Negotiating for a Borderless World - Essay Example

Negotiating for a Borderless World This decade is significantly marked with the heightened levels of interdependence, cultural awareness and openness among countries because of the upsurge of globalization. With goods and services now flowing freer with more lenient rules and restrictions, individuals, organizations, and governments can easily connect and interact. Thus, the World Trade Organization’s quest for trade liberalization, have created the rounds of trade negotiations among member countries, which tackled on different issues that can help in the growth and development of their economies. Moreover, it has bridged the gap of highly industrialized countries with the least developed ones, which allowed the specialization of skills and the use of comparative advantage, a theory popularized by David Ricardo. In this competitive arena of global players, it is very essential to know how to negotiate and make a sustainable partnership. Negotiation skills are a must to survive. The following paragraphs will tackle the different concepts of negotiations and how it is being used in trade and politics. As discussed in class, negotiations are made for many reasons: to divide resources, to create something new and to resolve any conflict among parties. Negotiations always involve at least two parties, a conflict that needs to be resolved, and a give and take process. Negotiations must end up with an agreement and must depend on each other in order to achieve this. This interdependence relationship can produce two outcomes: zero-sum and non-zero-sum. Zero-sum happens when there is a winner and a loser, while non-zero-sum is a situation where the parties involved get mutual benefits. In 2001, the Doha Round declaration paved way to the creation of mandates on the negotiation of a variety of trade issues by the Trade Negotiations Committee (WTO, 2001). They formed two negotiating groups, market access and WTO rules. The negotiating group on market access is concerned in the liberalization of non-agricultural goods, while the negotiating group for WTO rules was concerned on subjects like the Anti-dumping and subsidies agreement plus provisions on regional trade agreements. Negotiations are present in bodies such as agriculture, services, geographical indications, dispute settlement understanding, environment and on outstanding implementation issues. There are six principles the committee has to adhere in their negotiations. First is single undertaking, where every negotiation is just part of the whole package and it cannot be taken and agreed individually. Second is participation, where all WTO members are considered part of the negotiation and decision. Third is transparency where all negotiations must be reported to all members with all honesty. Fourth is the special and differential treatment in negotiations to developing and underdeveloped countries. Fifth is sustainable development, where the negotiations consider the environmental aspect of an issue. Last is that the subjects not negotiated must also be reported accordingly. Trade negotiations indeed, have a very important role in establishing a global market and this is how the WTO makes their negotiations. There are two contexts that affect international negotiations as mentioned in class. One is environmental context, where it includes forces shaped by the environment that a negotiator cannot anymore control. This includes political and legal pluralism, international economics, foreign governments and bureaucracies, instability, culture, ideology and external stakeholders. The other context is immediate context, where factors can be controlled by the negotiator. Examples of this context are the bargaining power, levels of conflict, relationship between negotiators, desired outcomes and immediate stakeholders. In a manual provided by Monning and Feketekuty (2002) on International Trade Negotiations, they mentioned that negotiations are the core of any international diplomacy. This art of negotiation has become a substantial tool for different entities in pursuing their own interests to influence an outcome of a certain policy. An economic partnership is rested upon the effective use of negotiation skills. In commercial diplomacy, negotiations take place to tackle different issues about business, policy, economy, politics and even law (Monning and Feketekuty, 2002). Negotiations among governments are the most popular and most broadcasted with the rise of different free trade agreements, both bilaterally and multilaterally. A negotiation usually takes a long time before any policy or economic partnership is implemented. In the discussions in class, there were five strategies presented to manage conflict. The first is contending, where parties involved display their own preferred outcomes and have little concern for others involved. The second strategy is yielding, where they show more concern to other parties’ outcomes than their own. The third strategy is inaction, where there is little concern for both parties’ outcomes. The fourth strategy is problem solving, where parties show concern for both parties’ outcomes. Last is compromise, where parties show moderate concern for both parties involved. In the following examples, the ideal strategies that must be used especially in trade negotiations are problem solving and compromise. Also, they must portray an integrative process of negotiation. Such negotiation is stressed on the parties’ needs and interest not with its position. Moreover, it must seek to unify than to alienate. The goal of such negotiation must be to satisfy this need. The process and strategies involved in different kinds of trade negotiations will be discussed in the following paragraphs. The context of trade negotiation can be divided into three areas: multilateral, regional and bilateral (Debefve, 2004). Multilateral trade negotiations involve a meeting of different countries, which aims to form rules on its participating members. Examples of such negotiations are the Uruguay round from 