Chapter 307: The Art of Negotiation
The trade agreement covered many aspects, and even though it was just a preliminary draft, the stack of documents was quite thick.
It took the representatives from each country the entire morning just to skim through the main content—and this was after Austria had already communicated the general framework of the agreement to them in advance. Otherwise, it would have taken them the whole day.
However, as they carefully examined the terms, many of them showed expressions of surprise and began whispering to each other.
"This says we can maintain a 60% tariff on French wine imports and a 38% tariff on Austrian iron goods. These terms seem... acceptable."
"We can even impose an 80% tariff on French paper. This isn't what I expected at all."
"Apart from having to align our textile tariffs with those of Britain, the other terms aren't too harsh..."
"In fact, they seem... quite reasonable. Austria only imposes a 10% tariff on most goods exported from Württemberg."
"It's the same for us. We can enter Austria and France with very low tariffs."
Lunchtime arrived quickly.
On the way to the dining hall, Bavaria's State Minister Montgelas quietly discussed the situation with the trade representatives of several smaller nations: "Although on the surface, the terms proposed by Austria seem favorable to them, our industries can't compete with those of France and Austria, especially France.
"For example, the draft stipulates that we can only impose a maximum 12% tariff on French machinery and a 15% tariff on chemical products, which seems quite disadvantageous for us."
Count Wintzingerode, the plenipotentiary representative of Württemberg, nodded and asked, "So, what do you suggest we do?"
"This trade agreement is a good opportunity," Montgelas said, looking around at the others. "It gives our goods a chance to enter the vast markets of France and Austria, but we must unite and negotiate for better terms.
"Specifically, we need to stand together when discussing the tariff rates. Of course, Bavaria is willing to make concessions to you in return."
The other representatives nodded in agreement. As Montgelas had pointed out, under the draft's terms, the tariffs France and Austria would impose on their goods were negligible, giving them access to these large markets—something that had been difficult to achieve in the past.
So, the focus of the negotiations would shift to the maximum tariffs they could impose on French and Austrian goods. After all, these small countries had to rely on tariffs to protect their markets from the highly competitive goods of the larger nations.
At 2:30 in the afternoon, the trade negotiations resumed.
Count Wintzingerode of Württemberg was the first to speak. He stood up and addressed the French Minister of Commerce, Bailly: "Esteemed Mr. Bailly, regarding the iron goods your country exports to Württemberg, I believe a 12% tariff is far too low. You must understand, Württemberg has many ironworks, and we need to protect them. Perhaps the tariff on iron goods should be raised to around 35%."
The representatives from Bavaria and other countries immediately chimed in, "Bavaria would like to raise the tariff on French steel to 30%."
"Salzburg also wishes to increase it to 30%..."
Bailly then stood up and made a few polite remarks, emphasizing that France also valued the protection of their industries, but he made no concessions on the tariff rates.
Seeing the situation stall, Count Wintzingerode was about to threaten to withdraw from the negotiations when Bailly signaled to a young official behind him: "Mr. Buonaparte, please present the trade data between France and Württemberg regarding iron goods to Count Wintzingerode."
"Yes, sir."
Joseph Buonaparte immediately pulled out a few pages of documents and politely placed them on the table in front of the Württemberg representative, explaining kindly, "Count, as you can see, over the past five years, France has exported an average of only 110,000 livres worth of iron goods to Württemberg annually. The average price per item is 16 sous.
"At the same time, the average price of locally produced iron goods in Württemberg is 14.8 sous. In other words, French iron goods have virtually no competitive edge in Württemberg."
Before technological advancements, ironworking techniques across Europe were on par with each other. France, which didn't have abundant iron resources, had no advantage over smaller countries.
Count Wintzingerode was taken aback. He had no idea where the French had obtained such detailed figures.
In fact, when Joseph began planning to expand into the German states, he had sent people to investigate the industries and trade conditions of each country, spending hundreds of thousands of livres on the research.
So this trade agreement draft was far from arbitrary; he ensured that the tariff rates listed were ones the various countries could accept.
In future trade negotiations, extensive commercial research would be conducted in advance. But in the 18th century, people still relied on experience, unaware that such research was necessary, which often left them at a disadvantage in negotiations.
Joseph Buonaparte pointed to the next page with a smile: "Here's a survey of 200 Württemberg residents, and only 7 of them expressed a willingness to buy French iron goods. So, there's no need to worry about your local ironworks being threatened."
Count Wintzingerode was astonished as he looked at the survey forms, which bore the signatures of the respondents, making it unlikely that they were fabricated.
He didn't know how to respond, so he sat down in frustration.
Next, the Bavarian representative raised concerns about the tariffs on French chemical products.
Bailly responded in the same manner, with the official in charge of Bavarian trade research presenting detailed data to Count Montgelas, using a wealth of evidence to prove that the 15% tariff was sufficient to protect their chemical industry.
And so, the negotiations continued for three days, with France using data and survey results to ensure that the tariffs on French goods remained largely unchanged.
In contrast, Austria, under the persistent pressure of several small countries, agreed to allow them to raise their tariff limits.
On the fifth day of negotiations, Bailly, with a smile on his face, introduced the "Free Navigation of Inland Waterways" clause...
Vienna.
Schönbrunn Palace.
Emperor Joseph II frowned as he looked at his brother, asking weakly, "Are you saying that there has been no confirmation of the marriage from Paris?"
Leopold II, his face dark with anger, nodded. "Marie Antoinette's letter didn't mention anything about an engagement. Your Majesty, you know that Clementine even lived in Paris for a year. What they're doing is nothing short of an insult to the House of Habsburg!"
Joseph II was silent for a long time before he sighed deeply and said, "Perhaps they're considering that Clementine is too young and unable to bear children yet, and that's why our sister made this decision."
What he said wasn't without precedent. King Louis XV had been engaged to a Spanish princess, but she was sent back to Spain because she was too young to have children.
(End of chapter)
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