Global Trade Negotiations and Its Importance in Business

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Table of Contents

Introduction
Literature Review
Findings
Conclusion
References

Introduction

Trade negotiation refers to the process by which businesspeople formulate some synergies to an effective approach of solving some elements of distinctive nature and differences along the business line of operation. Negotiation in business may involve settling disputes related to contract basis, terms and conditions applying to the particular established contract that bond the business administration and the consultant, a more detrimental coalition between two closely related operating companies, internal disagreements arising in the business between the CEO and the HR as a result of failure to authorize funding of some projects instilled by one of them.

All the outlined dispute scenarios can only be resolved with the involvement of dialogue. The act of resolving disputes through dialogue in the business-oriented field or organizations is referred to as trade negotiation. Global trade is of great importance because it fosters international relationships, it is also of great competitive advantages, it enhances cost reduction, and finally, the major role played by the system of global negotiation is the resolving of conflicts at all levels related to business affairs.

Literature Review

Global trade negotiation is facilitated by the World Trade Organization (WTO) and General Agreement on Tariffs and Trade (GATT). The two bodies have been managing the multilateral trade negotiations globally with aim of liberalizing barriers related to trade thus increasing the coverage of international trading obligations and other rights of business trading. The trading negotiation process has always been reinvented with an increase in the number of years thus aiding in harmonizing business activities globally. The last time the negotiation system was employed is during the postwar period towards the end of the Uruguay round. It was during this period when the GATT underwent some reforms as the initial negotiation body thus giving rise to the WTO. The new trade package (WTO) started its operations in January 1995 by reviewing all the activities that were under the commitment of the latter body (GATT). The newly formed body greatly differs from the latter body (GATT) in three forms and these are: membership requirements entail that, all countries are involved except those that are underdeveloped thus encouraging all countries to sign up the obligations of the body.

Another difference is that the current body formed contacts a permanent forum for the betterment of consultations and negotiations pertaining to trade international welfares. Third, the WTO has a well-established system of resolving disputes that are well unified. The global trade negotiation system plays a vital role in the business trading field. Among these roles include: first, resolving business-related conflicts, whenever conflicts are resolved in any trading related field especially at the business level, the impact is the production is usually boosted.

Another role of the negotiation system is that it renders an aspect of cost reduction that is a result of negotiation competence developed by the partnering business organizations. The system fosters international relationships. This is established whenever people negotiate effectively and mutually achieve whatever they want through exchanging values. In this case, a sense of value is created among the involved parties thus resulting to better international relations.

Finally, the global negotiation also enhances competitive advantage through the formulation of new ideas and opportunities that are of beneficial agreement within the involved parties. Through successful negotiations in an organization, people create synergies of greater values within the system. These advantages enable organizations to raise their edges thus making them sharp in order to withstand greater completion and enhance maximum profit.

Findings

The negotiation process can either be made successful or fail to depend on the kind of strategies involved. The following strategies must prevail for an effective negotiation process to occur. First, the parties that are willing and potential to participate should be identified. The involved members should be willing to sit at a table and discuss, agree, then come up with a workable decision in order to enhance a productive negotiation.

Another condition to prevail for a successful negotiation process to occur is the idea of independence. For the process to be successful, participants should be reliable to one another to enhance satisfaction thus meeting the requirements of the process. This works better if one party fulfills her needs without the uplift of one another. This leads to minimal response under the negotiation process thus enhancing the effective process of understanding. Influencing leverage means should be considered in order for the disagreeing people to make a satisfactory conclusion. The influential means impact greatly on the attitudes and characters of the negotiating team. The influence is termed as the power of inflicting pain on the cost of the property under negotiation thus enhancing change of mind to the rigid party.

Other means of prevailing influence on the process of negotiation involve: subsequent asking of provoking questions, advice-seeking from the elites, provision of the resourceful information that can be of use to the negotiation process, reward provision under legitimate authority, and finally need for appealing to influential associated parties.

Another important condition to prevail for a successful negotiation process to be achieved is the agreement terms and conditions. Negotiators ought to agree upon some fundamental issues for the interest of the negotiation process. In the entire process, it is clear that some people especially the involved parties may have issues concerned with their interests thus need to establish a common interest to enhance a successful process for both parties. The common interest is the core determinant of the negotiation process to succeed. With the submission of different ideas from various negotiating parties in businesses, the process of decision-making can be greatly achieved.

The final condition to prevail for effective achievement of the negotiation process is the will for acceptance and settles on a common basic decision. It is advisable that for an effective negotiation process, all participants involved in the process need to settle first on a common denominator. The prevailing conflict is the default factor contributing to the failure of the entire process of negotiation. The negotiation parties will always prefer to keep the conflict in progress so as to achieve a better and stable relationship. This is done basically to attract public opinion in efforts to acquire support from the incentives in the establishment of good rapport.

All the above-outlined conditions promote progressive division of work contrary to the problem settlement factors. Other additional factors may include a sense of urgency of the negotiation and the income unpredictability factor.

Conclusion

Negotiation in business may involve settling disputes related to contract basis, terms and conditions applying to the particular established contract that bond the business administration and the consultant, a more detrimental coalition between two closely related operating companies, internal disagreements arising in the business between the CEO and the HR as a result of failure to authorize funding of some projects instilled by one of them. All the outlined dispute scenarios can only be resolved with the involvement of dialogue. The act of resolving disputes through dialogue in the business-oriented field or organizations is referred to as trade negotiation.

Global trade is of great importance because it fosters international relationships, it is also of great competitive advantages, it enhances cost reduction, and finally, the major role played by the system of global negotiation is the resolving of conflicts at all levels related to business affairs. The global negotiation system renders an aspect of cost reduction that is a result of negotiation competence developed by the partnering business organizations. The system fosters international relationships. This is established whenever people negotiate effectively and mutually achieve whatever they want through exchanging values. In this case, a sense of value is created among the involved parties thus resulting to better international relations.

It is advisable that for an effective negotiation process, all participants involved in the process need to settle first on a common denominator. The prevailing conflict is the default factor contributing to the failure of the entire process of negotiation. The negotiation parties will always prefer to keep the conflict in progress so as to achieve a better and stable relationship. This is done basically to attract public opinion in efforts to acquire support from the incentives in the establishment of good rapport. All the above-outlined conditions promote progressive division of work contrary to the problem settlement factors.

References

Leigh, L. T. (2005). The Mind and Heart of the Negotiator (3rd ed). London: Prentice Hall.

Lewicki, J. R, Saunders, M. D, & Minton. J.( 2001). Essentials of Negotiation. Los Angeles: McGraw.

Maswood, J. S, & Crump, L. (2007). Developing Countries and Global Trade Negotiations. New York: Taylor & Francis.

Scott, J. J. (1998). Launching New Global Trade Talks: An Action Agenda. New York: Peterson institute.

Shell, R.G. (2006). Bargaining for advantage. New York, NY: Penguin Books.

Thomas, C. & Taylor, A. (1999). Global Trade and Global Social Issues. London: Routledge.

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