1986 to 1994, where 125 countries took part (WTO). It tackled all sides of trade issues from tariffs to anti dumping. It was the largest negotiation that ever happened in history. It was also believed to be the defining moment of the development of agricultural policy (FAO). Another example of a multilateral trade negotiation would be the Doha round, which recently collapsed last July 2006 after five years of negotiation because of the failure of the developing countries to reciprocate on trade concessions (Shah, 2006). Other examples of such negotiations are not just constricted with the World Trade Organization but also with the members of different regional trade agreements like the European Union and even other organizations like the Organization for Economic Co-operation and Development (OECD) and Asia Pacific Economic Cooperation (APEC). Multilateral trade negotiations undergo these several stages (Monning and Feketekuty, 2002). The first stage is the issue identification stage where, just like the usual research procedure, you need to identify the problem at hand that is in need of action. Such problem must be feasible for member countries to solve. Next stage is the analysis phase, where negotiators dwell their minds in search for the possible remedies for the problem addressed in the first stage. Third is the pre-negotiation stage, where the member countries will define the problem, provide the possible solutions and make a mandate for the upcoming negotiations. Usually, the Trade Negotiations Committee will handle this part. The fourth would be the negotiating phase, where members will propose new provisions or agreements and discuss and make comments of these proposals. A successful negotiation is characterized by the mutual benefits it provides to the participating countries. Another form of trade negotiation is the bilateral trade negotiations, which aims to reduce trade barriers between two countries and resolve disputes among governments. From the prefix bi-, it obviously connotes to a negotiation involving only two parties. An example of this would be the JPEPA or the Japan-Philippines Economic Partnership Agreement, which is currently under negotiation and is a subject of controversy. This bilateral seeks to ease the restrictions of the Japanese labour market to accommodate the increasing supply of our nurses and other healthcare professionals (Bilaterals.org, 2007). Moreover, it also seeks to lower tariffs on agricultural trade, which could allow the free flow of the Philippine pineapples and bananas. However, many protest to this arrangement for it will push the trade of toxic wastes from Japan to the Philippines. Currently, there are so many bilateral trade agreements under negotiation across the world. The process of negotiation is almost the same as the multilateral arrangement. It includes the problem identification stage, problem solving stage, the negotiation phase, and last is the dispute resolution phase (Monning and Feketekuty, 2002). The last form of trade negotiation is the regional trade negotiation, where it involves a few countries (Smith, 2002). Examples of this are the North American Free Trade Agreement (NAFTA) and Canada-United States Trade Agreement (CUSTA), which like other trade agreements, aimed at easing the trade barriers in goods and services. These trade policies will only impact the participating countries. Just like any trade agreements, these regional agreements were also a subject of controversy as many workers in the United States have lost their jobs to reallocation of factories in Mexico and also its negative impact on the environment (Constantini, 1998). In a report from the Carnegie Endowment for International Peace (2003), according to many analysts, the proliferation of bilateral and regional trade negotiations has become a threat to more essential multilateral trade negotiations. Countries like Singapore have been disappointed to the outcomes of the multilateral negotiations, thus shifting its focus on bilateral free trade agreements. For this decade, Singapore has made agreements with New Zealand, Japan, and United States and now they are having pursuits in countries like Mexico, Canada and Australia. Moreover, the report also mentioned that bilateral and regional trade arrangements are less difficult and it is an effective source of commercial reforms. Some see it as a stepping stone for them to be able to meet the demands of the multilateral trade arrangements. Since, the Doha Round has failed to settle many disputes; a lot of countries have used bilateral and regional negotiations as the alternatives for addressing the needs of their own countries. A new addition to the literature on international negotiations is the interest-based negotiation (Pascoe, 1998). It is a strategy, which emphasizes the importance of meeting the interests of all negotiators. The process used here is problem-solving not rewards/punishment system. This would be the most ideal approach to any negotiation since it makes resources unlimited, provides multiple substantial solutions and distinguishes the issues from the parties involved (Pascoe, 1998). The traditional approach is more competitive and unhealthy, since it seeks to win the game at the expense of the other (Monning and Feketekuty, 2002). This approach also delays an agreement since parties will keep on debating and be placed in different tight situations. The process as enumerated by Pascoe is as follows. Identify the issues and make an agenda. Second is to make a survey of the interests of all the parties involved. Third is to make options and or different solutions to the problem at hand for a settlement. Fourth is to discuss and evaluate these options. The fifth stage will pave way for the final bargaining and last will be the final settlement. If all negotiations are done in this approach, negotiations will be a breeze. In the lessons discussed in class, conflicts refer to a sharp disagreement and a divergence of interest. It can be divided into four levels: intrapersonal, interpersonal, intragroup, and intergroup