Qualitative Study
4.5 Chapter Summary
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Higher levels of mutually beneficial bilateral trade flows reduce the chances for severe militarized disputes over border issues for countries that are jointly sustained by the resources in each other’s territories. However, this is not fully the case with Belize and Guatemala.
In the case of Belize and Guatemala, peace talks highlight the significance of the role of multilateralism. Both Guatemala and Belize are participating in confidence-building measures approved by the OAS. Initial conversations about trade as a means of minimizing conflict and building communication were facilitated by international organizations. Therefore one can conclude that both Belize and Guatemala find it in their interest to solve the controversy through diplomacy because of the pressures from the international community. War is not supported by the international community therefore negotiating peace comes as a safer bet for support than initiating conflict. Trade is therefore introduced as a strategy to secure peaceful resolution of conflict for the sake of both countries. Hence the reason, both countries continues to move forward in hopes of further improving their trading relations.
4.5 Chapter Summary
Belize has displayed extreme caution when addressing its territorial issue. The issue of sovereignty makes territorial conflict notoriously difficult to resolve. Territorial dispute has placed into questions Belize’s complete and exclusive control of half the land and maritime area within its claimed territory. Guatemala contest Belize’s right to exercise sovereignty over the southern half of its homeland which is claimed to have been colonial territory inherited by Guatemala from Spain (Shoman 2001; Perez 2009; Shoman 2010).
The outcomes of settlements on border issues are unpredictable, and political leaders are often unwilling to accept the risks of losing territory. Hence the reason scholars of international relations identify conflict over territory as one of the leading source of state war. Sovereignty is the central organizing principle of the system of states therefore fear of losing territory generates feelings of great apprehension. This makes it difficult to resolve territorial conflicts peacefully and enduringly (Huth 1996:19)
However trade has been identified as a potential path to peace for countries embroiled in long-standing border disputes. Through mutual dependence, an equilibrium is produced and
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peace remains definite and secure; therefore, neither party is provoked to change the status quo.
Trade Interdependence makes conflict more costly because it increases incentives for cooperation. Increasing trade between countries with territorial issues reduces the likelihood of militarized conflict (Hegre 2005; Marrow 2009). Hence the reason, third parties and International Organization continues to recommend improved trade relationship for countries such as Belize and Guatemala with enduring territorial dispute.
However, in spite of the pacifying effects of trade, it is commonly argued that territorial disputes between governments create some form of insecurity for economic actors (Huth 1996;
Hensel 2001; Huth and Allee 2002). Border agreement that has been settled is normally beneficial for neighboring countries. Settled borders can signal much greater jurisdictional and policy certainty, which reduces the transactions costs associated with international economic transactions. Disputing a border has a significant negative impact on the bilateral trade between bordering nations.
Despite the little progress achieved by both Belize and Guatemala in strengthening communications; it is important to note that countries in dispute over borders or territory can cause disputing governments to occasionally obstruct trade at the border (customs hassles) or create policies that reduces their dependence on the adversary out of mistrust of motives due to the territorial dispute (Hegre 2005; Simmons 2005). Therefore the legitimization of jurisdictional boundaries, reduces economic actors’ uncertainty, reduces transactions costs, and decreases the negative effects of sensitive territorial claims (Hegre 2005; Simmons 2005). The possible benefits of trade can make legitimization of jurisdictional boundaries or the decrease in border tension worthwhile. Therefore it is recommended that Belize and Guatemala expedite the process to settling their territorial conflict in order to gain even greater benefits from bilateral trade
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Economic interdependence creates opportunity costs for expansionist states and governments with intentions of seizing contested territory through violent means (Hegre 2005).
