Story: Empire and Commonwealth

Page 3. Trade and empire

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At its peak in the mid-Victorian age, the British Empire was a legacy of three centuries of maritime and colonial activities around two great trading networks focused on the West Indies (which at first meant all of the Americas) and the ‘East Indies’ (India and adjacent regions). The Atlantic trades found in the Caribbean islands of St Kitts, Barbados and Jamaica provided the first great source of colonial wealth, followed by the larger North American mainland colonies.

This success was partly based on slave labour from West Africa. Until abolition of the trade in 1807, British companies supplied the colonies with slaves, along with capital and manufactured goods, including cloth and hardware of various kinds. Britain imported agricultural commodities, including sugar, tobacco and rice.

By the late 18th century North America and the West Indies took 57% of British exports and supplied 32% of imports. This was not free trade – even the carriage of goods was controlled. The British Navigation Acts required that British ships staffed by British sailors were used, and that they trade between British ports and those within the empire.

New markets

India was the core of the East Indies trade network. China, with its vast potential market, was an ever-elusive goal. India provided bullion, tea and textiles, and a market for British manufactured goods. In contrast, China was not a part of the empire; access was very restricted and in the early 19th century the trade was strongly in China’s favour. Chinese tea, silk and porcelain were all sought-after commodities, and British and other European traders, faced with the need to pay for goods, turned to opium as an alternative to silver. When Chinese authorities tried to stop the opium trade, Britain went to war to maintain and extend its trading position. British possession of Hong Kong was one outcome of the opium wars.

Passing its peak as the ‘workshop of the world’ by the mid-19th century, the British Empire continued, nevertheless, to expand. Trade remained integral to the empire, but Britain, still with immense economic power, favoured free trade.

New Zealand trade and the empire

New Zealand, like other colonies, sourced most of its manufactured goods from Britain and also regularly raised development loans in London. In the 1870s, 60% of New Zealand’s imports came from Britain, and 75% of exports (mostly wool and gold) went there. Like other colonies, New Zealand promoted and protected its own trade, although this sometimes angered British manufacturers.

A number of inter-colonial conferences aiming to improve trade and communication were held in Australia from 1867 onwards, and New Zealand representatives attended four of these.

If New Zealand wanted to negotiate commercial arrangements with foreign governments, until the 1920s it had to do so through Britain.

Importing people

Mosgiel Woollen Mill founder Arthur Burns didn’t just get machinery from Britain – he picked out groups of skilled workers and imported them as well. He wasn’t the only early manufacturer to go headhunting. Some planned ahead, and migrated to New Zealand bringing their staff with them.

Imperial preference

In the later 19th century New Zealand developed a trade in frozen meat, butter and cheese into Britain, and the proportion of its exports going to Britain rose.

From 1904 New Zealand offered a preference for British imports compared with those from other countries. ‘Imperial preference’ – the lowest customs duties or tariffs for British imports, and lower tariffs for those from other parts of the Empire – was maintained for decades.

The 1930s economic depression prompted the British to abandon free trade. At an empire economic conference, held in Ottawa in 1932 and attended by representatives from the dominions, reciprocal trade preferences were agreed to.

Maintaining access to the British market for its meat and dairy products continued to be of primary importance to New Zealand until the 1970s. Britain’s entry into the European Economic Community (later the European Union) in 1973 signalled the beginning of the end of what had been New Zealand’s primary trade relationship since the 1840s.

How to cite this page:

W. David McIntyre, 'Empire and Commonwealth - Trade and empire', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/empire-and-commonwealth/page-3 (accessed 26 March 2019)

Story by W. David McIntyre, published 20 Jun 2012