Comparative Foreign Policy: An Evaluation of
Simulated Bargaining among Canada, Japan, and the United States*
（比較対外政策―カナダ、日本、アメリカ間バーゲニングのシミュレーション評価）
SUMMARY IN JAPANESE：シミュレーション実験は、現実の状況を示す指標として使用しうる。本稿で行う実際のバーゲニングとシミュレーションによるバーゲニングの再現の研究には二つの目的がある。一つは、1986年秋の事例において、対外政策シミュレーションに、実際の政策決定者による慎重な行動、及びそれに伴う限界が反映される度合いを評価することである。今一つの目的は、実際の相互作用とシミュレーションによる相互作用のいずれ（あるいは双方）が既存の交渉行動理論によって説明されるかを検討することである。
シミュレーション評価に関しては、カナダ、アメリカ合衆国、日本の三国による、経済、酸性雨、南ア問題等の対外政策問題に関する行動が検証される。シミュレーション評価と諸仮説の検証という全体的な目的を達成するがため、1、シミュレーションの解説とその妥当性の評価、2、シミュレーション行動の文脈での既存のバーゲニング、交渉に関する議論の概観、3、諸仮説の展開、4、各問題領域での実際の世界の現状の詳説、5、シミュレーション相互作用に関しての発見の紹介、6、一般的な意味での実験結果の分析、の六段階にわたって行われる。
Compared to other models, a distinctive element of simulations is their ability to represent changes that may occur in a complex system even though these changes cannot be accurately forecast by humans who know only the initial properties of the system.[1]
Simulation exercises, as Hermann suggested, can serve as
potentially accurate indicators of conditions in reality, while also raising
questions about how actual bargaining may proceed. As Verba noted in a classic
exposition on political leadership, the small group experimental model can
serve as a “useful complement to verbal or mathematical models”.[2] For such reasons, simulation has become a major area of
research activity, useful in studying conflict, decision making, intergroup
relations, intercultural communication and other interactions.[3] The present investigation of real and simulated bargaining
has two basic objectives. One is to assess the extent to which a foreign policy
simulation, occurring in the fall of 1986, reflected the deliberations
conducted and boundaries faced by those who make decisions in the real world.
The other purpose of this study is to determine whether the real or simulated
interactions—possibly both—can be explained by existing ideas about negotiating
behavior.
With regard to evaluating the simulation, the actions of
the three participants—Canada, the United States and Japan—are examined in
relation to the foreign policy issues of economics, acid rain and South Africa.
Given the state of negotiations in reality, it is postulated that the simulated
bargaining should result in varying degrees of conflict in each of the three
areas among all three participants. More specific propositions about the
negotiating process are introduced at a later point.
To achieve the overall goals of assessing replication and
testing propositions, the investigation unfolds in six stages: (1)description
of the simulation and an assessment of its validity; (2)some reflections on
bargaining and negotiation in the context of simulated behavior; (3)development
of hypotheses; (4)description of the real world conditions in each issue area;
(5)presentation of findings with respect to the simulated interactions; and
(6)discussion of the results in more general terms.
Lasting seven weeks, the inter-university simulation
exercise took place under the auspices of Project ICONS, a cross-national
effort directed toward enhanced usage of simulation techniques in a classroom
setting. Referred to as the Western Industrial Dialogue (WID), trilateral
simulated bargaining among the US, Japan and Canada provided graduate students
in political science with a better understanding of the practical aspects of
foreign policy. Wilkenfeld and Brecht describe the WID as
“situated in the contemporary world projected forward by
about six months to allow an original simulated world to develop. A scenario,
which launches the exercise, outlines the state of the world, inspired by
present-day facts, but including new data.”[4]
While exposing students to the
every complexities of bargaining and diplomacy, the simulation followed
extensive preparation based on more academic material. The six weeks
immediately preceding the simulation were spent reviewing theoretical
approaches to foreign policy in general, and to Canadian, American and Japanese
foreign policies in particular. The three participants—McGill University from
Canada, California State University at Stanislaus from the United States, and
Waseda University from Japan, communicated through networked personal
computers. Each school represented its respective country.
Faculty at the University of Maryland at College Park
monitored the system. Consistent with that role, the Maryland team of
supervisory personnel (referred to as “Polcon”) set the initial agenda from
which the discussions proceeded. They also routed and recorded all messages.
In designing and implementing the simulation, Polcon made
every effort to include topical issues and constraints faced by leaders in the
real world, such as the need for translating foreign languages. As a result,
Polcon monitored all messages to ensure that the positions advocated by the
respective teams did not stray into unrealistic areas. For example, at no point
during the simulation would it have been permissible for Canada to threaten to
hold the US Ambassador hostage over the latter’s policy of constructive
engagement regarding South Africa.
In logistical terms, Canada transmitted messages to
Maryland (for approval and translation) in French, one of its two official
languages. At that point, translators produced versions in Japanese and/or
English and rerouted the messages to the intended final destination, either
Waseda, Stanislaus or both.[5] This procedure increased the presumed validity of the
simulation by introducing a variable that normally has to be accounted for in
international negotiation. As Wilkenfeld and Brecht have observed, “within the
framework of this simulation, a foreign language is no longer an abstract
system devoid of meaning or consequence; rather, it becomes a purposeful,
authentic, and communicative activity.”[6] Canada exchanged a total of 74 messages in the WID with
the other two teams and Polcon. The communications system allowed two teams to
exchange messages without the third team having knowledge of such activity,
although Polcon automatically had access to all communications.
