Chapter 296: Franco-Austrian Trade Agreement
When Kaunitz heard the word "Silesia," his pupils instantly constricted.
Silesia was an eternal pain in the heart of every Austrian.
After this wealthy industrial region was occupied by the Prussians, Austria completely lost its status as the preeminent leader of Germany.
At the same time, Prussia was consequently viewed with new respect by European nations, officially joining the ranks of first-class great powers and becoming a strong contender for the title of Germany's preeminent leader.
If any Austrian claimed they didn't want to reclaim Silesia, they would surely be branded an Austrian traitor and thrown into prison.
However, Kaunitz maintained his composure.
Silesia had to return to Austria, but not now.
Although the radical reforms initiated by His Imperial Majesty would make Austria stronger in the future, for now, they only brought chaos and weakness to the nation.
He still remembered that during the last War of the Bavarian Succession, Austria had mobilized over a hundred thousand troops, attempting to reclaim Silesia amidst the chaos, but they couldn't even reach Silesia's borders. They were blocked by the Prussian army in Saxony, which was the key western route into Silesia.
Austria was even forced to spit out Lower Bavaria, which it had already swallowed.
One must remember that that war happened ten years ago. At that time, Austria's reforms hadn't even begun, and its national strength was greater than it was now. If it couldn't overcome Prussia then, reclaiming Silesia now was even less likely.
Kaunitz exhaled and shook his head with a smile. "Austria currently has no need to wage war with Prussia. To be frank, General Wurmser's army is already fully prepared and ready to march; the Brabant rebellion will soon be quelled. At that point, the Prussians will have no choice but to retreat to Potsdam.
"If you can persuade Bavaria to send more troops, this process will be even faster."
Talleyrand then smiled, raising his wine glass in a toast to him. "To General Wurmser and his glorious victory."
Yet, in his mind, he silently recalled the Crown Prince's confident prediction: that the Austrian army would suffer a crushing defeat in the Southern Netherlands.
He would remain in Vienna for this period, awaiting news of the Austrian army's failure, and then begin the next phase of his plan. According to His Highness, Austria would not accept defeat lightly and would consequently mobilize the nation's entire military force to engage Prussia in a decisive battle.
His mission was to shift the location of that decisive battle from the Southern Netherlands to Silesia!
At the head of the banquet hall, Joseph II had barely touched the delicacies before him—for the past year, he had mostly eaten only porridge and fish stewed to a pulp. Instead, he looked excitedly at his French nephew. "Are you saying that if this trade agreement is signed, France will impose tariffs below 5% on all Austrian exports of glass, fur products, silverware, and musical instruments?"
Given his recent health, he rarely managed to say such a long sentence in one breath.
Joseph smiled and nodded. "You forgot linen textiles, Your Majesty."
"Oh, textiles," Joseph II waved his hand dismissively and chuckled. "I'm not so muddled by sickness yet. Austrian textiles simply couldn't compare to French goods; they wouldn't sell in France at all."
Joseph feigned serious thought, then looked up and said, "Mother asked me to help you as much as possible, and linen textiles are an extremely important commodity for Austria... So, how about this? France can reduce the tariffs on these to zero, including in North Africa and throughout the Caribbean Sea. In return, Austria can set any tariffs it wishes on French linen textiles."
A look of pleasant surprise, long unseen, flashed in Joseph II's somewhat clouded eyes. "Oh, my dear sister, she is always so generous!"
According to the "Franco-Austrian Trade Agreement" Joseph had just proposed, Austria's most important goods like glass and fur would be able to enter France with extremely low tariffs. Furthermore, other goods, including minerals, grain, cotton, and timber, would receive an exemption from tolls in France—a privilege not even extended to France's own domestic goods. Currently, goods transported from Lyon to Paris had to pay at least ten or so tolls along the way.
If this agreement could be implemented, Austria's commodity exports would usher in a historically glorious era.
Based on his experience, he judged that it could increase export revenue by at least thirty to forty percent, thereby bringing in substantial fiscal revenue!
This would provide immense support for his struggling reforms.
However, as the Holy Roman Emperor, Joseph II knew there was no such thing as a free lunch. Such immense benefits would surely require Austria to pay a corresponding price.
So he waved the silver fork in his hand at Joseph. "Perhaps I should reciprocate my dear sister in some way; only then can I feel at ease."
Joseph smiled. "You are my closest uncle, there's no need to be so polite. However, if Austria could also lower some of its tariffs on French goods, I believe Mother would be very pleased."
Joseph II immediately adopted an attentive posture. "Tell me more."
"Well, you know, a large number of workers in Lyon depend on textile production for their livelihood. If France could gain lower tariffs in this area than Britain, that would be excellent. Of course, linen textiles would be an exception."
Joseph glanced at the Holy Roman Emperor and added, "Ideally, it should be more than 5% lower than British goods."
Although France's textile industry couldn't compete with Britain's, it still held an unparalleled advantage over other European countries. Joseph estimated that with the widespread use of automatic looms and steam engines, along with wool supplied by New Zealand, in another one to one and a half years, the cost of French textile production would be close to that of Britain.
At that point, as long as the tariffs were more favorable than Britain's, France would be able to significantly capture the Austrian textile market.
Joseph II pondered for a moment, but did not agree. "That might be difficult. Britain has Most Favored Nation status for Austrian textiles. At most, I can make French and British textile tariffs the same."
Joseph could accept this; after all, asking for 5% lower was just asking an exorbitant price. So, to gain an advantage in terms of cost, he would have to find ways in areas like transportation.
He put on a dejected expression. "How could French textiles possibly compete with Britain's...
"Alright then, you'll have to give me low tariffs on machinery, steel products, paper, and chemicals."
Joseph II quickly pondered. Among these goods, he hadn't heard of French products having strong competitiveness, except for paper.
Anyway, the cost of French paper was so low it astonished all of Europe and simply couldn't be stopped. So, agreeing to lower tariffs on these items seemed to have no significant impact.
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