The Impact of Trade on International Mediation

Abstract

If trade affects the costs of conflict, does it also influence the likelihood of mediation attempts? This article argues that dense bilateral trade between antagonists yields high opportunity costs since it is expensive to seek alternative markets and the belligerents will be highly vulnerable to sanctions from their counterpart. This creates incentives for combatants to limit hostility and settle conflicts through mediation. By contrast, the extent to which belligerents trade with other states decreases the likelihood of mediation since antagonists with alternative partners can mitigate the consequences of sanctions and substitute for markets, which may be at risk or even lost because of the outbreak of a dispute. The divergent effects of different trade ties imply that the impact of bilateral trade on the prospects for mediation should vary conditional on countries' trade with states outside the dyad and vice versa. This article demonstrates that this is partially valid.Trade features prominently in the study of actors affecting the risk of interstate conflict. Several studies have argued that the higher the amount of trade between two countries, the more dependent they are on each other, which then leads to a significantly lower propensity

The Occurrence of Mediation: A Critical Evaluation of the Current Debate1

“…2001; Terris and Maoz 2005; Beardsley 2009, 2010). It may also be instructive to think of mediation as a market with a supply side (mediators) and a demand side (disputants) (Bercovitch and Schneider 2000; Beardsley 2010; Böhmelt 2010). I will attend to the incentives of disputants and the incentives of mediators in two separate sections.…”

US Security Strategy and the Gains from Bilateral Trade

“…Most of the findings suggest that countries that engage in trade are less likely to go to war with commercial partners . Bilateral trade improves also the prospects for mediation between antagonists (Böhmelt, ). Trade has equally been shown to spur the development of institutions, the destruction of which would generate sufficient costs for individuals to opt instead for peaceful livelihoods (Jha, ).…”