New Zealand and the GATT subsidies code negotiations 1975-81 : Politics, policies and tactics of a small state

Abstract

This thesis is an examination of New Zealand trade policy and diplomacy in the context of that country’s role as a relatively small and dependent exporter in a competitive, global trading environment. The underlying hypothesis is that New Zealand can be effective in trade negotiations with major powers by employing appropriate negotiating tactics. The New Zealand government’s decision and efforts to sign the GATT Code on Subsidies and Countervailing Duties is analysed as a case study. The period concerned begins with the Code’s negotiation during the Tokyo Round of GATT multilateral trade negotiations (1975-79) and concludes with New Zealand’s signature of the Code in 1981. The central focus of the case study is New Zealand’s bilateral negotiations with the United States in 1980-81 on the terms of New Zealand’s signature of the Code. The political and trade policy issues that shaped New Zealand’s trade policy and diplomacy in this episode are examined in detail. Tactics employed by New Zealand negotiators in bilateral negotiations with the United States are identified, and the effectiveness of those tactics in influencing the outcome of the negotiations is appraised. The effectiveness of New Zealand’s diplomacy in the multilateral context of GATT is also considered. Among the key factors found to influence New Zealand’s trade policy and diplomacy in this case were the government’s wider economic policy and longer-term foreign policy goals and the strategies used to help achieve those goals. Seven tactics employed by New Zealand in the negotiations with the United States are identified. Four of those are concluded to have had a significant effect on the outcome of the negotiations, thus conferring credibility upon the hypothesis originally postulated.