Qualitative Study
4.4 Trade and Conflict: Case study of Belize and Guatemala
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advances with the aim of analyzing how the decrease in military interstate dispute is connected to the increased in trade interdependence that may have facilitated the presence of peace and the absence on militarized conflict.
4.4 Trade and Conflict: Case study of Belize and Guatemala
It is expected that mutually beneficial trade relations decreases the possibility of militarizing strategies to resolve conflict because the presence of interdependence should make military actions non options when states choose strategies for conflict resolution. However, literature also supports that trade is irrelevant to conflict or can result in conflict or heighten tensions when not mutually beneficial. This research follows Barbieri methods of investigation by exclusively focusing on conflictual relationships assuming that “the absence of intense conflict rather than the presence of cooperation is more consistent with the notion of peace”
(Barbieri 1996: 35). Hence the reason Belize - Guatemala territorial conflict plays a major role in this research. Evidence of cooperation in a region like Central American , which is consumed by land and maritime conflict, should display evidence of whether the expectation that interdependence is either irrelevant to conflict (in the case of Belize and Guatemala) or conditions relationships in a manner that constrains the type of conflict behavior exhibited in interstate relations (Barbieri 1996).
A recent study (Hensel et al. 2008) indicated that the level of salience or value given to an issue has similar effects on issues of territorial, maritime, and river disputes, with issues of each type being more prone to armed conflict when overall salience levels are higher. Based on the ICOW( Issues Correlates of War) index of the salience or importance of the claimed territory to the claimants; the issue of Belize’s territorial and maritime conflict with Guatemala ranks highest in terms of salience in Central America (see Table 4 and figure 24 and 25) (Hensel, 2013). Its territory, economic resources, strategic location, and permanent population in the claimed territory make the disputed area of great value to the nations involved. Hence the reason, the case study of Belize and Guatemala was chosen for this particular paper.
Data retrieved from the Correlates of War Project (Militarize Interstate Dispute ) indicates that Belize and Guatemala’s last instance of conflict relating to militarized interstate dispute was recorded in the year 2001 (Ghosn et.al 2004). Moreover, trade statistics retrieved
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from Trade Map12 and analyzed, indicates increase in total trade volume between the years 2001 and 2013 (see figure 18). Belize and Guatemala has grown to become jointly sustained by products such as sugar, textiles and clothing, furniture, chemicals, petroleum, metals, rubber, and tourism due to cooperation that has been manifested from the benefits of trade (Korres 2007).
Guatemalan export basket to Belize is very diverse and Belize’s dependence on Guatemalan products is indicted in the import trade value which increased from 12108.63 in 2000 to 62753.11 in 2013(see Table 3).
The commercial transactions between the neighboring countries are noticeable at Belize’s western border crossing area where “Cross border shopping, tourism and money exchange are visible manifestations of commercial relations between the uneasy neighbors” (Korres 2007:274).
In November of the year 2000, Guatemala and Belize signed an agreement with the intention of stabilizing diplomatic and trade relations in order to promote increasing communication between Belizean and Guatemalan Armed Force (Caribbean Community Secretariat). Here it was established that the territorial conflict has and continues to cripple economic growth (Caribbean Community Secretariat).
“Guatemala's point of contention relates inter alia to territories allegedly usurped by Britain from the Sibun to the Sarstoon Rivers. This alleged 'usurpation' has pre-empted Guatemala from gaining access to the Atlantic coast, thus hampering its future economic development and its access to the high seas through the territorial sea of Belize and the use of Belize's port facilities. However, Belize's Prime Minister, H.E. Said Musa, has publicly indicated the willingness of his country to assist Guatemala in gaining access to the Atlantic in exchange for access to the Pacific by Belize”13
Spanning from the 1859 Anglo Guatemalan treaty, majority of the agreements made in regards to the peaceful settlement of the Belize Guatemala territorial dispute, involved clauses with aims of enhancing economic cooperation. On August 17 of 2001, officials of Belize and Guatemala met in search of practical ways in which the two neighbors could have helped each
12Trade statistics for international business development monthly, quarterly and yearly trade data. Import & export values, volumes, growth rates, market shares
13(Montserrat2000: http://asil.org/insights/volume/5/issue/20/oas-mediates-belize-guatemala-border-dispute ).