Throughout the simulation, the teams met twice a week for
approximately two hours per session.[7] These meetings, chaired by a randomly selected class
member, consisted of discussing information researched by team members,
assessing recently received messages and formulating outgoing correspondence.
The instructor in each class played a minimal role, attending the sessions but
contributing only when it became necessary to answer procedural questions. For
the final session, referred to as the “conference”, each team assembled in the
computer lab at its respective university.[8] In contrast to the regular meetings, this “live” session
required virtually immediate decision-making. Messages had to be received,
evaluated and replied to within a 5 to 10 minute period. The final session
lasted for approximately one hour.
In terms of preparation, each member of a given team
selected an area of policy for more intensive study, based on personal interests.
Subsequently, each student became a resident expert on a given issue and
assumed responsibility for advising the rest of the team with regard to that
specific area. These roles approximated ministries within a cabinet setting.
Messages reflected the expertise of those most directly concerned with the
subject matter, although transmissions generally emerged as the result of a
consensus regarding content and wording. Failing that, in a few instances the
message was revised to be amenable to the majority of team members. In other
words, the final composition of each outgoing message corresponded to a team
decision.
Seven general issue areas can be identified within the
simulation. Appearing in Table 1, each has been numbered for notational
purposes. While each among Issues 2-7 contains a main component, Issue
1—economics—is an amalgam of finance, trade and investment. Due to the
interrelated nature of these items, they are placed under the general heading
of economics. This aggregation reflects the actual process of decision-making
observed within the simulation.
|
Issue Number |
Issue |
Content |
|
1 |
Economics |
Topics discussed include pegging
the US dollar, protectionism, global integration of capital markets, foreign
investment regulations and US-Japan trade relations. |
|
2 |
Strategic Defense Initiative |
Major points of deliberation
include SDI’s possible violation of the ABM Treaty, cost sharing and
technology licensing for commercial applications. |
|
3 |
Fishing |
This issue revolved about the US
refusal to recognize the United Nation’s Law of the Sea Agreement, as well as
driftnet fishing and the resulting resource depletion off the Canadian Coast. |
|
4 |
South Africa |
Attention focused on developing a
coherent policy towards South Africa while taking into account public
opinion, strategic minerals and global security. The legitimacy of the ANC
also was discussed. |
|
5 |
Oil |
This issue raised the questions of
the impact of fluctuating prices on the global economy, pegging the world
price of oil and reducing OPEC-based dependence. |
|
6 |
Environment |
Efforts focused on establishing a
bilateral agreement to reduce the toxicity of the Great Lakes, as well as acid
rain emissions. |
|
7 |
Sovereignty |
Deliberations centered on
Canada’s attempts to assert sovereignty over its northern waters and islands.
There also was an attempt to establish a joint board to enforce environmental
standards and monitor traffic in these waters. |
As noted, the foreign policy issues of economics, South
Africa and acid rain have been selected for detailed examination. Collectively speaking,
these issues are appropriate for further study, encompassing varying degrees of
interest and intensity of preference among the participants. For example, South
Africa is of particular interest to the US. Not only is it a source of
strategic minerals, but due to geographic location, South Africa exists as a
key element in maintaining a sphere of influence.[9] Japan’s position in the world today is, by and large, a
function of its economic power. However, fiscal relations with the US have
floundered over Japan’s allegedly protectionist policies and an associated
trade surplus. Of course, trade, capital markets and investment are of interest
to all three participants. Acid rain is different in that regard. Although this
issue also concerns economics, it primarily reflects a growing concern over the
environment and the overall quality of life. The issue is of fundamental
importance to Canada, a state whose international power does not rival that of
the US or Japan. Consequently, the strategies employed in dealing with these
issues should indicate the priority attached to them.
As previously asserted, the goal of a simulation is to
replicate conditions that resemble the international situation in meaningful
ways, specifically, the observed interactions among Japan, the US and Canada
with regard to the issues at hand. Since the simulation did not take place in a
completely controlled environment, intervening events (i. e., “history”) may
have affected its results. The simulation occurred over a period of six to
seven weeks; with some of the most important agreements occurring toward the
end of that period, it is possible that the traditionally hectic end of
semester activity had some impact on the proceedings. It is also is known that,
generally speaking, most of the agreements in any simulation exercise will tend
to be generated near the point of termination. A second potentially distorting
factor is that of selection bias. Selection means that results may have been a
product of differences in team composition, because the latter were neither
matched nor randomly selected. While all three teams consisted of students in
political science, with participation in the simulation being a course
requirement, neither matching nor random assignment of team members was feasible.
Factors such as age, ethnicity, work-related experience and academic background
could not be controlled.[10]
On balance, however, it is unlikely that the validity of the simulation exercise is compromised seriously by either history or selection. With regard to intervening influences, the simulation did not overlap with any major events in world history. As for selection, impressions from each of the instructors suggested that the participants exhibited a range of characteristics that would be normal for those at similar life stages in the respective countries.
In order to place the negotiations among the simulation
participants in a context that is useful analytically, it may be helpful to
borrow some ideas from the influential framework established by Sawyer and
Guetzkow.[11] Although their approach is by no means new, there is no
denying its comprehensive treatment of the bargaining process. What follows is
less a formal application of their model than an attempt to benefit from using
some of its concepts, which retain practical value.
