We all negotiate when we buy a car or discuss terms for a new job. Negotiations between nations to end wars or shift trade seem a world away, both types of negotiations share something in common: there is always a chance they will fail.
If one side in the negotiation is stronger than the other — whether this is a new employer, a car dealership or a more powerful country — they might use that strength to seek concessions. They could threaten to make things worse for the other side if negotiations fail.
“Instead of trying to compromise and give concessions, a non-cooperative strategy tries to extract those concessions from the other side,” said Heather Elko, an associate professor of political science in the College of Letters and Science at UC Davis.
Elko, an expert on international negotiations, said the U.S. government’s recent shift to a non-cooperative negotiating strategy has used this tactic of threatening to increase the costs of not agreeing to U.S. terms. While non-cooperation is far from unprecedented in international negotiations, Elko said it could make U.S. negotiations in the future much more challenging.
The BATNA in international negotiations
A common feature in all negotiations is the Best Alternative to a Negotiated Agreement, most commonly called its acronym, BATNA. The BATNA is what’s left for both sides when negotiations fail. When individuals and even nations negotiate, both sides seek an agreement on better terms than their own BATNA.
The BATNA has played a powerful role in the U.S. government’s recent non-cooperative negotiating strategies, said Elko, particularly using threats of tariffs. Tariffs change a country’s BATNA by reducing demand for its exports.
Tariffs are an additional tax that domestic companies pay to import products. For example, the proposed tariff on all goods from certain countries will increase the cost for U.S. companies to import bananas, aluminum, sweaters and every other product from those countries.
“Tariffs change the BATNA,” said Elko. “If instead we sat down and tried to negotiate, the BATNA would be the status quo before tariffs. Using tariffs to change the BATNA is a coercive tactic.”
For some countries, a sudden cut in demand from a trading partner as large as the U.S. could be catastrophic for their national economy. For example, the U.S. market accounts for roughly 82% of Mexico’s exports worldwide. Mexico is a major exporter of cars to the U.S., which it builds for a number of brands, including Audi, Hyundia-Kia, General Motors and Ford.
Cooperative negotiations for the benefit of all
International negotiations do not have to be non-cooperative to be productive. In the mid-2000s, Elko spoke with delegates from nearly every country in the European Union during their negotiations in the EU institutions. The delegates worked cooperatively to come to agreements on trade, environmental and social policy, economic competition and other areas. Both sides in every negotiation wanted preferential trade agreements that reduced tariffs and increased trade.
Those negotiations were unique, Elko said, because the delegates met so frequently that for the most part they didn’t need translators. Even though they needed approval from their governments to accept any agreements, such close and consistent interactions helped to result in compromise.
“They were very collegial in this particular institution,” said Elko. “There were lots of informal meetings. They would go to lunch and just chat about stuff not in the official room.”
The cooperative approach has also extended beyond the EU itself. In negotiations between the EU and Vietnam for a trade agreement signed in 2019, EU negotiators compromised on their initial terms in exchange for Vietnam agreeing to improve labor standards for its workers.
“The EU could have just strong-armed Vietnam into doing what it wanted, but in this agreement both sides got something,” said Elko.
The cost of non-cooperation
Elko said that non-cooperative strategies like changing the BATNA can affect a country’s reputation in the long-term, affecting future negotiations. Research on the threat of force in war can also apply to non-cooperative negations on trade, Elko said. The threat of military forces functions in the same way as the threat of tariffs.
“If you show willingness to use force against another country, that can sometimes get other states to do what you want,” said Elko.
When the U.S. invaded Iraq in 2003, for example, the government showed a willingness to engage in conflict in order to prevent countries from having weapons of mass destruction. At that time, Libya was developing a nuclear program. In the immediate aftermath of the U.S. invasion of Iraq, Libya dismantled that program.
“If you have a reputation for doing these things, you can get things you want even without having to do them again,” said Elko.
Elko said that in a similar way, placing tariffs on Mexico and Canada — the two largest U.S. trading partners — can establish a U.S. reputation for following through on trade threats. However, this approach might create challenges for future negotiations.
“Countries might not want to negotiate with the United States in the future even if we have a compromise-oriented future government because it’s been show that the agreement can be reversed at any time,” said Elko. “I think the reputation of the United States could really be hurt in that way.”
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