(resumen) negotiating the world economy.pdf
TRANSCRIPT
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RESEARCH RIEF NUM ER 7 JUNE 2 3
EUROPE N
UNION CENTER
OF C LIFORNI
Negotiating the World
Economy
John s
Odell
In December 1999 trade ministers from 135 nations failed to
launch a new global trade round- the famous Seattle debacle.
Yet less than two years later negotiators from these same states
agreed to a remarkably ambitious liberalizing agenda at Doha.
The difference in
outcome between
these two deliberations could
not be
more
striking.What accounts for it? What determines the
gains
and
losses from different international
economic
negotiations
more generally?
Four
broad factors must be attended to : market
conditions, domestic politics, negotiators
behavior and
beliefs,
and the strategies they choose. This s according to John Odell,
in
his recent book Negotiating the
World conomy
(Cornell University
Press, 2000 . Odell provides insights into each
of
these influences.
His comparative study of ten major international economic
negotiations teases
out
general principles
showing
how
creative
bargaining strategies and tactics can raise the chances for success,
even in apparently hopeless
encounters
. His study, currently
being
translated into Chinese and with negotiations for a Spanish edition
underway, generates practical
knowledge aimed
at
improving
negotiating performance and the prospects for successfully realizing
gains
in
both bilateral and multilateral negotiations.
Research
riifs
s
a publication of
the
European
Union
Center
of California. The series provides summaries of major research
projects
concerning Europe
and
transatlantic relations,
written
by the original researchers .
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RESE RCH BRIEF
NEGOTI TING
THE
WORLD
ECONOMY
In
September
1985
the
U.S.
administration
of Ronald
Reagan
threatened
Brazil
with economic
penalties
if
it did not
change
a program
designed to
promote
its
national
computer
industry and displace foreign
firms.
In March
1986 the
United
States
threatened
to punish exports from the
European Community if
it did
not
provide
additional
compen
sation for
new
barriers to
US
feedgrains in Spain
and
Portugal, restrictions that had
just
been
raised thanks
to the ent
ry
of
the
I
berian
states
into
the
EC.
Both
Brasilia
and
Brussels
angr
ily
threatened co
unter
retaliation.
Paradoxically,
the
same American
strategy gained more
commercia
lly from
the
EC,
the largest
trading unit in
the
world
,
than
it
did
from
the
weaker player,
Brazil.
The European
case
ended
after
ten months with
a
written agreement
modifying
the enla r
geme
nt treaty
and making su
bstantial
conune
rcial
concessions to the US .
Meanwhile the
Brazil-U.S. dispute dragged
on
for
some
thirty-six
months,
with
Reagan
finally
gaining only
a tacit
agreement
oflittle
comnlercia
l value.
The
same superpower,
with
the
same institutions ,
operatin
g
under
the
same
international
rules, led
by
the
same President using the same
lead
negotiator
during
the
same
period,
reached remarkably different results,
with
the
apparently weaker negotiating
partner
resisting
Anlerican
demands
more
effectively.
Why?
Questions
like this
one
(whose
answer will
come in
a
moment)
are
not
merely
of
academic concern. Executives
and officials
in co untri
es
across
the
world wo
uld like to see
improvements
in
the
political management
of the
glob
al
economy.
Governments
manage
it through
negotiations,
some
bilateral
and some
multilateral,
and the outcomes
of
these negotiations are
no
t wh o
ll
y
determined by nature. To ga
in the most
and
lose
the
least possible fro m
th
ese
negotiations, and to
im
prove
inter
national institutions,
our
representatives
of
course
need
solid
knowledg
e
of
t
he
relevant businesses and laws and an
appea
lin
g
blueprint
,
but
those are
not
en o
ugh.
The
successfu l
proponent of
an
2
inte
rn
ational
agreement
and
the
effective
defender against external pressure will also
need
an effective
negotiation pl n
a strategy for gain ing
other countries'
assent despite
opposition.
Without a
sound understanding
of
how
the
co m
pl
ex
process
of international economic
negotiation
works, our representatives
would
be
primed
to step
into
familiar
pitfaUs while
overlooking important
opportunities.
Negotiatil g the World Economy
l
ays
out key diagnostic questions to ask
in
planning
for any international
econom
ic
negotiation. It
documents some
pitfalls
and some
u
sef
ul general principles by
analyzing ten particular
monetary and
trade
outcomes
of
the past.
