Portugal, Spain and the 1893 Treaty of Commerce and Navigation. Portuguese-Spanish relations at the second half of the 1800’s and the importance of the Spanish market in the context of the 1891-1893 Portuguese crisis

Keywords: foreign trade, Portuguese-Spanish relations, Iberian market, Iberia

The theme of Iberian relations in modern times has strongly attracted the attention of historians in both countries. Its importance is paramount to take an indepth approach to developments in each country, fully grasp solutions adopted throughout the nineteenth and twenty centuries, and analyze phenomena and trends common to – sometimes simultaneously occurred in – the peninsular and/or nonEuropean framework. In this continued exercise of historiography special emphasis is laid on studies in the political, military and cultural strands, in which historians soon found a similar pattern in the pathways followed by Iberian nations in the 1800’s. This pattern, albeit certainly influenced by the Iberian Peninsula’s geographic and orographic features, is not exclusively determined either by the spatial proximity of both countries or by their peripheral positioning vis-à-vis Europe’s centre. It rather resulted from an interaction born in Iberia’s core scope, in which the dualist stability of the two Iberian partners anchored itself to an external projection of both parties – be it through the extraEuropean territorial expansion, be it through a differentiated diplomatic stand 1. In the early 1800’s Iberian nations were at a turn-point due to events occurred abroad which had a unique impact on the peninsular context, upon the arrival of changes associated with the advent of modern times 2. Such uniqueness, visible in the 1

Hipólito de la Torre Gomez, “História, identidad nacional y vecindad ibérica”, in La Mirada del outro. Percepciones luso-españolas desde la História, coord. por Hipólito de La Torre Gomez e António José Telo, Mérida, Ed. Regional de Extremadura, 2001. 2 António José Telo e Hipólito de Torre Gomez, Portugal e Espanha nos Sistemas Internacionais Contemporâneos, Lisboa, Cosmos, 2000; Maria Manuela Tavares Ribeiro, “Portugal e Espanha – estados liberais: singularidades e afinidades”, Relações Portugal-Espanha. uma História Paralela, um Destino Comum, II Encontro Internacional, Porto, Cepese/Fundação Rei Afonso Henriques, 2002, pp. 203-212.

anti-Napoleonic reactions throughout the Peninsula 3, in the construction process of the liberal state, or in the resistances to the new institutional architecture, stemmed from a readjustment of the centuries-old features intrinsic to the Portuguese-Spanish relationship to the new European framework following Europe’s redefinition after the fall of Napoleon Bonaparte. On one hand the Iberian nations had to address the definition of their identity attributes in line with the rationale of prevailing liberalism, which involved the demarcation of borders and the promotion of national economic space 4. On the other hand they had to accommodate the new principles of “European sociability” established at the Conference of Vienna 5 and integrate themselves into the international system of exchanges previously announced by the studies of William Huskisson 6 and Emerich Vattel 7 on the relevance of foreign trade and its relationship with the law of nature and nations, meanwhile extensively adopted in the 1860’s following the Cobden treaty signed by France and England 8. These were not however the only drivers impacting on the Iberian Peninsula, which soon had to address the re-organisation of trade flows occurred in Central and Northern Europe as from 1815. This change, owed to the impact of the Continental Blockade on the economic regions that would henceforth constitute Belgium (1830) and/or Germany (1871), gained new momentum with the provisions governing river navigation determined by the Conference of Vienna, giving rise to the formation of trade areas partially exempted from duties. This trend, subsequently strengthened by the review of customs’ regulations, materialised in Iberia on the 31 August 1829 upon the signature of a treaty on the navigation of river Tagus, extended to river Douro by

3

António Ventura; Alexandre de Sousa Pinto; Cristina Borreguero Beltrán (coord.), La Guerra de la Independencia en el Mosaico Peninsular (1808-1814), Burgos, Universidad de Burgos, 2010. 4 David Justino, A Formação do Mercado Nacional, (1810-1913), 2 vols, Lisboa, Veja Editores, 1988-1989; Miriam Halpern Pereira, Das Revoluções Liberais ao Estado Novo, Lisboa, Presença, 1994. 5 Quoting Almeida Garrett. Proceedings of Câmara dos Deputados, Session no.11, 13 November 1840, p. 212. 6 For William Huskisson cf. Denis Patrick O’Brien, The Classical Economists Revisited, Princeton University Press, 2004 [1ª ed. 1975]. 7 For Emerich Vattel cf. Frédéric Ramel, Anthologie des Relations Internationles, Paris, Presses de Sciences Politiques, 2011. 8 G. Haberler, A Survey of International Trade Theory, Princeton, 1961; Paul Bairoch, Commerce Exterieur et Développement Economique de Europe au XIXe siècle, Paris, Mouton e Co., 1976.

an additional clause 9. The fall of Absolutism in Portugal rendered non-viable the enforcement of the above agreement. In May 1835 Iberian governments again discussed the theme of river navigation and came to an agreement. But the acceptance of the Treaty on the Navigation of River Douro triggered strong controversy between the Setembrista party, which promoted customs protectionism and the reserve of national space for energising Portuguese agriculture and industry, and the Cartista party, which praised the virtuous nature of vitalised trade as a means to boost wealth creation in the country 10. Submitted to Parliament Chambers in January 1836, the Treaty was enforced five years later, only after overcoming the difficulties arising from the drafting and approval of the respective provisions and addressing the issues related with the resistance expressed in Parliament by members such as José Estevão, Moura Cabral, Sá Nogueira, João de Sousa Pinto de Magalhães, Vicente Ferrer or Bernardo Gorjão Henriques. It should be stressed that throughout this decision-making process Spanish diplomacy kept the Portuguese foreign office under strong pressure 11. Such pressure reached its peak in December 1840, date of the ultimatum addressed by the Spanish 9