conflict. Intrapersonal conflicts happen within an individual while interpersonal conflicts refer to conflicts between people. Intragroup conflicts happen within a group, while intergroup conflicts happen among groups. For this discussion on trade negotiation, we will be referring to intergroup level of conflict. This level is also the most complex and complicated among all levels since more parties are involved, thus more issues are raised and more disagreements are bound to happen. Conflicts arise because of inequality and restrictive attitudes. This kind of approach is not really properly exercised in many negotiations especially in international trade because other countries seek to take advantage of the weakness of the others. This is especially true for those developing countries negotiating with developed countries. Trade justice is really a huge issue that many countries participating in different negotiations. There would always be protests surrounding the negotiations on free trade. Paul Krugman (1987), in his paper, Is Free Trade Passé?, he said that, free trade is not passé, but it is an idea that has irretrievably lost its innocence. Free trade is not always good as what economic theory is suggesting to us. Recently, China has been facing a lot of anti-dumping investigations, with their goods sold at very low prices (China Daily, 2005). They were having disputes with economic superpowers like the United States, Japan and the European Union. Their products are often subject to higher technological barriers. Moreover, their products are involved in many trade conflicts. There is a wide gap in quality standards of commodities in China compared to other countries. However, due to the booming market of China, it has started to gain influence in the global field. Such disputes must not hinder them from continuing their international relations with other countries. Further negotiations were thought to be the solution in order to gain mutual benefits from different agreements the country has already established. In dealing with domestic conflicts in free trade agreements, the paper of Ahn (2007) has given us her important lessons based on the Korean-Chile and NAFTA experience. Ahn suggested the following policies. First is a strong political leadership, because such trait would help a country survive any disputes and resistance from different parties. Next is the international leadership of the big economic superpowers that is the United States, China and Japan. Another policy is the hunt for mid-level free trade agreements because it can be a springboard for a regional economic integration, like for the Asia Pacific region. The last policy suggested is the sustainable domestic support for the losers. The government cannot just leave these losers behind as they will only contribute to a more political chaos due to protests and of course, to underdevelopment. To sum up, this paper has tackled the different concepts of negotiations, with a particular focus on international trade negotiations. Specific examples of multilateral trade negotiations of World Trade Organizations like the Uruguay and the Doha Round were cited. Other types of trade negotiations were also tackled like the bilateral and regional trade arrangements. The experience in countries like the United States, Philippines, Korea, China and many others have provided us how they do their negotiations and which issues were involved. We were also informed of the different sides of the international negotiations, that the implementation of free trade agreements has its loopholes, which contributes to greater conflicts faced by the parties involved. However, with proper education on international negotiations and conflict management, countries can always arrive at the optimal solution for their problems and still get the best of their own interests. Bibliography Ahn, S. (2007). Dealing with domestic conflicts in FTA negotiations: lessons from the Korea-Chile FTA and NAFTA. Accessed on October 25, 2007 at Pacific Economic Cooperation Council Website: http://pecc.org/KOPEC/2-Se-Young-Ahn.pdf Bilaterals.org. (2007). JPEPA. Accessed on October 24, 2007 at Bilaterals.org Website: http://www.bilaterals.org/rubrique.php3?id_rubrique=113#links Carnegie Endowment for International Peace. (2003). Proliferation of Bilateral and Regional Free Trade Agreements May Threaten Multilateral Talks. Accessed on October 25, 2007 at Carnegie Endowment for International Peace Website: http://www.globalization101.org/index.php?file=news1&id=60 China Daily. (2007). Solving trade disputes through negotiation. Accessed on October 25, 2007 at China Daily Website: http://www.chinadaily.com.cn/english/doc/2005-06/30/content_456015.htm Debefve, M. (2004). Regional dimensions of information for trade negotiations. Accessed on October 24, 2007 at UNESCAP Website: www.unescap.org/tid/mtg/egmtis04_s4tis.pdf Krugman, P. (1987). Is free trade passé? The Journal of Economic Prespectives. Accessed on October 24, 2007 at JSTOR Website: http://links.jstor.org/sici?sici=0895-3309(198723)1%3A2%3C131%3AIFTP%3E2.0.CO%3B2-F Monning, W. and G. Feketekuty (2002). International trade negotiations: Training manual. Accessed on October 24, 2007 at Commercial Diplomacy Website: http://www.commercialdiplomacy.org/pdf/manual/InternationalTradeNegotiations.pdf Pascoe, A. (1998). What are interest-based negotiations? Accessed on October 24, 2007 at Communications Workers’ News Website: http://www.btinternet.com/~donald.macdonald/allen1.htm Shah, A. (2006). WTO Doha “development” round collapses, 2006. Accessed on October 24, 2007 at Global Issues Website: http://www.globalissues.org/TradeRelated/FreeTrade/dohacollapse.asp World Trade Organization, (2001). Doha development agenda. Accessed on October 24, 2007 at World Trade Oganization Website: http://www.wto.org/english/tratop_e/dda_e/dda_e.htm Smith, V., Summer, D. and C. Rosson. (2002). Bilateral and multilateral trade arrangements. Accessed on October 24, 2007 in Farm Foundation Website: www.farmfoundation.org/2002_farm_bill/vsmith.pdf Read More