Japanese Trade Competition and its effects on British Free Trade Policy in Southeast Asia during the early 1930s

Abstract

This article deals with the end of "free trade policy” that had been introduced and pushed forwarded into Southeast Asia by the British since the early 19th century with the mercantile community of the Straits Settlements as a driving force. Adherence to free trade policy ended when the colonial government of British Malaya employed trade protection measures to counter Japanese competition which succeeded in increasing Japan's share of Southeast Asian import trade during the early part of the 1930s. This was a period of global economic depression, yet Japan was able to significantly expand her trade with Southeast Asia. Official trade reports from British and Dutch sources, including the important Trade Commission appointed by the British colonial government to look into the Straits Settlements trade during 1933-34, gave details about the structure and organization of the Straits Settlements’ trade under the free trade principle. The report also pinpointed a trend towards Japanese take-over of the Straits Settlements importing and distributing networks, thus providing a rationale behind the British move to protect Southeast Asian markets. The result of this study shows that although the British were the main propagator of free trade policy, they were not averse to ending it when such a policy affected their interests negatively. The policy of free trade, at this particular point in time, was sacrificed in order that manufacturing and trading interests of Great Britain were preserved.