Trans – Pacific Partnership (TPP) History and Negotiations

3701 words (15 pages) Essay

18th May 2020 Politics Reference this

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Executive Summary

The Trans – Pacific Partnership (TPP) is a now obsolete trade agreement between Australis, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States, which was signed on the 4th of February 2016.  Even after 11 years of negotiation the agreement was not ratified and then voided do to the change of presidents in the United States and their withdrawal.  However, the other remaining countries did negotiate a new deal called the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership, which incorporates most of the provisions of the TPP and was enforceable from  30 December 2018.

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The TPP (for which is better known as) began in 2005 after an expansion of the Trans- Pacific Strategic Economic Partnership Agreement (TPSEP) signed by Brunei, Chile, New Zealand, and Singapore in 2005.  In the following years, additional countries joined the negotiations until it expanded into a very broad encompassing pacific rim treaty.  In all twelve countries ended up signing the agreement, with the Untied Stated withdrawing during the first ninety days of Donald Trumps’ presidency.  The TPP was a massive multi-government agreement that was intended to reduce tariff barriers, protect the environment, expand human rights, protect intellectual property, establish a fair investor-state arbitration system, increase labor rights, and facilitate regulatory cooperation, while increase economic trade between smaller and larger economies.

The Beginning of the TPP traces it history back to the TESPA which was signed agreement in 2005 between four countries, Brunei, Chile, Singapore and New Zealand , these four smaller economies began the framework for what would become one of the largest trade agreements in the modern world.  In 2008 the US decided to enter into negotiation with these four smaller economies which began the creation of the TPP as other countries began to follow the US’s lead over the next decade.  Over this 11-year negotiation, there were nineteen formal rounds or negotiation with various other informal and smaller meetings between participating countries trying to ensure that their citizen’s best interest is protected while increasing trade and commerce. 

In the following paper, I will discuss certain Rounds of negotiation and how the techniques used were put to the test during this dynamic and highly complex multi-party negotiation was conducted.  In particular, I will review the US Negotiation notes from four specific rounds; these are Round 1 Melbourne, Round 4 Auckland, Round 6 Singapore, Round 9 Lima.  As the negotiation progressed through each round, the issues became more complex, and the skills and team sizes became even more difficult to maneuver through the complex web of stakeholders and interested parties.

Round 1 Melbourne (2010)

Eight Members of the TPP, with over 200 delegates, from the USA, Australia, Brunei, Chile, New Zealand, Peru, Singapore and Vietnam; meet to discuss and kick off the negotiations in a planning session.  This round discussed the framework and how each country could provide input to the overall partnership and how the aspects of the treaty will be raised and discussed.  This negotiation situation revealed all of the primary interests and issues making this a very complex integrative negotiation situation.  This is true because an Integrative situation is one based off of focusing on the common issues and not their differences.  So each country came into this first round trying to focus on these issues and ensure that each party understands the common issues.  Without information sharing than the negotiation is more of a win-lose situation instead of a win-win.   The benefits of approaching round one in such an open dialogue is to set the ground work to try and make the integrative negotiation a win-win for all parties, this then allows you in further rounds to: focus on the shared issues, bring out each parties needs and wants, which allows each party to address them in the negotiation, focus on the commitment to solve each parties issues, share information on the issues and create ideas on how to solve the issues and create options that solve each party issues. Communication during the initial negotiation phase creates information sharing, which can then lead to problem solving.

     Round 4: Auckland (2010)

Round four is when the TPP negotiations seemed to pull out of the issues, positions, and interests of each participating party.  Each country came to Auckland with an understanding of what they waited to achieve, and from my research it seems that each country showed up understanding their BATNA and what their stakeholders were expecting as an outcome.   This round included more than 100 stakeholders from five countries who provided direct input directly to the negotiators.  There was an entire day of exchanging and sharing ideas, while the lead negotiators tried to extract information from their counterparts.  As we have learned, the issues that were discussed during this period, will eventually become our principle’s that one can enter a formal agreement. To understand the issue each country also need to understand the position of each party involved and also understand the interest of each stakeholder, which is why they care about each issue and take certain positions.   Most importantly in this round is when the negotiators set their BANTA. There are four major reasons why a negotiators BATNA is the most important source of power, It increases your chances of making the initial offer, as we have learned making the opening offer and hearing the counteroffer will provide you with vital information as you try to find our your opponent’s BATNA. Having a strong BATNA increases your outcomes and as well as other outcomes. A BATNA gives you the ability and knowledge to know when to walk away, this is a power that is often over looked. A BATNA also provides you with leverage, knowledge is power and a good BATNA gives you great knowledge on the situation.  This allows you to make informed decisions during the negotiation. And last but not least, a good BATNA increase your share of the pie, pie expansion and overall goal achievement is why we are in the negotiation in the first place.  During Round 4 of the TPP negotiation, the parties involved where using their BANTA to increase their overall position, and many stakeholders met in small working groups trying to understand the issues, position, and interest of all parties involved. 

