By the 1820s, Britain had completed its industrial revolution and became unrivalled in world markets after defeating France in the Napoleonic wars. However, during the same years, other European countries in the midst of their own industrial revolutions were blocking British products from entering their markets with protective measures. This caused British capital to turn to non-European countries; thus between 1820 and 1840, Britain signed numerous free trade deals with countries in Latin America and China among others.(SOURCE) These deals were sometimes secured through gaining the support of local powers, and sometimes by use of military power. For example, when China banned Britain from selling opium in her lands in 1839, Britain waged war against China in return. When the British came out victorious from this war, they forced the Chinese government to allow for extensive capitulations through various agreements.
However, all this intense effort didn’t yield the results the British deep state was hoping for.
In the first half of the 19th century, customs taxes in Europe rose and British foreign trade entered a period of stagnation between 1819 and 1835.(SOURCE) This stagnation could have seriously impaired the young industry of the country, and urgently necessitated the discovery of new markets. Even in its period of decline, the Ottoman Empire was still one of the richest countries in the world, with its vast territory and affluent people. This appetizing, potentially profitable market suddenly made it the center of the British deep state’s attention. Britain did everything in its power to sign a free trade deal with the Ottomans, in an attempt to exert its influence over this market.(SOURCE) The Treaty of Balta Liman signed between the Ottoman Empire and Great Britain as a trade agreement on August 16, 1838, was the enactment of this desire.
The highlights of the agreement were as follows:
- New capitulations will be added to the existing ones.
- Britain will be allowed to freely buy and sell their agricultural and industrial products.
- The Ottoman Empire will abolish all monopolies over domestic trade as well as bans on export.
- Foreign merchants will enjoy the same rights and privileges as the local merchants of the Ottoman Empire.
- Taxes on export will be 12%, and import 5%.
The Treaty of Balta Liman of 1838 removed all the restrictions on domestic and foreign trade, and facilitated the entry of foreign merchandise into the country. It also made it easier to export domestic products. Ostensibly, it brought the Ottoman industry and trade under European control, but in fact, it was under British control.
The most significant aspect of this trade system was the irrevocable and significant loss of Ottoman sovereignty over its own foreign trade. Additional taxes previously levied on export and import, which had been a main source of revenue for the state, were restricted, and the Ottoman Empire was no longer able to collect additional taxes from these sources in extraordinary situations such as war.(SOURCE)