Treaty between Prince Dom Miguel and Don Fernando VII King of Spain on the Free Navigation of Rivers Tejo and Douro, signed in Lisbon on the 31 August 1829 and ratified by the Usurping Cabinet on the 7 October and by Spain on the 29 September 1829, in Colecção de Tratados, Convenções, Contratos e Actos Públicos celebrados entre a Coroa de Portugal e as mais potências, desde 1640 até ao presente, compiled by José Ferreira Borges de Castro, tomo VI, Lisboa, Imp. Nacional, 1857, pp. 78-88; António Monteiro Cardoso, “A Questão da Livre Navegação do Douro e a crise de 1840 entre Portugal e Espanha”, in Heriberto Cairo Caron, Paula Godinho e Xerardo Pereira (coord.), Portugal e Espanha. Entre discursos de centro e práticas de fronteira, Lisboa, IELT, Colibri, 2009, pp- 55-56. Também Artur Teodoro de Matos, Transportes e Comunicações em Portugal, Açores e Madeira (1750-1850), Ponta Delgada, Universidade dos Açores, 1980; Maria da Conceição Meireles Pereira, “A navegação do rio Douro no séc. XIX. Algumas questões”, Douro. Estudos e Documentos, vol. II, (4), 1997, pp. 251-269; João Carlos Garcia, A Navegação no Baixo Guadiana durante o ciclo do minério (1857-1917). Dissertação de Doutoramento, Porto, Faculdade de Letras da Universidade do Porto, 1996. Maria da Graça Lopes Fernandes Martins, As Relações do Nordeste Transmontano com Castela-Leão no séc. XIX (1834-1880). Dissertação de Doutoramento, Porto, Faculdade de Letras da Universidade do Porto, 2007. 10 Miriam Halpern Pereira, Miriam Halpern Pereira, Das Revoluções Liberais ao Estado Novo, Lisboa, Presença, 1994; Maria de Fátima Bonifácio, Seis Estudos sobre o Liberalismo Português, Lisboa, Editorial Estampa, 1991; João Bonifácio Serra, “Em defesa dos interesses industriais – António Oliveira Marreca (1848-1849), Análise Social, vol. XVI, (61-62), 1980, pp. 53-69. 11 Judging from the outlook drafted by Carlos Creus, Spain’s chargé d’affaires in Portugal, on the 27 de November 1839, the fall on the eve of the cabinet headed by Barão da Ribeira de Sabrosa would be a key driver for unblocking the negotiations. This was however wishful thinking; the new cabinet headed by Rodrigo da Fonseca Magalhães, albeit favouring the Treaty’s signature, did not fail to submit it to the ratification of parliament chambers (a measure contrary to Madrid’s interest), which widely debated the said Regulations between November 1840 and January 1841. António Monteiro Cardoso, “A Questão da Livre Navegação do Douro e a crise de 1840 entre Portugal e Espanha”, in Heriberto Cairo Caron, Paula Godinho and Xerardo Pereira (coord.), Portugal e Espanha. Entre discursos de centro e práticas de fronteira, Lisboa, IELT, Colibri, 2009, pp- 55-56.

cabinet to Portugal’s government. England, both hostile to the customs-oriented guidelines of the “Setembrista” cabinets and favourable to political change triggered by Espartero in Spain, backed up this ultimatum 12. This treaty, with an anticipated duration of 25 years 13, failed to meet the needs and expectations behind its signature in Spain or Portugal. Spain pointed out the unduly taxing of goods unloaded at Porto, heading for the neighbouring country where they paid the same duties. Portugal considered this treaty insufficient insofar as its restrictive nature did not yield economic complementariness of the two countries14. This view guided the interventions of Cláudio Adriano da Costa, who advocated the potentialities of Portugal’s economic linkage to Spain by way of a customs league, labelled Prussian, as it stood for the replication, inasmuch as possible and desirable, of the organisational model developed in German land since 1818 15. Also Agostinho Albano de Silveira Pinto praised the increment of the circulation infra-structure, in connection with the idea of a customs league in Iberia. In Eco dos Operários, Sousa Brandão expressed his support to Iberian Federalism and claimed that the Iberian customs league would help address Portugal’s economic bottlenecks and subsequently the misery of Portuguese workers. In O Patriota, Manuel Jesus Coelho criticised the Portuguese cabinet for not sharing the purposes of its Spanish counterpart, a position similar to the one expressed by António da Costa de Sousa Macedo in Leiriense, also shared by José Barbosa Leão 16. The same views, albeit in a different context, underlay the statements of the Viscount de Vila Maior regarding the road and railway network of Trás-os-Montes, issued in January 1866 about the new challenges faced by Portugal and Spain; the 12

Idem. This treaty also required that the regulations governing the customs houses of Porto, Barca de Alva and Sabor and monitoring posts be altered, according to the decree-law of the 18 May 1841. 13 Vd. Article 12 of the Navigation Treaty, Diário da Câmara dos Senhores Deputados do Reino, Session no. 19, 26 January 1836, p. 236. 14 This position was not unanimously supported by the Portuguese side, as evidenced by the controversy between Alexandre Herculano and Lopes de Mendonça in 1853 about the introduction of railway transport in Portugal and its impact on Portuguese-Spanish trade relations, among others. Adriano Moreira, “A Tensão Ibérica”, in Hipolito de la Torre Gomez e António José Telo, La Mirada del Outro. Percepciones luso-españolas desde la história, Mérida, Ed. Regional de Extremadura, 2001, pp. 25-33. 15 “Poderia ter algum lugar, se nós quisessemos adoptar com a Espanha uma liga prussiana, mas nós tão longe estamos disso que tomáramos edificar as muralhas da China, entre Portugal e Espanha”. Cláudio Adriano da Costa, Exame do Orçamento de Portugal, Lisboa, Oficina de M. J. Coelho, 1841, p. 90. O autor voltaria a insistir nesta temática na obra Memória sobre Portugal e Espanha, Lisboa, 1850. 16 Maria da Conceição Meireles Pereira, op. cit, pp. 258 and following.

design of the railway itineraries and the construction and funding of the railway lines linking the two countries17. To this extent the re-vitalisation of Iberianism in the second half of the nineteenth century took stock of the European trends of that time, subsidiary to the List’s doctrines 18. The objective of economic modernisation, shared by both governments in the mid-1800’s19, became a common denominator in PortugueseSpanish relations, with a political and institutional impact. Also historiography became decisively important, much attention was paid to Iberian geography and, lastly, a perception of difference cropped up as to identity features in the birth and consolidation of Iberian communities. This confluence triggered a wide debate, involving intellectuals, politicians and economic operators, on the advantages and shortcomings of proximity between the Iberian nations20. In parallel Portugal and Spain were compelled to gradually adopt a new paradigm, which did not stem from any Iberian will and/or specificity but rather from each country’s integration into the framework of supranational dynamics that vitalised Europe at that time. This centripetal drive at the European level triggered in the 17