Sawyer and Guetzkow defined negotiation as “a process
through which two or more parties—be they individuals, groups or larger social
units—interact in developing potential agreements to provide guidance and
regulation of their future behavior.” In presenting a socio-psychological
framework, Sawyer and Guetzkow asserted that the ultimate goal of any
negotiating party is to obtain the most favored outcome to which the other parties
will agree. The ability to achieve such a result is a function of the manner in
which the goals of the negotiating parties are interrelated, because reciprocal
benefits may accrue via a meshing of the various needs and capabilities of the
participants. Goal attainment also is a function of the specificity with which
objectives are defined: “if you are unclear in the definition of your goals,
you are not likely to be clear in their expression.” Generality and long-term
perspectives serve only to dilute the negotiating process, while specific goals
are more conducive to settlement. Overarching principles, such as a general
ideology, also generate greater conflict, because participants are no longer
disputing only interests, but also values.
Negotiating, according to Sawyer and Guetzkow, includes (1)
preliminary bargaining over procedure and agenda; (2) formulation of
alternatives and preferences by each party; (3) communication intended to alter
the other’s perception of the situation; and (4) activity intended to widen or
narrow the range of available outcomes and alternatives. To begin, the decision
to enter into negotiations is based upon the belief that a more favorable
outcome may be obtained from such interactions, as opposed to abiding by the
status quo. For example, when participants are amenable to a mutually
advantageous solution, the situation is more likely to be resolved than one in
which a participant cannot be convinced that negotiations will improve its
position.
Ultimately, the goal of any negotiator is to alter the
opponent’s preferences in a favorable direction. In establishing this point,
Sawyer and Guetzkow refer to the roles played by communication and persuasion.
Since “connotative differences and culturally specific meanings may hinder
translations” in international relations, negotiations should become easier as
communications increase.
Persuasion also is an integral component of negotiating.
Here the task is to convince the opponents that they have different interests
than previously perceived. This, in turn, will cause the adversaries to
reconsider the respective outcomes. Re-evaluation may be triggered by one of
three factors: (1) Intrinsic Interest—the opponents are persuaded to perform an
act for their own self-interests, i. e., “lower tariffs will permit your people
to buy imported goods more cheaply”; (2) Second Party Effects—the opponents are
convinced that, if a specific task is not completed, you may be forced to
perform an act detrimental to their interests, i.e., “If you do not lower your
tariffs, we may raise ours”; and (3) Third Party Effects—a third party or
parties approve of your request with regard to the opponent’s actions, i. e.,
“Other countries will approve if you lower your tariffs.”
Despite these examples of techniques of persuasion, it is rare that the most favored position of one party will ever match that of its opponents. Hence, there will not be a “best” point, but a set, among which “one party gains only at the expense of the other.” Thus bargaining often becomes a matter of “trying to establish what is the least the others will take, and convincing them that that is the most one will give.”
Consequently, a great deal of importance is attached to knowing the opponent’s baseline position. Upon discovery of that position, the task becomes to convince the opponent to implement an agreement more favorable to you. As with persuasion, effective communication is central to achieving this goal. Four techniques may be utilized: (1) Alter the conditions upon which the opponent’s minimal bargaining position is based; for example, increasing military power during negotiations for peace; (2) Emphasize the maximum advantages and minimum disadvantages of your position; advocates of Canada-US free trade, for instance, attempted to convince their nationalist opponents that the Agreement would not lead to an erosion of sovereignty; (3) Communicate to the opponent the actual or fictitious estimates of its minimal position; for example, convey to the opposing group (or individual) that you know it still generates a profit if it sells to you at the disputed price; or (4) Communicate to the opponent “an intrinsic development in the negotiations and relay to him that negotiation mores require that he follow this development”; for instance, explain to the opponent that because you have been making all the concessions up to this point, it is now time for reciprocity. If the adversary refuses, it will result in aggravated relations and place the negotiations in jeopardy.[12]
It also may be beneficial to modify the opponent’s
conception of your minimal bargaining position. This can be achieved by
altering the conditions upon which the latter is based or by asserting that it
would be impossible to come to terms at anything below the false level
perceived by the opponent. The goal is to stand firm at a favorable position
along what economists refer to as the ‘contract curve’, that is, the set of
efficient points.
Outcomes will correspond to different utilities ascribed by
the players. Moreover, because there is no metric by which all results can be
measured, the value attached to different outcomes must be assessed
individually by the various participants; “utility is taken, both operationally
and conceptually, to correspond directly to preference; outcomes of a higher
utility are those that are more highly preferred, and vice versa.”[13] This becomes even more complex with multiple issues and
potential linkages among them.[14] Negotiators seek an agreement that permits them to avoid a
zero-sum (or pure conflict) situation, increases collective utility and,
ultimately, approximates to a Pareto-optimal position. (Pareto optimality means
that it is not possible to make one person better off without worsening the
position of at least one other.)[15] Within this scenario, negotiations will be limited to
those outcomes whose utility at least equals that of the status quo resulting
from no agreement. Exit from negotiations, of course, is a salient option for
players in interstate bargaining games.
