Bilateral agreements have become increasingly common in recent years. This type of agreement involves two parties, typically countries, agreeing to cooperate in a specific area. These agreements are often referred to as “bilateral investment treaties” or BITs. But why have bilateral agreements proliferated in recent years? Let`s explore some of the reasons.
1. Economic Interests
One of the primary reasons for the proliferation of bilateral agreements is economic interests. Countries have realized that they can benefit from bilateral agreements by opening up new markets for their goods and services. By signing a bilateral agreement, countries can reduce trade barriers and facilitate cross-border investments. This can lead to increased economic growth and job creation in both countries.
2. Political Stability
Another reason for the rise in bilateral agreements is political stability. Countries may seek to establish bilateral agreements in order to increase political stability and reduce conflict. By cooperating on economic issues, countries can build trust and establish a framework for resolving disputes.
3. Regional Integration
Bilateral agreements can also be a tool for regional integration. In many cases, countries may sign bilateral agreements as a precursor to joining a larger regional trade organization. This can create a more unified regional market, with reduced trade barriers and increased cross-border investments.
4. Investment Protection
Bilateral agreements can also provide investment protection. In many cases, countries may sign bilateral investment treaties (BITs) to protect the interests of their investors in foreign countries. This can provide a legal framework for resolving disputes and can encourage foreign investment in the country.
In conclusion, bilateral agreements have proliferated in recent years due to economic interests, political stability, regional integration, and investment protection. By signing these agreements, countries can benefit from increased trade, investment, and political stability. As globalization continues to accelerate, it is likely that we will see more bilateral agreements in the years to come.