The
ten cases
involved
the United
States and various
partners,
including the European
COl1ll1lunity,Japan,
Mexico
and Brazil.
There
are
no
obv
iou
s reasons
why the
conclus
ion
s
shou
ld be peculiar to
the
United
States.
The
ideas are
meant
to
be
general and
inter
es ting
to
readers
worldwide, to those outside
as
weU
as
inside
governments
.
CORE RGUMENTS
In
a nutsheU, the
book
argues that
variations in the process
of international
economic negotiation, including
the
strategies chosen, make a significant
difference to
the
outcomes.
This
theme
is developed into
a se t
of
specific
propositions designed to help answer
two core
questions. First, w
hat
negotiating
strategies are available to
international
economic
negotiators,
and why
do their
strategy
cho
ices vary
from case
to
case?
Second,
why
do
negotiat
d
rs
gain
more
in
some
cases
and less in
others,
even when using
the same strategy?
The
key drivers are
market
conditions, domestic politics,
negotiator
biases, and their strategies.This
li
st flags
central diagnostic questions that
need
to be addressed in any effective
nego
tiation analy
sis
.
In
order to
concentr
ate
on
these factors, thi s study largely sets
aside for
other
occasions the
co n
sid
eration of
contexts be
yond
the trade
or
finance minister's influence, such
as
the countries'
current military security
situations,
their
government
institutions,
and their cultures.
he str tegymenu
Negotiation
(or bargainin
g
refers
to a sequence
of
actions
in
which
two
or
more
parties address demands and
proposals
to
each
other
for the ostensible
purpose
of reaching
agreement and
changing
th e
behavior of
at least
one
actor.
When eng
aging
in
negotiation the
participants must choose from a
menu
of al
ternative strategies, each
meaning
a mix
of
tactics associated with an
overall plan to achieve
some
objective
through
bargaining.
The
strategy
menu
can be
thought
of as
a
spectrum running
from purely
dis tributive tactics at
one
end
,
through
mixed
strat
eg
ie
s,
to purely integrative
tactics at the other.
These
general
cate
gories apply regardless
of the
number
of
parties, the issue
under
discussion,
or
the
proposed deal's structure. The
most
lllill
on
strateg y
known
as
distrib
utive
or
value-
cla
iming is
a set
of
actions
that
pro
mo
te
on
e party's
go
als
by claiming value
of some kind
from
other
parties, making
them
worse
off
than
before. Examples include tactics
such
as openin
g
with
high
demands
,
refusing to make any concessions,
ex
ag
gerating one's
mi nimu
m needs and
misrepresenting o
ne'
s
true
priorities
,
manipulating
information
to one's
advantage,
worsening others'
alternatives
to agreement, making
threats, and
actually
imposing
penalties. A defensive
value-claiming strategy responds
to
such
pressure
with
steps
to
offset
them
and
protect
against losing value.
At
the
other
end
of
the
spectrum
,
st
ric
tly integrative or value-creat
in
g
tactics p romise to create joint gains
th
rough
negotiatio
ns with others
whose
objectives are n
ot
whoUy
in
conflict.
T his doe
s
not mean
merely
making
unre
quit
ed
conce
ssions; it
is another
w
ay of making
oneself better
off than
be
fore
the
talks. At
the
outset,
when
the
chances
of reaching
a mutual-gains
deal are unclear,
int
egrative players
often
take steps
to
clear away
some
haze.
They
may propose joint research
into
a
common
problem; later, informal
discussions
to brainstorm
possible
so
lution
s are
sometimes
held,
on
the
understanding
that
no one
will be
bound
by
anything
said in such settings.
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Generally this approach favo rs greater
op enn ess with in
fo rmation.
One o f the most pot ent tr icks o f
the trade is discovering
opp
ortunities
for exc hanges of con cess ions that will
leave each side better off on balance.
Opp ortuniti
es
for such deals exist when
nego tiatin g parti es privately rank two
or more issues differently in priority.
For example, if A a
nd
B are negoti atin g
about two i
ss
ues, and
if
A privately ca res
mo r
e about 1 a
nd
less a
bout
2 while
B cares mo re about 2 than 1, then an
oppor
tunity for joint ga in exists.
