Reciprocity with the United States of America
From the mid-19th century on, many Newfoundlanders thought that one of the
keys to a more prosperous future was a close and free trading relationship with
the United States. Here was an enormous market which could easily absorb exports
of all kinds from Newfoundland. Further, Americans might be induced to invest in
Newfoundland. The significant level of emigration from Newfoundland to the
northeastern U.S. helped keep the idea alive.
The issue of "free trade" or reciprocity was first debated during the early
1850s, when it was proposed that Newfoundland should become party to a reciprocity
treaty being negotiated between the British North American colonies and the U.S. The
treaty was signed in 1854, and Newfoundland signed on the following year. It
provided for free trade in certain goods, and opened the fisheries north and south
of the border.
The impact on the local economy was not great, partly because of the outbreak of
the American Civil War, but support for reciprocity persisted after the U.S.
abrogated the treaty in 1866.
Newfoundland became party in 1873 to the next general agreement with the U.S.,
the Treaty of Washington (1871). Under the treaty certain Newfoundland exports
received free entry into the U.S. in return for American access to the inshore
fisheries. The same terms applied to Canada. Both countries received financial
compensation from the U.S. for the difference in value between the concessions
granted to the U.S., and those granted to Canada and Newfoundland.
|American schooner, n.d.
A schooner from Massachusetts off the
coast of Newfoundland.
Courtesy of the Provincial Archives of Newfoundland
and Labrador (PANL A17-96), St. John's, Newfoundland.
American fishermen took advantage of the treaty to develop a winter trade in
frozen herring along the south (and later the west) coast, and frequently visited
Newfoundland ports to purchase bait and other supplies.
The fishery clauses of the treaty were abrogated by the U.S. in 1885. The
Newfoundland government now became interested in negotiating independently with
the U.S. for a new trade treaty. This was because it was thought that Canada's
various disputes with the U.S., in which Newfoundland did not share, would stand in
the way of a joint treaty. Thus the colony asked the British government - which at
that time handled external relations for all members of the Empire - for permission
to open separate discussions with the Americans. Canada was strongly opposed to any
such move, and it was not until 1890 that the British allowed Robert Bond, then a
member of Sir William Whiteway's Liberal government, to go to Washington to find
out what might be possible.
Bond's discussions with the American Secretary of State, James Blaine, went
well. They reached a draft reciprocity agreement (later known as the Bond-Blaine
Convention) which was similar to, but more limited than the Treaty of Washington:
it traded free entry for some Newfoundland fish and mineral ores for American
access to Newfoundland bait supplies. The Canadian government was outraged at this
development, and lodged a strong protest with the British government. It argued
that its own bargaining position had been severely weakened, and that
anti-confederate sentiment in the Maritimes, particularly Nova Scotia, would be
strengthened. As a result the British government decided not to ratify the
||James Blaine, ca. 1880
In 1890 Bond, Newfoundland's Colonial Secretary, met with Blaine, the
American Secretary of State, and reached a
draft reciprocity agreement.
Engraving by J.C. Buttra, based on a photograph
by Napolean Sarony. From John Clark, Life and Public Services of James
G. Blaine (Cincinnati: Jones Brothers & Co., 1884) frontispiece.
An angry Newfoundland government retaliated by refusing to allow Canadian
fishermen to purchase bait. Canada took the issue to court, and imposed duties on
Newfoundland imports; Newfoundland did the same to Canadian imports. Canada then
threatened to impose sanctions on Newfoundlanders fishing on the Canadian Labrador.
At this point it was decided to end the "war", and refer all points in dispute to a
conference between the two governments.
This took place in Halifax in November, 1892. Nothing was achieved. The
Newfoundland delegates refused to discuss confederation, and the Canadian delegates
refused to lift their veto on the Bond-Blaine convention. Their position was
strengthened by a court decision that Newfoundland could not refuse bait to
Canadian fishermen, the only lever which the colony had at its disposal, and by
the knowledge that in the last analysis, the British government would support
Canada over the reciprocity issue.
Bond did not give up, however. He became premier in 1900, and returned to his
goal of negotiating a trade agreement with the U.S. The British government overruled
Canadian objections, and Bond was able to conclude a draft reciprocity agreement
once again, this time with John Hay, in 1902. The problem now was not the Canadian
government, but the U.S. Senate and the hostile Massachusetts fishing industry, which
lobbied hard against the ratification of the Bond-Hay Convention.
|John Hay, November 1904
In 1902 Bond, now Newfoundland's premier, met with Hay, the current
American Secretary of State, and drafted a new reciprocity agreement.
Photograph by Pach Bros. From William Roscoe Thayer,
The Life and Letters of John Hay (Boston: Houghton Mifflin Company,
The Senate Foreign Relations Committee listened, and in 1905 effectively
rejected the convention. The Bond government reacted by trying to ruin the American
winter herring fishery in the Bay of Islands. In addition, the government adopted a
highly restrictive interpretation of the 1818 Anglo-American Fisheries Convention,
which governed American fishing activity in British North American waters. The
situation became tense. The U.S. government was not prepared to allow American
nationals to be harassed, and the British government would not allow Newfoundland
to cause an international incident which might harm Anglo-American relations. Thus
Bond was forced to retreat, accept the fact that his convention was lost, and agree
to refer the legal points at issue to international arbitration at The Hague.
The judgement of arbitration tribunal, announced in 1909, generally supported
the case submitted by Newfoundland and Canada. This clarified the meaning of the
1818 Convention, but did not revive reciprocity. There was no further talk of a U.S.
trade agreement in Newfoundland until the 1940s. The idea then surfaced once more,
in the context of the debate over the country's future which began in 1946.
During the Second World War, the U.S. government negotiated long-term leases of
Newfoundland territory for military bases. Many Newfoundlanders thought that the
U.S. should pay rent in the form of a trade agreement, and that such a deal would
be preferable to confederation with Canada. An Economic Union Party fought on the
anti-confederate side during the 1948 referendum campaigns, and generated a
significant amount of support. However, in the end Newfoundlanders decided to join
Canada; and as a Canadian province, Newfoundland developed a closer trade
relationship with the U.S. than it had ever experienced in the past, and eventually
the "free trade" talked about for the previous century.
©2002, J.K. Hiller