Trade and Commerce Section 4

• Cain and Hopkins

  Britain's economy was not doing great and they needed money for resources. They wanted their imperial control back again.
• Cain and Hopkins

  Britain became economically reliant on and hence keen to maintain, their empire (certain areas of it)

  • Vital dollar earning suppliers (things they can sell on US market to get dollars)
  • Reflected in the forming of the colonial development corporation 1947
  • Prioritised of areas with these resources
• Trade and Commerce: Key points

  • Empire and commonwealth 1st were central to Britain's international trading position until the 1960s
  • Was largely because Britain's foreign exchange reserves were low to import from elsewhere
  • Britain invested heavily in its empire - 1956: 58% of UK overseas investments in Europe companies and governments
  • By the 1960s, the focus shifted to West Europe
• No trade surplus anymore. Other countries don't have to trade with them. Not as much of an economic opportunity
• Post war reconstruction

  Aim = Britain needed to earn dollars and build up foreign exchange reserves and buy us goods.
• Post construction - List the ways Britain attempted to do so

  Rationing at home, to cut the cost of food imports, and prioritising British Industrial production. Develop productive and export capacities of the colonies, especially in Africa. Increase dollar reserves from colonial sales and supply of goods to Britain with sterling area - Continued rationing until 1952
• Post war reconstruction

  Purpose of the colonial development and welfare Acts of 1940 and 1945. Expand agricultural produce and promote new technology in the colonies.
• Role of the colonial development cooperation

  Set up to co - ordinate major projects and develop self sustaining agriculture, industry and trade. Renamed the commonwealth development cooperation (CDC) in 1963.
• Examples, now successful Britain's colonial development. Policies were

  Not successful = Tanganyika groundnut scheme 1948 (£49 million)

  Successful = Malay rubber proved a crucial dollar earner as a member of the sterling area. Major contributor to the Hard Currency pool
• Key economic shift

  Trade shifted away from the colonies and to Western Europe and North American.

  Manufactured goods were more profitable than foodstuff and raw materials. Europeans had higher incomes and cash from the Marshall plan. Industrialised nations challenged further away looked closer to home.
• European economic recovery:

  • Western Europe recovered quickly after WW2 partly because of the Marshall plan (13 billion). Political climate, which favoured private enterprise. Advances in Science and technology. Changes in Industrial relations
  • Britain didn't join the EEC in 1957. Set up their own rival trading bloc of European non EEC members. EFTA (European free trade association)
• European economic recovery

  • EEC flourished and British were increasingly torn between a future based on the commonwealth of global trade links and one in which trade and economic relations with Europe would become basis of future policy
  • Exports to Europe outstripping those to the empire in the early 1960s. Britain applied for a membership in 1963. Again in 1967. Rejected partly because British insisted on special concessions being allowed for British commerce. Britain joined in 1973
• Summary for Trade and Commerce

  • Dramatic shifts in importance of empire + Commonwealth as both a supplier of British imports and a market for British goods
  • 1940/early 1950s. Heavily focus and investments to develop colonies to increase exports and earn dollars
  • The key turning point was between the late 50s and 60s where the focus shifted to Europe