Un d
er such circum stances, if A will
compromise on 2 in return for B 's
conces
si
on on 1,
both
will
ga
in .
But
makin g thi s type of discovery- when
all parti
es
have incentiv
es
to misrepre-
sent
th eir
tru
e inter
es
t
s---;-
requir
es
that
nego tiators depart from firmly repea tin g
their offic
ial
briefs, and instead
as
k one
another about actual priorities while
s
haring informa
tion a
bout
th e sam
e.
Before ch
oo
sing a strategy, th en,
the plann er needs a sound diagnosis of
the unde
rl
ying situ ation, which requir
es
as
king
wh
eth er
th
e parti es' objec
tives
are
compl etely inco nsistent or at least partly
consiste
nt
with each
oth
e
r.
Answe
rin
g
thi s
qu
es
ti
on acc
ur
ately is
no
simple t
as
k,
th
o ugh, given
th
e normal incentiv
es
to
exaggerate
or
c
on
ceal
tru
e obj ec tiv
es.
A se nsible place to start,
th
en, is th e
u
se
of market data to est
im
ate
oth
er
c
ountri
es' obj ecti ve interests in th e
matter at hand . In monetary affairs,
is th e co untry runnin g a surplus o r
a deficit in its balance of payments; is its
c
ur r
ency
und
er d
ow
nward or upward
pressure? n trade, do es it export or import
the product or
se
rvice in
qu es
tion?
Th e book di scusses a va riety of
ways in whi ch market conditions shape
th e pro cess
of
negotiation. Such matters
help guid e decisions not only about
th e c
on t
e
nt of proposa
ls
but
also abo
ut
tac ti
c s
for exampl e, who should be
included and excluded from a neg
o-
tiatin g coalition.
But
govern me
nt
s o ften
pl ace weight on intangible obj ectives
like maintaining good relations with
one anoth er even wh en som e of th eir
specifi c interes ts clash.Wi se nego tiators
will be
se
nsitive to these
int
angible
o
bj
ectives and con straints as well .
atching
str tegy to situ tion
Govern ments natura]jy gain the
most wh en th ey s
hr
ewdly match their
strategies to the situ ations they face. For
example,
if
parti es' obj ec tives are entirely
inconsiste
nt
a
nd
cannot be changed, a
di stributive strategy is indica ted. But
if
th e parties' unde
rl
ying o
bj
ectives are
partly con
siste
nt
or subject to persu
asion
,
mixing integrative t
ac
ti
cs
into the strategy
m
ay
gain
mor
e (or lose less) than a strict
di stributive strategy, even
wh
en some
main objectiv
es
are in conflict.
For exampl
e,
in 1999 members
of
the WTO who accounted for th e bulk
of world trade sa id they shared th e
o
bj
ective of launc
hin
g a new round
of
negoti ations.Yet
durin
g
pr
epara
ti
ons
for their fa
mo u
s ministerial conference
in Sea ttle they adh ered ove
rwh
elmingly
to distributive tac ti
cs. Th
e r
es
ult was
an embarrassing and costly imp asse.
Th
e fiftee
n nation
Ca irns group of
agri c
ultur
al ex
port
ers, for instance,
demanded one way co ncessions
from tho
se who
protect and s
ub
sidize
fa
rmi ng. Cairn s insisted on nailing
down s
ub
stantial
ga
ins in the agenda
itse
lf
, before the nego
ti
a
ti
on proper
had even begun. Th e g roup wanted the
EU
and Japan to c
ommit
not
onl
y to
substantially liberalize agriculture
wh ich the latter accepted b u t also to
bring ag riculture
under
th e same rules
as trade in other goods by the end of
thi s round.
Th
ey dema
nd
ed that the
EU con cede that the negoti ating goal
would be th e e lirnination of ex
port
s
ub
sidies. Mea
nwhil
e man y
Ca
irns
members showed little enthusiasm
for the EU
's
pri o
ri
ty
propo
sals o n
investment, c
ompetition, environment
and
la
bor.
For
its part ,
Brusse
ls w
as
adama
nt on
agriculture and also on including these
ambitious new issues for be
hind th
e
border regulatio n through the WTo.
The Europeans argued that a bro ad
age
nd
a including th e latter offered
chances for trading off issue areas w here
priorities mig
ht
differ.
