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Negotiating Services Agreements. Geza Feketekuty. Negotiations on Services. Regulation of International Services Bilateral Agreements (Civil Aviation) International Agreements(ITU, IPU) Solving Bilateral Trade & Investment Problems Enterprise to Host Government Negotiations

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negotiations on services
Negotiations on Services
  • Regulation of International Services
    • Bilateral Agreements (Civil Aviation)
    • International Agreements(ITU, IPU)
  • Solving Bilateral Trade & Investment Problems
    • Enterprise to Host Government Negotiations
    • Bilateral Negotiations Between Home and Host Government
  • Negotiating Trade Agreements
    • Free Trade Agreements – (NAFTA, Mercosur)
    • WTO/GATS
  • Dispute Settlement
    • Bilateral Consultations Preceding Dispute Settlement Process
    • Consultations on Implementation of Dispute Settlement Outcomes
negotiations on regulatory issues
Negotiations on Regulatory Issues
  • Establishment of Regulatory Framework for International Services was Traditional Venue and Objective of Negotiations on Services
  • Trade-Oriented Negotiations on Services are Aimed at Facilitating and Liberalizing Trade
  • Negotiations in a Regulatory Framework and in a Trade Framework can overlap, so require coordination between regulatory and trade agencies
rationale and venue for problem solving negotiations
Rationale and Venue for Problem Solving Negotiations
  • Trade Problems can arise as result of
    • Inadequate Information
    • Misunderstanding of regulation by a firm or of proposed activity by regulator
    • Regulation/Law is more Trade Restrictive than Necessary to accomplish Objective
  • Mutual efforts to address issues in a problem-solving context can benefit both sides
  • Periodic bilateral meetings between trade officials provide opportunity to address bilateral issues
examples of problems
Examples of Problems
  • Regulation of International Transactions by Central American owned banks
  • Visas for Training Assignments associated with outsourcing
  • Screen quotas and discriminatory tax treatment of foreign advertising copy
  • Regulations related to ground handling of aircraft operated by foreign airlines
  • Use of leased lines to transmit data originating from a distributed network
problem solving interests of developing countries
Problem Solving Interests of Developing Countries
  • Problems solving negotiations by Developing Countries in the past have usually involved trade-offs between goods and services, this may change
  • Growth of outsourcing is likely to increase importance of solving problems related to exports of services by Developing Countries
steps in addressing issues in problem solving negotiations
Steps in Addressing Issues in Problem Solving Negotiations
  • Consultations between Enterprise and Host Government
  • Consultations Between Home Government and Host Government at Increasingly Higher Levels
  • Consultations in Multilateral Forum (If one exists for issue and issue is generic)
  • Use of Formal Negotiating Mechanisms or Dispute Settlement Procedures (Choice Depends on Nature of Issue, Options)
observations on the process
Observations on the Process
  • Most Problems that arise in trade are resolved through a Mutual Problem Solving Approach
  • Only Problems that cannot be resolved between Enterprises and Foreign Governments Should go to Government to Government Level
  • Multilateral Forum Provides Basis for testing Scope of Issue, Potential Allies
  • Involving Trade Officials Can Facilitate Resolution, but also Increase Resistance of Regulatory Officials
making the case
Making the Case
  • Clarify Information
  • Correct any Misunderstandings
  • Clarifying objective of Regulation
  • Pinpoint Unintended Consequences of Regulation
  • Set out any Violations of International Rules, Commitments, or Generally Accepted Practices
  • Explain how Regulatory Reform could promote economic growth, preserve desired Social Goal
  • Identify Reciprocal Help, Consequence of Failure to Solve Problem
negotiations under gats
Negotiations Under GATS
  • Doha Round
    • Request & Offer Process
    • Negotiation of Rules
  • Other Negotiating Approaches Used in Past
    • Sectoral Agreement
      • Model Schedule
      • Rules for Sector
    • Functional Agreement
  • Other Possible Approaches
    • Sectoral and Other Targets
    • Negotiating Guidelines
    • Agreement Organized Around Customer Needs
request offer negotiations
Request-Offer Negotiations
  • Involve requests and offers for specific changes in national regulations/laws
  • Based on bilateral negotiations, multilateral assessment, MFN treatment
  • Dialogue surrounding negotiations is likely to revolve around commercial impact and regulatory purpose of measures viewed as trade barriers
negotiation of rules
Negotiation of Rules
  • Usually initiated by national papers outlining need for rule and substance of rule
  • National papers often supplemented by Secretariat paper summarizing negotiating proposals
  • Negotiations revolve around common needs of member countries, best regulatory practices, and fairness of rule
steps in any negotiation
Steps in any Negotiation
  • Analysis of the Issues
  • Consultation with Stakeholders
  • Framing the Issue for Negotiations
  • Building Public Support
  • Bargaining
  • Selling the Results to Home Constituencies
analysis of the issue
Analysis of the Issue
  • Impact on Commercial Interests
  • Domestic Policy Issues
  • Stakeholder Politics
  • National and International Legal Provisions
  • Macroeconomic Effect
  • Institutional Considerations
  • Public Opinion and the Media
who are the stakeholders who should be consulted
Who Are the Stakeholders Who Should be Consulted?