Higher levels of bilateral trade flows reduce the chances for severe militarized disputes over border issues because the countries are jointly sustained by the resources in each other’s territories. Therefore, mutual benefit from trade makes it less rational for nations competing for territory to use military means for the resolution of their conflict (Polachek 1980; Polachek and McDonald 1992; Huth and Alee 2012). As seen in the case of the dispute between El Salvador and Honduras over the Conejos Islands, initiating the claim in 2006 came at great losses for the Salvadoranians. The initiation of the claim hindered progress of bilateral relation. Both countries started pulling out of preplanned development goals in order to create incentives for the other country to give in. However, when the conflict begun posing actual threat to their income generated through bilateral trading and the signing of trade agreements with Taiwan; both countries suddenly found it in their best interest to resolve the dispute through continuous communication, and diplomatic means.
This is primarily because conflict over a territory has negative impact on neighboring countries’ bilateral trade. Governments who depend on trade for economic growth and development are more restricted in the strategies that they can employ because of the high opportunity cost to clashes concerning international boundary (Huth and Alee 2012; Simmons 2006).
As chapter 3 indicated, economic interdependence influences the onset and escalation of crises in the Central American Region. Trade interdependence reduces a state's tenacity to fight due to the fear of losing the trade in the case that war breaks out (Marrow 2009). Therefore, it is expected that a state’s persistence to pursue war for territorial gains declines as trade increases.
Trade makes war less attractive, with the understanding that the value of trade should be assessed by a measure of dependence. When crisis are in progress, states that are more invested in their opponent’s economy will impose higher costs on themselves. International trade prevents conflict because militarizing conflict requires a consideration effect on both sides’ actions before beginning a dispute (Hegre 2005; Marrow 2009).
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Trade also provides an eye of access into the policies of trading partner; it signals intentions, enabling nations to craft some form of trust. This minimizes uncertainty, which plays a key role in the escalation of militarized territorial conflict. Territorial conflicts present competitive situations where the outcome of a state’s choice of action depends critically on the actions of the other state (Marrow 2009). Therefore, strategies to address salient territorial issues must be carefully formulated. The analysis of strategies to be used when dealing with the resolution of territorial conflict requires an understanding of the adversaries’ intent. A nation’s intent or “resolve” as Marrow puts it is not always made clear. Countries are uncertain of their adversary’s intention. Uncertainty about states’ future motives and intentions makes states uneasy, and insecure (Marrow 2009).
To ensure territorial integrity and safety, states feel propelled to increase their security through defensive or offensive military power build up (Collins 2012). International territorial conflict escalates because of uncertainty; states cannot fully observe one another's resolve. This makes it more likely for states to participate in preemptive wars/conflict to secure their strong hold under uncertain circumstances. Costly signals therefore plays critical role in the prevention of conflict through the communication of unobservable resolve (Marrow 2009). Trade flows lends an eye into the policies of trading partners. Trade provides a way for states to signal their unobservable resolve more accurately and thus assist in the peaceful resolution of disputes that occur (Marrow 2009).
The signaling of resolve would be more efficient for inter-dependent states in preventing the escalation of their disputes. With higher levels of trade, nations competing for territorial resources could reduce the chance of escalation by providing a richer menu of costly signals for states to use during a crisis (Marrow 1999).
After considering the cost of war and the loss of valuable markets through the escalation of conflict, governments are pressed to seek peaceful means of resolving conflicts. Trade reduces the chances for militarized territorial conflict since it promotes peaceful negotiations by increasing opportunity costs and by improved information and signaling; hence, improving the chances for peaceful settlement of territorial conflict to be struck. Trade through various means minimizes the likelihood of militarizing territorial conflicts (Hegre 2005, Marrow 2009).
Thus, there are mostly declining benefits of territorial conquest in this economically globalized world. Human capital in contrast to territory is now of hire value to national power
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due increasing global trade (Simmons 2006). Countries that trade or invest in each other will less likely utilize militarized strategies even in the cases where stakes are high because their strategies for coercive foreign policy are constrained. In majority of the cases, it is seen that in times of heightened tensions, the countries involved considered the impact of their disputes on their economy. Central America comprises of a group of developing economies united through different integration schemes in order to participate in economic, social and political exchanges in the international environment. Without the CARIFTA, DRCAFTA20, SICA21, CARICOM22, Belize and the other Central American nations would find great difficulty in being included as a small individual economy in economic exchanges on the global scale. In order for these integration schemes to be successful , it requires the commitment of all nations involved to peacefully resolving their conflicts with each other, being aware that Central America’s transformation into a modern and open sub-region depends on how the these 7 countries prevent conflict and promote security in order to collectively implement policies to face globalization.