Th
ey
al
so argu ed
that WTO agreements regulating nations'
dom
es
tic polici
es
would be beneficial in
th eir own right.
[f so,
th e
EU
strategy
could be considered partially integrative.
Many
oth
ers, however, viewed these
new
sc
hem
es as
losses,
not ga
ins. D
es
pite
widespread opposition in N orth as we ll
as
South , th e EU held firm for these
demand
s
thr
ough
th
e l
as
t d
ay
in
Seattle- and beyond.
N ego tiators for the U S, Japan,
Indi
a,
and oth
er
developing c ountri es
also held firm to their own vigorous
distri butive
ta
cti
cs
rig
ht
to the e
nd of
the Sea ttl e meetin g.Th e Clinto n
administra tion insisted that th e WTO
s
tud
y how domes tic labor prac tices affect
trade, even though dozens
of
developin g
co
untries
had de
cl
ared for years that
thi s would be a dea
l br
ea ker; at th e
sa
me tim e W
as
hin gton re
fu se
d even to
discuss certain issues of prime interes t
to develo
pin
g countri
es
. Meanwhil
e,
India led a small
but
vocal group that
ad
va
nced demands for renego tiatin g
many of th e WTO
's
rul
es
to
th
e
advantage of developing countries
w hile offe
rin
g no benefit for th e
develop ed world.
Th is combination of strictly
di stributive strategi
es
r
es
ulted in th e
sacrifi ce of economic opportunities
that governm e
nt
s c
ould
have opened
for many
of
th eir businesses. [t also cost
their Orga ni
za
tion a se rious loss of
credibility.
But ju
st two yea rs later the
sa
me gove
rnm
e
nt
s tried again , with
both the EU and th e US shifting from
stri ctl
y
di
stributive to mixed strategi
es
.
Oth er players reciproca ted, and in D oha
th ey broke the
imp
asse and laun ched
the new round in
No v
emb er 200 1.
Wh at had changed?To begin with ,
Pasc
al
Lam
y,
chief negotiator for th e
EU, fell bac k from som e of the more
ambiti ous term s he had b een demanding
on th e new issues, indica tin g that he
co uld se ttle for w eaker n ew rul
es
on
in
ves
tm e
nt
a
nd
c
ompetiti
on po licy.
Th e EU and an informal coalition
working
on
competition policy agreed
that individual decisions by competiti on
authoriti
es
wo uld not be subj ect to
WTO dis
put
e
se
ttleme
nt
, a
nd
suggested
they might even se ttle
fo
r a plurilateral
agreement
fr
om w hich any WTO
memb er co uld opt o ut . A Friends
of [nv
es
tm ent coalition led by Japan
a
nd
including th e
EU
di
sc
u
sse
d an
inves tm ent agreement whose principles
wo uld not be binding exce
pt
for secto rs
that each governm
e
nt
c
hose
to offer on
a positive st.
3
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On another front, the
EU
announced
a unilateral
concess ion
to
th
e least
developed me mbers, cutting import
duties to zero on all their exports except
arms. Lamy and his team also traveled
during the year to several regional
meetings of developing countries to
woo th em. He remained firm on
agriculture, however, and co ntinued to
demand ma
jor
concessions regarding
the environment, especia ly the recog
nition of th e so- called
prec
autio nary
prin
ciple that could perntit greater
r
es
tri c
ti
o
ns
against agric
ultur
al
import
s.
[n
Doha
Lamy made additional
compronuses, accepting a deal with
little environment co
ntent
and wh ich
co
mmitt
ed the
EU
to
th e eventual
elinunation of farm export subsidie
s.
Durin
g 2
00
1 the
US
negotiating
strategy also becam e more mixed. The
n
ew
R epublican adminis
tr
ation dropped
Clinton 's demand to discuss labor rights,
thu s weake
nin
g the
blocking
coalj
tion
.
[n O ctober, recognizing that a
numb
er
of developing
countries
were placing
heavy politi cal
weight on the issu
e
of
publi c health within the conte xt of
th e
WTO
agree
ment
on inte lectual
property rig
ht
s, ch
ief
US negotiator
R obe
rt
Zo
e
Lli
ck
of f
ered two limited
c
on
ces
si
ons on that issue. After
the
developing country coalition res isted
thi s att empt to spJjt them,
Zo
ellick
fe l back still further in Doha on this
issue and another-anti-dumping
policy - where s
eriou
s gaps rema
in
ed,
in
exc hange for gains on other i
ss
ues.
