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Effects on Trends in Trade Policy

sely united in the form of the Zollverein and under the leadership of Prussia, had a much smaller industrial base compared to a formidable agricultural sector. Thus the industrial sector was not powerful enough to make strong demands for high protection in opposition to the interests of other groups. The Zollverein was very protectionist up until the 1850s, when two factors contributed to its adoption of more liberal policies (although still protectionist by comparison to France or England). As mentioned, the agricultural sector was predominant, and hence preferred lower prices on manufactured good. Secondly, Prussia wished to retain sole control over the Zollverein and was fearful of an Austrian attempt to join. Thus by liberalizing trade policy Prussia hoped to deter a highly protectionist Austria from seeking admittance. Spain, the Italian customs union, and Russia all relaxed their highly protectionist laws from 1850 onward as a result of the spectacular economic success of Great Britain and the ratification of trade agreements with adherence to the most favored nation clause. Since all had relatively small industrial sectors, the industrialists as an interest group demanded more protection. Yet due to the political weakness of the interest groups, and the largely despotic nature of the regimes as regards trade policy at the time, protectionism was lowered in spite of the industrial sector. The nations remained generally protectionist, though, and were in no way leaning towards true free trade...

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