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other prosper. Agricultural officers from both governments met with the intention of coordinating and standardizing the regulations for the import and export of plants and animals in order to facilitate business on both sides of the border. In addition to public sector representatives, business people from both countries also met, and according to a press office release, they also explored ways to jointly access CARICOM and Central American markets. For Belize, the best prospects for exporting to Guatemala lies in corn, animal feed and red kidney beans for which Central America provides market.
Both countries economic interests have further pressed for more dense bilateral trade relation between each other in order to facilitate greater stability. This interest has been expressed on several occasions, one of the recent instances being the 2014 agreement on constructing the road map14between Belize and Guatemala.“The plans reflected in the roadmap have an important political content in themselves, in that they contribute to a much more stable bilateral relationship” (Secretary General Insulza 2014). Subsequent to the agreement Guatemala Foreign Minister Fernando Carrera expressed that the agreement “will contribute to ensure that for next year this relationship will not only remain as peaceful as it has been for many years, but also that this positive relationship will be strengthened.” He further called attention to the need to ensure that: the political, economic, cultural, educational and religious leaders of both countries maintain fluid and permanent communications, “Because dialogue creates the possibility for peace anywhere.” Foreign Minister Fernando Carrera statement indicates the ways in which cooperative relationships can be formed as a result of mutual exchange which provides opportunities for conversation about issues that matters to the nations involved.15 (Organization of American State)
Belize’s trade with Guatemala has experienced increases in growth of 1014% in exports and 280% in imports between 2001 and 2013. Could this growth in economic interactions have encouraged governments of both countries to remain composed and to continue to insist/work towards furthering its mission of seeking closer economic, trade, security, social and cultural
14Road Map and Plan of Action outline the activities, programs and projects to be implemented to promote the Confidence Building Measures between the two countries
15 (Organization of American State http://asil.org/insights/volume/5/issue/20/oas-mediates-belize-guatemala-border-dispute)
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integration by strengthening confidence building measures to refrain from militarized conflict?
To what extent can we attribute the period of peace to increasing economic relations?
Guatemala , in the year 2013 was ranked as Belize’s 6th largest import partner and 10th largest export partner (see table 5 ) holding a total of 6.7% share of Belize’s imports but 1.3%
share in its exports with an annual average growth rate of 11.7% in imports and 22.2% in exports over the period 2001-2013 (See table 6)
Despite continuous increase in trade volume or the recent annual average growth rate (see table 6) witnessed by Belize and Guatemala over the years; the question remains whether the long period without militarized interstate dispute as indicated by the Correlates of War MID 3.10., illuminates these neighboring countries preference for participation rather than conflict. If the annual average growth in trade volume has provided mutual benefits for both countries, then it will be safe to conclude that these countries connected through trade are less likely to use militarized strategies to resolve territorial disputes. This is because governments depend on reciprocal exchange for economic growth and development, which therefore causes them to pursue more restricted approaches in their coercive foreign policy (Hegre 2005 31; Huth and Allee 2012).
However further observation of the trade relations between the two countries continues to highlight that trade between Belize and Guatemala has structurally been weighted to benefit Guatemala (see figure 25, table 7). In 2013 trade with Guatemala reflected imports to Belize, 62753 (in thousands US Dollars) while exports to Guatemala adds up to 5225 (in thousands US Dollars) (table 7) this is a gross deficit for Belize (see figure 26). As figure 26 and table 7 indicates, the import from Guatemala consistently outweighed Belize’s exports to Guatemala.