Round 6: Singapore (2011)

This round of negotiation is where the TPP party members made significant progress and began laying out the framework and legal text that would be the base of the agreement.  This was accomplished by the teams exchanging initial offers on services and investment, government procurement and product specific rules of origin.  This specific round really lays out how this large multi-party negotiation is one of the most complex integrative negotiations in recent history.  This round of negotiation showed cooperation, tried to create a win-win situation, the problems where set as overall agenda items, it was interest based and overall everyone was concerned on the overall mutual gain that would be accomplished if the TPP was successful.    The interest based overall negotiation was reinforced during the closing moments of this round with the release of a memorandum where the participants agreed to continue to work and collaborate to further build on the momentum achieved during round 6.   I think this memorandum was one of the key outcomes of this round as this publicly and privately continued to build trust within the ranks of the party member’s. Allowing the negotiators to come back to their stakeholders and show that progress was made, as we have learned in the intercultural negotiations, saving face and showing progress is very important to all cultures, however, some take trust building more importantly than others.  This round also showed that the negotiators were able to focus on interests, and not positions.  In this round the member states showed the importance of communication and how they used it successfully to maintain relationship between all parties.  There are many reasons why communication breakdown’s happen within group .              The first reason and I feel the most important reason is the informational and computational issue, which is as you add more parties to the negotiation the communication path becomes more complex.   As with any conversation, when you begin sharing information and increasing the number of senders and receivers, the message can become muffled.  In a dyad you may be able to take turns speaking and exchanging ideas.  Whereas in a multi-group scenario, parties might be fighting for time or one party in the group might not be giving sufficient time to speak.  When it comes time to close the deal this one-party might be the reason why a deal wasn’t met. The next reason is that communication breakdowns in larger groups is that in these larger groups there is larger more complicated social structure, this social complexity is the dynamics that the social environment will have on the negotiation, there could be coalitions controlling the conversation which will make other parties potentially feel excluded from the negotiation and may affect the group’s ability to come to an agreement. The communication process is another attribute why the multi-party communication is more complex than one-to-one conversations.  This process can be confusing for the parties involved, there can be confusion on who’s turn is it, or perhaps misunderstanding on what the agreement was. Because of these reasons, I feel this memorandum was very important, as it showed the participating parties and their stakeholders that there was good communication and alignment with in the groups to ensure a positive outcome for all parties involved.

Round 9: Lima (2011)

This was one of the more interesting round of negotiation, as we will see a small emergence of the Asia-pacific coalition forming.  From my research, I do not feel that this was combative or for the reason to block any agreement, instead it seemed that the smaller Asian economies know that they will be a major player in the 21 century economic growth. What truly bound this coalition together was an understanding that their emergence on the global stage and that the six smaller countries still held great opportunity for investment for the larger economy’s.  This band together to make ourselves a larger force, helped it gain traction and put a larger emphasis on swaying the negotiation towards a favorable outcome for them.  The power of this coalition is because Asia already accounts for a larger percentage of export jobs and import material, and for many years we have heard how these economies will grow faster that the world average.  What was interesting about the Lima discussion’s is that the smaller APAC countries decided to protect themselves; they remembered that each party has an interest and is as powerful as the other party. To do this one needs to make sure you understand your resistance point and stick to it.  Do not feel obligated to stick a deal, just because the other party is more powerful.  As shown in the fourth session each country has a strong BATNA- this is important because it will give you the information required to ensure your position is strong, so that you will know where you stand if your current negotiation falls through.  You may want to try and let the other party know what your alternative is (maybe partner with china), this can help restore some power to your side of the table.  It is important to make sure your negotiation has an alert system, this is a system that will let you know that you are approaching your resistance points. You may also improve your power, this can be done by using some different strategies, you many enlist a third party to help improve your power, the power holder (other party) may surrender some power, and you as the powerless may take power back.  There are many tactics that help the powerless achieve more power through the contextual source of power. The benefit of this is that as a negotiator try’s to change the power level within a negotiation, it will become more collaborative.  As each party will begin to see that a hardline win-lose approach is not worth it and the power party will naturally begin to release some power back to the party in the low-power position.

TPP Overall

After detailed analysis of the TPP and seeing that it took over 10 years, 19 formal rounds of negotiation and included thousands of various stakeholders, I would say that the TPP was a very successful collaborative negotiation.  This complex treaty was setting the TPP countries up for economic successes and could have laid the ground work for many other multi- party negotiations specific to this region.  All the negotiators in the TPP, where patient, collective, calculated, understood their BANTA, responsive to their Stakeholders, and collaborative, which I feel is why this was such a success.  The ability to share information and ensure that the outcome was for the greater good of all involved is shown by when the United states withdrew their bid, the remaining parties then formed another alliance without the US called Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which has many of the same fundamental agreements and articles that was in the TPP.  This shows that each of the 12 parties, negotiation not for one beneficiary, but instead for the greater good of the group, as this second agreement was easily ratified by the remaining 11 countries. 

