The practical application of bilateralism in solving a nation’s development problems requires strategy as well as tactics. The application of strategy helps reduce the trade imbalance, remove trade barriers, and reduce inflation or price hike, to name a few examples. A great tactic connects the strategy and the execution, ensuring that every country to the agreement does the right work in the right way at the right time to achieve its goals. In other words, the mindset should focus on things that change normal operations to optimize values and benefits. Best bilateral deals, however, strive for a win-win, quid pro quo situation. Bilateralism is a good thing. However, it may stand to benefit one party against the interest of the other party both in the short and long term. This happens if a nation that is a party to an agreement does not harbor effective strategy as a well tactic and does not have the productive capacity and capability. Productive capacity is the ability to produce or provide competitive goods and services. Capability connotes the prowess to drive technological innovation and create products and services demandable to another party. Capability also means designating or hiring folks well-grounded in contract law, administration, accounting, psychology, project management, business or trade, and planning to participate in bilateral trade negotiation talks.
Table 1. Imports and Exports
|
Country |
Imports |
Exports |
|
Liberia |
Fuels, chemicals, machinery, transportation |
Iron, diamonds, timber, rubber, cocoa, coffee |
|
Morocco |
Cars, mixed mineral or chemical |
Refined petroleum, cars, petroleum gas, vehicle parts, and wheat |
|
Sierra Leone |
food products, machinery |
Diamonds, cocoa, coffee, and fish |
|
Guinea |
Machines, metals, textiles, and petroleum products |
Bauxite, alumina, gold, diamonds, |
|
Cote d’Ivoire |
Crude Petroleum, Rice, Non-fillet Frozen Fish, |
Cocoa Beans, Rubber, Cocoa Paste, |
Bilateralism is simply an exchange of ideas, security, and goods and services that the two countries agree to honor. Such an agreement between two nations or trading groups gives each party a preferential trade status, removes tariffs and other trade barriers.
One of the unique and effective tools of bilateralism is that two nations can directly agree to make it easier for specific goods or services to enter in one country in exchange for another good or service to enjoy similar reciprocal treatment to the other party. For instance, Morocco (according to Table 1) does not manufacture timber. It however produces finished transportation products such as cars, trains, and airplanes. So, it can directly contact Liberia to export timber to Morocco in exchange for transportation products.
Between 1980 and 2011, Liberia and Morocco signed several bilateral agreements in the fields of Economic, Culture, Technical, Scientific, Youth, Sport, and transportation. From the benefits management perspective, these agreements have been mutually propitious to both countries. Between 1987 and 2018, for instance, over 300 Liberians have pursued technical and academic studies in various fields in the Kingdom of Morocco while Air Maroc continues to benefit from the freedoms to land in Liberia to pick up or drop off passengers or fly over Liberian territory. Despite the Ebola outbreak, Air Maroc and Brussels Airlines continued to pick up and drop off passengers when most airlines refused to land in Liberia. In 2015, the Liberia Airport Authority honored Royal Air Maroc and Brussels Airlines for continuing service to Liberia during the Ebola outbreak.
Moreover, many Moroccans have expressed interest in investing in Liberia’s timber, port management, and construction industries. Liberia has also continued to support Morocco reentry to the African Union and its membership to the Economic Community of West African States, ECOWAS.
Moreover, Liberia has entered into bilateral agreements with multiple states including Kenya, Mauritania, United states, Nigeria. The question is, who benefits the most from these portfolio of bilateral agreements? How many other parties to these agreements gain from Liberia? Is there a gain-loss, win-win or lose-lose situation? Is there a useful and reliable metric that measures the value of these business, trade, political exchanges? Was the goal in entering these agreements specific, measurable, achievable, timely, and in some cases environmentally responsible?
Unlike bilateralism, multilateralism expands the exchange of goods and services from two to three or more nations or parties. Mano River Union, Ecowas, and AU are examples of multilateralism. In a security affair, bilateralism is also found in agreements between states to come to each other’s defense if attacked or threatened by a third party.
Sovereignty
Sovereignty determines the full power of authority to sign or negotiate bilateral agreements. Do the delegates to a mutual understanding represent a fully independent country and a president or king that is recognized and accepted under de jure or de facto? A de jure is the legal right of the president to negotiate on behalf of the country that it represents. This right emanates from winning a legitimate election. De facto right requires the leader to be in total control of the country. Without the determination of the sovereignty or legitimacy of government with whom you negotiate and sign bilateral agreements can lead to the nullification of that agreement under the laws. For instance, misrepresentation, Undue Influence, or any contract that in violation of criminal statutes is void and unenforceable.
Pro/Advantages
- Direct contact between two nations makes it easier to contact the other party to negotiate the terms of agreement strategic to the interest of both parties. In other words, the bilateral contracts can go into effect faster, reaping trade benefits more quickly.
- It increases competition between local and foreign businesses to the benefit of consumers
- It increases trade, creates jobs, and transfer technology through training local personnel
- Foreign direct investment can be made by obtaining a lasting interest or by expanding one’s business into a foreign country
- Foreign direct investment can grow one’s business into a foreign country
- It increases the control of the dominant country over a less powerful partner
Cons/Disadvantages
- Small or medium-sized businesses can go out of business when they can’t compete with more successful and influential foreign companies. This act can whittle away the advantage of bilateral trade agreements
- Bilateralism is not effective in dealing with global warming, terrorism, and cybersecurity issues. These issues require a multilateral approach.
- The elimination of trade taxes means companies lose their price advantage.
- Many developing countries don’t have laws to protect patents and inventions. Intellectual property is often susceptible to theft.
- It degrades natural resources such as the depletion of timber, minerals, and other natural resources. Deforestation and strip-mining reduce their jungles and fields to wastelands.
- As big companies operation moves in remote areas, indigenous cultures can be vulnerable. Many may suffer disease and death when their resources are polluted.
- Multinational companies may outsource jobs to emerging market countries without adequate labor protections. As a result, women, and children can work in substandard conditions.
References
Caporaso, James A., 1992. International Relations Theory and Multilateralism: The Search for Foundations. International Organization 46 (3): 599–632.
Hardin, Garret. 1968. The Tragedy of the Commons. Science 162: 1243–1248.
Krugman, Paul. 1991. Is Bilateralism Bad? In International Trade and Trade Policy, ed. Elhanan Helpman and Assaf Razin. Cambridge, MA: MIT Press.