Given this leaders
hip
by th e trade
superpowe
rs, the n
uddl
e and sma l
trading powers reciprocated by falling
back
quite
substantially from th eir
o
pening
positions as well . D eveloping
countries accepted a new round
that
som e o f
them tho
ught was pre
matur
e,
and with out mu ch tangible ga in on
age
nd
a items th ey had said
would
be
criti ca l for their asse nt. But th e result was
that by late 200 1, with strategies better
matched to th e situ ation on the gro
und
,
negotiators ga ined mo re th an in 1999.
dding domestic
politi s
to the mix
n pr
ac
ti
ce th e situa
ti
on is
al
ways
more co mpl ex than trus bri ef sketch has
so far suggested.
Thinkin
g of co untries as
undivided w holes with only national
interes ts is a fine way to mi
ss
maj or
opportunities and barr iers to agreement.
Econonuc negotiators norm a
ll
y wo rk
in the presence of politica l divisions
bac k home, and must therefore barga in
with constituents while talking to other
government
s.
Th ese internal divisions
often pose seri ous barri ers
to
in ter
national agreement .Th e path followe d,
and the eve
ntu
al gains
or
losses at the
intern ational level,
al
so depend on
do m
es tic political conditions and how
th ey are manage
d.
First, choices made during intern al
barga
ining can inject c
ount
erproductive
tacti cs into inte
rn
ational talks. Early in
2002 George W Bush granted increased
protec
ti
on to US steel producer
s,
a
mo
ve
that generated widespread protests and
co ntradicted the Pres ident 's own policy
of negoti atin g lowe r
tr
ade
ba
rriers in
the world. At this tim e Bush lacked
authority from Co ngr
ess
to con
duct
those intern ational negoti ations in the
mo
st
effi
cie
nt
ma
nn
er, so c
all
ed fas
t- t
r
ac
k
authority. Some legislators re
port
edly
demanded new steel
prot
ec tion as their
pri ce for granting
th
at authority, while
others demanded increased subsidies for
US farm ers.
Bu
sh decided to
gr
a
nt both
dema
nd
s,
taking
two
steps backward
,
as a means of gaining an authority that
was expected to help eventually to ra
ti
fy
multilateral trade agreements that op en
trade again . Co ngress did authori ze
fas t-tr
ac
k authority that summer, by a
tiny margin .
Likewise at the end
of
th e pro cess,
domes tic co nstraints ca n limit the gains
that the
nu
xed-
int
e
gr
a
tive
strategy c
ould
theoretica
ll
y achieve. As discussed earlie
r,
dovetailing two c
ountri
es' different
pri orities can crea te joint va lue.
But
setting national priorities implies
downgrading som e demands, and most
co nstituencies hate being sacrifi ced.
This can make it awkward for the nego
tiator to engage in open logrolling with
her counterparts abro ad, even if national
in teres t might so di ctat unl ess th e
pro cess is kept secret.This is a reason for
attempted secrecy, and one reason why
trades of
mutu
al co ncessions are o
ft
en
delayed until a las t-minute
fr
enzy ju st
before a negotiating deadlin e.
Whil
e it
would be mo re e
ffi
cient to get these
trades on th e ta
bl
e ea rli er in th e ga me, in
order to scrutini ze
th
e costs and benefits
more accurately and to allow time for
expl
ora
ti
on
of
ways to improve jo
int
ga ins even more, sometimes dom es tic
political co nditions make this imposs ible.
Finally, the stri ct distributive
strategy also depends on certain domes tic
politica l conditions for its effec
ti
ven
ess
.
For instance, impl ementing an econornic
thr
eat w
ill
alw
ays be
cos
tl
y to
so m
e
int
eres ts in the
th r
eatening country,
and so nego tiation analysts always ask
w hether th e threatener is bluffi
ng
.
Th
e credibi li ty of the threat depends
on domes ti
c political conditions in the
thr
eatenin g c o
untr
y.
