Bilateralism

Bilateralism refers to any relationship between two parties. In the study of international relations, we normally think of bilateralism as referring to relations between two states. But this is an overly narrow definition. Bilateralism can denote an arrangement between two private companies—economists, for instance, write of a “bilateral monopoly” where there is effectively only one seller and one purchaser in a market. Alternatively, bilateralism can involve two nongovernmental organizations (NGOs), two intergovernmental organizations, or any two-party combination of these actors (including states). For instance, a bilateral agreement is negotiated when an intergovernmental organization, such as the United Nations Children's Fund (UNICEF), commissions a local NGO to manage a project for it.

The term bilateralism is also used to refer to a strategy of how relations are conducted; it denotes an approach that prioritizes reaching agreement with one other party rather than acting by oneself (unilateralism) or together with two or more other parties (multilateralism). It is also differentiated from regionalism, where relations are conducted with two or more other parties within the same geographical area. Bilateralism need not involve geographical proximity—an instance is the U.S. free trade agreement with Bahrain.

The vast majority of treaties between states are of a bilateral character. These cover the full range of diplomacy, including agreements on extradition, overseas development assistance, cultural and educational exchanges, aviation, double taxation, cooperation on criminal and terrorism issues, the exchange of nuclear materials, postal services, visa requirements, mutual acceptance of domestic standards, cooperation on meteorological services and space exploration, as well as defense, investment, and trade issues. It is in the areas of investment and particularly trade that strategies of bilateralism have become most controversial in recent years: The focus in the remainder of this entry is on these areas.

Bilateralism has been the dominant form of international trade agreement since the start of international commerce. Such treaties have a history as long as that of international trade itself—the first known bilateral trade agreement was between Egypt and Babylonia, dating to 2500 BCE. As international commerce expanded, so did the number of bilateral trade treaties multiply, driven first by the establishment of the great maritime empires of the 16th and 17th centuries and then by the Industrial Revolution in the 18th and 19th centuries.

These bilateral agreements customarily assumed the form of a treaty of friendship, commerce, and navigation, which typically outlined the terms under which trade and shipping between the two states would take place and the rights enjoyed by individuals and firms from one state who lived, conducted business, or owned property in the partner state. The treaty also detailed the tariff treatment to be applied to various goods.

In the 19th century, in particular, these bilateral commercial treaties were used not just to protect existing commerce or to establish, on a reciprocal [Page 147]basis, new markets for the two parties but also to impose decidedly unequal arrangements on militarily weaker states. The most notorious examples were the treaties imposed by Britain on Qing Dynasty China after the First Opium War (1839–1842). The Treaty of Nanking opened five ports to British exports, at fixed tariffs to be agreed between the two governments, and ceded Hong Kong to Britain. Other industrializing countries followed suit, the United States, for instance, negotiated a commercial treaty with China in 1884 that was markedly unequal in the concessions made by the two parties.

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