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501. Getting to “No”: Defending Against Demands in NAFTA Energy Negotiations

Author:
Antonio Ortiz Mena L.N.
Publication Date:
06-2005
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
How can a developing country defend itself against unwanted demands in international economic negotiations, especially when the demandeur is a stronger state? Such defense can be a necessary component of any strategy, not only a distributive one but also a mixed strategy aimed at a wider agreement that benefits both sides. Sometimes what looks like an unwelcome demand turns out, after exploration and exchanges of concessions, to be an acceptable element in a beneficial package deal. But some demands are unwelcome in the stronger sense that one's government places an infinite reservation value on that particular issue. The government would prefer no agreement. In the case of a deal breaker, the delegation can walk away from the entire negotiation, but this could have large costs in opportunities foregone and even possible penalties imposed. What are the alternatives short of walking away? Mexico's negotiators faced such situation in the North American Free Trade Agreement (NAFTA) negotiations with the United States and Canada (1990-1992), specifically in the energy sector. In general the three states sought a mutual-gains agreement, and in general each employed a mixed strategy. In energy, however, Washington made demands--regarding investment and supply commitments--which Mexico found unacceptable. At the end of the day the Mexican team managed to attain its main offensive negotiation aims in NAFTA (significantly improved market access, faster tariff reductions in the U.S. and Canada than in Mexico, and an effective dispute settlement mechanism), as well as the main defensive ones in energy. How did they do it? Structural conditions, such as being a neighbor of the U.S., gives Mexico certain leverage in negotiations, for the U.S. will typically take into account non-economic considerations when negotiating over economic issues. Nonetheless, many lessons derived from Mexico's negotiation strategy in energy negotiations during NAFTA can be applied across a range of cases.
Topic:
Development, Economics, Energy Policy, and Government
Political Geography:
United States, Washington, Canada, North America, and Mexico

502. Iran, the international community and the nuclear issue: where to next?

Author:
Anthony Bubalo and Dr. Michael Fullilove
Publication Date:
12-2005
Content Type:
Working Paper
Institution:
Lowy Institute for International Policy
Abstract:
The international impasse over Iran\'s nuclear program is entering a critical phase. The compromise being offered by the international community, whereby Iran would carry out sensitive uranium enrichment work in Russia, is unlikely to be accepted in full by Tehran. The hardline rhetoric of new President Ahmedinejad is further limiting the prospects of a diplomatic solution being found. As a result, the issue is likely to come before the Security Council. Once in New York there are a number of ways it could play out. But at this stage it is not clear what the Council would be able to do to force a change of behaviour from Tehran. Faced with poor options all round, Washington may feel at some point that it has to risk the uncertain results of limited air strikes against Iranian nuclear facilities to delay what it regards as the unthinkable - a nuclear armed Iran.
Topic:
International Relations, Foreign Policy, and Nuclear Weapons
Political Geography:
Russia, Iran, Washington, and Middle East

503. Balancing act: Taiwan's cross-strait challenge

Author:
Malcolm Cook and Craig Meer
Publication Date:
04-2005
Content Type:
Working Paper
Institution:
Lowy Institute for International Policy
Abstract:
Taiwan is in the middle of a deep social transformation that is redefining the way its people identify themselves, how it sees its place in the world and, most urgently, its relationship with China. Taiwan's metamorphosis, and China's reaction to it, are making it more difficult to maintain peace across the Taiwan Strait. Washington and its regional allies, including Australia, need to understand these changes better and to incorporate responses to them into their policies.
Topic:
International Relations and Democratization
Political Geography:
China, Washington, Taiwan, Asia, and Australia

504. Prospects for Regional Free Trade in Asia

Author:
Gary Clyde Hufbauer and Yee Wong
Publication Date:
10-2005
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Frustrated with lackluster momentum in the WTO Doha Round and the Asia Pacific Economic Cooperation (APEC) forum, and mindful of free trade agreement (FTA) networks centered on the United States and Europe, Asian countries have joined the FTA game. By 2005, Asian countries (excluding China) had ratified 14 bilateral and regional FTAs and had negotiated but not implemented another seven. Asian nations are also actively negotiating some 23 bilateral and regional FTAs, many with non-Asian partners, including Australia, Canada, Chile, the European Union, India, and Qatar. China has been particularly active since 2000. It has completed three bilateral FTAs—Thailand in 2003 and Hong Kong and Macao in 2004—and is initiating another 17 bilateral and regional FTAs. However, a regional Asian economic bloc led by China seems distant, even though China accounts for about 30 percent of regional GDP. As in Europe and the Western Hemisphere, many Asian countries are pursuing FTAs with countries outside the region. On present evidence, the FTA process embraced with some enthusiasm in Asia, Europe, and the Western Hemisphere more closely resembles fingers reaching idiosycratically around the globe rather than politico-economic blocs centered respectively on Beijing, Brussels, and Washington.
Topic:
Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
United States, China, Europe, Washington, Canada, India, Beijing, Asia, Australia, Qatar, Chile, Hong Kong, Brussels, and Macao

