The recent escalation of tensions between Belize and Guatemala, especially following the latter’s apparent sidestepping of the confidence building measures, is something for the international economic relations’ textbooks and scholarly journals. Particularly, if the recent reports by the Belizean media of declining bilateral trade in Melchor de Mencos are accurate, then the Guatemalan government has just become a real-time confirmation of what recent international relations research have predicted.

For instance, in a 2015 study by Ryan Brutger and Austin L. Wright, entitled “The Costs of Conflict: Border Disputes and Trade Diversion”, it was found that two things are likely to happen “when a dispute between two states becomes particularly intense”: bilateral trade declines by “an average of 82%”, and it is likely that trade with third party, non-disputing trading partners increases by 2.5%.   Continue reading →