Bilateralism

Last updated July 17, 2024

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 states recognize one another as sovereign states 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 agreements (FTAs) or foreign direct investment (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 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.^[1]

Examples

Australia and Canada have a bilateral relationship; 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.^[2] Both nations have been wartime allies, and their trade and economic relations are strong.
India and Nepal have had a bilateral relationship since ancient times even before the birth of the Buddha 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. Gurkhas form a part of the Indian Army. Millions of Nepalis have been living in India for long periods of time.^[3]
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. Unlike its relationship with European nations which takes multilateral alliances centered in NATO, 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.^[4]^[5]
- 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 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."^[5] 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. 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 (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 [was] absent, religion and domestic value were shared in only few cases, and race invoked as a powerful force separating the U.S. from Asia".^[6]
- Victor Cha proposed the Powerplay theory in his article "Powerplay: Origins of the U.S. Alliance System 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) 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".^[7]
The United States also has a history of bilateral agreements with Panama, beginning with the Hay–Bunau-Varilla Treaty (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 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. The first rejection of bilateralism came after the First World War 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 (which was disbanded in failure after 26 years).

A similar reaction against bilateral trade agreements occurred after the Great Depression, 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, the West turned to multilateral agreements such as the General Agreement on Tariffs and Trade (GATT).^{[ citation needed ]}

Despite the high profile of modern multilateral systems such as the United Nations and World Trade Organization, 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.^{[ citation needed ]}

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."^[8]

Related Research Articles

The domino theory is a geopolitical theory which posits that changes in the political structure of one country tend to spread to neighboring countries in a domino effect. It was prominent in the United States from the 1950s to the 1980s in the context of the Cold War, suggesting that if one country in a region came under the influence of communism, then the surrounding countries would follow. It was used by successive United States administrations during the Cold War as justification for American intervention around the world. U.S. President Dwight D. Eisenhower described the theory during a news conference on April 7, 1954, when referring to communism in Indochina as follows:

Finally, you have broader considerations that might follow what you would call the "falling domino" principle. You have a row of dominoes set up, you knock over the first one, and what will happen to the last one is the certainty that it will go over very quickly. So you could have a beginning of a disintegration that would have the most profound influences.

The spoke–hub distribution paradigm is a form of transport topology optimization in which traffic planners organize routes as a series of "spokes" that connect outlying points to a central "hub". Simple forms of this distribution/connection model contrast with point-to-point transit systems, in which each point has a direct route to every other point, and which modeled the principal method of transporting passengers and freight until the 1970s. Delta Air Lines pioneered the spoke–hub distribution model in 1955, and the concept revolutionized the transportation logistics industry after Federal Express demonstrated its value in the early 1970s. In the late 1970s the telecommunications and information technology sector subsequently adopted this distribution topology, dubbing it the star network network topology.

In international relations, multilateralism refers to an alliance of multiple countries pursuing a common goal. Multilateralism is based on the principles of inclusivity, equality, and cooperation, and aims to foster a more peaceful, prosperous, and sustainable world. Middle powers play a crucial role in the international system by promoting multilateralism and internationalism.

Atlanticism, also known as Transatlanticism, is the ideology which advocates a close alliance between nations in Northern America and in Europe on political, economic, and defense issues. The purpose is to maintain or increase the security and prosperity of the participating countries and protect liberal democracy and the progressive values of an open society that unite them under multiculturalism. The term derives from the North Atlantic Ocean, which is bordered by North America and Europe.

Transatlantic relations refer to the historic, cultural, political, economic and social relations between countries on both side of the Atlantic Ocean. Sometimes it specifically means relationships between the Anglophone North American countries, and particular European countries or organizations, although other meanings are possible.

International relations between Japan and the United States began in the late 18th and early 19th century with the diplomatic but force-backed missions of U.S. ship captains James Glynn and Matthew C. Perry to the Tokugawa shogunate. Following the Meiji Restoration, the countries maintained relatively cordial relations. Potential disputes were resolved. Japan acknowledged American control of Hawaii and the Philippines, and the United States reciprocated regarding Korea. Disagreements about Japanese immigration to the U.S. were resolved in 1907. The two were allies against Germany in World War I.

Japan is a middle power and a member of numerous international organizations, including the United Nations, the OECD, and the Group of Seven. Although it has renounced its right to declare war, the country maintains Self-Defense Forces that rank as one of the world's strongest militaries. After World War II, Japan experienced record growth in an economic miracle, becoming the second-largest economy in the world by 1990. As of 2021, the country's economy is the third-largest by nominal GDP and the fourth-largest by PPP.

The Department of Foreign Affairs is the executive department of the Philippine government tasked to contribute to the enhancement of national security, protection of the territorial integrity and national sovereignty, to participate in the national endeavor of sustaining development and enhancing the Philippines' competitive edge, to protect the rights and promote the welfare of Filipinos overseas and to mobilize them as partners in national development, to project a positive image of the Philippines, and to increase international understanding of Philippine culture for mutually-beneficial relations with other countries.