Scholars of dependency theory commonly warn that apart from mutual gains, economic ties can also create economic ills and challenges due to the unequal division of benefits. Asymmetrical economic relationships can lead to dependency, exploitation, and conflict (Mearsheimer 1992).
Therefore it is important to highlight the extent to which the need for economic cooperation can hold as a source of peaceful relations for the nations between the periods of 2001-2013. Trade when weighted to Belize’s GDP; imports to Belize from Guatemala in the year 2013 were 0.0038 percent an increase from 0.001 percent in 2001. On the other hand exports from Belize to Guatemala weighted to Belize’s GDP, totaled to 0.00032 percent, again this indicates the increase from 2001 which totaled to 0.000054 percent( see Figure 27) .
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In 2013 Guatemala only accounted for 6.7 percent of Belize’s total imports 1.3 percent of total exports. Belize on the contrary accounts for 0.03 percent of Guatemalans imports and 0.65 percent of the total exports with its annual import export growth rate at -3 percent and 22 percent respectively (see table 8). Despite the increase in trade volume , trade between the countries have continuously shown great trade deficit on the part of Belize , with stronger benefits of trade weighted on the part of the larger country , Guatemala (see figure 27 and table 9 ).
On the other hand, the Dispute Narratives, Correlates of War Project MIDv3.10 Project identifies several instances under which border incidence between Belize and Guatemala could have escalated to critical conflict. Issue heated up in 1993 when Guatemala renewed its claim over pristine jungle where Guatemalan peasants creep to farm and fish. With the renewal of this claim, Belizean soldiers patrolling the borders were accused of crossing into Guatemala and were arrested and charged with exporting arms. This created an uproar among the Belizean public who referred to this a as kidnapping.
Subsequent to this incident, Belize tightened border patrols. This has led to numerous border incidents. Belizean military personnel under the mindset that Guatemala has nothing to lose, “Worst-case scenario”: Belize get certainty to where their land ends: became rigid border protectors. This has thus cost numerous Guatemalan lives. In the year 2001, a peasant running from a Belizean soldier died when chased into a river. He could not swim. In that same year, Belize’s military personnel’s discovered a Guatemalan family living inside the limits of the Belizean border. This lead to an armed altercation and the lives of two Guatemalan men were lost.
On another incident, three communities of Guatemalans living well inside the boundaries of Belize were identified. After protracted negotiations and land surveys, the families were relocated. Subsequent to these incidents, numerous Guatemalan farmers and Belizean law enforcers have lost their lives within the border limits of Belize. These incidents on a number of occasions escalated tensions between the two nations. In the year 2013 the Guatemalan government threatened to relieve the Belizean ambassador to Guatemala of his mission in Guatemala subsequent to the two separate incidents that year, where armed illegal Guatemalan loggers where shot and killed by the Belizean soldiers. In September of that same year the Belizean Minister of foreign affairs Honorable Wilfred Elrington was chastised by the
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Guatemalan foreign minister for comments regarding the dispute that was made at the 68th Annual General Assembly of the United Nations held in New York City:
“The Guatemalan claim is a constant source of anxiety to our citizens as well as investors in our country. Furthermore, both our territorial and our maritime border regions have been suffering from depredation and environmental degradation in consequences of the wanton and sustained illegal activities of Guatemalan campecinos, fishermen and other criminal elements engaged in narco-trafficking, human-trafficking, smuggling, illegal panning for gold, the extraction of xate and other exotic plants and animals, the illegal felling of timber and the pillaging of our ancient Mayan ruins. The felling of timber in our rain forests are contributing to the denuding of our mountains, which results in violent flooding in the rainy season and the transmission of topsoil, sand and silt into the sea. These soils are then ultimately deposited into our pristine barrier reef; choking and destroying the fragile ecosystems therein and compromising the health of the entire reef and the marine ecological system thriving therein. Additionally, the increasing trespassing by the Guatemalans into our country has given rise to more frequent violent encounters between Guatemalans and members of our Belize Defense Force resulting in fatalities in some instances. These incidents put a heavy strain on the relations between our country and Guatemala and the peace of our region as a whole.”16
However, with the fear of greater lost governments of both countries continues to insist on strengthening confidence building measures to refrain from militarized conflict. Throughout the duration of the conflict, the countries have continued to communicate on strategies for improving and maintaining trade relations. The Belize-Guatemala Partial Scope Agreement (PSA)17 is the