505. Swiss National Bank Sales—Lessons and Experiences

Author:
Philipp M. Hildebrand
Publication Date:
05-2005
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
I am pleased to be in Washington today and would like to thank Fred Bergsten and his colleagues at the Institute for International Economics for providing me with this opportunity to talk about the recently completed gold sales of the Swiss National Bank (SNB).
Topic:
International Relations, Economics, and International Trade and Finance
Political Geography:
Europe and Washington

506. Managing Energy Insecurity

Author:
John Browne
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
It is great to be in Washington again and a privilege to be invited to speak here for the first time. You asked me to talk about energy security, and I think the basic question is whether, to use the words of one of your recent papers, there is "a gathering storm" around energy supply, and what, if anything, should and could be done to avert that storm.
Topic:
Economics, Energy Policy, and Science and Technology
Political Geography:
United States and Washington

507. Can Disasters Be Good for Growth?

Author:
John H. Makin
Publication Date:
10-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The U.S. economy was in recession when the 9/11 terrorist attacks struck New York and Washington, D.C. Yet within a few months, despite fears of a collapse in confidence, consumption growth surged to a fourth-quarter annualized rate of nearly 5 percent, up sharply from a 1 percent rate during the third quarter. That consumption surge was enough to drag the economy out of what turned out to be a mild recession. By the first quarter of 2002, overall growth reached a booming 5 percent rate.
Topic:
Development, Economics, Environment, and Terrorism
Political Geography:
United States, New York, and Washington

508. Energy Conservation: An Economic Perspective

Author:
Robert W. Hahn
Publication Date:
10-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
With oil and gas prices at record levels, Persian Gulf producers threatened by terrorists, and exploding demand from China likely to strain supplies for years to come, surely it is time for Washington to get serious about energy conservation. Well, yes . . . and no. While most economists (including me) are deeply skeptical about the value of government mandates for energy efficiency, in principle there is a case to be made for using taxes to “internalize” the costs of consumption that are not otherwise reflected in prices. But those costs are lower than you might expect—lower, perhaps, than the taxes currently charged at the pump. Moreover, while oil-security worries are now driving the calls for conservation, a careful look suggests that the neglected costs are actually related to traffic congestion and the threat of global warming. Taxing oil consumption (as opposed to taxing road use or carbon emissions) would hardly get to the roots of these problems.
Topic:
International Relations, Economics, Energy Policy, and Terrorism
Political Geography:
China and Washington

509. North Korea Triumphs Again in Diplomacy

Author:
Nicholas Eberstadt
Publication Date:
10-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Contrary to conventional wisdom, which holds the North Korean state to be an unremittingly hostile “negotiating partner,” history actually demonstrates that Pyongyang can be a highly obliging interlocutor under certain very specific conditions. All that is necessary to “get to yes” with the Democratic People's Republic of Korea (DPRK) is to concede every important point demanded by the North Korean side while sacrificing vital interests of one's own. The mid-September “breakthrough” at the six-party talks in Beijing would appear to conform precisely to this long-established pattern. The vaunted outcome—a long-desired “consensus statement” inked by North Korea and the other five governments engaged in protracted discussions over North Korean denuclearization—is being celebrated by diplomatic sophisticates in Seoul, Beijing, Moscow, Tokyo, and Washington.
Topic:
International Relations, Diplomacy, and Nuclear Weapons
Political Geography:
Washington, Beijing, Asia, North Korea, Tokyo, Korea, and Seoul

510. Beware the Arafat Model in Iraq

Author:
Michael Rubin
Publication Date:
09-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Iraqis gathered around television sets as midnight approached on August 22. They watched as constitutional-drafting committee members and political elites whispered among themselves. When the speaker of the national assembly, Hachim al-Hasani, declared, “We have received a draft of the constitution,” the assembly erupted in applause. “But,” he added, “there are some points that are still outstanding and need to be addressed in the next three days.” Late into the night, politicians and activists continued to meet in the Baghdad homes of the major powerbrokers, grappling with the roles of federalism and Islam in the new Iraq. While U.S. diplomats and Washington advisers continue to facilitate compromise among Iraq's disparate sectarian, ethnic, and political groups, the reality emerging outside Baghdad is directly challenging Iraq's aspirations to constitutionalism. The U.S. government has spent hundreds of thousands of dollars to bring outside experts to Baghdad for a period of a few days or a few weeks, but Iraqi powerbrokers dismiss their advice as naive or irrelevant. Massoud Barzani in the Kurdish north and Abdul Aziz al-Hakim and Muqtada al-Sadr in the Shiite south have rejected the experts' academic proposals, and have chosen instead a model perfected by Yasser Arafat, the late chairman of the Palestine Liberation Organization.
Topic:
International Relations and Politics
Political Geography:
United States, Iraq, Washington, Middle East, and Baghdad