The San Francisco System is a network of alliances pursued by the United States in the Asia-Pacific region, after the end of World War II – the United States as a "hub", and Japan, South Korea, Taiwan, the Philippines, Thailand, Australia, and New Zealand as "spokes". The system is made of bilateral political-military and economic commitments between the United States and its Asia-Pacific allies. This system stands in contrast to a multilateral alliance, such as NATO.

Pactomania is a term originally created to describe the period between 1945 and 1955, during which the United States concluded or ratified a significant amount of alliances, treaties, and pacts. The word pactomania was first used in a New York Times article in 1955.

The Mutual Defense Treaty between the United States and the Republic of China, was a defense pact signed between the United States and the Republic of China (Taiwan) effective from 1955 to 1980. It was intended to defend the island of Taiwan from invasion by the People's Republic of China. Some of its content was carried over to the Taiwan Relations Act of 1979 after the failure of the Goldwater v. Carter lawsuit.

Victor D. Cha is an American political scientist.

U.S.–Uzbekistan relations formally began when the United States recognized the independence of Uzbekistan on December 25, 1991, and opened an embassy in Tashkent in March 1992. U.S.-Uzbekistan relations developed slowly and reached a peak following the U.S. decision to invade Afghanistan following the September 11, 2001 attacks. Relations cooled significantly following the "color revolutions" in the former Soviet republics of Georgia, Ukraine, and Kyrgyzstan in 2003–2005, and the Government of Uzbekistan sought to limit the influence of U.S. and other foreign non-governmental organizations (NGOs) working on civil society, political reform, and human rights inside the country.

The United States has maintained diplomatic relations with Iceland since the mid-1800s.

Bilateral relations between the Kingdom of Thailand and the United States of America date back to 1818. Thailand and the United States have long been close allies and diplomatic partners.

U.S. President Barack Obama's East Asia Strategy (2009–2017), also known as the Pivot to Asia, represented a significant shift in the foreign policy of the United States since the 2010s. It shifted the country's focus away from the Middle Eastern and European sphere and allowed it to invest heavily and build relationships in East Asian and Southeast Asian countries, especially countries which are in close proximity to the People's Republic of China (PRC) either economically, geographically or politically to counter its rise as a rival potential superpower.

Canada is a member of various international organizations and forums. Canada was a founding member of the United Nations in 1945 and formed the North American Aerospace Defense Command together with the United States in 1958. The country has membership in the World Trade Organization, the Five Eyes, the G7 and the Organisation for Economic Co-operation and Development (OECD). The country joined the Organization of American States (OAS) in 1990, and seeks to expand its ties to Pacific Rim economies through membership in the Asia-Pacific Economic Cooperation forum (APEC). Canada ratified the Universal Declaration of Human Rights in 1948, and seven principal UN human rights conventions and covenants since then. As of 2023, Canada is a signatory to 15 free trade agreements with 51 different countries, and has diplomatic and consular offices in over 270 locations in approximately 180 countries.

<span class="mw-page-title-main">Commercial policy</span> Governments policy governing international trade

A commercial policy is a government's policy governing international trade. Commercial policy is an all encompassing term that is used to cover topics which involve international trade. Trade policy is often described in terms of a scale between the extremes of free trade on one side and protectionism on the other. A common commercial policy can sometimes be agreed by treaty within a customs union, as with the European Union's common commercial policy and in Mercosur. A nation's commercial policy will include and take into account the policies adopted by that nation's government while negotiating international trade. There are several factors that can affect a nation's commercial policy, all of which can affect international trade policies.

US-China strategic engagement refers to a wide range of specific practices and interaction including economic cooperation, public diplomacy, military and foreign aid between the United States and China. This phase of engagement can be traced back to the late 1960s following an intense period of hostility caused by indirect confrontation between the two countries, particularly during the Korean War and the Vietnam War. With the US' support for Taiwan during the Taiwan Strait crises and its military expansion in the Pacific region, the relationship grew more antagonistic for the Chinese government perceive these initiatives to be US' attempt to encircle China. The domestic upheaval as a result of the Cultural Revolution in China and its commitment to communism through political radicalism accelerated the conflict. The four presidencies preceding the Bush administration were said to embrace a national policy direction toward strategic ambiguity, or deliberate ambiguity particularly in dealing with China. In October 2018, Vice President Mike Pence delivered a speech at the Hudson Institute on China, signifying the end of strategic engagement and officially proclaiming a new stage in the bilateral relationship, strategic competition.

