England had an old-established trade with Spain and Portugal; there were settlements of English merchants at Lisbon and San Lúcar (near Cádiz) before the end of the fifteenth century, and despite the political conflicts which repeatedly shook the trade for over a century after the Reformation, economic relations were always renewed and tightened; this political struggle did not, like the later Anglo-French rivalry, cause a prolonged severance of economic ties. The main lines of English import trade with Spain changed little during the seventeenth and eighteenth centuries. Wine was the chief import, already in 1604 coming principally from Málaga rather than from Seville or Cádiz; the quantity increasing during the seventeenth century but eventually stabilized and even declining in the face of competition from French smuggling and the favoured Portuguese product. Olive oil, a vital raw material of the woollen industry, came in great tonnage from southern Spain, but the import began to be supplemented, before the middle of the seventeenth century, by an Italian supply. Fruit (chiefly raisins from Málaga and Alicante, but also including oranges and lemons from Seville) was a large import, growing constantly until after 1713. The products of Spanish America - especially cochineal, indigo and logwood - came in from Cádiz; valuable though these cargoes were, their total tonnage was too small to be of importance to shipping. From the Biscay coast, chiefly from Bilbao, quantities of iron were brought to the western ports, and growing cargoes of wool to Bristol and Exeter.

Portugal had more difficulty in finding cargoes of goods saleable in England. In the early years of the seventeenth century none of its native products was specially wanted; sugar from Brazil was the trading staple and supplied the English market until, after mid-century, English West Indian sugar began to replace it. There was always a small import of Portuguese fruit - figs, oranges and lemons - and this grew steadily; and a large tonnage of salt went to Bristol and the south-western ports. Port wine import was expanding in the years after 1689, and the customs preference established by the Methuen Treaty of 1704 greatly strengthened its competitive position in the English market. Becoming the chief supplier of legally imported wine, Portugal had at last acquired a firm basis for its trade with England.