Magda Pinheiro, Chemins de fer, structure financiére de l’ état et dépendance exterieure au Portugal (1850-1890), 3 vols, Paris, 1986. 18 António Pedro Vicente, Espanha e Portugal. Um Olhar sobre as relações peninsulares no séc. XX, Lisboa, Tribuna da História, 2003, p. 212 19 David Justino, “O Livre Câmbio e o fontismo revisitados através dos debates parlamentares”, in José Vicente Serrão, Magda de Avelar Pinheiro e Maria de Fátima Sá e Melo Ferreira, Desenvolvimento Económico e Mudança Social. Portugal nos últimos dois séculos, Lisboa, Imprensa das Ciências Sociais, Abril de 2009, pp. 49-68; Gabriel Tortella, El desarollo de la España contemporánea. Historia económica de los siglos XIX y XX, Madrid, Alianza Editorial, 2001. 20 Among other studies, Fernando Catroga, “Nacionalismo e Ecumenismo. A Questão Ibérica na Segunda Metade do Séc. XIX”, Revista Cultura História e Filosofia, Lisboa, vol. IV, 1985; Jose Antonio Rocamora, “Causas do Surgimento e Fracasso do Nacionalismo Ibérico”, Análise Social, nº 122, 1993, pp. 91-98; Maria da Conceição Meireles Pereira, “Concertação Económica e Peninsular e União Aduaneira na Imprensa Portuense – propostas e resistências no 3º quartel de Oitocentos”, Revista da Faculdade de Letras. História, 2ª série, vol. 13, Porto, Universidade do Porto, 1996, pp. 423-462; Amadeu Carvalho Homem, “O tema do iberismo no republicanismo federalista português (1870-1910)”, O Federalismo Europeu. História, Política e Utopia, Lisboa, Edições Colibri, 2001; Maria Manuela Tavares Ribeiro, “Portugal e Espanha – Estados Liberais: Singularidades e Afinidades”, Relações Portugal-Espanha, uma História Paralela, um Destino Comum. II Encontro Internacional, org. por Fernando de Sousa e Maria da Conceição Meireles Pereira, Porto, Cepese/Fundação Rei Afonso Henriques, 2002, pp. 203-212; José António Rocamora, “La Alternativa Ibérica en España”, Actas dos X Cursos Internacionais de Verão de Cascais (7 a 12 de Julho de 2003), Cascais, Câmara Municipal de Cascais, 2004; Sérgio Campos Matos, “Iberismo e Identidade Nacional (1851-1910)”, Clio. Revista do Centro de História da Universidade de Lisboa, nova série, vols 14-15, 2006; Idem, “Conceitos de Iberismo em Portugal”, Revista de História das Ideias, nº 28, Coimbra, Instituto de História e Teoria das Ideias/Faculdade de Letras da Universidade de Coimbra, 2007; Maria da Conceição Meireles Pereira, “Iberismo e Nacionalismo da Regeneração à República. entre Utopia e Distopia”, Ibéria. Revista de História das Ideias, vol. 31, Coimbra, Instituto de História e Teoria das Ideias/Faculdade de Letras da Universidade de Coimbra, 2010, pp. 257-284.

Iberian context the signature of bilateral conventions of sectoral character and scope – postal convention 21, consular convention 22, improvement of metric system 23, literary and artistic property 24, emigration of nationals subject to conscription 25 – which enshrined basic mechanisms for trans-Iberian co-operation. These in turn formed a basic structure set up by Iberian diplomatic corps, which also had to address other issues linked to interests vital to each Nation (but sometimes different or even irreconcilable). We repeatedly find such clash in domains such as communications, trade and transit, or territorial waters and fishing activities. A paradigm of this trend was the agreement on river and railway communications, signed on the 27 April 1866 for ruling the circulation of people and goods and replacing the 1835 Navigation Treaty. The agreement would be regulated much later, as it was difficult to agree on transit regulations capable of rendering compatible Portuguese-Spanish interests 26. In force since January 1877 its enforcement clearly fell short of the provisions laid down by the parties, namely in articles 3 27 and 4 28. The general efficacy of the same agreement was weakened as a result of this factor, due less to the satisfaction of national needs than to the expansion of Spanish products to the Portuguese market and, moreover, to the destination markets of Portuguese exports 29. 21

Signed in August 1850; renewed on the 2 April 1862, in force as from 15 January of the following year. 22 April 1871. Sinopse dos Tratados, Convenções, Contratos e Actos Públicos celebrados entre a Coroa de Portugal e as mais potências e que não foram expressamente revogados, Lisboa, Imprensa Nacional, 1889, p. 33 23 20 May 1875. Idem. 24 Signed on the 5 August 1860 and subsequently on the 8 August 1889. Idem. 25 16 June/13 July 1875. Idem. 26 This fact leads us to partially disagree with the statement of António Monteiro Cardoso on the impact of the 1866 agreement. António Monteiro Cardoso, “A Questão da Livre Navegação do Douro e a Crise de 1840 entre Portugal e Espanha”, in Heriberto Cairo Caron, Paula Godinho, Xerardo Pereiro, coord., Portugal e Espanha. Entre discursos de centro e práticas de fronteira, Lisboa, IELT/Colibri, 2009, p. 70. 27 “Estabelecer-se-ão depósitos em Madrid e Lisboa para as mercadorias de trânsito procedente de Espanha e Portugal e para todas as que se destinem a qualquer dos dois países pela via férrea, e sucessivamente se estabelecerão outros depósitos na fronteira de Espanha e portos do litoral espanhol, segundo se designe e necessário for, à medida que forem abrindo novos caminhos de ferro à circulação. Também se construirão outros depósitos onde convier, logo que em Portugal e Espanha se construirem novas vias férreas, que hajam de entroncar na fronteira com as de Madrid e de Lisboa a Badajoz”. 28 Works done for extending navigation and making it easier in rivers crossing the respective territories. 29 We should also take stock of the speech by Mariano Cirilo de Carvalho on the 9 February 1893 (Diário da Câmara dos Senhores Deputados, session 19, 3 February 1893, p. 8); and also the parliamentary controversy opposing Mariano Cirilo de Carvalho, Fernando Matoso dos Santos and Ferreira do Amaral, on occasion of the appraisal of the 27 March 1893 Commerce and Navigation Treaty between Portugal and Spain. Diário da Câmara dos Senhores Deputados, session 40, 31 May 1893, pp. 6-12. 22

