At the time of the American Revolution, Great Britain and continental
Europe adhered to unconditional MFN treatment, which they had done since
the seventeenth century. To maintain the political and economic
independence of the new American republic, the Founders focused on
balancing internal economic development among industry, agriculture, and
commerce. Once established, the national government aimed to develop the
nation's resources and secure neutral rights internationally.
Leaders of the early republic did not seek autarky (that is, national
economic self-sufficiency and independence). Indeed, Benjamin Franklin and
Thomas Jefferson, for example, leaned toward free trade. However, since
they believed that free trade would threaten America's political
viability, they sought access to overseas markets for U.S. commodities
through both reciprocity and nondiscrimination. Ideally, they wanted the
benefits of unconditional MFN treatment. But they were prepared to settle
for equality of treatment with foreign nations. Moreover, they recognized
that the great powers of Europe were unlikely to reciprocate on trade.
Ultimately, they adhered to conditional MFN treatment to preserve the
means to bargain for access to overseas markets, but this approach ensured
that all trade treaties were bilateral, unique, and discriminatory.

In July 1776 the delegates to the Continental Congress were prepared to
allow unrestricted imports into the U.S. market in order to gain
diplomatic recognition and break Britain's hold on Atlantic trade.
John Adams, assisted by Benjamin Franklin, drafted a model commercial
agreement that was approved by the delegates. It instructed trade
negotiators to obtain equal national treatment or unconditional MFN
treatment to gain access to Europe's markets (and those of its
colonies).

Neither side wanted the treaty to benefit Britain; French negotiators
feared the consequences of a possible U.S.–British political
reconciliation. U.S. negotiators wanted Britain and other European
countries to buy access to the U.S. market with reciprocal trading
privileges to their home and colonial markets. French officials only
offered access to its home market. In 1783, France reverted to
unconditional treatment and tried to interpret Article II in this way.
U.S. officials balked; they decided to use reciprocity to secure equality
of treatment.

During the early national period, U.S. officials had little success in
opening overseas markets to American goods. They concluded treaties with
Sweden and the Netherlands, but only the latter offered MFN access to both
its home and colonial markets. In 1784 U.S. negotiators initiated another
round of trade talks, using the 1776 plan as a blueprint. They succeeded
only in securing a pact with Prussia in 1785, which secured the
conditional MFN treatment granted by France in the 1778 treaty. Officials
such as John Jay and Elbridge Gerry became convinced that a strict
reciprocity approach would best serve U.S. interests, at least until
negotiators gained experience in trade matters and America gained in
importance within the international economy.

Crucial aspects of U.S. trade policy hampered the use of either
reciprocity or conditional MFN treatment in a manner that benefited
American exporters. Treasury Secretary Alexander Hamilton's 1791
Report on Manufactures provided the justification for a protective tariff
system to enable America to establish its own manufacturing base as the
basis for economic development. After the War of 1812, Congress took up
the recommendations of Hamilton and James Madison's Treasury
secretary, Albert Gallatin, and adopted the so-called American System
sponsored by Senator Henry Clay: a nationalistic industrial policy based
on high tariffs and support for domestic manufacturers. Until the Great
Depression, many U.S. leaders, especially Whigs and Republicans, remained
adamant that protectionism was the key to U.S. economic development, class
harmony, and political independence.

Congress also subjected all imports to a uniform (single-schedule) tariff,
leaving little room for officials to negotiate preferential bilateral
agreements. Until Congress adopted a dual-schedule tariff in the 1909
Payne-Aldrich Act, there was little chance that trade negotiators could
wield reciprocity, not to mention MFN treatment, to win concessions from
trading partners. This limited policymakers in the executive branch to
adjusting the level of tariffs: Democrats tended to lower tariffs to
levels adequate to fund the budget, and Whigs and Republicans tended to
raise tariffs to protect domestic producers from foreign competition.

Until the late nineteenth century, foreign markets were the concern only
of commodity producers in the South and timber and fur exporters in the
North. Hence, there was little interest-group pressure to persuade
Congress to lower the barriers that protected domestic industries and
workers. Diplomacy served the economic and security interests of a
developing country with a large domestic market and little disposition to
global leadership.

State Department negotiators therefore sought equal access for American
goods to the markets of European competitors by offering equal access in
return. The administrations of Presidents John Tyler, James Polk, Franklin
Pierce, and James Buchanan were especially interested in using reciprocity
to pry open overseas markets. However, Congress generally refused to
ratify the reciprocal pacts that State Department officials negotiated,
fearing that the MFN clauses in earlier treaties might compel the United
States to generalize proposed concessions. Opponents also recognized that
the State Department paid inadequate attention to negotiating an
equivalent exchange of concessions.

With others—Canada, Latin America, and Asia—U.S. trade
officials sought special privileges and offered special concessions for
raw materials and agricultural goods in the U.S. market. The expansionist
Polk, Pierce, and Buchanan administrations were eager to experiment with
new approaches. They sought either unilateral MFN treatment or one-sided
agreements that assured the United States of MFN treatment. For example,
treaties with China in 1844 and Japan in 1854 provided America with MFN
access to both markets, but did not extend equality of treatment to the
U.S. market for either China or Japan in return.

The United States held contracting parties to conditional MFN treatment
even when commercial agreements contained ambiguous language or appeared
to contradict each other. As Secretary of State John Jay put it in 1787,
it would be inconsistent with "reason and equity," as well
as with "the most obvious principles of justice and fair
construction," to demand that the United States grant unconditional
MFN treatment simply because a treaty—in this case the 1782 treaty
with the Netherlands—failed to specify conditional MFN treatment.
Just because "France purchases, at a great price, a privilege of
the United States," the Netherlands cannot "immediately
insist on having the like privileges without [paying] any price at
all."

The use of conditional MFN treatment led to disputes with trading
partners. For example, the so-called Convention of 1815 with Britain set
the stage for a dispute with France over the Louisiana Purchase. The
convention extended privileges to British ships in American harbors that
French ships did not enjoy. In the absence of a specific MFN clause,
France insisted that the United States adhere to the literal
interpretation of the MFN clause. France claimed that it had given America
an equivalent concession at the time of the Louisiana Purchase.
Nonetheless, Secretary of State John Quincy Adams asserted that
"the condition, though not expressed in the article, is inherent in
the advantage claimed under it." Only when France reduced duties on
wines in 1831—acceding to a request from Secretary of State Martin
Van Buren—did the United States grant France the commercial
privileges it sought.