The Franco-Austrian Trade Agreement

Kaunitz hearing the word "Silesia," Kaunitz's pupils constricted instantly.

Silesia is an eternal pain in the heart of every Austria.

It was after the Prussia occupied this prosperous handicraft region that Austria completely lost its status as the "common master" of Germany.

At the same time, Prussia gained the attention of Europe countries and officially joined the ranks of the first-class powers, becoming a strong contender for the Germany of "German leader".

If any Austria said he didn't want to reclaim Silesia, he would immediately be thrown into prison as a traitor.

However, Kaunitz remained calm.

Silesia must return to Austria, but not now.

While His Majesty the Emperor's radical reforms may make Austria stronger in the future, they bring only chaos and weakness to the country at present.

He remembered that during the last War of the Bavarian Succession, Austria had mobilized hundreds of thousands of troops in an attempt to take advantage of the chaos to reclaim Silesia, but they hadn't even reached the borders of Silesia and were blocked by the Prussian Army in Saxony. Saxony was the key western route into Silesia.

The Austrian Army and the Prussia were locked in a stalemate for more than a year, consuming a huge amount of logistical supplies, but failed to make any progress on the battlefield. In the end, they had to stop the war under the mediation of France and Russia.

As a result, Austria was forced to spit out Lower Bavaria it had already taken in.

It's important to understand that that war took place ten years ago, before Austria's reforms began and when its national strength was greater than it is now. Even then, Austria failed to conquer Prussia, so there's even less chance of it regaining Silesia now.

Kaunitz sighed, smiled, and shook his head. "Austria has no need to go to war with Prussia for the time being. To be honest, General Würmser's army is ready to go, and the Rebellion in Brabant will be quelled soon. At that time, the Prussia will have no choice but to retreat to Potsdam."

"If you can persuade Bavaria to send more troops, the process will be even faster."

Talleyrand smiled and raised his glass in a gesture of respect, "To General Würmser, and to his glorious victory."

But in his heart, he silently recalled His Crown Prince's unwavering judgment that the Austrian Army would suffer a crushing defeat in the Southern Netherlands.

He will remain in Vienna for the time being, awaiting news of the Austrian Army defeat, and then proceed with the next steps—as His Highness has said, Austria will certainly not accept defeat and will mobilize its entire military force to engage in a decisive battle with Prussia.

His mission was to shift the location of the decisive battle from the Southern Netherlands to Silesia!

At the head of the banquet hall, Joseph II didn't touch the food in front of him—he had been eating almost nothing but porridge and stewed fish for the past year—but instead looked at his France nephew with great interest. "You mean, if this trade agreement is signed, France will impose Tariff of less than 5% on all Austria exports of Glass, fur products, silverware, and musical instruments?"

Given his recent health condition, he rarely has the ability to speak such a long passage in one breath anymore.

Joseph smiled and nodded, "You forgot about Flax, Your Majesty."

"Oh, Textile." Joseph II waved his hand and laughed, "I'm not delirious yet. Austria Textile are far inferior to France goods; they can't even be sold in France."

Joseph looked up and said seriously, "My mother asked me to help you as much as possible, and Flax is an extremely important commodity for Austria... How about this, France can reduce Tariff on this area to zero, including North Africa and the Caribbean Sea. And Austria can set Tariff on France Flax at will."

A long-unseen look of delight flashed in Joseph II's somewhat cloudy eyes. "Oh, my dear sister, she's always so generous!"

According to the "Franco-Austrian Trade Agreement" just proposed by Joseph, Austria's most important goods, such as Glass and furs, will be able to enter France with extremely low Tariff. In addition, goods such as minerals, grains, Cotton, and Timber will be exempt from transit fees in France —a privilege that even France goods do not enjoy. Currently, goods transported from Lyon to Paris have to pay transit fees at least ten times.

If this agreement is implemented, Austria's merchandise exports will experience a historic boom.

Based on his experience, he judged that this would increase export revenue by at least 30% to 40%, thereby generating substantial Finance revenue!

This will provide tremendous support for his difficult reforms.

However, as the Holy Roman Emperor, Joseph II knew that there was no such thing as a free lunch, and that Austria would certainly have to pay a corresponding price for such enormous benefits.

So he waved the silver fork in his hand at Joseph: "Perhaps I should repay my dear sister in some way to put my mind at ease."

Joseph smiled. "You're my dearest uncle, no need for such formalities. But if Austria could also lower some Tariff on France goods, I believe Mother would be very happy."

Joseph II immediately adopted a listening posture. "Tell me more details."

"Yes, you know, a large number of workers in Lyon rely on Textile for their livelihood. It would be great if France could obtain lower Tariff in this area than United Kingdom. Of course, Flax is an exception."

Joseph glanced at the Holy Roman Emperor and added, "Ideally, it should be at least 5% cheaper than United Kingdom goods."

Although France's Textile could not compete with the United Kingdom's, it still held an unparalleled advantage over other Europe countries. Joseph estimated that with the widespread use of Automatic Loom and Steam Engine, as well as the supply of Wool from New Zealand, the cost of France's Textile would be close to that of the United Kingdom in another year to a year and a half.

If France can gain a significant advantage in terms of Tariff compared to the United Kingdom, it will be able to capture a large share of the Austria Textile market.

Joseph II hesitated for a moment, but did not agree, "That may be difficult. United Kingdom has Most-Favored-Nation Treatment Austria Textile. At most, I can make France and United Kingdom Textile Tariff the same."

Joseph could accept this, since a 5% discount was just an exorbitant price. Therefore, to gain a cost advantage, he would have to find solutions in areas like transportation.

He wore a frustrated expression. "How could France Textile possibly compete with the United Kingdom..."

"Alright, then you'll have to give me low Tariff on machinery, Steel Products, Paper, and Chemical."

Joseph II quickly considered the matter; apart from Paper, he hadn't heard of any France goods being particularly competitive.

Since the cost of France paper is so low that it sends shivers down the spines of all of Europe, it's impossible to stop the price gouging. So, agreeing to lower Tariff on these items doesn't seem to have much of an impact.