Europe today faces a pressing political challenge: can it preserve openness as geopolitical rivalry intensifies and the global trading system becomes increasingly fragmented? As tensions rise between major powers and the global trading system becomes more contested, policymakers often frame the choice starkly: either deeper centralised multilateralism or a retreat into protectionism and competing blocs.

History suggests a more nuanced possibility.

Long before the creation of the General Agreement on Tariffs and Trade (GATT) or the WTO, Europe sustained a remarkably integrated trading system through a dense network of bilateral agreements. During the 19th century, international trade expanded rapidly during the so-called first era of globalisation (O’Rourke and Williamson 1999), driven in large part by declining transport costs and technological change. Yet the institutional infrastructure underpinning this expansion rested on a complex system of bilateral commercial and political agreements that long predated modern multilateral institutions. Trade integration deepened despite recurring geopolitical tensions, shifting alliances, and imperial rivalry, and recent evidence suggests that rising economic integration was associated with declining intra-European conflict (Ahsan et al. 2025). In the absence of a single centralised institution, this earlier trade system of overlapping treaties provided a solid coverage for reciprocity, via the most-favoured nation (MFN) clause, ensuring that countries do not discriminate among their trading partners and the national treatment (NT) provision, establishing that imported and domestically produced goods and services would be treated equally. 

Understanding how this system emerged and functioned offers important lessons for Europe’s future.

We assembled a new dataset of nearly 900 European commercial treaties from 1815 to 1919 (Ptashkina 2022), and coded the key principles embedded in these agreements, including MFN provisions, NT clauses, and market-access commitments. We then linked these data to historical bilateral trade data and political alliance networks, allowing us to study both the effects and the formation of trade agreements during Europe’s first era of globalisation. 

The conventional narrative often portrays 19th century globalisation as either the product of British unilateral liberalism or the precursor to the multilateral system created after 1945 (Irwin 1993a, 1993b). While Britain’s commercial liberalisation and the spread of MFN clauses played an important role in reshaping 19th century trade relations, our analysis shows that the historical reality was more complex: Europe’s trade integration was built through decentralised treaty networks that gradually acquired multilateral properties, as illustrated in Figure 1.

Figure 1 Europe’s expanding trade treaty network, 1815–1939

Notes: The figure reports the annual number of commercial treaties signed by European countries between 1815 and 1939. Each observation corresponds to the year in which a treaty was concluded. When a treaty was subsequently revised, renewed, or superseded, the new agreement is recorded separately (in red). 
Sources: Authors’ dataset based on the Consolidated Treaty Series (Parry 1969–1980) and United Nations Treaty Collection.

A central mechanism behind this process was the spread of MFN clauses. Early treaties typically stipulated the repeal of import and export prohibitions, freedom of transit, measures fostering transnational commerce, and the mutual concession of unconditional MFN status (Lampe 2009). These provisions required countries to extend any trade concession granted to one partner to all other treaty partners. Although agreements remained formally bilateral, MFN clauses created indirect spillovers across the network. When two countries liberalised trade, the effects propagated outward through existing treaty relationships, expanding openness well beyond the original signatories. This treaty network propagated extensively through a domino effect (Baldwin 1993), incentivising countries to join in. 

The Cobden–Chevalier Treaty between Britain and France in 1860 is often portrayed as the pivotal moment in 19th century European trade liberalisation. Yet, our evidence suggests that its significance lay less in creating a new system than in accelerating and extending an integration process that was already underway. By 1860, a growing network of bilateral agreements and MFN commitments had begun to link European economies. Existing research has debated whether the Cobden–Chevalier system meaningfully increased trade (Accominotti and Flandreau 2008, Lampe 2009, Tena-Junguito et al. 2012). Our findings instead emphasise the broader network dimension of European commercial integration. Rather than being driven by a single landmark agreement, European trade integration emerged through the gradual accumulation of interconnected treaties whose effects extended beyond their immediate signatories.

Figure 2 Trade flows between countries with and without trade agreements, 1827-1939

Sources: Authors’ dataset based on the Consolidated Treaty Series (Parry 1969–1980), United Nations Treaty Collection, merged with TRADHIST dataset by CEPII.

In practice, this produced a form of ‘multilateralism without multilateral institutions’: the network of bilateral treaties had a distinctly multilateral character, much like the post-World War II GATT system, but unlike the GATT, it lacked any formal international enforcement mechanism.