In spite of the above limitations, this agreement for rendering communications easier would play a structuring role in the Iberian balance, marked, in commercial terms, by a clear gap between the Spanish and Portuguese positions. Both agreed on the basic assumption of improved proximity of Iberian markets, which would have a virtuous impact, by multiplication, on economic activity in both countries – and, consequently, on extra-European regions under the respective sovereignty and direct influence. Likewise the visibility of Iberian economies in Europe was an key element in the argument for proximity, cherished by Spain’s foreign office in the second half of the 1800’s. Spanish diplomacy and its representatives in Lisbon certainly had not forgotten the Portuguese resistance against the creation of a customs league similar to others that existed in Europe, as proposed by Miguel Fernandez de los Rios in June 1870. Relying on a customs tariff common to both countries for import and export duties, as well as on the equitable split of the revenue collected at the customs houses30, Spain’s formula clearly diverged from Portugal’s preference for a conservative modality for approaching customs duties and product circulation, as could be gauged from the instructions sent by Foreign Minister Casal Ribeiro to the Portuguese representative in Madrid, in November 1866 31. This difference was the kick-off for the negotiations process begun on the 20 December 1872, date of signature of the first treaty of commerce and navigation between Portugal and Spain. The agreement, with an anticipated 8-year duration, imposed limitations to the scope originally wished by each party. Spain was forced to immediately give up hopes for an Iberian customs union and make plans according to the guidelines presented by the Peninsular Association in June 1869 32. 30

Negócios Estrangeiros. Documentos apresentados …. Negociações com Espanha. Comércio, trânsito, pesca, Lisboa, Imprensa Nacional, 1893, p. 95. 31 Idem, p. 94. 32 Ricardo Molina, Portugal. Su origem, constituicion e Historia politica en relacion com la del resto de la Peninsula, Sevilha/Madrid, Félix Periá, 1870, p. 225 and following. Special reference should be made to the author’s interest in the customs union and the mechanisms for its materialisation – i.e. among others, periodical Spanish-Portuguese-American industrial fairs; industrial fairs at the regional level, simultaneously covering a part of both Portuguese and Spanish territory; on-equal foot admission and listing of Portuguese government bonds and company stock to Spanish stock exchanges and security markets; creation of new partnerships between merchants and bankers of the Peninsular Association to invest in Portugal, incentive premiums and other kind of protection to Portuguese industrialists ready to develop industries in Spain and on-equal foot treatment for Spanish investors in Portugal; adoption of single tariffs in railway and steamership transportation, etc.; government subsidies to the construction of new railway lines for promoting communications between the two countries; government subsidies

In exchange for the recognition of its contract formula, Portugal’s duty now was to integrate Spain into the group of nations with whom a treaty of commerce and navigation was signed, based on the most favoured nation clause 33. Indeed this practice was in line with the goal of establishing a foreign trade scheme capable of meeting the requirements of prime-minister Fontes’s economic model, which aimed to gradually integrate Portugal into the enlarged economic system, at the pace imposed by European and non-European industrial powers. This entailed a demanding pathway for Portugal’s economic and social structures, not exempt from difficulties, as evidenced by the widespread unpopularity of Fontes Pereira de Melo’s reforms in the fields of infra-structure and administrative and tax organisation 34. Headed by Great Britain (with whom a Treaty of Commerce and Navigation on India was signed on the 26 December 1878, plus a convention added to the 1842 Treaty, on the 22 May 1882), the above group was joined by Russia (28 February 1851), Peru (26 March 1853), Liberia (4 March 1865), Austria-Hungary (13 January 1872), Germany (2 March 1872) and Italy (15 July 1872). The group was subsequently joined by Switzerland (6 December 1873), Belgium (23 February 1874), the Netherlands (9 January 1875), Greece (12 January 1877), Bolivia (10 May 1879), France (19 December 1881 35, plus an additional convention on the 13 May 1882), Hawaii (5 May 1882) and Denmark (20 December 1887)36. for setting up the main steamership lines linking the entire coastline; creation of more trading houses and exhibition of Portuguese products in Spain and of Spanish products in Portugal; rendering legislation uniform in the fields of water and pastures; creation of farming colonies in depopulated areas of both countries, offering incentives for available Portuguese citizens to settle in Spain and for Spaniards to settle in Portugal; creation of credit institutions common to both countries. 33 Francisco António Correia, Política Económica Internacional, Lisboa, Livraria Sá da Costa, 1922, pp. 2338. 34 David Justino, op. cit. 35 It was the second treaty of commerce and navigation signed by both countries; the first dating back to April 1867. 36 This list includes the treaties of commerce and navigation repealed between 1890 and 1892, as they were the structuring axes of the Portuguese trade system in the said period. Nevertheless the same regime also implied signing covenants or specific-nature agreements and strictly keeping relationships governed by treaties signed before the “Regeneração”. Such was the framework of trade relations between the United States of America and Portugal, pursuant to the treaty negotiated by João Baptista Almeida Garrett and Edward Havanagh, signed on the 26 August 1840 and ratified eight months later. Signed to last a six-year (renewable) period, this treaty of commerce and navigation expired only on the 31 January 1892 when both signatory parties repealed it, although according to Portugal’s understanding the McKinley tariff constituted an express breach of its articles. The timeframe of these agreements should also be stressed, a fact that suggests a mismatch with the thesis of Pedro Lains regarding the impact of external markets on Portugal’s economic growth (Pedro Lains, A Economia Portuguesa no séc. XIX. Crescimento Económico e Comércio Externo 1851-1913, Lisboa, Imprensa

