China-Australia Free Trade Negotiations - Example

Running Head: CHINA-AUSTRALIA FREE TRADE NEGOTIATIONS China-Australia Free Trade Negotiations Insert Name Institution Date Introduction Negotiation involves the interactive communication that may occur when a person or group wants to get something from the other. It is a common practice in day to day life. It is therefore a part of culture. At the international level, negotiations are a common way through which decisions affecting two or more countries are reached. An example of this is the china-Australia Free Trade negotiations. The extended fourteen rounds of negotiations have been done according to the ideal principles of negotiation practice and have among other aspects, been beneficial to the education sector (Lewicki, Saunders & Barry, 2009). This paper addresses the negotiations, especially in reference to the export of education services. Elements of the Negotiation Process A Free Trade Agreement (FTA) is a market-opening agreement which encourage greater trade while acting as a source of commercial ties between members countries. FTAs have been an important aspect of the Australian economy as it boosts the access to significant trading aspects. Through such cooperation in services, goods and investment for instance, Australia has been able to maintain its competitiveness in the markets. Among the interesting aspects of negotiation theory is the fact that the basic elements involved are subject to a variety of opinions. The negotiation process takes place in four stages, preparation, an exchange of information, an explicit process of bargaining and finally commitment to the agreement reached. The first stage in the process is its pre-bargaining stage. At this stage, there is first the need to gather information. Here, the negotiator seeks to know the much that he or she can about the problem that is to be dealt with through the negotiation process (Shell, 2006). The next stage involves leverage evaluation. Here, there is the evaluation of one’s own leverage against the other party’s as at the beginning of the process. Doing this is important. This is because of the possibility of there being several things that may be done in order to boost one’s leverage or reduce the leverage held by the other party. After identifying these, the next stage involves the analysis of issues identified in the discussions and development of a rapport. In trying to create such rapport, there is the need to note at the outset whether the other side is likely to be cooperative or not. In case this is not the case, then there should be the exploration of the possibility of bringing in a mediator. When the negotiation process has almost been defined, the negotiators should find out the kind of negotiation that is necessary. The options that exist include cooperative or competitive forms. There is then the development of a plan for negotiation after this (Bhagwati, 2003). When the actual process of bargaining begins, there is then the identification of the venue and procedure of bargaining that is to be pursued. The offers to be made, offers to be given, tactics to be used, concessions that will be made and the resolution to be made are also identifiable at this stage. The issue of mistrust and need to overcome it may also be illustrated by the case of the talks. The next round of talks proceeded as from September 2009 in spite of the relations between the two countries being faced with a number of challenges. The main cause for tensions was Australia's decision to give Rebiya Kadeer, a suspected mastermind of riots in Urumqi that resulted in the deaths of about two hundred people. The other issue was the arrest of a mining executive together with three other staff who were accused of espionage. The September talks marked the fourteenth round of negotiation (Lester & Mercurio, 2009). The Talks and Australia’s Emphasis on Education In the first round of the talks held in Sydney on May 23 2005, the issues that were dealt with included procedures that were supposed to be followed and the individuals to head the different negotiation teams. There was the laying down of the foundation for future engagements. There was a joint agreement that the next round of the talks would deal with information exchange between the parties. The second round was held in Beijing beginning 22 to 24 August 2005. The members of the Australian negotiation team were drawn from the various departments that stood to gain from the implementation of a free trade agreement. These included Foreign Affairs, trade, Customs Service and education among others (DFAT, 2009). The beginning of the meeting was characterized by a broad information exchange on the parties’ investment and trading aspects. In this, there was the open inquiry through questions to the two teams. The focus remained purely on exchange of information and steered away from commitments to be entered into in case of an agreement. The exchange of information enabled the clarification the issues generated with regard to expectations of the two countries. During the third round of talks in Beijing, China, there was the continuation of information exchange and this involved the identification of ways through which the different interest areas would be handled within the framework of the FTA (Courtney & Anderson, 2009). In the fourth forum that was held in Canberra between February 27 and March 2 2006, there was the commencement of actual negotiations. The main objective was the arrival of an agreement on the best approach to the expected provisions within the FTA. There was also the noting of concessions that would be required of each of the teams. This was the foundation of concrete negotiations that were to begin during the next meeting. At this stage, the Chinese side observed that the talks were indeed complex and represented an FTA ambition that had not been thought of before. China also formally declared a strong political commitment to success in the negotiations and production of mutually beneficial results (DFAT, 2009). Australia also expressed a similar belief but declared its determination to deal with the issues arising constructively. Australia stated its willingness to negotiate, however long it took in order to come up with the most benefits for both parties. The next round of talks was in Beijing between May 22 and 24, 2006.  