Imperial Preference

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Imperial Preference was a system of reciprocally-levelled tariffs or Free trade agreements between different dominions and colonies within the British Commonwealth of Nations. The purpose of such practices was to ensure the wealth, and thus unity, of allied imperial nations. While the idea of imperial preference is as old as colonialism itself, it:

• was a practice that was not necessarily used all the time;
• did not necessarily include every nation in the British Empire, and
• did not necessarily apply to every commodity.

The idea was fleetingly popular around the turn of the 20th century, advocated by such tariff reformist as Joseph Chamberlain. Problematically for Chamberlain, the new Chancellor of the Exchequer, C.T. Ritchie, under the guidance of leading economists of the time including Sir William Ashley, was vigorously opposed to any scheme of Imperial Preference, and it ultimately lead to a damaging rift within the Conservative Party under Arthur Balfour.

During the 1920s, Imperial Preference became popular once more with somewhat tepid support from British prime minister Stanley Baldwin, Churchill, always a free trader was an opponent. One of its strongest supporters was Leo Amery, colonial and dominions secretary during the 1920s. For a while it looked like a system of imperial preferences whold be instituted in 1932, but the incompetence and tactless manner of J. H. Thomas, the British Labour Party cabinet minister in charge of negotiations so alienated dominion prime ministers that an opportunuity was missed. The Prime Minister of Canada, Conservative Richard Bedford Bennett who supported Imperial Preference was replaced in 1935 by the Liberal William Lyon Mackenzie King who responded to pressure from the American Secretary of State, Cordell Hull and abandoned Imperial Preference.

In North America, it was the cause of the widespread dedication to the idea of free trade in the United States after the 'beggar-thy-neighbour' strategy of protectionist tariffs, which were levied by the United States and Canada, drove North America further into the Great Depression. A significant conference in Canadian history is the "Commonwealth Conference on Economic Consultation and Co-operation" (or the "Ottawa Conference") held in Ottawa, Canada, in the summer of 1932.