As a rule, the mo re dom es tic
pl
aye rs
th ere a re w ithjn a
thr
eatenin g co
untr
y
express ing o pposition to impl ementin g
their own negoti ator's threa t, the less
credibility that
thr
ea t w ill have in the
target co untry- and hence the smaller
the co ncession th e targe ted country
w ill make, other things being equal.
Th i
s general
propo
sition helps acco
unt
for the different
ou t
c
om
es when the
R eagan administration employe d the
strict value-cla
inun
g strategy in
tw
o
trade episodes be
tw
een 1985 and 1988.
A key ex
planation for the apparently
paradoxical o
ut
c
om
w
ith W
as
hin gton
ga ining more from the giant EC than
from Braz
i l w as
thatWasrungto n 's
threat against Braz
il
was less credible
than that directed at Europe. And th e
difference in credibility derive d in large
measure from much grea ter domes tic
U.S. opposition to implementing th e
threat in th e Braz
il
case. Several of th e
sa
me U.
S.
co mputer firms that were
thought to be the beneficiari es of
R eagan 's strategy indi ca ted priva tely
to the
Braz
ilians
th
at they did not
suppo rt carrying o ut th e threat.
But th e expan sion of th e Co mmon
Agricultural Policy to Spain
dr
ove
U.S. farm ers into a unified fury, and
ve
ry f
ew US
in ter
es
ts spoke o
ut
for
res traint in th at secto
r.
Negoti ators for Braz
il
and Eu rope
monitored Am erica's domestic po liti cs,
es timated the credibili ty of th eir
Am erican co
un t
erpart 's
th r
eat, and
acted accordingly T he first Am eri ca n
thr
eat
fa il
ed- for d omes
ti
c reason
s-
to co nv
in
ce
Braz
ilians un ambi g
uou
sly
4
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5/6
RESE RCH RIEF
that their alternative to a deal with the
US really had worsened very
much.
But
the second threat,
coup
l
ed with
apparent
unity in the US private sector, left no
doubrs in
Europe
that
a high price
would
be paid
without
substantial concessions.
ffsetting negotiator bis s
Another key influence on outcomes
is
the biases the negotiators
bring
to the
table Some pre-conceived mental map is
of course essential in order to construct
interpretations
of incoming
data,
which
reach the
negotiator
surrounded by
much
noise. But familiar cogn iti
ve
biases
can also lead to sub-optimal results. For
example, experimental studies document
that
se ll
ers tend to frame a transaction
as losing something they already own,
and they tend to price th e
object
higher
than independent observers with the
same
information. Many other
studies
have
confirmed
partisan bias, such as a
tendency of partisans (absent debiasing
mechanisms) to over-value their
own
concessions and under-value those of
counterparrs, compared with va lues
assigned by neutral observers having
all the same
information.
It is easy to
see how biases like these could impede
negotiated agreement, even
when
a
deal
could
benefit objective interests.
Thus
the potential gains from bargain
ing, regardless of the strategy employed,
increase to the
degree
that the
negotiator
uses tactics to
compensate
for his
or
her
own biases and to take advantage of
others biases.
A final comparison bears ou t this
point. In the late 1970s, the Mexican
government
engaged in two bilateral
trade negotiations with the United States,
the first
concerning
natural
gas
and
the
second vegetable exports.
In
the
first instance, an effort by Petr61eos
Mexicanos
(PEMEX)
to secure
Washington s agreement for large gas
exports
ended
in an impasse.
In
the
second case, Mexi co s representatives
persuaded Washington to se ttle a dispute
threatening its exports of vegetables,
mostly tomatoes. C
ompeting
Florida
growers had filed a
complaint un der
the
5
US a
nti-dumpin
g statute. In the end,
Washington determined that M exican
producers had no t engaged in dumping
and did not impose any
new
duty.
M
ex
ico s tom
ateros
succeeded in keeping
the
U.S. mark
et open,
thus evading a
lo
ss that
surely would have befallen
them
had they no t responded effectively to a
new
threat.
Two key differences explain this
difference in outcomes. First, the market
circumstances had changed between the
two events, and the United States
objective alternative to an agreement
with Mexico had worsened. The 1979
oil cr isis accelerated US inflation,
which
added an argument against imposing
ant
i-dumpin
g duties that
would
raise
prices further.
And
second, Mexico s
team in the first case fell victim to
several classic judgment biases.
