The reader cannot tell whether "It" at the beginning
of the second sentence refers to the treaty or to the peaceful
way of setting disputes. Using "This was" instead of
"it was" wouldn't help the reader very much. Consider
these revisions of the second sentence:
John and Fred loved to watch the Braves. THEY were great.
In fact, even after a week spent deliberating the case, the jury
could not reach a verdict. The media considered IT a complete
fiasco.
When confronted with the issues discussed, the tutor could not
answer the questions the writer raised about her Biology
paper. THOSE things were just too difficult for him, since he
had no experience with IT.
After the game, Fred told John that HE had won free season's
tickets.