In this across-the-board calculation Spain typified a specific pattern for Portugal’s economic diplomacy, whose priorities were far from favouring the criterion of geographic proximity through the 1840’s to the 1870’s. Hence Spain’s late integration into the group of nations with whom Portugal kept commercial relations governed by covenant. In turn the fact that both countries produced similar goods and the difference of scale between the Iberian economies 37, far from inspiring a broaderscale understanding in line with the objectives enounced by Spain, introduced an element of permanent instability in Portuguese-Spanish trade relations, quite clear in the period after 1878 in the framework of negotiations aimed to set up a new treaty. The negotiating process between Portugal and Spain developed in this context would drag on until 1882, year of signature of a new commercial agreement based on different assumptions, as a means to match the customs tariff alterations approved by Spain in that same year. Quoting a speech by José Vicente Barbosa du Bocage on the 16 January 1885, this circumstance forced Portugal to make more concessions to its Iberian partner, especially duty exemption for goods more often trade by land – cattle, sheep and goats – and sea, as evidenced by the tariff below 38. The “Regeneração” Nacional, 1995; Benedita Câmara, “Relações Económicas com o Exterior”, in História Económica de Portugal 1700-200. O século XIX, org. Pedro Lains e Álvaro Ferreira da Silva, Lisboa, ICS, 2005, pp. 337356. The so-called “treaty crisis” occurred in the early 1890’s and later on the Portuguese diplomacy did not spare efforts to line up, by way of treaties of commerce and navigation, with rapid growth economies such as Germany (1908) and the USA (1910). 37 Following the characterisation of large and small economies proposed by Paul Bairoch. Portugal, in the second group, was an advocate of the strategy of complementariness with the dominant economy in the 1800’s, i.e. England – together with Denmark, Sweden, Norway and Finland. Paul Bairoch, Commerce Exterieur et Développement Economique de Europe au XIXe siècle, Paris, Mouton e Co., 1976, pp. 260 e seguintes; Pedro Lains, op. cit., pp. 38 Tariff A Minerals and ore in raw, unclassified

Unit

Duties

Kg

Duty free

Kg

2.7 reis

Salted and pressed pilchard sardine

Kg

3.6 reis

Other fish (salted, pressed, smoked

Kg

9 reis

Seafood

Kg

1.8 reis

Fresh and dry fruits

Kg

3.6 reis

Olive oil

Decaliter

500 reis

Fresh fish, with salt required for preservation

and pickle)

cabinet stressed the importance of this understanding for opening up the Spanish market to Portuguese salt and its impact on fish trade – salted and pressed pilchard sardine, pressed and salted, smoked and pickle fish, and seafood (products then relevant and with a strong growth potential due to the signatories’ decision of adopting equal customs duties. These requirements offset other drivers considered as having a lower impact, e.g. the reduction of duties applicable to wine, olive oil, grain, flowers – products whose easier access to the Portuguese market indicated a stronger pressure on national producer counterparts. This fact explained the parliamentary resistances against the ratification of the Treaty which, after its signature by António de Serpa Pimentel and Filipe Mendez de Vigo y Osorio on the 12 December 1883, was approved two years later, with the strong opposition of the “Progressista” Party. 39. In force since then, such circumstance did not provide any grounds for altering the anticipated expiry date, i.e. June 1887. Spain however favoured the adoption of a privileged commercial agreement with its Iberian partner, an intention disclosed in February to Portugal’s representative in Madrid, Count de Casal Ribeiro. Spain’s objective was to negotiate a new treaty of commerce and navigation with Portugal, while the 1883 treaty was still in force. In line with the experience acquired through the tariff attached thereto, Madrid none the less wanted to generally enforce it in the scope of peninsular trade relations pursuant to the bases presented both to the Portuguese Chargé d’Affaires in Spain and directly to the Lisbon cabinet. Such bases were (1) totally free two-way circulation of cattle across the land border between the two countries, (2) full duty exemption at land customs houses for all exotic items imported by Portugal and Spain from third countries, in order to make their circulation within the peninsula entirely free, (3) free access to Cattle, sheep and goats

Head

Duty free

Pigs

Head

90 reis

Cork in raw and in planks

Kg

Duty free

Bottle corks

Kg

9 reis

Raw wool, dirty or washed

KG

Duty free

39

Diário da Câmara dos Deputados, May-July 1885. José Luciano de Castro and José Frederico Laranjo ranked among the critics to the Treaty of Commerce with Spain, opposed by Pinto Magalhães and Barbosa du Bocage.

both countries by land for all items not produced on annual average, in the previous quinquennium, above the amount of 2,500 pesetas and 500,000 reis, (4) incentives of all kind to international exchanges, both to France and Italy and Mediterranean ports, and (5) review of the treaty of fisheries and navigation so as to secure total freedom 40. Portugal’s reply advocated the extension of the 1883 Treaty and showed no interest in reviewing the terms of the agreement in force. But it failed to obtain Spain’s agreement on sectors such as transit, by land and sea, and fisheries. After a deadlock, on the 18 June 1887 the parties agreed on a modus vivendi and simultaneously approved the following bases for a new treaty: 1. the governments of Portugal and Spain undertook to identify, by common agreement, which imported products, while safeguarding the interests specific to each country, could be equalled in duties to be paid at the maritime customs houses and terrestrial customs houses in the border with France; 2. the two governments would also look into which goods, object of cross-border trade and intrinsic to such trade, could be freely imported, or subject to equal (low) duties payable and the land customs houses. They also undertook to look into all matters concerning cross-border livestock imports; 3. both governments undertook to include in the provisions of future treaties the following reservation, i.e. special advantages mutually granted by the two goverments to render cross-border trade easier, or special advantages granted by third nations, shall not be comprised in the most favoured nation treatment; 4º both governments agreed to fully enforce the transit covenant then in force (signed in 1866, ratified in 1877); 5. the commerce treaty and the fisheries regulatory covenant should be extended for one year, i.e. up to the 30 June 1888; 6. during the extension period, cattle and pigs from Spain imported to Portugal by land would pay 5 percent ad valorem. The same duty would be paid at Spain’s land borders, to livestock coming from Portugal; 7. sheep and goats would be imported free of duty 41.