While Pareto-optimality represents a logical—if not always
normatively appealing—solution to negotiated conflict, there is no guarantee
that such an outcome will be achieved. For example, even commonality of goals
will be overlooked if “sufficiently strong negative feelings” exist between the
negotiating parties. The likelihood of a zero-sum game being perceived
increases under such conditions, as each participant is preoccupied with
obtaining results “better” than the opponent. An increase in zero-sumness is
also likely when the absolute level of utility derived from negotiations is
small. This implies that winning—“getting more than the other by trying to
force him to compromise while holding out oneself—might be valued more when
there is little or no absolute reward.”[16]
From a spectrum of approaches toward bargaining and
negotiating the Sawyer and Guetzkow framework has been chosen because it is
applicable to the simulation. Specifically, Sawyer and Guetzkow eschew the
highly formal approach to bargaining, preferring instead a dynamic mode of
analysis which grants due consideration to the roles of communication,
persuasion and the individual negotiator’s capabilities. In a highly realistic
manner, their framework is designed to explain the actions of states in the
context of international bargaining. Unlike some other approaches, it is not
expressed in terms of mathematical formulae. Rather, Sawyer and Guetzkow focus
on aspects such as interests, persuasion, threat and delay which, often are
significant in international negotiations.
Two sets of hypotheses have been derived for testing. One set focuses on interrelated aspects of the above-noted framework as applied to both the simulation and reality. The other set pertains only to events within the simulation. It would be beyond the scope of this investigation to test this latter group of hypotheses in each setting, especially given a focus beyond the three designated issue areas.
There are three propositions (A1-A3) which deal with both
the simulation and reality.
A1: Canada-US negotiations over acid rain will result in a high degree of conflict, while Japan will occupy a neutral position.
Due to the high benefits and costs that Canada and the US
associate (respectively) with controlling acid rain, it is reasonable to assume
that both countries will engage in conflictual negotiations over this issue.
While Canada wants to curtail acid rain emissions, the US, due to the cost
involved, would prefer to ignore the problem. Consequently, the probability of
reciprocal benefits accruing is low. The US, in attempting to elude a dialogue
focusing on a potentially expensive issue, is expected to behave obstinately,
thereby generating tension with Canada. Since acid rain is a Canada-US concern,
Japan is anticipated to try to abstain from negotiations regarding this issue.
South Africa and apartheid is expected to generate conflict
among all.
A2: Canada and the US will engage in conflictual negotiations regarding South Africa, with Japan occupying a less conflictual middle position.
The US has been a persistent advocate of the policy of
constructive engagement. This position is a function of dependence upon South
Africa’s strategic minerals and the latter’s salient location in the context of
global security. In contrast, Canada, due to its leading position within the
Commonwealth, has been a strong advocate of sanctions. Japan is expected to
take a milder approach; although not wanting to jeopardize their leading
position among Asian states, South Africa has been the largest African trading
partner for the Japanese. These preexisting, background factors are expected to
result in conflictual negotiations.
Economic issues provide the focus for a third hypothesis:
A3: The US and Japan will engage in conflictual negotiations over economic policy, with Canada tending to work with the US, perhaps even forming an alliance with the latter, in an attempt to bring about changes in Japanese economic policy.
Japan’s protectionist policies and its growing trade
surplus vis-à-vis the US have become major concerns. Despite US requests to
change its import policies, or revalue its currency, Tokyo’s position has been
steadfast. While both nations have intense preferences attached to this issue,
bargaining is not expected to be as conflictual as in the above-noted issue
areas. If negotiations should go awry, the potential losses would be
substantial. The cross-cultural nature of negotiations, of course, will not
make a consensus easier.
Although Sawyer and Guetzkow do not mention alliance
building, given the historically close relationship between Canada and the
US—and the fact that US-Japan economic relations often set the precedent for
Canada-Japan economic relations—it is reasonable to infer that Canada would be
willing to influence US-Japan economic relations. Moreover, Canada’s presence
on the US’s behalf might allow the latter to claim Third Party Effects in
persuading Japan to alter its economic policy.
Two other hypotheses concern the full range of
issues within the simulation. The first focuses on the expected distribution of
communications:
B1: Canada will have a relatively even distribution of communications across the issues; Japan and the US will not.
Given the different level of capabilities,
it is anticipated that the more powerful states will attempt to control the
agenda. The US and Japan are expected to communicate high minimum dispositions
across the issue areas, concentrating on those in which gains are perceived to
be feasible. By contrast, Canada is anticipated to put forward initiatives in
some areas but also to respond on others, thus producing more balanced message
traffic.
A second hypothesis focuses on the priorities attached to
the respective issues:
B2: The three states will reveal different orders of importance as measured by the amount of communication devoted to each issue area.
Since conflict among the states is expected, that should be
reflected in “talking past” the opposition, avoiding unpleasant initiatives,
and so on. By contrast, relatively similar orderings would reflect potentially
cooperative interactions, all other things being equal. Given the nature of
Hypothesis B1, it is expected that Canada will exhibit the least range in its
ordering of the issues.
Each of the three issue areas—acid rain, South Africa and
economic policy—will be covered in turn.
