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On average, the Lake-men and the Wood-elves had an easy relationship, primarily based on trade. The narrator mentions that there are occasional squabbles about river-trolls, but does not elaborate what role the elves or the men have in regards to these.
The wood-elves are responsible for the upkeep of the river, which has become especially difficult with recent changes. With earthquakes and flooding, the river channel has become unpredictable. As this is the major avenue of trade, it of course is a major focus of the relationship between the two races about whose responsibility it is to maintain it.
The road that the dwarves had initially started on from the west dwindled as it neared the eastern edge of Mirkwood. Thus the only reliable road is the river itself. This in effect cuts off the men and elves from the western regions of Middle-earth, making them more dependent on each other for trade. The relationship between men and elves has always been rather close, much more so than elves and dwarves, for instance. Men and elves do tend to intermarry, Elrond Half-elven being a prime example.
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