40

Negócios Estrangeiros. Documentos apresentados …. Negociações com Espanha. Comércio, trânsito, pesca, Lisboa, Imprensa Nacional, 1893, pp. 92-93. In the first case, “tendo em conta que esta medida responde melhor a fins administrativos e políticos do que comerciais, levar-se-á a cabo de maneira que não apareça como estipulado no novo tratado excepto quando os negociadores o derem por ultimado”. In the second, “admitida esta base, será preciso igualar os direitos que estes artigos pagam nas alfândegas marítimas dos dois países com o objectivo de não permitir que haja preferência de um porto sobre os outros, nem torcer-se nesse sentido o movimento comercial existente”. 41 Idem, Ibidem, pp. 124-125.

After the difficulties encountered by the Moret cabinet in having the modus vivendi approved by Parliament chambers, Spain’s executive managed to recover its original position meanwhile adjusted to the already mentioned Portuguese requests. Such convergence led to new bases for negotiating, which were presented in Lisbon in November 1887. The new (old) Spanish position relied on seven structuring articles, requiring the simultaneous discussion of the treaties of fisheries and commerce and duty-free access at land-based customs houses of all exotic production items imported to Portugal and Spain from third nations, with the aim of ensuring their free circulation. Once this basis was accepted, it would be necessary to (1) equal the duties payable by these items at maritime customs houses, (2) ensure the free access to both countries, by land, to all items not produced on annual average, in the previous quinquennium, above de amount of 2,500 pesetas in Spain and 500,000 reis in Portugal, (3) allow the completely free transit of livestock at land borders and the removal of barriers to the total freedom of pasture, (4) create a set of exemptions and benefits not applicable to other nations, (5) secure the benefits applicable to any goods destined for France or the Mediterranean, and, last, (6) secure the agreement of both countries for doing the works required by the navigation of the Tagus42. Portugal replied very soon, on the same month. It reflected the difficulties of Lisbon’s government in meeting Spain’s requirements and also the advocacy of protectionist-driven domestic priorities in terms of customs duties, geared towards the promotion of national industry and agriculture, which were not compatible with the Spanish objectives of opening trade at the Iberian scale. Accordingly Portugal’s Foreign Minister, Barros Gomes, invoked the changes to the Portuguese tariff to explain that Portugal could not take on board the purposes of its Iberian partner 43. Be that as it may Portugal remained willing to simultaneously discuss the treaties of fisheries and commerce to be negotiated, the latter necessarily having a restrictive nature. In early 1888 Portuguese-Spanish differences concerning this subject-matter became more serious. Faced with the statements of the Marques de Viesca calling upon the Spanish cabinet to promote a customs union between the Iberian partners,

42

Idem, Ibidem, p. 141. Pauta Geral das Alfândegas do continente de Portugal e ilhas adjacentes. Aprovada por decreto de 22 de Setembro de 1887, Lisboa, Imprensa Nacional, 1887. 43

as well as the alleged convergence between the advocates of free trade and of protectionism at to the potentialities of the Iberian market for Spanish economy, Lisbon responded by delaying negotiations. This position was keep even after February 1888, date at which Spain determined that the entry of animals through its borders – from then on restricted to 1st class customs houses – be ruled on health grounds. Also Spain resented the incidents occurred at the Portuguese parliament, whose advisory bodies refused to sign the new treaty, and the opinions voiced by Portugal’s press as to the true motifs of the Spanish cabinet. These were the grounds for the memorandum delivered by Mendez de Vigo to Barros Gomes, in April 1888, clearly stating that Spain was ready to start a tariff war as a means to overcome the negotiations deadlock 44. The Portuguese cabinet replied invoking tax legislation differences, similar agricultural and industrial productions and the protectionist nature of the customs legal framework in force, to justify Portugal’s difficulties in accepting Spain’s proposals. According to Barros Gomes, agricultural crisis and the impact of health restrictions imposed on livestock imported from Portugal by England further weakened Portugal’s negotiating stand. Differences remained until 1890. Their resolution would be influenced by drivers external to the Iberian context, namely the British Ultimatum 45, the review of customs policies in Italy and particularly in France 46 impacting on the placement of Iberian wines, or the refusal of Brazil’s parliament to ratify the treaty of commerce and navigation negotiated between Portugal and this South-American republic since March 1888. Approved in January 1892, the trade agreement provided significant benefits to a vast array of national products, including wines, olive oil, vinegar, salt, bottle corks and fruit in exchange for Portuguese concessions to Brazilian sugar 47. 44

Negócios Estrangeiros. Documentos apresentados …. Negociações com Espanha. Comércio, trânsito, pesca, Lisboa, Imprensa Nacional, 1893, p. 188. 45 Pilar Cuesta, A Espanha Ante o Ultimato, Lisboa, Livros Horizonte, 1975; António José Telo e Hipolito Torre Gomez, Espanha e Portugal nos sistemas internacionais contemporâneos, Lisboa, Cosmos, 2000. 46 Jean-Charles Asselain, Histoire Économique de la France du XVIIIe siècle à nos jours. I De l’Ancien Régime à la Première Guerre Mondiale, s.l., Éditions du Seuil, 1984, pp. 152-160. 47 O Economista. Revista semanal, no. 3106, 16 January 1892, p. 1. Benefits provided under this treaty concerned wines, olive oil, vinegar, salt, bottle corks, fresh fruit, dry fruit, onions, garlic, footwear, brushes, paintbrushes, bristle items, stones and marbles, in addition to ceramics. Improving conditions of access to the Brazilian market was a theme of consensus in Portugal’s party framework, both monarchic and republican. This fact explained the intervention of Portuguese diplomacy across the entire party spectrum, although the promoters of the agreement, the “Progressista” party, stepped down in January 1890, being replaced by non-partisan executives and subsequently by the

