Henry VII equated overseas trade with an extension of his power. A successful trade policy that led to expansion abroad could only make England more wealthy and Henry knew that if he had more wealth, he could use it to expand his own power – especially in the years immediately after 1485 when his position was precarious.
However, if Henry’s overseas trade policy is analysed, there was no obvious pattern to it. Henry was to all intents an opportunist who exploited opportunities as and when they arose. Trade and the expansion of it abroad always took a secondary place to a secure and peaceful, and therefore prosperous, realm.
In 1486, Henry negotiated a treaty with France that removed all restrictions on Franco-English trade. In theory this served a two-fold purpose. First, there was every chance that England would financially prosper from the agreement. Second, those malcontents to Henry being on the throne tended to gather in France. Therefore, if both nations were more closely tied to one another, Henry believed that the French monarchy would no longer give any form of support to those who challenged him for the throne. The treaty was signed with good intentions, but initially failed to deliver as England and France continued to quarrel over Brittany. It was not until 1497 that the treaty fully came into being and English merchants enjoyed unrestricted trade with the French.
Henry was also keen to develop trade in the Mediterranean, especially with Florence. Venice dominated the trade in luxury goods in the Mediterranean and Henry viewed the Venetians as a rival – hence his move to develop stranger ties with Florence. Henry had to encourage merchants to trade in the region, as the Venetians were so dominant. The rewards for success were great and in 1488 a few English merchants ships returned to England with a cargo of malmsey. In retaliation for this encroachment on what the Venetians deemed to be their trade, they imposed very large tariffs on all English goods imported into Venice, effectively killing off any English trade there. Therefore, it became even more important for Henry to develop trade with Florence. In 1490, a treaty was signed that provided for English wool to be imported into Pisa, the main port of Florence. At the same time, Henry restricted the sale of wool to the Venetians. Fearing that they would lose out to Florence in the wool trade in that area, the Venetian government lifted import duties on English goods. This enabled English merchants to carry out more trade with the wealthiest Mediterranean state.
The most important country that England could develop trading relations with was Spain. Spain was pioneering overseas exploration to the ‘New World’ and these voyages opened up exciting possibilities in trade. The negotiations surrounding the marriage between Prince Arthur and Catherine of Aragon (the Treaty of Medina del Campo of 1489) also allowed for trade talks. Each nation was given the opportunity to trade with the other with duties fixed at an advantageously low rate. From a trade point of view, this was a very successful treaty for Henry. However, the Spanish never allowed the English to become as involved in trade with the ‘New World’ as Henry would have liked.
Henry’s success with the Spanish did not materialise with the Hanseatic League. The League jealously guarded their presence in the Baltic. Edward IV had got the League to promise to agree to allow English merchants free access to Hanse ports – but the promise was never kept. The trading power of the Hanseatic League was too great for Henry to ‘muscle’ in on and he also had to tread carefully as the region could also have become a place where pretenders to the throne gathered. Henry did a great deal to antagonise the Hanse leaders – Hanse merchants were forbidden by Parliamentary law from exporting unfinished cloth from England and a later law forbade them from taking any money out of England. Attacks on Hanse merchants in London and elsewhere went unpunished. Henry believed that his aggressive approach would force Hanse leaders to become more flexible in their approach to trade with England. In this Henry failed.
Henry was successful in certain areas. For example, in 1489 a treaty was signed with Denmark that gave English fishermen the right to fish in Icelandic waters.
An area that did intrigue Henry was overseas exploration. The Royal Council advised him not to finance the voyages of Christopher Columbus, as they believed the plans for the first voyage were too muddled. Henry did, however, finance the voyages of John Cabot. Lured by his belief that he would make a fortune by funding a route to the Far East by sailing west, Henry funded Cabot’s first journey – to the sum of £50. It seems as if Henry’s spirit was willing to support exploration but his desire to keep a close rein on spending curtailed his total investment. In fact, Henry’s caution served him well as Cabot’s first voyage was not a success whereas on the second Cabot landed (probably in Newfoundland) and planted the flag of Henry VII on the land there.
“Henry deserves credit for the encouragement he gave to those brave enough to face the dangers of the North Atlantic. Due to Henry’s patronage, England had more knowledge of North America than any other European country."
How successful was Henry’s overseas policy? If it is judged on revenue collection (linked with a growth in monarchical power) then custom dues did rise at the start of Henry’s reign. However, this may simply be due to a more effective, aggressive and efficient method of collection and recording as opposed to anything else. Compared to Spain and Venice, the amount of commodities traded abroad was small and overseas trade can only be seen as ‘small scale’ in Henry’s reign.