The
second Mexican negotiating team used
de-biasing tactics to a greater extent
and with greater effect, and added
partially integrative tactics to devise
a solution that met key
White Ho
use
object
ives.
POLICY IMPLI TI ONS
Negotiations between governments
and
internatio
nal organizations are
central to th e management of the glob
al
economy, and the economic and political
outcomes depend
on h
ow
these official
negotiations are conducted. Running
through
this
book,
whose
ideas this
Briifhas
on
ly sampled, are practical
implications for economic negotiators
and those who direct them.
The most general lesson is that
sophisticated negotiation ana lysis will pay
off. Th is mea
ns
usi
ng
some independent
checklist of diagnostic questions, like those
developed in this
book,
to
determine
where
the
im
mediate case fits in the
known patterns of bargaining situ ations
and to help ant icipate possible pitfalls.
This means negotiators should
determine
the type of situation they face
before choosing a strategy, and they
should recall the full range of strategy
options, not only strict distributive
tactics, which dominated in the WTO
in 1999
but
less so in 2001. At the same
time, a sophisticated analysis warns
of
the
opposite dilemma .Adding integrative
tactics to the
mix
inheren tly opens the
economic diplomat to ex
pl
oitation,
a different type of cost which must also
be gua rded against.
Whatever
strategy is used,
the
international outcome will depend on
prevailing domestic politic
al
conditions
and
how
they are
nuna
ged. It
is
common
place to observe that politicians face
constituency pressures
wh
en negotiating
over international deb t and trade,
but
how
constituents behave also depends
on
how
their leaders act toward them.
For instance, leaders can consider forms
of
side payment to domestic constituents
that do th e least h
arm
to international
negotiations.
They
can avoid th e pitfall
of
makin
g an exte
rn
al threat
or counter
threat when they lack the domestic
support
to car ry it out.
They
can launch
international talks in order to create
incenti ves for special interests to accept
ref
or ms at
home.
In add ition ,
when
attempting to create joint va lue through
negotiation, part of the plan can include
tactics and proposals to build support
inside the domestic politics of partner
countr ies.
Finally, leaders should structure
nego
ti
ations
to
help offset normal
judgm
ent
biases that can reduce the
gains What we can best control in a
negotiation
is
o
ur own
decision. The
lead negotiator can be asked to defend
her
plans before
int
ernal meetings
of
eq uals wh o play the role
of
deviJ s
advocate. Leaders can structure nego
tiation teams so that some
member
has
the sole
job
of reporting on the
ot
her
parties beliefs.
In sum, leade
rs
should prepare thei r
future economic negotiators with training
not
only in
econ
omic
s and the subst
an
tive issues on the ta
bl
e,
but
also in
negotiation itself.
John S Ode
is
Projessor School
o In
temational Rel
ati
ons University o
Southern
Ca lifornia.
Negotiating the World
COI101 I I)'
is
available from Cornell University Press
at www.comellpress.cornell.edu
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6/6
RESE RCH
BRIEFS
OF THE EUROPE N
UNION
CENTER OF
C LIFORNI
Number 1,
June
1999,
The Geography cif Money Benjamin J Cohen
Numb
er
2, September 2000, The Myth
o
the Global Corporation LouisW. Pauly
Number 3,
December
2000,
Fellees and
Neig
hbors:T1le
Politi l
Geography o
Immigration Control,Jea
nn
ette Mo ney
Numb
er 4 June 2001, Markets and
Moral
R egu
lation:
Cultural Change and the Si
ng
le Market Paulette Kurzer
Number 5, September 2001, R eshaping National Intelli
gence
for an Age hiformation Greg
ory
F.Treverton
Number 6 June
2002,
Constituting Federal
Sovereignty Leslie
Friedman
Goldstein
The
opinions expr
esse
d in
R esearch Briefs are
those
of
the authors, and do not n
ecessa
rily repre
se
nt
the views
of
the European Union Center
of
Cali fornia or
its
affiliates.
For more
inf
ormation , please contact
EUROPEAN UNION CENTE
R
OF
CALIFO
RN IA
SCRIPPS COLLEGE
1030
COLUMB IA
AVENUE
CLAREMONT
, CA
LIFORNIA
91711-3948
TEL: 909) 607-8103 FAX: 909) 607-1192
e
-m
ai l: eucenter@scrippscol edu
www.eucenter.scrippscol edu
6