Federalism and sub-national protectionism

Comparing the evolution of the internal trade regimes of Canada and Australia is appropriate in view of the important similarities between the two countries. [...] Table 2: Relevant Sections of the Canadian and Australian Constitutions Section 121 of the British North America Act Section 92 Constitution of Australia All Articles of the Growth, Produce, or On the imposition of uniform duties of customs, Manufacture of any one of the Provinces shall, trade, commerce, and intercourse among the from and after the Union, be admitted free into States, whether by m [...] In advocating a federation of the Australasian colonies, Sir Henry Parkes spoke positively about the free internal market that existed in the United States: “the whole of that great territory now possessed by the United States of America, is as free as the streets of Boston or the streets of New York.” (Parkes, 1890, 43) He emphasised this point in the discussions surrounding a future Australian F [...] The court ruled that the sole aim of section 121 was “to prohibit the establishment of customs duties affecting inter-provincial trade in the products of any province of the Union.” Other fetters on interprovincial trade, such as the ban on alcohol sales in some provinces, were according to the ruling, perfectly constitutional. [...] The respective stances taken by the Australian and Canadian courts helps to explain the differences in the internal trade regimes of the two countries.