This failure caused Portugal to focus on a trade agreement with its Iberian partner, made desirable also due to drivers external to the Portuguese situation. The 1891-1893 financial crisis added to the repercussions of the so-called “treaties crisis” on Portugal’s economy, namely the loss of external markets by certain manpowerintensive Portuguese industries; the fishing sector, particularly in the Algarve, was affected by the repeal of the treaty of commerce between Portugal and Italy. The same applied to the cork sector which, following the limitations to the entry of national products into the USA imposed by the McKinley tariff, now had to face the shut-down of the German market to processed products as from 1892. The modifications of the Spanish tariff adopted in January 1891, with particular impact on the import duties applicable to certain products more significantly marketed between Portugal and Spain, represented an additional pressure on Portugal’s cabinet to carry on its dialogue with the Iberian partner 48. This pressure would be made even stronger by other drivers, such as the contacts of the Spanish community in Porto with the Madrid government 49 and the possible positive outcome of the bilateral negotiations between France and Spain concerning customs duties on alcohol, consequently leading to the presence of Spanish wines in the French market to the detriment of Portuguese products 50. We should also take stock, in this context, of the publication of Spain’s new customs regulations, considered by Portugal an instrument of pressure on the Paris government; it was however admittedly an instrument of pressure on the Lisbon executive 51. At this juncture the negotiations of the treaty of commerce and navigation between Portugal and Spain gained new momentum. On the 16 February 1891, Foreign Minister Barbosa du Bocage gave instructions to Portugal’s representative in “Regenerador” party. Vivina Amorim Sousa, Comércio entre Portugal e Brasil nos inícios do séc. XX: o Inquérito Comercial de 1916 e as propostas de uma comunidade Luso-Brasileira. Dissertação de mestrado, Porto, Faculdade de Letras da Universidade do Porto, 2004. 48 See Appendix A. Albert Carreras, Xavier Tafunel, Historia Económica de la España Contemporánea (1789-2009), 1st updated ed., Barcelona, Critica, 2010, pp. 183-219. 49 “Reunião da Colónia Espanhola”, Economista Português. Revista Semanal, no. 2684, 17 August 1890, p. 2. 50 Special reference should be made, in this regard, to the fears voiced by Elvino de Brito. Diário da Câmara dos Senhores Deputados, session 22, 9 February 1892, p. 7. 51 Portuguese press stressed the flexibility of the new Spanish customs tariff, which consisted of a maximum tariff applicable to nations who had made no special concessions to Spain and a minimum tariff whose benefits were granted to nations that attributed do Spain their minimum tariffs. Economista Português. Revista Semanal, no. 3100, 9 January 1892, pp. 1-2.

Madrid to agree on a basic understanding for the modus vivendi with the Iberian partner. Casal Ribeiro, subsequently replaced by Count de São Miguel, was also informed on the negotiation bases agreed by the Lisbon cabinet, i.e. commissioners appointed by both countries would jointly study tariff specificities and the mutual commitment to include in future treaties with third nations the reservation of not being covered by the most favoured nation clause governing concessions exchanged between Portugal and Spain. In July and August 1891 each party appointed its members of the joint study commission 52; in Portugal’s case, the Portuguese representatives appointed on the 18 July 1891 – Augusto de Sequeira Thedin and João de Sousa Calvet de Magalhães, the latter subsequently replaced by Francisco de Salles Lencastre – received their instructions from the Finance Minister, Joaquim Pedro de Oliveira Martins, on the general guidelines to be adopted in this diplomatic negotiation, i.e. (1) the treaty should not last more than 10 years, after which the Portuguese government would like to keep it up to one year after the repeal that might be filed, (2) the principle according to which benefits could not be extended to third nations, (3) concessions should preferably add value to national farming products and industries, by mutually establishing equal import duties in both countries, (4) Portugal declared itself ready to make concessions on import duties for the following products coming from its neighbour, i.e. cattle, filtered or laminated iron, mineral coals, or other industrial products that did not compete with similar Portuguese products, (5) the treaty should not apply exclusively to border regulations, and (6) the international transit scheme should be considered separately from the treaty of commerce and navigation 53. Negotiations lasted until the 27 March 1893, when the Treaty of Commerce and Navigation was formally signed. In June 1893 this document was ratified, following its debate and approval by the parliament, during which different viewpoints cropped up as to Spain and the potentialities and/or shortcomings of the economic proximity openly and subliminally inherent to the said treaty. Special reference should be made to criticism voiced by two widely renowned personalities of the “Progressista” Party – 52

The Spanish commission was created on the 29 August 1891, following the appointment of Don José Ruiz Gomez and Don Julian Castedo. 53 Negócios Estrangeiros. Documentos apresentados …. Negociações com Espanha. Comércio, trânsito, pesca, Lisboa, Imprensa Nacional, 1893, p. 286 and following.

Fernando Matoso dos Santos and José Frederico Laranjo –, limited by the open support given by Mariano Cirilo de Carvalho, author of the advice on the Treaty proposal. The theme was not unanimously supported by the members of the “Regenerador” Party with a seat in parliament – though the initiative had been launched by the cabinet chaired by Hintze Ribeiro and resulted from the continued efforts developed by wellknown protagonists of the said party, namely José Maria Casal Ribeiro and subsequently João Franco. The first was a firm believer in the preferential connection, in political and economic terms, of both Iberian nations; this belief, stated since the mid-nineteenth century, would be kept and developed by Casal Ribeiro after his entry to the “Regenerador” Party. Once its member, be it as Foreign Minister be it as Portugal’s representative in Spain, he became known for sticking to his ideas, more often than not badly accepted or feared by his colleagues or by the cabinet members in charge (as evidenced by events in the period of 1887-1888, during the Portugal-Spain diplomatic crisis). To a large extent this treaty meant the recognition of his long-term work, a fact acknowledged by his fellow party members in Parliament 54. The second case was a clear instance of political orientation driven by pragmaticism. João Franco actually felt that, in face of England’s political and commercial estrangement, Portugal had no alternative but to find new European and non-European partners/allies in markets with a stronger growth potential– Brazil and On the other hand he looked for a formula capable of neutralising any possible threats to national sovereignty, at a time when Portugal’s position was particularly fragile among European nations – Spain also having a top position in this ranking. These perceptions, voiced at Parliament in May 1894 55, were evidenced by the conduct and political solutions adopted by Franco since 1890. An example of these was his reform of tonnage taxing, submitted in July 1890, based on the need to render Portugal’s

