British exports and foreign tariffs: Insights from the Board of Trade's foreign tariff compilation for 1902

Abstract

This research note contributes to the debate over whether British exports were elastic to foreign tariffs before the First World War. In doing so, this study is the first to make econometric use of the commodity- and country-disaggregated foreign tariff data that Britain's Board of Trade compiled for the year 1902. Contrary to previous literature, British exports were indeed elastic to foreign tariffs across a range of manufactured commodities, with a conservative estimate of the elasticity being 3.1, which is not low by modern standards. Counterfactually, if foreign countries had emulated Britain's policy of free trade in manufactures in 1902, a partial-equilibrium estimate is that British exports would have been 57 per cent higher. If the trade-liberalizing trend of the mid-nineteenth century persisted into the late-nineteenth century, then much of the late-Victorian deceleration of British exports would have been avoided.