16 CTV3 Publisher http://www.ctv3belizenews.com/index.)
17The Partial Scope Agreement, allows for reciprocal (two-way) trade between Belize and Guatemala on a small number of goods. The Agreement covers 150 specified tradable products. The PSA specifies for the immediate elimination of tariffs by 50 percent and 100 percent ; these goods are grouped in Category A. Under Category A products, Belize will be able to sell at preferential tariff margins to Guatemala products such as: tilapia, yellow maize (up to 20,000 MT at 0 percent duty), black beans (up to 875MT at 0 percent duty), rice, toilet paper, doors, windows, wooden and wicker furniture, matches, most citrus fruits and concentrate, mangos, guavas, watermelons, pineapples, plantains, among others. The goods marked with Category ‘A’ on Guatemala’s list are those products in which Guatemala has granted Belize preferential (duty free in many instances) access to their market.
The agreement also provides for Belize to gradually eliminate its tariffs it charges on Guatemalan imports by 50 and 100 percent over three years for those products categorized as ‘B’. Likewise, a gradual elimination of Belize’s tariffs on Guatemalan imports by 50 percent and then 100 percent over a five year period is contained in category (Belize Trade and Invest Zone)
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first trade agreement that Belize has signed with another country bi-laterally. Negotiations were launched on the 22nd of November 2004 and signed on 26 June 2006. The nations have jointly cooperated on strengthening trade agreement in spite of all the border incidences. According Eamon Courtnenay, Belize’s Minister of Foreign Affairs & Trade “The agreement is historic, it is important and it underscores for our side, our commitment to continued good relations with the government and people of the Republic of Guatemala” (Courtenay)18. The H.E. Mario Ronaldo Cuevas Quezada, Minister of Economy, Guatemala also commented “Sin embargo, estoy seguro que este es el inicio de una nueva etapa de nuestra relacion comercial que sera positiva y fructifera para nuestros sectores productivos. (Translation: None the less, I am positive that this is the beginning of a new era of a positive trade relationship that will strengthen our productive sectors (Quezada)19. According to Emile Mena, President of the Belize Chamber of Commerce and Industry, signing the PSA represented a major opportunity
“this partial scope agreement that is being signed is a huge, huge move between Belize and Guatemala to increase trade not only between both countries, but also between Central America and the Caribbean. Guatemala is a country that has grown a lot. I think we need to look at the bigger picture Central America and Guatemala (Mena).” Notwithstanding the unresolved territorial dispute, Belize and Guatemala continued to negotiate the implementation of an agreement to partially liberalize trade between the two countries. The agreement was sold as a mechanism for boosting the economies of both countries, by expanding access to regional markets in Central America for Belize and the Caribbean for Guatemala.
However, there is clearly the need to even the scales of trade particularly as it concerns Belize. Belize is more dependent upon Guatemala’s imports than Guatemala is dependent on either Belize’s Import or Exports (Figure 28). Belize Rank as Guatemala’s trading partner fall far beyond the top ten list at 69 as Guatemala’s import partner and 25 as its export partner (see table 8). Closer look at the trade data indicates that despite the slight growth in trade volume, trade between the nations has not provided mutual benefits and has therefore not been significant enough to be the sole cause of the decrease in the use of violence as a means of conflict resolution. Economic interdependence should create opportunity costs for expansionist states and governments with intentions of seizing contested territory through violent means (Hegre 2005).
18 http://edition.channel5belize.com/archives/9078
19http://edition.channel5belize.com/archives/9078
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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.