54

For instance Viscount de Pindela, in whose view the 1893 treaty resulted from political guidelines gradually developed in Portugal by Casal Ribeiro, as from 1866. Diário da Câmara dos Senhores Deputados, session 40, 31 de May 1893, p. 14. 55 “Há duas nações que, para nós, primam sobre todas as outras, uma é a Espanha e a outra é o Brasil. A Espanha é nossa irmã, o Brasil é nosso filho. […] Não há ninguém que propugne mais abertamente pelas cordiais e afectuosas relações entre Portugal e Espanha”. Idem, session 17, 30 October 1894, p. 304

collection duties and the object of collection similar to those practised by the Iberian partner 56. Both were however criticised by their fellow partisans, namely Ferreira de Almeida who condemned the loss of sovereignty in matters as sensitive as the demarcation of exclusive fishing zones and the criminal jurisdiction applicable to cases of non-compliance 57 In the anti-monarchic party field, the March 1893 Treaty of Commerce and Navigation was interpreted in many different ways. At the lower chamber of Parliament, Teixeira Queiroz urged the other members of parliament to take a more in-depth approach to the matrix bases of the agreement with a view to favouring the creation of an Iberian customs alliance, a mechanism which he deemed potentially useful to free the peninsular nations from the trend of decadence common to both, as opposed to the growing industrialised European countries 58. Rodrigues de Freitas took a different stand 59. In 1888 he used the same arguments to disprove of the signature of a commerce treaty with Spain, considering the merger expectations placed on the said agreement plus its economic uselessness60. Oddly enough the same reservations inspired the caution of Consiglieri Pedroso 61, between March and May 1893, a

56

Idem, 28 July 1890 session, pp. 1560-1564. Idem, session 39, 30 May 1893, p. 48. 58 “Por consequência, em vez de um tratado que significa, por assim dizer, em parte uma luta, eu entendo que devíamos fazer uma liga económica de defesa aduaneira com aquele país e faço votos que assim aconteça no futuro, e farei o possível para chegarmos a esse resultado […]. Eu desejaria que o tratado em discussão fosse mais livre no ponto de vista comercial, que fosse mais amplo para se chegar a profícuos resultados económicos e que tivesse uma margem mais largamente política para que os dois povos se podessem conhecer e estimar intimamente, porque o comércio foi sempre considerado, e hoje mais que nunca é reconhecido, como sendo um dos mais eficazes elementos de civilização dos povos”. Idem, session no. 40, 31 May 1893, p. 15. 59 Jorge Fernandes Alves, Intervenções Parlamentares (1870-1893), recol. e introd. de Jorge Fernandes Alves, Lisboa, Assembleia da República/Afrontamento, 1999. 60 Rodrigues de Freitas, “A União Ibérica e o Tratado de Comércio com a Espanha”, Comércio do Porto, no. 102, 25 April 1888, p. 1. In this article and others that followed, Rodrigues de Freitas mentioned the “fantasia espanhola, fácil e arrojada, acharia prontamente numerosas consequências óptimas de unidade peninsular, tudo venturas e nem um só dano”. On the other hand he explained the uselessness of the treaty, given the performance of Portuguese imports and exports in 1885-1887, with the treaty in force. Its balance reverted exclusively to the benefit of Spain. 61 Lucília Rosa Mateus Nunes, Zófimo Consiglieri Pedroso: Vida, Obra e Acção Política. Dissertação de Mestrado, Lisboa, Universidade Nova de Lisboa, 1993. 57

rationale that blatantly contradicted the views expressed by the same MP in March 1885 on the proposed re-organisation of the customs service 62. The treaty was globally welcomed by the Portuguese press, who looked closely at its European repercussions. In July 1894 it was enforced by way of several regulations on domains such as land trade via common roads63, fluvial trade in rivers Minho, Douro, Tejo and Guadiana, along the sections that served as border between Portugal and Espanha 64, maritime trade 65, service of surveillance and repression of smuggling and loss of duties 66. On one hand this treaty, in force since then, constituted the most stable institutional bond linking the two Iberian nations in the 1800’s. It was repealed at the end of September 1913. On the other hand it represented the beginning of a new era in Portuguese economic diplomacy, marked by the logic of strict commercial bilateralism emerging from the customs options made in 1892 and a new effort of external market diversification, as relevant as urgent in face of England’s unavailability to renew the trade agreements repealed in January 1892. Such circumstance, which lasted until the eve of World War I, was one of the other characteristics of this period, during which continental powers – namely Germany (mainly after the signature of the 1908 Treaty of Commerce and Navigation with this power, in force after ) but also Spain – acquired a new economic projection in Portugal’s space 67. Appendix A

62

“Refiro-me à união das alfândegas portuguesas e espanholas, ao que poderemos chamar, para nos servirmos de uma frase já consagrada, o zollverein peninsular. Para ninguém é desconhecido, Sr. Presidente, que a união alfandegária dos dois países, que um zollverein hispano-português, seria uma reforma de grande alcance económica para qualquer dos dois países”. Speech by Zófimo Consiglieri Pedroso, at the 14 March 1885 session. Idem, 8 April 1885 session, p. 1032. 63 Diário do Governo, no. 149, 6 July 1894, pp. 1449-1759. 64 Idem, pp. 1759-1764. 65 Idem, p. 1765. 66 Idem, pp. 1766-1767. 67 Sacuntala de Miranda, Portugal: o círculo vicioso da dependência (1890-1939), Lisboa, Editorial Teorema, 1991, pp. 33 and following. Compare the data provided by this author on the comments made by British delegates in Portugal, issued in 1902 (Idem, p. 35), with the data provided by the Boletim Comercial do Ministério dos Negócios Estrangeiros, reported to a previous period, regarding the system of commercial propaganda developed by Germany, the efficacy of German agents and their impact on English foreign trade. Boletim Comercial. Ministério dos Negócios Estrangeiros. Direcção geral dos negócios comerciais e consulares, vol. II, February 1899, no. 2, pp. 266-267.

“Pauta Espanhola”, Economista Português. Revista Semanal, nº 2830, 13 February 1891, p. 1. Goods

Unit

Previous duty

New duty

Horses

1

128

180

Other

1

31.50

135

Mules

1

19.60

80

Donkeys

1

8.40

12

Cattle

1

13,80

40

Pigs

1

8.45

20

Sheep, goats and 1

1.40

2.40

2.80

11.60

15

50

others Meat in brine, dry 100kg or salted Pork fat, including Idem bacon Other qualities

Idem

5.17

18

Paddy rice

Idem

3.40

5.30

Husked rice

Idem

6.80

10.60

Wheat

Idem

4.20

10.60

Wheat flour

Idem

6

13.20

3.10

4.40

4.50

7.10

Other grain (except Idem millet) Flour from other Idem grain