Bilateralism is the conduct of political, economic, or cultural relations between two
sovereign state
A sovereign state or sovereign country, is a polity, political entity represented by one central government that has supreme legitimate authority over territory. International law defines sovereign states as having a permanent population, defin ...
s. It is in contrast to
unilateralism
__NOTOC__
Unilateralism is any doctrine or agenda that supports one-sided action. Such action may be in disregard for other parties, or as an expression of a commitment toward a direction which other parties may find disagreeable. As a word, ''un ...
or
multilateralism
In international relations, multilateralism refers to an alliance of multiple countries pursuing a common goal.
Definitions
Multilateralism, in the form of membership in international institutions, serves to bind powerful nations, discourage ...
, which is activity by a single state or jointly by multiple states, respectively. When states recognize one another as
sovereign state
A sovereign state or sovereign country, is a polity, political entity represented by one central government that has supreme legitimate authority over territory. International law defines sovereign states as having a permanent population, defin ...
s and agree to diplomatic relations, they create a bilateral relationship. States with bilateral ties will exchange diplomatic agents such as ambassadors to facilitate dialogues and cooperations.
Economic agreements, such as
free trade agreement
A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occ ...
s (FTA) or
foreign direct investment
A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct co ...
(FDI), signed by two states, are a common example of bilateralism. Since most economic agreements are signed according to the specific characteristics of the contracting countries to give preferential treatment to each other, not a generalized principle but a situational differentiation is needed. Thus through bilateralism, states can obtain more tailored agreements and obligations that only apply to particular contracting states. However, the states will face a trade-off because it is more wasteful in transaction costs than the multilateral strategy. In a bilateral strategy, a new contract has to be negotiated for each participant. So it tends to be preferred when
transaction costs
In economics and related disciplines, a transaction cost is a cost in making any economic trade when participating in a market. Oliver E. Williamson defines transaction costs as the costs of running an economic system of companies, and unlike pro ...
are low and the member surplus, which corresponds to “
producer surplus” in economic terms, is high.
Moreover, this will be effective if an influential state wants control over small states from a liberalism perspective, because building a series of bilateral arrangements with small states can increase a state's influence.
Examples
* Australia and Canada have a
bilateral relationship
Bilateralism is the conduct of political, economic, or cultural relations between two sovereign states. It is in contrast to unilateralism or multilateralism, which is activity by a single state or jointly by multiple states, respectively. When ...
; both have similar governments and share similar values as well as having the same titular head of state. In 1895 the Government of Canada sent John Larke to Sydney to establish a trade commission and in 1935 Canada sent Charles Burchell (Australia's first Canadian High Commissioner) to formalise ties between the two countries. Both nations have been wartime allies, and their trade and economic relations are strong.
* India and
Nepal
Nepal (; ne, नेपाल ), formerly the Federal Democratic Republic of Nepal ( ne,
सङ्घीय लोकतान्त्रिक गणतन्त्र नेपाल ), is a landlocked country in South Asia. It is mai ...
have had a bilateral relationship since ancient times even before the birth of the
Buddha
Siddhartha Gautama, most commonly referred to as the Buddha, was a śramaṇa, wandering ascetic and religious teacher who lived in South Asia during the 6th or 5th century BCE and founded Buddhism.
According to Buddhist tradition, he was ...
in 563 BC. In modern times, this traditional relationship has been confirmed by written treaties. The
India-Nepal treaty of friendship was signed in July 1950. That provided economically and politically important effects for both countries. In 2011, the two countries signed a new Bilateral Investment Promotion and Protection Agreement. These bilateral treaties have played a significant role in the evolution of international investment law. Citizens of both countries can move across the border freely without passport or visa, live and work in either country and own property and business in either country.
Gurkha
The Gurkhas or Gorkhas (), with endonym Gorkhali ), are soldiers native to the Indian subcontinent, Indian Subcontinent, chiefly residing within Nepal and some parts of Northeast India.
The Gurkha units are composed of Nepalis and Indian Go ...
s form a part of the Indian Army. Millions of Nepalis have been living in India for long periods of time.
* The United States has bilateral relationships with several East Asian countries, particularly South Korea, Japan, and Taiwan. The United States formed a bilateral alliance with Japan during the
Security Treaty between the United States and Japan. The U.S. also formed a bilateral alliance with Korea during the 1953
U.S.–South Korea Status of Forces Agreement and one with the Republic of China during the 1954
Sino-American Mutual Defense Treaty
The Sino-American Mutual Defense Treaty (SAMDT), formally Mutual Defense Treaty between the United States of America and the Republic of China, was a defense pact signed between the United States and the Republic of China (Taiwan) effective from ...