One of the most enduring issues in Canada-US relations is acid rain. “Acid rain or acid deposition, as it is more formally known, is a chemical soup of air pollutants, primarily sulphuric acid and nitric oxides, which is carried by the prevailing winds hundreds, even thousands of miles from industrial and population centers before falling to the ground as dry dust or acidified rain or snow.”[17] The net result of such fallout is the loss of millions of acres of forests, in addition to entire lakes—especially in the Muskoka region of Ontario—being completely killed. It is a scientifically supported fact that the vast majority of acid rain in North America originates from coal burning plants in Pennsylvania, Ohio, Indiana, Illinois, Missouri, Kentucky and West Virginia.[18]
Acid rain has become a high-profile issue over the last decade. Negotiations date back to the Carter administration. In 1979, Canada and the US signed the Joint Statement on Transboundary Air Quality, which outlined
“The substantial basis of obligation,
commitment, and cooperative practice in existing environmental relations
between Canada and the United States, the affirmation of a common determination
to reduce or prevent transboundary air pollution, and the intention to develop
a cooperative bi-lateral agreement on air quality.”[19]
Nevertheless, the goodwill generated by
the Statement was short-lived. In February 1980, the Carter Administration
passed legislation initiating a $10 billion program to decrease oil imports by
converting 107 power plants to coal. Not only did such legislation directly
contradict the 1979 Statement, but it also resulted in the production of an additional
400,000 tons of sulphur dioxide.[20] Moreover, the legislation was
implemented despite a warning from the US Academy of Sciences:
“The circumstantial evidence linking
power plant emissions to the production of acid rain is overwhelming. In fact the
picture is disturbing enough to merit prompt tightening of restrictions on
atmospheric emissions from fossil fuels and other large sources, such as metal
smelters and cement manufacturers. Strong measures are necessary if we are to
prevent strong degradation of the natural ecosystems, which together support
life on this planet.”[21]
Canada’s ability to elicit US action on
acid rain did not improve with Ronald Reagan’s rise to office. Campaigning on a
platform that included a strong critique of environmental policy, Reagan, from
1981 to 1983, not only cut the Environmental Protection Agency (EPA) budget by
26 percent, but also reduced its headquarters’ staff by 249 positions. He also
virtually eliminated the Council on Environmental Quality (CEQ), which had been
designed to initiate and review environmental policy.
Reagan believed that regulation would not
prove to be the best way to preserve the environment. He argued that “greater
reliance should be placed on free market forces to correct environmental abuses.”[22] Meanwhile, the pleas of
Canadian officials for bilateral action against acid rain went unheard. Romeo
Leblanc, then Minister of the Environment, called acid rain an “environmental
time bomb.” John Roberts, his successor, was far more outspoken. Addressing the
Air Pollution Control Association’s annual convention in the US, he declared
the following:
“Stated very bluntly, I see no reason why
Canada’s ecosystem—let me be blunter yet, Canada’s people, tourist camp operators,
fishing guides, commercial fishermen, loggers and other forest product workers,
building owners and tenants, and possibly our asthmatics or others with
respiratory illness, should have to pay the price of keeping the electricity
rates of those coal producing middle western states well below those now being
paid along the United States’ eastern seaboard.”[23]
Despite
such actions, US indifference towards acid rain prevailed.
Canada’s first official acid rain
proposal, a 1982 joint program designed to reduce sulphur dioxide emissions up
to 50 percent by 1990, was rejected. Face-saving measures were implemented at
the 1985 Shamrock Summit, with special envoys being appointed to once again
study the problem. This time, however, minor action was taken, as Reagan
pledged to spend $2.5 billion over 5 years to investigate cleaner ways of
burning coal.[24] However, such a concession
remained a far cry from the actual reduction in emissions that the Mulroney
government desired.
South Africa and apartheid have been of
concern to the United States, Canada and Japan for some time. The evolution of
US public opinion in a direction solidly opposed to apartheid coincided with
President Carter’s term in office. Under Carter, Washington’s South Africa
policy consisted of three actions: (1) a tightening of the arms embargo
implemented previously by the US via the United Nations (UN) Security Council;
(2) close scrutiny of South Africa’s possession and use of nuclear weapons, and
the consequences of this with regard to the Non-Proliferation Treaty; and (3)
the effective closing of US military facilities in South Africa.[25]
With the ascendancy of Reagan, American
policy toward South Africa changed significantly; closer links were established
between the two nations. This new policy of constructive engagement has been
defined as an approach to apartheid which “purports to stress quiet diplomacy
rather than confrontation” in an attempt to bring about change by working
within the system.[26] To a large extent, this shift
in policy reflected American dependence on South African strategic minerals. In
January 1980, the US Subcommittee on Mining declared, “America is now dependent
on foreign sources, in excess of 50 percent, for 24 of the 32 minerals
essential to national survival.”[27]
In detailing constructive engagement, the
Administration stated that, while finding apartheid objectionable, its primary
concern was the evolution of South African society in a direction that would
allow the US to pursue full relations with Pretoria. Therefore, Washington
encouraged change while minimizing the risk of damage to its interests. This
could be achieved only by providing support for Pretoria and maintaining
communications with South Africa as a whole.[28] The policy was not endorsed
by all US allies, however, because Canada and Japan adopted somewhat
contradictory positions.