20 “CAFTA-DR (Dominican Republic-Central America FTA) The Dominican Republic-Central America FTA (CAFTA-DR) is the first free trade agreement between the United States and a group of smaller developing economies: our Central American neighbors Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, as well as the Dominican Republic. The CAFTA-DR promotes stronger trade and investment ties, prosperity, and stability throughout the region and along our Southern border.
Central America and the Dominican Republic represent the third largest U.S. export market in Latin America, behind Mexico and Brazil. Total two-way goods trade between the U.S. and our six CAFTA-DR partners has increased over 71 percent since entry into force, from $35 billion in 2005 to $60 billion in 2013. In 2013, U.S. exports to the CAFTA-DR countries totaled $30 billion;
imports totaled $30 billion.” https://ustr.gov/trade-agreements/free-trade-agreements/cafta-dr-dominican-republic-central-america-fta
21 “The Central American Integration System (SICA) is the institutional framework of Regional Integration in Central America, created by the States of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. Subsequently, Belize joined afterwards as a full member; in 2013, The Dominican Republic did likewise. SICA’s General Secretariat headquarters are located in the Republic of El Salvador”.http://www.sica.int/sica/sica_breve_en.aspx
22 “The Caribbean Community (CARICOM) brings together 15 states in the Caribbean, including Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Haiti, Jamaica, Grenada, Guyana, Montserrat, St. Lucia, Suriname, St. Kitts and Nevis, St.
Vincent and the Grenadines, and Trinidad and Tobago. The objectives of the Caribbean Community are to improve standards of living and work; the full employment of labor and other factors of production; accelerated, coordinated and sustained economic development and convergence; expansion of trade and economic relations with third States; enhanced levels of international competitiveness; organization for increased production and productivity; achievement of a greater measure of economic leverage;
effectiveness of Member States in dealing with third States, groups of States and entities of any description; and the enhanced coordination of Member States’ foreign and foreign economic policies and enhanced functional cooperation”. http://www.iccnow.org/?mod=caricom
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Economic exchange decreases the possibilities of war; therefore it can be seen as a potential course to peace for countries embroiled in long-standing border disputes (Hegre 2005).
It is commonly argued that territorial disputes between governments create some form of insecurity for economic actors (Huth 1996; Hensel 2001; Huth and Allee 2002). On the contrary, a border agreement that has been settled is normally beneficial for neighboring countries. Settled borders are hence detrimental, signaling much greater jurisdictional and policy certainty, which reduces the transactions costs associated with international economic transactions. Disputing a border has a significant negative impact on the bilateral trade between bordering nations.
When countries are in dispute over borders or territory it allows or can cause disputing governments to occasionally obstruct trade at the border (customs hassles) or create policies that reduces their dependence on the adversary out of mistrust of motives due to the territorial dispute (Hegre 2005, Simmons 2005). Therefore the legitimization of jurisdictional boundaries, reduces economic actors’ uncertainty, reduces transactions costs, and decreases the negative effects of sensitive territorial claims (Hegre 2005, Simmons 2005). The possible benefits of trade can make legitimization of jurisdictional boundaries or the decrease in border tension worthwhile.
The benefits of territorial conquest are declining with states increasing engagement in economic exchange, trade, and investment.
Trade is identified as a potential path to peace for countries embroiled in long-standing border disputes. Through mutual dependence, equilibrium is produced and peace remains definite and secure; therefore, neither party is provoked to change the status quo. Mutual dependence makes conflict more costly because it increases incentives for cooperation.
Increasing trade between countries with territorial issues reduces the likelihood of militarized conflict (Hegre 2005; Marrow 2009).