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Bilateralism consists of the political, economic, or cultural relations between two sovereign states. For example, free trade agreements signed by two states are examples of bilateral treaties. It is in contrast to unilateralism or multilateralism, which refers to the conduct of diplomacy by a single state or multiple states, respectively. Typically when states recognise one another as sovereign states and agree to develop diplomatic relations, they exchange diplomatic agents such as ambassadors to facilitate dialogues and cooperation in various fields mentioned above.
1. Australia and Canada have a bilateral relationship. Both have similar governments and share similar values (though these are not requirements of a bilateral relationship). In 1895 the Government of Canada sent John Larke to Sydney to establish a trade commission and in 1935 Canada sent Charles Burchell (Australia's first Canadian High Commissioner) to formalise ties between the two countries. Both nations have fought alongside each other a number of times since WWII and trade and economic relations are strong.
2. India and Nepal have a bilateral relationship since ancient times even before the birth of Buddha in 544 BC. In modern times, this traditional relationship has been confirmed by written treaties. The latest India-Nepal treaty of friendship was signed in July 1950. Citizens of both countries can move across the border freely without passport or visa, live and work in either country and own property and business in either country. Gurkhas form a part of the Indian Army. Millions of Nepalis have been living in India for long periods.
There has been a long debate on the merits of bilateralism versus multilateralism. The first rejection of bilateralism came after the First World War when many politicians concluded that the complex pre-war system of bilateral treaties had made war inevitable. This led to the creation of the multilateral League of Nations.
A similar reaction against bilateral trade agreements occurred after the Great Depression, when it was argued that such agreements helped to produce a cycle of rising tariffs that deepened the economic downturn. Thus, after the Second World War, the West turned to multilateral agreements such as the General Agreement on Tariffs and Trade (GATT).
Despite the high profile of modern multilateral systems such as the United Nations and the World Trade Organization, most diplomacy is still done at the bilateral level. Bilateralism has a flexibility and ease that is lacking in most compromise-dependent multilateral systems. In addition, disparities in power, resources, money, armament, or technology are more easily exploitable by the stronger side in bilateral diplomacy, which powerful states might consider a positive aspect of it, compared to the more consensus-driven multilateral form of diplomacy, where the one state-one vote rule applies.
See also 
- "Canada country brief - September 2010". Department of Foreign Affairs and Trade. Retrieved 3 June 2011.
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