Key Arguments

• Smith reproduces the literal text of the treaty’s three articles, then notes their asymmetry: by Article I, Portugal only promises to admit English woollens 'as was accustomed, till they were prohibited by the law,' i.e. to restore the previous status quo.
• He points out that Portugal 'becomes bound to admit the English woollens upon the same footing as before the prohibition; that is, not to raise the duties which had been paid before that time.'
• Critically, Portugal 'does not become bound to admit them upon any better terms than those of any other nation, of France or Holland, for example.'
• By contrast, 'The crown of Great Britain ... becomes bound to admit the wines of Portugal, upon paying only two-thirds of the duty which is paid for those of France, the wines most likely to come into competition with them.'
• Thus, 'So far this treaty, therefore, is evidently advantageous to Portugal, and disadvantageous to Great Britain.'
• Yet 'It has been celebrated, however, as a masterpiece of the commercial policy of England,' which Smith implicitly criticizes as a misjudgment.

Source Quotes

The most excellent lords the plenipotentiaries promise and take upon themselves, that their above named masters shall ratify this treaty; and within the space of two months the ratification shall be exchanged. By this treaty, the crown of Portugal becomes bound to admit the English woollens upon the same footing as before the prohibition; that is, not to raise the duties which had been paid before that time. But it does not become bound to admit them upon any better terms than those of any other nation, of France or Holland, for example.

By this treaty, the crown of Portugal becomes bound to admit the English woollens upon the same footing as before the prohibition; that is, not to raise the duties which had been paid before that time. But it does not become bound to admit them upon any better terms than those of any other nation, of France or Holland, for example. The crown of Great Britain, on the contrary, becomes bound to admit the wines of Portugal, upon paying only two-thirds of the duty which is paid for those of France, the wines most likely to come into competition with them.

But it does not become bound to admit them upon any better terms than those of any other nation, of France or Holland, for example. The crown of Great Britain, on the contrary, becomes bound to admit the wines of Portugal, upon paying only two-thirds of the duty which is paid for those of France, the wines most likely to come into competition with them. So far this treaty, therefore, is evidently advantageous to Portugal, and disadvantageous to Great Britain.

The crown of Great Britain, on the contrary, becomes bound to admit the wines of Portugal, upon paying only two-thirds of the duty which is paid for those of France, the wines most likely to come into competition with them. So far this treaty, therefore, is evidently advantageous to Portugal, and disadvantageous to Great Britain. It has been celebrated, however, as a masterpiece of the commercial policy of England.

So far this treaty, therefore, is evidently advantageous to Portugal, and disadvantageous to Great Britain. It has been celebrated, however, as a masterpiece of the commercial policy of England. Portugal receives annually from the Brazils a greater quantity of gold than can be employed in its domestic commerce, whether in the shape of coin or of plate.

Key Concepts

• By this treaty, the crown of Portugal becomes bound to admit the English woollens upon the same footing as before the prohibition; that is, not to raise the duties which had been paid before that time.
• But it does not become bound to admit them upon any better terms than those of any other nation, of France or Holland, for example.
• The crown of Great Britain, on the contrary, becomes bound to admit the wines of Portugal, upon paying only two-thirds of the duty which is paid for those of France, the wines most likely to come into competition with them.
• So far this treaty, therefore, is evidently advantageous to Portugal, and disadvantageous to Great Britain.
• It has been celebrated, however, as a masterpiece of the commercial policy of England.

Context

Immediately after quoting the three articles of the Methuen treaty, Smith offers his evaluative interpretation of its terms and their distributional consequences.