Mercantilism is the dominant school of economic…
1785 CE
Above all other nations, the two leading mercantilist countries are Britain and France, who follow the guidance of Jean-Baptiste Colbert.
Colbert had enforced the policy in seventeenth century France based on his understanding that "natural resources are limited, and the power of the nation depends on what portion of the world’s resources it acquires."
As a result, mercantilist policies go hand-in-hand with colonialism; colonies provide the mother country with access to resources and raw materials, and, in return, act as a market for industrial products made in the mother country.
Both Britain and France have enacted a mercantilist commercial policy that aims at negating foreign imports.
Already known as traditional rivals, these stringent mercantilist policies (specifically the high tariffs, and the race to colonize Africa and East Asia) create tense diplomatic relationships between England and France.
The Treaty of Utrecht (1713) had regulated Anglo-French commercial relations prior to the Eden Treaty.
The reciprocal trading rights stipulated in the treaty had never became operative however, because Great Britain had refused to ratify the crucial Articles 8 and 9 of the agreement, and in the wake of the British refusal the French had quickly returned to their historic prohibitive policies.
The policies of mercantilism in Europe have been eased slightly by a series of agreements between several nations leading up to the Eden Treaty of 1786.
Besides the House of Bourbon renewing their Family Compact in 1761, the French had also opened a few colonial ports to foreign trade in the same year.
Twelve years later the French government negotiated the Franco-Portuguese Agreement of 1773.
In 1778 France had signed the Treaty of Amity and Commerce with the fledgling United States, on a reciprocal trading basis, which broke Britain's mercantile Navigation Acts; they also signed the Franco-American Alliance for mutual defense to protect it, if war erupted as a result, which it did.
Additionally, in the years leading up to 1786, vocal economic leaders like Adam Smith and the Physiocrats have promoted a more liberal trade policy in eighteenth century Britain.
Their publications and discussions garner popularity and create a culture within the country that calls for relaxed trade barriers.
Although the influence of the people probably has little to no effect on policy-makers, the British government, similarly to its French counterpart, is highly concerned with the lack of national revenue being produced.
Both countries urgently seek a remedy; and, out of their urgency, the Eden Agreement of 1786 is agreed upon, effectively softening the stringent mercantile policies of France and Britain.