. Unlike its relationship with European nations which takes
multilateral alliances centered in
NATO
The North Atlantic Treaty Organization (NATO, ; french: Organisation du traité de l'Atlantique nord, ), also called the North Atlantic Alliance, is an intergovernmental military alliance between 30 member states – 28 European and two No ...
, the U.S. prefers a direct relationship with each of the East Asian countries. Rather than establishing a security alliance or hosting a summit, the U.S. tends to make a direct connection with each nation. From both historical and political perspectives, every country in the East Asian region can be an opponent or a target to any other. Therefore, it is comparatively difficult to construct multilateral alliances, which depend upon mutual reliance. A main U.S. reason for choosing a bilateral treaty was to avoid conflict, as might have been the case with multilateral treaties (e.g. risk of multilateral treaty defects). An example is the "
hub and spokes" reference, where the U.S. is the "hub" and the East Asian countries are the "spokes"; they each have a connection with the U.S. but not with each other.
** There are multiple factors that are unique when discussing why the United States has chosen to form bilateral relations particularly with East Asian countries, in comparison to the multilateral relations, such as NATO. Firstly, the United States had existing and longer relations with countries in Europe. Thus it was easier for the United States to build and form this
multilateral bond.
Victor Cha
Victor D. Cha (born 1960) is an American academic, author and former national foreign policy advisor.
He is a former Director for Asian Affairs in the White House's National Security Council, with responsibility for Japan, North and South Korea, ...
states "Acheson argued that NATO was the product of a long, deliberative process, that West European powers had carefully developed their plan for collective defense before asking for U.S. help, and most revealing, that the United States viewed NATO as a mutual collective defense arrangement." Another factor which contributed is the geography of East Asia compared to Europe. Because Europe is "connected", it is better for the security and economy. Whereas in East Asia, states are divided over a large space and is separated by large amounts of water and distance, making it a less admirable condition to form multilateral bonds for the United States. In East Asia, there are also a variety of regimes: communist, authoritarian regimes as well as democratic regimes. In comparison to the states in NATO, who are consisted of democracies, causing a level of difficulty in creating multilateral relations. Another factor is that the states in NATO recognised the same source of threat, which was
USSR
The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, it was nominally a federal union of fifteen nationa ...
. This allowed for an agreement amongst these NATO states to form this multilateral relation. However, in the case with East Asia, there was no unified threat. For the
ROC (Republic of China, otherwise known as Taiwan), China was seen as the threat. For the
ROK (Republic of Korea, otherwise known as South Korea),
DPRK
North Korea, officially the Democratic People's Republic of Korea (DPRK), is a country in East Asia. It constitutes the northern half of the Korean Peninsula and shares borders with China and Russia to the north, at the Yalu (Amnok) and T ...
(Democratic People's Republic of Korea, otherwise known as North Korea) was the threat. Thus there was a great level of difficulty in the United States forming an alliance with East Asia as the threats were different. Among many of the different explanations behind the United States’ choice of intervening in the bilateral alliances in East Asia, some social historians added that the U.S. decision makers firmly believed that unlike Europe, “inferior” Asians presumably did not possess the level of sophistication and responsibility that was required for the complex organization of the multilateral security arrangements. Christopher Hemmer and Peter J. Katzenstein concluded, “trust
asabsent, religion and domestic value were shared in only few cases, and race invoked as a powerful force separating the U.S. from Asia”.
** Victor Cha proposed the
Powerplay (theory)
Victor D. Cha (born 1960) is an American academic, author and former national foreign policy advisor.
He is a former Director for Asian Affairs in the White House's National Security Council, with responsibility for Japan, North and South Kore ...
in his article “Powerplay Origins of the U.S. Alliances Systems in Asia”, which explains the reasons behind the United States’ decision in creating a series of bilateral alliances with East Asian countries. Powerplay is commonly used in any political or social situation when one uses its knowledge or information against others in order to gain benefits using situational advantages the one has. According to the powerplay theory, the alliances were created to both contain and constrain potential rogue allies (
rogue state
"Rogue state" (or sometimes "outlaw state") is a term applied by some international theorists to states that they consider threatening to the world's peace. These states meet certain criteria, such as being ruled by authoritarian or totalitari ...
) from performing aggressive behavior that would trigger larger military conflict and involvement. The rogue allies (rogue states) include Taiwan's Kai Shek Chiang, who was publicly planning and looking forward to take back mainland China, and Korea's Syngman Rhee, who wanted to unify the Korean peninsula. The United States was also worried that Japan would recover its regional power in Asia. Cha concludes that the postwar United States planners had selected such a type of security architecture as an attempt to prevent aggression by the East Asian pro-west dictators and to increase leverage and states' dependency on the U.S. economy.