Here, there was the consideration of the possibility in agreement contents. Issues relating to services played a major role in this stage. The issues mostly revolved around the issues of telecommunications, financial services and education. The sixth stage took place in Beijing as from August 31 to September 6, 2006. China was required to come up with more information on the identified areas for the talks to commence (DFAT, 2009). In the next round of the talks in Canberra between December 11 and 15, 2006, there was the tabling of each country’s offers and requests about the different issues that were presented. The two countries also launched negotiations, basing on the barriers that each encounter in dealing with the other, for instance in offering educational opportunities. There was also the identification of the means through which the barriers would be minimized. During the eighth round in Beijing between March 26 and 30, 2007, there was the further discussion on access to markets and services, in addition to the revisiting of barriers upon investment and trade. The technical aspects of the relations were also discussed at length (Courtney & Anderson, 2009). In the ninth round of talks held in Beijing on June 18 to 22, there was the attainment of much progress in various areas. However, there was no indication of much movement in relation to issues related to market access. There was therefore the continuation of talks from the other stages. The next round of talks in Canberra between October 22 and 26, 2007, there was an observed slow pace in the discussions. Although there was the narrowing down of the differences between delegates from the two countries, the overall progress was not impressive. The eleventh session of talks was held in Beijing as from June 16 to 20th 2008, there was a further narrowing of differences and the need to set the negotiations into a higher gear was emphasized. There was the intensification of the work programme for negotiators (Courtney & Anderson, 2009). At the end of it all, there were major steps made in issues relating to inter-country interactions. The two parties most notably identified the areas from which they wanted the most immediate outcomes. Australia’s priorities were presented as being in education and training and financial services. China on its part opted for quarantine and investment issues as its most immediate concern. There were a number of agreements made in the issues. For instance, in training and education, China agreed to look for further clarification and consideration of Australian proposals. These included important issues a\such as the recognition of qualifications of students in the two countries, clarification of issues relating to funds repatriations and the attraction of Chinese students to come and study in Australia (Irwin, 2009). During the twelfth session in Canberra from September 22 to 26, there was an even more intense process of negotiation. Dates were set for continuation of different aspects of communication. Australia continued pushing the discussion on education and financial services. There was in this respect, the raising of some commercially-focused issues relating to telecommunications and legal services. During the thirteenth round in Beijing as from December 1 to 5, 2008, there was the presentation of ideas about the different issues at hand. There was a lot of progress made in trade. Australia also brought up issues across various sectors (Courtney & Anderson, 2009). The Nature of the Talks The China-Australian talks can best be described to have been collaborative. In such an arrangement, the goals being pursued tend not to be mutually exclusive. In case one side is able to attain its goal, the other party does not necessarily forfeit its own. Its main defining characteristic is its provision for the attainment of both parties’ objectives. Although it may initially appear that one party is gaining and the other losing, there is the arrival at shared decisions through mutual exploration and discussion (Zhibin & Frank, 2006). Collaborative negotiations are guided by a number of characteristics. The first of these is the attempt to take care of interests and needs rather than positions. This leads to a considerably higher degree of selflessness among the negotiators. There is also a continuous process of information and idea exchange. In the case of the Australia-Chinese talks, this is exhibited in the many rounds of talks that dwelt on the sharing of information and expectations by the two countries. There is a general focus on the commonalities that exist instead of differences and options are invented throughout to ensure the mutual benefit of all parties. There are a number of personal traits that are considered as ideal for negotiators in this case. One of these is a mentality of abundance. This involves not considering the concession of their suggestions as being a loss, but as a means of expanding their options further. The negotiator in this case understands that making a concession always leads to the building of a stronger long term relationship with the other party. Negotiators also need to exhibit integrity and honesty in whatever they do. Considering that the negotiations are oriented towards interests, there is the need for some level of trust between the people involved. Consideration for other peoples’ concerns leads to the creation of trusting environments. Another important trait is a high degree of maturity. This refers to the possession of courage to assert one’s values and issues and at the same time realize the fact that even the other peoples’ values and issues have an equal validity (Lewicki et al., 2009). Good listening skills are also necessary. A large proportion of communication does not exist in the words that an individual speaks. Rather, it is the context within which the communication occurs that matters. This includes the body language of the communicators and modes of expression among others aspects. Proper listening for negotiators calls for each individual to listen from a broad perspective other than their own. A systems orientation is also necessary on the part of the negotiator. A systems thinker is able to explore the ways in which the totality of the system instead of its components (Zhibin & Frank, 2006). The provision of a chance for a free information exchange is valuable in ensuring successful bargaining. Much of the failure that occurs in attempts at negotiation is often due to a failure by the parties to facilitate adequate information flows. Such information is necessary as they are the main way through which options that are available may be identified. In