What Is a Bilateral Agency?

In the complex world of international relations, many governmental and non-governmental organizations operate to help facilitate policies, encourage trade, coordinate finances and enable the flow of development assistance. Some of these institutions have a multilateral focus, a few are trilateral, while a large number of international organizations are bilateral agencies that focus attention on interactions between two countries.

An agency is typically an organization constituted by a government or formally recognized by governments. Examples in the U.S. include the Central Intelligence Agency and the Environmental Protection Agency. Internationally, agencies include the groups such as the International Atomic Energy Agency. However, the term is also applied more generally as a reference to any type of organization or institution, such as the common reference to an "advertising agency" or "adoption agency."

The term bilateral means "two sided" and refers to organizations that operate directly between two well-defined parties, typically, two countries. A bilateral agency may restrict its interactions to only two countries. However, a bilateral agency can also be a vehicle through which one country interacts with numerous other countries on a one-to-one basis.

The Danish International Development Agency (DANIDA) is a bilateral agency for focusing Denmark's development assistance to countries in need. Even though DANIDA interacts with many countries, the agency is bilateral since two countries -- Denmark and the country receiving aid -- are the primary parties involved in deciding aid targets. Other bilateral agencies include the German Development Bank and the Turkish-U.S. Business Council.

Other international organizations extend beyond a strictly bilateral focus. For example, labor and environmental agencies established under the North American Free Trade Agreement are trilateral as they include the U.S., Canada and Mexico in all dialogue and decision-making. The World Bank and the International Monetary Fund are multilateral agencies, as many countries are involved in deciding the priorities and activities of these international organizations.