Description
Hegemonic stability theorists have argued that the interwar collapse of the international liberal trade regime was due to Britain’s loss of economic hegemony and hence its turn to protection resulting in systemic “closure”. This paper shows that when the British policymakers adopted both general tariff and imperial preference in 1932, they did it for precisely the opposite reason, namely, to negotiate removal of tariff barriers with both allies and rivals and incentivise “re-opening” of the international trade for domestic welfare creation and greater systemic stability. This strategy was developed and implemented by Walter Runciman, the President of the Board of Trade (1931-1937), who used Keynes’s idea of a 10 per cent revenue tariff to reduce the scope of protection that was introduced. He then applied this low tariff to negotiating bilateral agreements that lowered protection reciprocally, following Cobden’s approach to commercial liberalisation in Anglo-French Treaty of 1860. Crucially, he was able to pursue trade re-opening under a fully protectionist mandate of the Conservative-dominated National Government at the lowest point in international trade relations. Using the empirical evidence from the local policy archives, this paper places individual agency at the heart of the structural and systemic--level analyses offering a novel interpretation of this crucial IPE case. By analysing structural change as engendering active human agency, it highlights the contingency involved in the economic policymaking and corrects analytical assumptions of structural theories that continue to dominate the field of international political economy.
