Historical review of trade agreements

The formation of the first trade agreements goes back to the beginning of the eighteenth century, when the first trade agreements appeared in Europe. In 1707, England and Scotland signed the Act of Union, thus creating a bilateral customs union, i.e. an agreement which provides for elimination of internal tariffs and a unified external tariff. Similarly, in France the various internal tolls and tariffs in force since 1600 were abolished in 1790 after the French Revolution. Prussia also first considered an economic union in 1808, and this led to the establishment of the Zollverein in 1834, historically considered to be the first plurilateral regional trade agreement, under which most German states adopted the Prussian external tariff, thus operating as a fully-fledged customs union.

In the mid-nineteenthth century England was the first nation to unilaterally open its national barriers to foreign trade, with the repeal of the Corn Laws in 1846, which was followed by a number of unilateral reductions or even removal of tariffs. At the same time and until the end of the nineteenth century, a number of bilateral free trade agreements (FTAs) were signed between European countries, the most important of which was the Commercial Treaty signed between England and France in 1860. Under this treaty, France reduced its tariffs initially to 30 per cent and after 1865 to 20 per cent, and England decreased the number of dutiable goods from 419 to 48 and also reduced wine tariffs.