Reflection Who am I (Tough/Soft/ /Carrot and Stick/Collaborative)

 

As a negotiator, I feel that I am a Hodge podge of negotiation personality’s I switch between, tough, soft, carrot & stick and collaborative, depending on the situation. As a manager and negotiator in the oil and gas industry if I am trying to obtain a contract form my client than I am soft negotiator, if I am selling downwards towards a vendor and have many options then I am tough. The fundamental difference between tough and soft negotiators is that a tough negotiator is not concerned with what the other party feels or thinks about them at the end of the negotiation.   As an example, tough negotiators will look at their counterpart as an opponent, whereas the soft negotiators will look at the counterpart as a friend or ally in the negotiation. 

Below is a quick table showing what I feel is the difference between the two

Tough     Soft

Combative     Accommodating

Untrusting of others   Shows trust

Uses threats    Try’s to find solutions

There are some major disadvantages of adopting either stance, Tough Negotiators will be combative and this will affect the possible relationship with the other party.  They will make the other party more defensive, which could lead to them not knowing exactly how big the pie could have gotten.  There are a lot of potential doors that get closed during a tough negotiation as each team is caught up in pie grabbing and not pie expanding. Soft Negotiators will be seen as weak and passive.  They will try to make concessions and build trust with the other party.  They are also seen as more of an integrative negotiator that is trying to achieve a win-win.  This can lead to pie expansion as a soft negotiator will build trust with their opponent.  This will lead to a very open communication path that will only enhance the information sharing.  

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Another Strategy that I use when I negotiate change orders with vendors or clients is the carrot-and-stick is a tactic that is used when you want to use a reward and punishment type system.  It goes back to a metaphor of a cart driver holding a carrot in front of a donkey while also waving the stick.  The donkey will move the cart for the carrot (reward) but if the donkey stops then the stick (punishment) is used for further motivation.   Since the carrot is the reward side of the coin, there are many steps that can be taken to make this more attractive when negotiating a change order.  How is carrot-and-stick relevant in negotiating, it can be very useful in the planning and preparation stage of your negotiation.  One can list all of the carrots or sticks that you feel could be helpful in achieving your goal.  Like a pros/cons list for a decision that you might make personally.    As one is planning a negotiation with another party you should list all of your “carrots” that can help you achieve your goals, and also list all of the “sticks” that can help you achieve your goals, all of this information will be important in helping you formulate your BATNA.

Reflecting Back on the TPP negotiations and our class, I would say that I need to improve my collaborative negotiation skills.  There are many situation that I have reflected on, where I am sure my Tough, Soft, of Carrot and Stick tactic has shrunk my piece of the pie.  Over the years I have felt that this change in personality has help me win negotiations and be successful, however, reviewing the TPP and reflecting on the in-class assignments, it has not.  The negotiators in the TPP where calculated, honest, and collaborative. They set their sights on goals that were bigger than the issues at hand, they attached specific problems while trying to ensure that agreement was for the greater good.  So, going forward, , I will now approach all of my negotiations with two specific areas to prepare for and conduct, the first one is the pre-negotiation stage and the second is the formal negotiation stage.  Preparing for and defining these aspects will allow me to better define win-win situation, the two area’s I will focus on to becoming a better negotiator s is the pre-negotiation stage and formal negations stage. To accomplish this I have create a check list or habits, research, and traits that I will need ot improve on during each stage. 

During the pre-negotiation stage, I will focus on:

  1. Researching on who will be present and try to obtain as much of information on them as possible
    1. Find key members, focus on decision makers
  2. Find potential problem members
    1. Are there any coalitions
  3. Any members already leaning towards your agreement
    1. If there are allies, what is this member’s roles?
    2.  
  4. Is it equal voting rights, does anyone have ultimate power to agree or disagree
  5. Have a clearly defined agenda to send prior to the meeting. Seek agreement on the agenda, Try to focus the group on early wins, or see if participating parties have similar goals.

During the formal negotiation stage

  1. Discuss a formal process of communication
  2. Try to focus on one issue at a time, and provide a solution for each issue
  3. Do not improvise.
  4. Keep your cool, react calmly and reassure the group of your solution.
  5. Try to minimize side conversations
  6. Keep notes
  7. Be prepared

If I can focus on improving my pre-negotiation stage and formal negotiation stage, then it will prevent me from falling back to old habits.  As these old habits have only created conflict in my past negotiations, and having the skills to create a collaborative win-win situation will benefit me as a manager, husband, father, and colleague going forward.

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