** The U.S.–Japan alliance was a bilateral security order created with the intention of preventing the expansion of Soviet power and communism in the Asia Pacific. The U.S. provided Japan, and the other Asia Pacific countries, with the offer of security protection and access to American markets, technology, and supplies in exchange for providing diplomatic, economic, and logistical support for the U.S., as this, according to John Ikenberry, would lead to the “wider, American-centered anti-Communist postwar order".
* The United States also has a history of
bilateral agreements with Panama, beginning with the
Hay–Bunau-Varilla Treaty
The Hay–Bunau-Varilla Treaty ( es, Tratado Hay-Bunau Varilla) was a treaty signed on November 18, 1903, by the United States and Panama, which established the Panama Canal Zone and the subsequent construction of the Panama Canal. It was named ...
(1903) which established the United States' right to build a canal and own it and adjacent property across the otherwise-sovereign nation of Panama. This was replaced by the
Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal and the Panama Canal Treaty (both signed 1977). A
bilateral investment treaty
A bilateral investment treaty (BIT) is an agreement establishing the terms and conditions for private investment by nationals and companies of one state in another state. This type of investment is called foreign direct investment (FDI). BITs ar ...
amendment was signed by the two countries in 2000, and several more limited agreements have been signed between various law-enforcement and financial agencies of the two countries.
History
There has been a long debate on the merits of bilateralism versus
multilateralism
In international relations, multilateralism refers to an alliance of multiple countries pursuing a common goal.
Definitions
Multilateralism, in the form of membership in international institutions, serves to bind powerful nations, discourage ...
. The first rejection of bilateralism came after the
First World War
World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
when many politicians concluded that the complex pre-war system of bilateral treaties had made war inevitable. This led to the creation of the multilateral
League of Nations
The League of Nations (french: link=no, Société des Nations ) was the first worldwide intergovernmental organisation whose principal mission was to maintain world peace. It was founded on 10 January 1920 by the Paris Peace Conference that ...
(which was disbanded in failure after 26 years).
A similar reaction against bilateral trade agreements occurred after the
Great Depression
The Great Depression (19291939) was an economic shock that impacted most countries across the world. It was a period of economic depression that became evident after a major fall in stock prices in the United States. The economic contagio ...
, when it was argued that such agreements helped produce a cycle of rising tariffs that deepened the economic downturn. Thus, after the
Second World War
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
, the West turned to multilateral agreements such as the
General Agreement on Tariffs and Trade
The General Agreement on Tariffs and Trade (GATT) is a legal agreement between many countries, whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas. According to its pre ...
(GATT).
Despite the high profile of modern multilateral systems such as the
United Nations
The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and international security, security, develop friendly relations among nations, achieve international cooperation, and be ...
and
World Trade Organization
The World Trade Organization (WTO) is an intergovernmental organization that regulates and facilitates international trade. With effective cooperation
in the United Nations System, governments use the organization to establish, revise, and e ...
, most diplomacy is still done at the bilateral level. Bilateralism has a flexibility and ease lacking in most compromise-dependent multilateral systems. In addition, disparities in power, resources, money, armament, or technology are more easily exploitable by the stronger side in bilateral diplomacy, which powerful states might consider as a positive aspect of it, compared to the more consensus-driven multilateral form of diplomacy, where the one state-one vote rule applies.
A 2017 study found that bilateral tax treaties, even if intended to "coordinate policies between countries to avoid double taxation and encourage international investment", had the unintended consequence of allowing "multinationals to engage in treaty shopping, states’ fiscal autonomy is limited, and governments tend to maintain lower tax rates."
See also
*
Bilateral trade
Bilateral trade or clearing trade is trade exclusively between two states, particularly, barter trade based on bilateral deals between governments, and without using hard currency for payment. Bilateral trade agreements often aim to keep trade def ...
*
Bilateral treaty A bilateral treaty (also called a bipartite treaty) is a treaty strictly between two Sovereign state, state entities. It is an agreement made by negotiations between two parties, established in writing and signed by representatives of the parties. T ...
*
List of bilateral free trade agreements
A ''list'' is any set of items in a row. List or lists may also refer to:
People
* List (surname)
Organizations
* List College, an undergraduate division of the Jewish Theological Seminary of America
* SC Germania List, German rugby uni ...
*
Multilateralism
In international relations, multilateralism refers to an alliance of multiple countries pursuing a common goal.
Definitions
Multilateralism, in the form of membership in international institutions, serves to bind powerful nations, discourage ...
*
Multistakeholderism
*
Unilateralism
__NOTOC__
Unilateralism is any doctrine or agenda that supports one-sided action. Such action may be in disregard for other parties, or as an expression of a commitment toward a direction which other parties may find disagreeable. As a word, ''un ...
References
External links
{{Wiktionary, bilateralism
The Rise of Bilateralism
International relations theory