1. Tradeoffs in Negotiations Creating a win-win outcome
Ahmed F. Ghoneim
Cairo University
address:

2. Determine your objective(s)
Trade
Economic
Political
Institutional
Others

3. Identify your position before starting negotiations
What is the status of trade and economic situation at home? (indicators as exports % of GDP, rate of growth of exports, etc.)
What is the legislative status of services industries (are laws outdated, is inefficiency of services increasing transaction costs?)
To what extent is your political regime stable (is democracy well established, are human rights respected) (this is important in deep integration)

4. Identify potential gains from concluding such agreement
Are trade prospects likely to improve? How and which products, and why?
Are there are other economic gains (increased inflow of foreign direct investment, increased aid flows, etc)
Are there political gains (using the agreement as gateway for other forums, using the agreement as an anchor for reforms)
Are there legislative gains (introducing some changes in laws that were difficult to include or faced resistance by some lobbies)

5. Elements that need to be considered
Trade Interests
Economic Impact
Legislative Issues
Domestic Politics
Foreign Relations
Public Opinion

6. Tradeoffs in negotiations
There are a lot of tradeoffs that can be within the same sector or between different sectors (example: your country might gain a market access for an important product while losing domestic market share for another imported product, or you might gain on the trade front but lose on the legislative front)

7. You need to identify your priorities
What is the main aim of negotiating such agreement (probably that is clear and comes from the political leadership)?
However, you need to minimize costs and maximize benefits when reaching the ultimate objective

8. Costs are not always costs and benefits are not always benefits
Costs and benefits differ depending on the point of view of the stakeholder, and on time, etc.
Examples: trade liberalization might kill some industries in the short run but might result in birth of new competitive industries. It might destroy lobbies and increase efficiency but might lead to unemployment and loss of tariff revenue.

9. Examples of tradeoffs in Regional Trade Agreement
Political gain versus trade loss
Trade gain versus loss of national sovereignty
Trade gain versus unemployment
Legislative burden versus better market access
Legislative burden versus better efficiency
Increased investments versus regulatory burden
Suppressing domestic lobbies versus loss of national sovereignty
Short run costs versus possible long term gains in trade

10. Evaluating the gains and losses
There is no method that can identify the exact gains and losses from concluding a trade agreement
Research helps, but make sure the assumptions reflect reality
Evaluation should be an overall evaluation depending on your ultimate objective and not on an issue per se
Avoid being captured in details, however remember that devil is in details

11. Tips for better negotiations
Let the national interest be your driving force
Avoid personal influences on negotiations
Make sure you are capable as a country to handle the agreement
Always check the safeguard provisions and assistance provided
Sell your position domestically

12. Tips for negotiations Always have more than one option ready
Gradualism might help in certain cases
Ask for the moon, you will probably get less (which is what you want) but don’t start by asking for the less
Always have a wide vision, and not a narrow mercantilist vision

13. Playing it “Politics”
Balancing Commercial Interests at home and abroad
Addressing the Policy Issues at home and abroad
Building Political Coalitions at home and abroad
Solving Institutional Problems at home and abroad
Seeking Public Support at home and abroad

14. During Negotiations, take care of the following:
Have well command of information
Pay attention to cultural issues (it affects the mood and pace of negotiations)
Be credible
Start by points of agreement and then move to difficult issues
Depend on experts in each field you are negotiating (make sure you consult more than one with different background)

15. Remember the following
Theory ended up that in Regional Trade Agreements “anything can happen”, which implies that there is no guarantee for anything.
In other words, Regional Trade Agreements are rather an opportunity for expansion of gains but they cause losses as well.
Your role should be identifying an alternative combinations of measures to solve the trade problem, while preserving legitimate objectives in other policy areas (what policy laws, rules, or institutional arrangements do we accept as given, and which should we consider challenging?)

16. Thank you