Undoubtedly, among the three states being
discussed, the strongest response to apartheid came from Canada. This reaction
can be traced to Canada’s historical commitment to human rights and leadership
position within the Commonwealth. Despite its outspoken criticism of Pretoria,
until the late 1970s Canada also endorsed constructive engagement. Although it
had very limited economic interaction with South Africa (1 percent of total imports
and exports), Canada maintained a “hands-off” policy, while also abstaining
from UN votes designed to pressure Pretoria into enacting reforms. However, the
absence of change, a respected position in the eyes of black states in the
Commonwealth, and the insignificant opportunity cost involved in implementing
sanctions, led Canada to reevaluate its policy: “By 1985 Canada had concluded
that it could no longer tolerate a course which meant continued repression
within South Africa, and lawless raids on countries which are friends and
partners in the Commonwealth.”[29]
Up to that point, an arms embargo and a
voluntary ban on the sale of military equipment had been all that had existed
in the way of sanctions. Nevertheless, as part of its 1985 policy against apartheid,
Canada implemented
“an embargo on the sale of computers,
abrogation of double taxation agreements, a prohibition on the sale of
krugerrands, a ban on loans to the South African Government, a ban on the sale
of crude oil and refined products, an embargo on air transportation between the
two countries, and the assignment of an officer charged with responsibility for
labour affairs at Canada’s embassy in South Africa to maintain direct contact
with African opposition leaders who are agents of reform.”[30]
Ottawa
also eliminated the Programme for Export Market Development, designed to
promote the sale of Canadian goods to South Africa, and created a fund to
assist the families of South African political prisoners. Other measures
included a special administrator to monitor corporate behavior and a $5 million
educational aid program for black South Africans.[31] Furthermore, following the
1986 Commonwealth Conference, it was announced that Canada also would ban the
import of South African agricultural products, uranium, coal, iron, and steel,
as well as new investment and the reinvestment of profits earned in South
Africa.
Although South Africa is Japan’s largest
African trading partner, the latter, in response to the lack of change in
Pretoria’s racial policies, moved to implement economic sanctions. Japan’s
South African policy first gained substance in the late 1970s, when Tokyo
provided tempered support for all African liberation movements, including those
waging the battle against apartheid. Other steps taken at that time included
the refusal to open an embassy in Pretoria and a ban on direct Japanese
investment in South Africa.
Towards the mid-1980s, Japan still was
reluctant to impose unilateral sanctions against Pretoria, due to its
dependence on South African minerals. As a result, it continued to extend
official trade credits to South Africa through the Export-Import Bank, and
permitted Japanese firms to cultivate extensive licensing and technical
assistance arrangements with South African manufacturers. In addition, Japan,
along with the US and the UK, abstained from voting on the UN Anti-Apartheid
Act of 1980.[32]
The end of 1986 marked a hardening of
Japan’s policy towards South Africa. In a speech at the UN, Foreign Minister
Kuranori outlined Japan’s new position: “Japan has availed itself of every
opportunity to strongly urge the Government of South Africa to have the courage
to take decisive political actions to promptly abolish apartheid, free Nelson
Mandela, legalize the African National Congress (ANC) and other political
organizations, and enter into discussions with Black leaders.” He also claimed
that, because there had been little or no change in Pretoria’s policy, Japan
had no choice but to impose sanctions. Thus he announced new measures, including
“a prohibition on the import of iron and steel, restrictions on tourist travel
between Japan and South Africa, the continuation of the suspension of air links
with South Africa, and a prohibition on the use of international flights of
South African Airways by governmental officials.”[33]
Among the issues examined in the
simulation, perhaps none is as complex or volatile as economics. In 1985, the
US trade deficit with Japan already exceeded $50 billion. A significant portion
of this deficit was attributed to Japan’s “reluctance or even inability, to
expand substantially its imports of manufactured products.”[34] While 60 percent of American
exports to Japan are industrial supplies such as coal, logs and cotton, 65
percent of Japanese exports to the US are either automobiles or other capital
goods. This situation has triggered considerable concern in Congress, and has
led to the Japanese being viewed as free-riders: while expecting the US to
import Japanese manufactured products, they do not reciprocate. As noted in
Congressional Studies, “We are a developing nation, supplying a more advanced
nation. We are Japan’s plantation; haulers of wood and growers of crops, in
exchange for high technology, value added products.... This relationship is
unacceptable”.[35]
The US government has four main points of
contention with regard to Japanese trade relations. These are (1) Japan’s
reluctance to import foreign (i. e., US) manufactured products; (2) the unfair
support Japanese exports receive from government, especially those in the high
technology sector; (3) Tokyo’s tendency to balance periods of slow economic
growth by cutting imports while expanding exports; and (4) due to the
periodically misaligned exchange rates of the yen and/or dollar, Japanese price
competitiveness has been perceived to be promoted, while the US has been
undermined. More recently, the range of items under dispute has expanded; US
officials now claim that Japanese non-tariff barriers (NTB) are effectively
denying US agricultural products a share of the Japanese market.[36]
Increasingly frustrated over its
inability to persuade Japan to abide by the rules of the “trading game,” the US
government has concluded that it has no option but to “defend American exports
against foreign protectionism. The notion is as simple as it is biblical: the
United States must exact an eye for an eye, a tooth for a tooth; or in other,
more modern words, there must be a level playing field on which to engage.” US
economic policy has become forthright: to gain the same access to the Japanese
market as Japan has to that of the US. To facilitate this goal, Bill S-2094,
which “makes it an offence to deny the US commercial opportunities
substantially equivalent to those offered by the US,” has been enacted into
law.[37] In addition, domestic content
requirements and voluntary export restraints (VERs) have been imposed upon
Japanese automobiles.
