Bargaining Power of Developing Countries in Trade Negotiations

Abstract

The bargaining power of a country plays an influential and impactful role in trade negotiation. The final trade agreement is the result of the background negotiation among the contracting countries in a bilateral, regional or a multilateral arrangement. This paper has attempted to explore main strategies often exercised by the countries in trade negotiation and identifying factors that, in one way or the other, determine the bargaining power, particularly, of the developing countries. The data gathered from secondary sources are qualitatively analyzed. As strategies, the principle of reciprocity (negotiation based on a ‘give and a take’ policy) and prior preparation (conducting the negotiation process with full prior information, research finding and analysis), have been identified. Furthermore, the basic factors for building or relinquishing bargaining power particularly from the developing country’s perspective have been discerned as market, commercial intelligence, capacity to control others and resource. As trade cooperation is becoming an unavoidable and inescapable phenomenon in the entire world, developing countries are advised to make themselves ready to play well the trade negotiation game by improving their bargaining power and by exploiting maximum possible out of that. There is no trade deal that is wholesale good or bad; it rather depends on how the country negotiates.