International Institutions and Issue Linkage February 2004 from which negotiators are reluctant to retreat:second. tries to set their own pace for the timing and scope it signals to domestic groups that the success of any part of liberalization in any particular sector (Aggarwal of the negotiation will depend upon reaching an overall and Morrison 1998,13).Likewise,bilateral negotia- agreement.The formal agenda of the negotiation estab- tions may also address multiple issues,but they often lishes whether talks will address multiple sectors and do not bind them together with a formal agenda.For whether agreement on the entire range of issues will both aPEC and comprehensive bilateral negotiations form a single package.Considerable time and hard bar- tradeoffs across issues in the negotiation are possible gaining go behind the creation of the agenda,and this The lack of a formal commitment to the linkage,how- inhibits frequent renegotiation.Subsequent behavior ever,makes it more difficult to signal that concessions by states reinforces the linkage.By obstructing discus- in one area are necessary for gains in another sions in one negotiating group to match the deadlock There was a moderate linkage between agricultural in another negotiating group,a state can force parallel and industrial issues in the Tokyo Round.The declara progress on different issues.The combination of the tion that set the agenda for the Tokyo Round stated that formal agenda and the support for each agenda issue the negotiation"shall cover...both industrial and agri- by some participating states creates a more credible cultural products,"but also added flexibility by urging cross-sector linkage.Information that liberalization for that the negotiations should"take account of the spe- any sector is conditional on agreement on all issues cial characteristics and problems in this agricultural provides an incentive for interest groups and officials sector."11 It established several negotiation groups that to closely follow all parts of the negotiation rather than produced agreements from which nations could pick just the part related to their own sector.As a credible and choose:"GATT a la carte"(Jackson 1997,47) signal,the institutionalization of the issue linkage in the The agricultural group had a particularly weak link- agenda and procedures of the negotiation strengthens age with the rest of the round.Subgroups for dairy, the incentives for those who gain from free trade to meat,and grains discussed separate commodity agree- lobby against protectionist interests. ments rather than general principles for agricultural policy.Moreover,at the U.S.initiative,which wanted Linkage Hypothesis.The more institutionalized the to include the Soviet Union (a major purchaser on linkage among multiple sectors in a negotiation,the grains markets that was not a GATT member),the talks more likely that the negotiation will liberalize agricul- on grains were primarily conducted outside the Tokyo tural trade barriers. Round in the context of the International Wheat Coun- Different levels of institutionalization form a weak or cil (Winham 1986,252).These talks ultimately failed to strong linkage among issues.The two key institutional produce a new commodity agreement on grains,and features concern whether the agenda commits to lib- states were able choose whether to join the dairy and eralization of multiple sectors and whether procedures meat commodity agreements regardless of their posi- call for a single agreement with binding commitments tion on other issues in the round(GATT 1979,26).In on all of the agenda issues.An agenda that only calls sum,the agenda statement and the procedures that al- for liberalization of one sector does not have any insti- lowed stand-alone agreements provided only moderate tutionalized cross-sector issue linkage.An agenda that institutionalization of an issue linkage. includes multiple issues but provides for flexibility to In contrast,a strong cross-sector linkage character- reach settlements on each issue separately forms a weak ized the Uruguay Round.The Punta del Este Dec- linkage.In contrast,a package negotiation structure es- laration that set the agenda for the Uruguay Round tablishes a strong linkage by explicitly mandating that called for 15 groups to negotiate issues ranging from the negotiation will proceed in an all-or-nothing ap- industrial goods to agricultural goods to reform of proach that ties together deals on multiple sectors and GATT trade rules.In the declaration,the term single issues to culminate in signing a single agreement.Com- undertaking referred to the commitment to decide parison of two GATT trade rounds and one APEC ne- jointly on all the parts of the negotiation and supported gotiation illustrates these differences.The agendas for the refrain among negotiators that"nothing is agreed the two GATT negotiations,the Tokyo Round(1973- until everything is agreed"(Croome 1995,34).Two 79)and the Uruguay Round(1986-94),as well as the later events further strengthened the linkage credibil- Kuala Lumpur APEC ministerial meeting in 1998,gave ity.First,some Latin American states walked out of the a mandate for talks on a wide range of issues including 1990 Brussels meeting,declaring that they would not both primary and industrial sectors and other rules re. negotiate anything if the United States,EU,and Japan lated to economic activities,such as investment regula- would not agree to a substantive agricultural liberal- tions and product standards.Nevertheless,the agenda ization package.Then,at the end of 1991,the GATT and procedures of each negotiation present observable Director-General Arthur Dunkel independently pro- differences in the commitment to the cross-sector link- duced a draft agreement binding all parts of the negoti- age ations into a single text.12 A procedural step reinforced Weak institutionalization of the cross-sector link age characterized the APEC "Early Voluntary Sec- toral Liberalization"agenda.APEC trade liberaliza- 11 Text of the Tokyo Declaration issued at the ministerial meeting held in Tokyo,12-14 September 1973,in Winham 1986,414. tion talks jointly address trade sectors ranging from 12 The "Draft Final Act Embodying the Results of the Uruguay agriculture to automobiles.The principles of volun- Round of Multilateral Trade Negotiations"specified terms for all ne- tarism and flexibility,however,explicitly allowed coun- gotiation groups,including agriculture.Its provisions for agricultural 158 Reproduced with permission of the copyright owner.Further reproduction prohibited without permission.Reproduced with permission of the copyright owner. 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