Japanese economic relations with Canada
have followed a similar path. In 1980, trade between the two nations totalled
$7.1 billion. Japanese exports to Canada are far higher than those in the
opposite direction, with the absolute magnitudes being much greater compared to
a decade ago. This imbalance is all the more serious when it is noted that
Canadian trade with Japan is greater than its combined trade with Britain,
France, the Federal Republic of Germany and the Netherlands.[38]
Attempts to provide access for Canadian
manufactured goods to Japanese markets can be traced back to the early
initiatives of Trudeau’s foreign policy. Given that Japan is Canada’s second
largest trading partner, while Canada is Japan’s ninth largest, the policy
adopted a cautious tone and criticized Japan for its “restrictive import
policies, extraordinarily aggressive marketing policies and her undervalued currency.”
In a 1972 speech at the Japanese Press Club, the Secretary of State for
External Affairs, Jean-Luc Pepin, stated: “Only 3 percent of Canadian exports
to Japan are end products, and if I may speak frankly, as we do among friends,
this is an unsatisfactory situation.”[39] Despite the Trudeau
Government’s sustained efforts, the situation did not change. Japan steadfastly
maintained that the structure of its economy, i. e., few natural resources and
a heavy reliance upon manufactured exports, precluded an ability to import
finished goods. Nevertheless, Japan did import substantial quantities of
manufactured products from the US, UK and West Germany.
In commenting upon this relationship,
analysts have stated that, while Tokyo has acknowledged Canada’s initiatives in
this area, there has been no discernible change in Japanese policy.[40] This in turn has led Japanese
officials to state that “Canada by itself is not powerful enough to exert much
influence over Japan. Instead, it has often relied on the leverage created by
its close relationship with the United States to induce Japan to impose export
restraints or to increase direct investment.”[41]
Canada-US economic relations, however,
have not been free from controversy: imposition of the Nixon 10 percent import
surcharge encouraged Canada to lessen its dependence upon the United States via
the Third Option. Canada also has expressed concern about protectionist
policies being implemented at the state level in the US. At last count,
approximately 17 states had enacted legislation detrimental to foreign produced
goods.[42]
For its part, the US has accused Canada
of being protectionist, arguing that the latter’s unemployment insurance
benefits program, and its regional development grants, provide unfair
advantages for Canadian producers. Moreover, the US is still venting concern
that Canadian economic nationalism, previously characterized by the National
Energy Program (NEP) and the Foreign Investment Review Agency (FIRA), be kept
in check.
Simulated Bargaining
At this point it is useful to reflect
upon Hypotheses A1-A3, which concern the three highlighted issue areas, in the
context of the simulation. Tables 2A and 2B display the relevant data
concerning messages and lines of transmission.
TABLE 2A TOTAL MESSAGES, PER ISSUE, PER SOURCE
COUNTRY
|
ISSUE |
CANADA |
UNITED STATES |
JAPAN |
|
1 2 3 4 5 6 7 All |
11 6 1 5 6 6 3 38 |
5 6 0 2 6 3 0 22 |
17 6 0 4 4 0 0 31 |
TABLE 2B TOTAL LINES, PER ISSUE, PER SOURCE
COUNTRY
|
ISSUE |
CANADA |
UNITED STATES |
JAPAN |
|
1 2 3 4 5 6 7 All |
74.5 51.5 8.0 61.5 47.0 61.0 34.0 337.5 |
247.0 56.5 0.0 60.0 124.5 24.0 0.0 512.0 |
275.5 72.5 0.0 54.5 34.0 0.0 0.0 436.5 |
First, in relation to South Africa, it was
postulated that, due to Canada’s involvement in the Commonwealth and the
American policy of constructive engagement, the simulation would result in
Canada and the US experiencing a significant amount of conflict, with Japan
located somewhere in between. Upon examination of the total number of messages
and lines exchanged—as well as content—this hypothesis seems to be validated.[43]
In the context of Sawyer and Guetzkow’s
model of negotiating, where goal attainment is a function of communication, persuasion
and specificity, it would seem that Canada adopted a strong anti-apartheid
position. Although the Canadian team initially called upon the US to take the
lead in fighting apartheid, the latter’s policy of constructive engagement
meant that no satisfactory response would be forthcoming. Hence the Canadian
team conveyed “disappointment at the reluctance of the United States to
exercise leadership in coordinating an effective Western response to the South
African question.”[44]
By contrast, the US sent the least number
of messages about South Africa. However, in terms of lines transmitted per
issue, they were in second position, slightly behind the Canadian team. Despite
calls for sanctions, the US team maintained its position, asserting that
“strict sanctions would seriously undermine the Administration’s attempts at
peaceful reform. We do not want to impose sanctions for reasons previously
mentioned, and by the same token, do not want you (Canada and Japan) to impose
sanctions.”[45] Given the fact that the US,
along with Britain, has been a leading advocate of the constructive engagement
philosophy, a reaction of that nature is to be expected. The low message but
high line volume seems to characterize the American approach to negotiating. It
is logical, given its post-World War II dominance, to expect the US to “walk
softly with a big stick,” i. e., the US states its position once and expects
others to act accordingly. Moreover, due to the high line content, there is no
difficulty meeting the requirement of goal specification as dictated by Sawyer
and Guetzkow.