Importantly, these agreements were not purely economic arrangements. They were deeply embedded in broader political and diplomatic relationships. States were substantially more likely to sign commercial treaties when political ties were strong, and countries connected through alliances were more likely to sustain commercial cooperation over time.

This interaction between economics and geopolitics remains highly relevant today.

Current debates often assume that geopolitical competition necessarily implies deglobalisation.  Yet 19th century Europe was itself characterised by intense geopolitical rivalry, competing empires and shifting alliances. Despite this fragmented political environment, economic integration expanded rapidly through a growing network of commercial agreements. Our preliminary estimates indicate that commercial treaties increased bilateral trade by roughly 14% than otherwise comparable country pairs without such agreements, an effect broadly comparable to estimates for contemporary trade agreements (Nagengast and Yotov 2025). Figure 2 illustrates these patterns, comparing trade flows between country pairs that signed commercial treaties against those that did not. At the same time, treaty formation itself was closely tied to political alignment and diplomatic connectivity, echoing recent work on dynastic networks and interstate cooperation by Benzell and Cooke (2021).

The broader implication is not that geopolitics can be ignored, but that economic openness and strategic competition need not be mutually exclusive. What sustained integration the existence of interoperable networks of agreements that allowed commercial exchange to persist despite political rivalry.

This historical perspective offers several lessons for Europe’s future. The weakening of global multilateral institutions does not present a binary choice between waiting for a fully integrated global trading system to be restored and retreating into protectionism, economic nationalism or competing blocs. Europe’s 19th century experience suggests a more pragmatic alternative: maintaining a commitment to open markets while continuing to expand networks of commercial agreements even when universal cooperation is difficult to achieve.

This does not imply abandoning multilateral institutions. The WTO and its dispute-settlement mechanisms remain important foundations of a stable trading system. But Europe should not view progress in international economic integration as contingent upon the existence of a fully effective global framework. Where broader multilateral cooperation proves difficult, commercial openness can still be advanced through bilateral, regional, and sector-specific agreements that preserve reciprocity, transparency, and non-discrimination. The historical precedent suggests this is not a second-best option; it is how durable openness has actually been built. 

The 19th century does not provide a blueprint for the 21st century. Today’s world differs fundamentally in technology, production networks, finance, and institutional complexity. Yet Europe’s 19th century experience demonstrates that robust international economic integration can emerge even under conditions of political fragmentation and strategic competition.

As Europe confronts the prospect of a more divided global economy, its own history offers a useful reminder: multilateralism did not begin with formal multilateral institutions. Europe built openness before the GATT, and the logic of networked cooperation may once again become central to its economic future.

References

Accominotti, O and M Flandreau (2008), “Bilateral treaties and the most-favored-nation clause: The myth of trade liberalization in the nineteenth century”, World Politics 60(2): 147–188.

Ahsan, R N, L Panza and Y Song (2025), “Atlantic trade and conflict in Europe”, The Economic Journal 135(668): 1069–1107.

Baldwin, R (1993), “A Domino Theory of Regionalism”, NBER Working Paper 4465.

Benzell, S and K Cooke (2021), “A network of thrones: Kinship and conflict in Europe, 1495–1918”, American Economic Journal: Applied Economics 13(3): 102–133.

Irwin, D (1993a), “Free trade and protection in nineteenth-century Britain and France revisited”, Journal of Economic History 53(1): 146–152.

Irwin, D (1993b), “Multilateral and bilateral trade policies in the world trading system: An historical perspective”, in J de Melo and A Panagariya (eds), New Dimensions in Regional Integration.

Lampe, M (2009), “Effects of bilateralism and the MFN clause on international trade: Evidence for the Cobden–Chevalier network, 1860–1875”, Journal of Economic History 69(4): 1012–1040.

O’Rourke, K and J Williamson (1999), Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy, MIT Press.

Nagengast, A J and Y V Yotov (2025), “Staggered difference-in-differences in gravity settings: Revisiting the effects of trade agreements”, American Economic Journal: Applied Economics 17(1): 271–296.

Parry, C (1969–1980), The Consolidated Treaty Series, Oceana Publications.

Ptashkina, M (2022), Trade Agreements: A Historical Perspective and Modern Trends, mimeo.

Tena-Junguito, A, M Lampe and F Tamega Fernandes (2012), “How much trade liberalization was there in the world before and after Cobden–Chevalier?”, Journal of Economic History 72(3): 708–740.