News from the USTR: US-Japan Trade Talks

Trade talks between the US and Japan continue today marking the strategic importance of concluding the TPP negotiations before the end of the year. US Trade Representative Michael Froman’s visit to Japan is an attempt for the two nations to jointly commit to the proposed TPP rulings without succumbing to the pressure from local lobbyists.

The Japanese government has vowed to protect tariffs on certain farm products while USTR Froman maintains the US’s goal of the elimination of tariffs.

Due to Japan’s tensions with China and Europe, exports to the US rose 18.4% this past year signifying the vital importance of strong cooperation between the US and Japan.

News from the USTR: Trans-Pacific Partnership (TPP) Negotiations

On July 25th, 2013, strong progress had been reported about the TPP negotiations that ended that same day. Japan was welcomed into the negotiations while TPP leaders hope to reach agreement by the end of the year.

The United States’ goal of this agreement is “to advance a 21st-century trade and investment framework that will boost competitiveness, expand trade and investment with the robust economies of the Asia Pacific, and support the creation and retention of U.S. jobs, while promoting core U.S. principles on labor rights, environmental protection, and transparency.”

The Relationship Between China and the EU. What Is Going On Between the Two?

Earlier this week the CNN Business Blog commented on the relationship between China and the EU in “Is Love in the Air for the EU and China?”.

Here is what I think about it…

It may not be love between the EU and China but necessity. The Europeans badly need money to prop up the weak member States. There is simply not sufficient supply (or willingness) to make the necessary transfers. In contrast, China has accumulated lots of surplus, some of which it may be willing to invest abroad in order to keep the overall economic machine (and therefore their own economy) alive. So if the Europeans can find a match between their needs and China’s capabilities, then this might be a marriage made in heaven (for the time being at least)!

Now that international trade negotiations extend into 2012 – have fun with an American Trade Negotiator’s Glossary: What they said and what they really meant (Source: Anonymous, of course)

“An ambitious proposal”
(It is unlikely to get any support)

“An innovative proposal”
(This one really is out of the trees)

“This paper is unbalanced.”
(It does not contain any of our views.)

“This proposal strikes a good balance.”
(Our interests are completely safeguarded.)

“I should like to make some brief comments.”
(You have time for a cup of coffee.)

“We will be making detailed comments at a later stage.”
(Expect that your posting will be over before you hear from us.)

“This paper contains some interesting features.”
(I am going to give you some face-saving reasons why it should be withdrawn.)

“The paper will provide useful background to our discussions.”
(I haven’t read it.)

“We need transparency in the process.”
(I am worried that I won’t be included in the back-room negotiations.)

“English is not my mother tongue.”
(I am about to give you a lecture on a fine point of syntax.)

“The delegate of… spoke eloquently on this subject.”
(I haven’t the faintest idea what he or she means.)

“A comprehensive paper”
(It’s over two pages in length and seems to have an awful lot of headings.)

Negotiations in Other Countries: Part 1 of 2

We sometimes have to do things overseas that we would not do at home because what is acceptable and expected in our domestic markets might not work elsewhere–and vise versa. Bridging the cultural chasm is essential for success in negotiations, but it has the potential to offer a much bigger impact than that. The continuing efforts of marketers to understand cultural issues help them identify terminology that is persuasive, but, more than that, these efforts help secure important assimilation of value systems.

Meeting face-to-face generates a global connectedness that helps businesses on a personal level, but helps cultures on a global level. This enhanced “one world” sense can contribute to undermining support for terrorists, who polarize and alienate, rather than unite, world cultures. These suggestions regarding different styles for different regions will help negotiators adjust to the style of the host country.

Learn as much as possible about the other group’s traditions and culture first. Ask consultants and local representatives to help identity the critical behaviors or details that can make or break a relationship. For example, in highly structured societies such as those of Korea, people respect age and position, so do the same.

Rituals are important and should be respected. For example, in Asia a first encounter must include the exchange of business cards. Those who have not packed them should get replacements printed immediately. Add a translation to the back of the card so it can be read in the other group’s native language. The exchange of business cards is so important that some airlines offer to print the cards as a service to their business travelers when customers make a reservation for travel to regions where it is a common ritual.

Show respect by reading cards as they are received. Demonstrate the significance of the card’s symbolism by holding it with both hands before tucking it carefully away in the protected location, such as an inner jacket pocket, card holder, or wallet.

Use the company’s best people. Some companies make the mistake of assigning global negotiation to their less talented players. This could indicate that the organization either is not concerned about the outcome or doe snot understand the significance of a successful outcome. Because of the importance of business partner relationships and the impact a successful contract has on the company’s overall health, the negotiating team should feature a company’s top talent.

Use a team. Bringing in specialists will strengthen the company’s position and ensure that all points of view get proper attention. Expanding the team also allows less experienced participants to observe and learn more while participating less than they could without the backup. In addition, it helps a company match the firepower of the other group. While Western negotiation teams tend to have just two to four people, Chinese teams might have as many as ten.

Match titles. Negotiators will be more effective in certain regions if they make certain that the “rank” of the most senior member of their team matches the most senior member of the counterpart’s team. It can be an important sign of respect. Titles sometimes offer surprising leverage abroad, as well. For example, when meeting the chairman of the U.S. Democratic Party in China, people respond with greater respect than one might expect and certainly with more respect than is offered in the U.S. This is because Mao Tse-tung, the remarkably powerful former leader of the Communist Party in China, was also a party “chairman.”

Keep the team’s disagreements private. Just as parents work to present a unified front with their children, negotiators need to bring a single voice to the conference room. Team conflicts will exist , of course, but they should be imperceptible and kept out of the negotiation room. Otherwise, the team could be subject to a competitive “divide and conquer” strategy.

Speak the language, even if it is just a few words. In an ideal situation, the negotiator speaks the customer’s language fluently. If both teams are using English, but only one team has native English speakers, that team should be careful to avoid jargon and colloquialisms.

Making the effort to learn the language of a potential partner shows commitment, good faith, and sincerity, even if all the team masters is a few greetings or phrases. As international marketing becomes more important, companies will hire people who can speak several languages, particularly those of countries where the company plans to do business. These individuals can become part of the negotiating team, serving as translators when there are language barriers. There are drawbacks associated with using translators or interpreters, though. They impede spontaneity. Their presence can offend an executive who believes he speaks the other language fluently. The companies might be discussing confidential information they do not want to share with an outsider. On the other hand, the fact that they slow things down can provide each team with time to give more thought to what is being said.

Anyone involved with international business will want to learn at least one foreign language. This exposes the learner to new cultures, new thinking, and new ways of doing things– all of which better prepares the marketer for the global marketing experience.

Watch body language, too. Sitting in what might be considered a comfortable position might be interpreted in China as a lack of control over the body and, therefore, a lack of control over the mind.

This is an excerpt from Dr. Czinkota’s book Global Business: Positioning Ventures Ahead, co-authored by Dr. Ilkka Ronkainen.

Michael R Czinkota and Ilkka A Ronkainen, Global Business: Positioning Ventures Ahead (New York: Routledge, 2011), pg. 152-154.