(Resumen) Negotiating the world economy.pdf

7/13/2019 (Resumen) Negotiating the world economy.pdf

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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 .


2/6

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.


3/6

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


4/6

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


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


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

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