order to achieve success, it is necessary for negotiators to be able to proclaim their actual objectives and listen very carefully to each other. The desires of each party are usually varied. The recognition of this fact leads to more information exchange, better understanding of the negotiations and achievement of greater collective gains (Irwin, 2009). Impact on Education In Relation to education, the Australian investors and providers of education services have in the recent past increase their attempts at making inroads to key markets throughout the world. However, they continue to face serious challenges in dealing with many of the trading partners. The challenges include among others licensing and restrictions to market access, restrictions on joint ventures and quotas, in addition to transparency matters. These stand to gain a lot from the engagement of Australia in bilateral cooperation and dialogue through FTA negotiations such as that with China (Lester & Mercurio, 2009). Upon noting that FTAs offer a good opportunity for increasing trade relating to education services, the Australian government has sought to push for the greater place of \education in FTAs, for instance that between Australia and China. It has been noted that in case they are effectively implemented FTAs will lead to the further recognition academic and professional qualifications from Australian institutions. This is in addition to the expansion through establishment of Australian institutions in other countries. The FTA situation will also lead to a raised level of regulatory transparency, and also facilitate movements of professionals offering academic services. China has been one of the major contributors of foreign students to Australia. Although there was a large number of them coming to Australia during the 1970’s and 80’s, the beginning of the 1990’s marked the beginning of a decline in this. As from 2001, there has been a rise in the numbers of Chinese students, probably due to the concessions that Australia has made in agreements and a general relaxation in the regulations and policies of the country which made entry for Chinese students much easier (Courtney & Anderson, 2009). Education is the fourth largest industry in exports for Australia. There are over 13,000 foreign students getting into Australia annually, and another more than 55,000 already pursuing their studies in the country. Having realized the importance of negotiations and agreements in boosting trade, Australia has retained education as among its main issues of negotiation at the international level. In the Australia-China Free Trade Negotiations, Australia tried to facilitate the entry of Chinese students and offer a soft landing for Australian educational sector investors who may be interested in setting up their institutions in China (Lester & Mercurio, 2009). Australian negotiators have tried to coax their Chinese counterparts to offer conditions that would support its programmes offering offshore education.  In relation to the number of offshore programs being offered, Australia stands out as being among, if not actually the largest provider of foreign education in China. It is however not considered to be among top tier providers by the Chinese. Australian negotiators have been pushing for this as an interest issue and likely booster of exported education. The argument fronted is that the export of education to a trading partner such as China would help in further boosting Australia’s economy and trade, especially helping to build international relations. The relations in this case are able to underpin the parties’ bilateral relationship for extents that surpass other industries (Irwin, 2009). Australian negotiators pushed forth the idea that growth in its educational sector may be attributed to two main countries, China and India. These account for over a third of total export markets. The two were for instance the two main student sources, giving in a total of US$4.5 billion or A$5.1 billion in 2007-2008 alone. As a result of the talks, there was a drift towards further recognition of Australian education in China. This was initially not so much the case due to the mostly protectionist nature of Chinese policies. More Australian institutions have opened up their branches in China and getting employment using qualifications from the Australian institutions (Courtney & Anderson, 2009). Conclusion The china Australian Free trade negotiations were a good example of a collaborative negotiation process. It was driven by the need for both parties to benefit from each other. Throughout its progress, there was the following of the theoretically suggested measures of ensuring effectiveness. Among the areas that were emphasized by Australia was education and training. In this respect, there was the call for a freer environment in the two countries for the export of educational services and acceptance of foreign students. There is the need for further effort to facilitate educational activities between the two countries. There should for instance be a reduced emphasis on the sending out of tertiary level students. Negotiators should push for closer collaboration in exchange programmes between high school level students and even younger ones, an area that seems not to have been remembered. Through such arrangements, greater cultural and educational benefits will be achieved. The result of the negotiations has nevertheless been the further expansion of Australian education in China and also recognition of academic qualifications. The process can therefore be said to have been procedural and successful. References Bhagwati, J. (2003). Free Trade Today. New Jersey: Princeton University Press. Courtney, L. & Anderson, N. (2009). Knowledge Transfer Between Australia and China. Journal of Knowledge-based Innovation in China.Vol. 1 Issue: 3; 2009 Department of Foreign Affairs and Trade (2009). Australia-China Free Trade Agreement Negotiations, Accessed on 08 October 2009 from Irwin, D. (2009). Free Trade under Fire. New Jersey: Princeton University Press. Lester, S & Mercurio, B. (2009). Bilateral and Regional Trade Agreements: Case Studies. New York: Cambridge University Press. Lewicki, R., Saunders, D. & Barry, B. (2009). Negotiation. New York: McGraw-Hill/Irwin. Shell, R. (2006). Bargaining for Advantage: Negotiation Strategies for Reasonable People. Penguin Books: Hawthon. Zhibin, G. & Frank, A. (2006). China's Global Reach: Markets, Multinationals & Globalization. Westport: Greenwood Press. Read More