Influences on Bargaining and Negotiation

When thinking about bargaining and negotiation, one of the prime examples that comes to mind is the current trade talks between the United States of America and China. Historically, China and the U.S. has had a very uneven trade relationship, with most of the production taking place in China and then the U.S. importing those goods. Currently, President Trump has been negotiating trade deals with not only China, but other North American countries as well. The House passed the USMCA and sent it to the President’s desk on the 19th of December. The trade deal with China, however, has taken a great amount of bargaining and negotiation. Tariffs have been instituted and rolled back, and bargaining has taken place consistently for the past year (He, 2019). Recently however, China has agreed to a phase one deal with the U.S. after negotiations about imports, exports, and tariffs had taken place (He, 2019).

When you think about the differences between the U.S. and China, there are really no two countries that have such different ideologies and political systems, as well as cultural differences. According to Hogg and Cooper (2007), cultural differences exist in even the most basic social psychological processes such as emotion and self-conception. The biggest cultural differences that can be seen in the example of the U.S. china trade deal are: self-conception (that is how each country sees itself), politics (that is the political system of either country), and the general emotions that may be connected to certain outcomes of the deal (for instance, more positively favoring the U.S. vs China). These cultural differences are quite specific, but they have overarching themes related to individualism versus collectivism, as well as the self, identity, and social cooperation (Fiske, 2014).

Self-conception, that is the way that each country looks at itself, is important in the scenario above. Each country is a world power and economic powerhouse. The U.S. imports goods from all over the world, while China is a major producer of tech, textiles, and other consumer goods. Each country, if it sees itself as the stronger economically of the two, has a self-conception of deserving more benefit from the trade deal than the other country involved. Politics also plays a big part in the trade negotiations and bargaining. For example, the U.S. is a constitutional republic and the government must act in the best interest of its citizens. However, China is not necessarily beholden to its citizens, and can thus negotiate and bargain for the best deal, even if the negotiations or bargains are not immediately beneficial. Finally, the emotions of the citizens of each country are a big cultural difference. The U.S., as stated before, is beholden to its citizens. If the trade deal, negotiation, or bargaining has a negative affect on the citizens then the government must alter its approach.

One way that we can apply cultural sensitivity to alter the conflict is to redirect the political nature of these negotiation and bring in a mediator that can act in the best interests of all citizens from both countries, not just the benefits of either government. One potential approach is integrative negotiation in which the needs and desires of each side are included in a binding negotiation and allocation of resources (Fiske, 2014). Second, each country has unique emotional reactions to certain economic policies. For example, the U.S. citizenry reacts generally negatively when a company moves manufacturing jobs overseas, whereas Chinese citizenry would most likely react positively to receiving more work opportunities. Finally, each country has a different self-conception. Both the U.S. and China are world leaders and economic powerhouses. However, both countries cannot approach the negotiating table with the “I am the bigger of the two” attitude. We can apply cultural sensitivity to resolve this issue by pointing out points of commonality between the country, instead of allowing the confrontational attitude (Fiske, 2014).

References

Fiske, S. T. (2014). Social beings: core motives in social psychology (3rd ed.). Hoboken, NJ: John Wiley and Sons, Inc.

He, L. (2019, December 17). Asian markets edge up as US-China trade deal inches toward the finish line. Retrieved December 19, 2019, from https://www.cnn.com/2019/12/16/investing/asian-market-latest/index.html.

Hogg, M. A., & Cooper, J. M. (2007). The Sage handbook of social psychology: concise student edition. Thousand Oaks, California: Sage.