Bilateral Negotiations

Bilateral negotiations are negotiations which involve only two parties. Bilateral negotiations are frequently utilized in trade agreements between two countries. Because they involve fewer interested parties than multilateral trade negotiations, bilateral trade negotiations can sometimes be completed more easily and quickly. Bilateral trade negotiations will sometimes be superseded by, or exist alongside, agreements created in multilateral negotiations.

Neither bilateral trade negotiations nor multilateral negotiations are generally superior. The choice of negotiation structure will depend on a country’s needs and circumstances, as well as geopolitical and economic realities. Often, bilateral trade negotiations serve as a useful contingency plan if multilateral negotiations are unsuccessful because of one of the participants.

Bilateral trade balances are calculated by adding up all of Country A’s exports to Country B, then subtracting all of Country A’s imports from Country B. If the resulting number is positive, Country A is said to have a “trade surplus” with Country B. In other words, the value of its exports is larger than the value of its imports. On the other hand, if imports outweigh exports, Country A would be said to have a “trade deficit” with Country B.

Bilateral trade is trade conducted between two nations without the direct involvement of any other countries. It typically includes all of the exports and imports shared by two nations, even when those exports and imports pass through a third country’s borders. In other words, all goods and services that are bought and sold between two countries constitute those two countries’ bilateral trade.

Bilateral trade agreements are international agreements that govern the trade relationship between two countries. For example, before the North American Free Trade Agreement (NAFTA) was created, the United States had bilateral trade agreements with both Canada and Mexico. These agreements are usually created after successful bilateral trade negotiations result in substantial consensus on major issues of trade and commerce.