A quasi-alliance is a relationship between two states that have not formed an alliance despite sharing a common ally. It is an informal security arrangement that is not based on a formal collective defence pact, but it is instead based on tacit agreements. It is unique from an alliance as the states do not have this formal collective defence pact. These two states may remain unallied due to alliance hindrances such as historical animosity, but still share a common, powerful ally capable of diminishing the two states' security fears; security fears caused by a common threat.

References

↑ Thompson, Alexander; Verdier, Daniel (March 2014). "Multilateralism, Bilateralism and Regime Design" (PDF). International Studies Quarterly . 58 (1). International Studies Association: 15–28. doi: 10.1111/isqu.12100 . Retrieved 12 December 2023– via Ohio State University Department of Political Science.
↑ "Canada country brief". Department of Foreign Affairs and Trade . Retrieved 12 December 2023.
↑ Subedi, Surya P. (Fall 2013). "India's New Bilateral Investment Promotion and Protection Treaty with Nepal: A New Trend in State Practice" (PDF). ICSID Review . 28 (2). Oxford University Press: 384–404. doi:10.1093/icsidreview/sit027.
↑ Yeo, Andrew (April 2011). Bilateralism, Multilateralism, and Institutional Change in Northeast Asia's Regional Security Architecture (PDF) (Technical report). EAI Fellows Program Working Paper No. 30. East Asia Institute . Retrieved 12 December 2023.
1 2 Cha, Victor D. (9 January 2010). "Powerplay: Origins of the U.S. Alliance System in Asia". International Security . 34 (3). The MIT Press: 158–196. doi:10.1162/isec.2010.34.3.158. ISSN 0162-2889. JSTOR 40389236. S2CID 57566528.
↑ Hemmer, Christopher; Katzenstein, Peter J. (Summer 2002). "Why Is There No NATO in Asia? Collective Identity, Regionalism, and the Origins of Multilateralism" (PDF). International Organization . 53 (3). The MIT Press: 575–607. doi:10.1162/002081802760199890. JSTOR 3078589 . Retrieved 12 December 2023– via University of Montenegro.
↑ Ikenberry, G. John (September 2004). "American hegemony and East Asian order". Australian Journal of International Affairs . 58 (3): 353–367. doi:10.1080/1035771042000260129. ISSN 1465-332X . Retrieved 12 December 2023– via ResearchGate.
↑ Arel-Bundock, Vincent (Spring 2017). "The Unintended Consequences of Bilateralism: Treaty Shopping and International Tax Policy". International Organization . 71 (2): 349–371. doi:10.1017/S0020818317000108. ISSN 0020-8183. S2CID 157493354 . Retrieved 12 December 2023– via SocArXiv.

External links

The Rise of Bilateralism

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[1] Thompson, Alexander; Verdier, Daniel (March 2014). "Multilateralism, Bilateralism and Regime Design" (PDF). International Studies Quarterly . 58 (1). International Studies Association: 15–28. doi: 10.1111/isqu.12100 . Retrieved 12 December 2023– via Ohio State University Department of Political Science.

[2] "Canada country brief". Department of Foreign Affairs and Trade . Retrieved 12 December 2023.

[3] Subedi, Surya P. (Fall 2013). "India's New Bilateral Investment Promotion and Protection Treaty with Nepal: A New Trend in State Practice" (PDF). ICSID Review . 28 (2). Oxford University Press: 384–404. doi:10.1093/icsidreview/sit027.

[4] Yeo, Andrew (April 2011). Bilateralism, Multilateralism, and Institutional Change in Northeast Asia's Regional Security Architecture (PDF) (Technical report). EAI Fellows Program Working Paper No. 30. East Asia Institute . Retrieved 12 December 2023.

[powerplay-5] 1 2 Cha, Victor D. (9 January 2010). "Powerplay: Origins of the U.S. Alliance System in Asia". International Security . 34 (3). The MIT Press: 158–196. doi:10.1162/isec.2010.34.3.158. ISSN 0162-2889. JSTOR 40389236. S2CID 57566528.

[6] Hemmer, Christopher; Katzenstein, Peter J. (Summer 2002). "Why Is There No NATO in Asia? Collective Identity, Regionalism, and the Origins of Multilateralism" (PDF). International Organization . 53 (3). The MIT Press: 575–607. doi:10.1162/002081802760199890. JSTOR 3078589 . Retrieved 12 December 2023– via University of Montenegro.

[7] Ikenberry, G. John (September 2004). "American hegemony and East Asian order". Australian Journal of International Affairs . 58 (3): 353–367. doi:10.1080/1035771042000260129. ISSN 1465-332X . Retrieved 12 December 2023– via ResearchGate.

[8] Arel-Bundock, Vincent (Spring 2017). "The Unintended Consequences of Bilateralism: Treaty Shopping and International Tax Policy". International Organization . 71 (2): 349–371. doi:10.1017/S0020818317000108. ISSN 0020-8183. S2CID 157493354 . Retrieved 12 December 2023– via SocArXiv.

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