The Japanese, in addressing the South
African problem, were faced with a sensitive issue. On the one hand, they had
to contend with global public opinion regarding apartheid, a situation not made
easier by a leading position in Asia. On the other, South Africa represented
their largest African trading partner. To a large extent, the actions of the
Japanese team reflected that quandary. Although willing to implement minimal
sanctions, they argued that further action would “adversely affect the South
African blacks and other countries in the area.”[46] While Japan’s message volume
was higher than that of the United States, the total number of lines
transmitted with regard to this issue was the lowest of all three nations.
Moreover, of the four issues that the Japanese chose to address, only Issue 5
received less attention. Based on their ability to control Asian reaction, the
Japanese could justify continued—but limited—economic relations with South
Africa.
At the outset of this paper it was
hypothesized that US-Canada negotiations over acid rain would lead to a
conflictual dialogue. This expectation reflects the cost involved in rectifying
the problem, especially from an American perspective, and the fact that
regulation of the environment contradicted Reagan’s free market policies.
An examination of the results obtained in
the simulation lends support to such a line of reasoning. In terms of messages
dispatched, Canada sent 6, while the US responded with 3. This trend also was
maintained in the total number of lines per issue relayed, as Canada sent 61,
while the US uncharacteristically sent only 24. It would seem that the American
team had chosen to deal with this issue by not dealing with it; at one point, the
Canadian team remarked that “Canada is concerned with the US hesitation to
respond in detail.”[47] To the extent that goal
attainment is a function of specificity and communication, the US team appears
to have assigned an extremely low concession level, perhaps even preferring the
status quo, in the acid rain dispute. Moreover, the chances of resolving the
dispute could not have been enhanced by the level of frustration that must have
been experienced by the Canadian team.
The US appears to have reduced the situation
regarding the environment to a zero-sum game. In attempting to understand this
seemingly lopsided situation, two points should be considered. First, in
contrast to the South African issue, which was one of global scrutiny and
attention, the acid rain dispute is a bilateral issue concerning only Canada
and the US. Consequently, there is little global pressure to resolve the
dispute quickly. Second, due to the US’ economic and military strength,
historically it has experienced little trouble in convincing Canada to adjust
to its policies. The US had confidence in its negotiating strategy and,
accordingly, adopted a high request/expectation and low concession position.
Along those lines, Canadian trade officials have observed that “one cannot
discuss the settlement of disputes without bearing in mind the disparity in the
relative bargaining weights of Canada and the US.”[48]
Although the US appears to advocate a
zero-sum approach to the acid rain dispute, this is not a viewpoint endorsed by
all analysts. For example, addressing the issue of social costs, Coase asserted
that “in the absence of transaction costs, resource allocation is neutral with
respect to liability rules.”[49] If resolved along ‘Coasian’
principles, the dispute would result in Canada paying the US an amount equal to
the damage caused by acid rain, in an effort to induce the latter to halt its
production of sulphuric acid and nitric oxide.
Nonetheless, the applicability of the
Coase Theorem to the acid rain dispute is questionable for two main reasons.
First, as demonstrated by Aivazian and Callen, when applied to situations with
three or more participants, the theorem can lead to suboptimal solutions.[50] While it might be argued that
the dispute involves only Canada and the US, there can be no denying Japan’s
potential ability to influence the outcome in an effort to gain concessions
elsewhere in the simulation exercise. More fundamental, however, is the problem
of assigning a dollar value to the damage caused by acid rain. This is not only
a question of calculating the number of lakes and acres of forests destroyed
and the financial and emotional distress incurred by those individuals affected
by the loss of such resources. It also involves assessing the impact on the
future quality of life. Not only are Canada and the US unlikely to come to an
agreement over such a value, but Coase’s assumption of zero transaction costs
does little to aid the applicability of his theorem to this situation.
By far the most complex issue was that of
economics. In formulating A3, it was held that different levels of conflict
would be encountered, depending upon the countries involved. While all three
nations devoted the majority of their attention to Issue l, it must be
remembered that there are three sub-issues encapsulated within the heading of
economics. Japan led the way in terms of communications with the most messages
- 17, and the most lines per issue - 275.5. The US maintained its “big stick”
approach to negotiating, as it had the least number of messages - 5, but the
second most lines per issue - 247. Canada dispatched the least number of lines
per issue - 74.5. Based upon these figures, it would seem that, in relative
terms, the US and Japan devoted a great deal of attention to economic issues.
Each dispatched messages in an ef6ort to specify its own position, while also
attempting to alter the preference orderings of opponents. For example, the US
described Japanese economic policy as “one-sided, short-sighted and
self-serving,” while the Japanese replied that it was imperative for the US to
improve its balance of payments situation by “reducing its fiscal debt and
adjusting the environment for acceptance of foreign capital.”[51]
Within this area, perhaps the most interesting aspect is the behavior of the Canadian team. As previously stated, due to a lack of power, it was postulated that Canada would ally with the US in an effort to bring about changes in Japan’s economic policies. Intuitively, this seems to be a logical position; it would explain not only Canada’s low line per issue transmissions, but the Third Party effects generated by such a manoeuver would make it difficult for the Japanese to continue ignoring such requests. Toward that end, Canada communicated the following offer to the US team: “Should the US be willing to increase investment in our manufacturing sector, and to invest in new industry, Canada will entertain the notion of pressuring Japan in conjunction with the United States to open up to increased exports from both countries.”