisions, the United States reduced the duties upon some sixty commodities imported from Canada, including cattle, horses, whiskey, sawed boards, planks, deals, and sawed timber, cheddar cheese, maple sugar, and seed potatoes. Free entry to the American market was guaranteed to a number of products including newsprint paper, woodpulp, pulpwoods, and shingles of wood. Canada extended to the United States the benefit of the intermediate tariff in its entirety. Specific reductions below existing most-favoured-nation rates were made in respect of eighty-eight tariff items, including products in the groups of agriculture, textiles, iron and steel, machinery, agricultural, industrial and domestic, and electrical apparatus. Each country agreed to accord to the other unconditional most-favoured-nation treatment in respect of custom duties and related matters. Concessions by Canada to the other parts of the British Empire and by the United States to Cuba, the Philippine islands, the Virgin islands, American Samoa, etc., were not included within the scope of the treaty.

Source: D. C. MASTERS, “Reciprocity”, in W. Stewart WALLACE, ed., The Encyclopedia of Canada , Vol. V, Toronto, University Associates of Canada, 1948, 401p., pp. 228-230.

Resources

See Also

• Corn Laws
• Free trade
• Imperial Preference
• National Policy
• Tariffs

Further Reading

• F. E. Haynes, The Reciprocity Treaty with Canada of 1854 (Baltimore, 1892, publications of the American Economic Association, vol. vii, no. 6);
• Donald C. Masters, The Reciprocity Treaty of 1854 (London, 1937);
• Charles C. Tansill, The Canadian Reciprocity Treaty of 1854 (Baltimore, 1922);
• United States Tariff Commission, Reciprocity and commercial treaties (Washington, 1919);
• John W. Dafoe, Clifford Sifton in relation to his times (Toronto, 1931);
• Edward Porritt, Sixty years of protection in Canada, 1846-1907 (London, 1908);
• Trade and tariff relationships between Canada and the United States (Report by joint Canada-United States Committee, maintained by Canadian Chamber of Commerce and Chamber of Commerce of the United States, 1934).

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This entry was last updated: November 5, 2014