  • Affected Central Government Ministries and sub-central authorities
  • Affected Enterprises and Industry Associations
  • Labor Unions
  • Non-Governmental Organizations with a Policy Stake
  • Academic Experts
stakeholders may be affected in terms of
Stakeholders May be Affected in terms of
  • The Commercial Impact
  • The Policy Outcome
  • Bureaucratic Turf
  • Political Consequences
  • Legal Precedents
  • Macroeconomic Consequences
consultation with domestic stakeholders
Consultation with Domestic Stakeholders
  • Can yield critical information on commercial, policy and legal issues at home and abroad
  • Serves to identify their interests and to manage their involvement in the domestic political process related to trade negotiating decisions
  • Offers insights into the interests and views of their counterparts abroad, and informal communication channels with their counterparts abroad
why consult foreign stakeholders
Why Consult Foreign Stakeholders
  • Provides insight into foreign decision-making process
  • Provides opportunities to help shape the views and strengthen role of foreign stakeholders with compatible interests
  • Provides broader insights into possible win-win solutions
elements of a negotiating strategy
Elements of a Negotiating Strategy
  • Framing the Issue for Negotiation
  • Identification of win/win solutions
  • Identification of Potential Supporters among Domestic and Foreign Stakeholders
  • Message to Potential Supporters
  • Written and Oral Communications to Build Support (White Paper, Press Release, Speeches)
  • Identification of Opposing Stakeholders
  • Means for Reducing or Deflecting Opposition
  • Methods for demonstrating utility, legitimacy and fairness of proposed outcome
framing the issue
Framing the Issue
  • Careful framing of the issue at both the national and international level is critical to Negotiations
  • At National Level Statement of Issue Should
    • Highlight the key commercial and policy issues
    • Provide a basis for domestic coalition building
  • At International Level Statement of Issue Should
    • Identify Common Policy Objective and Economic Rationale
    • Provide basis for international coalition building
    • Allow for win/win solutions
framing the issues examples
Framing the Issues - Examples
  • Framing Typical Regulatory Issue
  • ATM Machines and US/Israeli FTA
  • Framing Issue for GATS Telecom Annex
  • Framing Negotiation Between US and India on services
building support
Building Support
  • Coalition building is the key to Negotiations
    • Out of Minorities Majorities are Built
  • Coalitions have to be built around common interests
  • For Rule-Making Negotiations support of Epistemic Community is important
  • International coalitions of private stakeholders can be an important asset
  • For regulatory issues, support also has to be built among regulators, who have their independent channels of communications with each other
building support examples
Building Support - Examples
  • Building Support for GATS Among Services Stakeholders Across Countries
  • Building Support for Telecom Reform and Liberalization Among Stakeholders
  • The Aborted Tourism Agreement
  • Building Support for GATS by Epistemic Community
strategies for request offer negotiations
Strategies for Request/Offer Negotiations
  • Mercantilist Strategy
    • Aimed at Maximizing Imports
    • Aimed at Minimizing Imports
  • Regulatory Reform Strategy
    • Aimed at Reducing Cost of Achieving Regulatory Objectives
    • Aimed at Increasing Domestic Competition
    • Aimed at Increasing International Competition
  • Political Strategy
    • Deflect Pressure on Politically Sensitive Policies
    • Take Advantage of Foreign Pressure on Politically difficult but desirable policy reforms
strategies for formulation of requests
Strategies for Formulation of Requests
  • Offensive – Maximize Export Opportunities
    • Identify list of foreign regulatory changes that would increase exports
    • Identify which of these requests other countries will pursue (free rider opportunity)
  • Defensive – Minimize Import Opportunities
    • Make few requests, to signal limited interest
    • Request changes difficult for other countries to implement to deflect foreign pressure
strategies for formulation of offers
Strategies for Formulation of Offers
  • Domestic Reform Strategy
    • What regulatory reforms/removal of import barriers can we offer that serves domestic regulatory reform objectives?
  • Mercantilist-Reciprocity Strategy:
    • How much do we have to offer now so the other country will take our requests seriously?
    • What is our opportunity for being a free rider?
    • What will we have to offer to obtain commitments on issues where we are a principal demandeur?
interest based vs competitive negotiations
Interest-Based VsCompetitive Negotiations
  • Positions Vs. Interests
  • Personalities Vs Group Interests
  • Zero-Sum Vs Positive Sum Approaches
  • Hiding Vs Sharing Information
  • Judgmental Vs Pragmatic Advocacy
how to build negotiating momentum
How To Build Negotiating Momentum
  • Build success by establishing areas of common ground, even on procedural issues
  • Pick the easier issues first and continue to build common ground
  • Record areas of agreement in writing as you you make progress
  • Periodically review progress by going over areas of agreement and outstanding issues.
  • Seek Potential Allies
interpreting what is said identify
Interpreting What is Said: Identify
  • Beliefs
  • Positions
  • Interests
  • Arguments
negotiating success depends on
Negotiating Success Depends on
  • Economic Power of Coalition
  • Commonly Shared Ideas of Legitimacy
  • Utility of Agreement to Business
  • Sound and Comprehensive Analysis
  • Identifying Reasons Why Other Party Can Gain from Negotiating Proposal
  • Creativity in Identifying Win/Win Solutions
  • Achievement of Mutually Beneficial Outcomes
negotiating resources
Negotiating Resources
  • Technical assistance programs of World Bank, WTO, UNCTAD, ITC, OAS, other Regional Organizations
  • WTO Trade Policy Course and WTO training Course
  • WTO/OECD Doha Development Agenda Trade Capacity Building Database
  • Briefing notes, workshops and training seminars offered by AITIC in Geneva
  • Resources on ITCD’s website, www.comercial diplomacy.org
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