Complex negotiations have been conducted for a long time, although until somewhat recently analysts had yet to conceptualize their fundamental nature, their essential elements, and the relationship between these elements. Over the past forty years, however, scholars have gained increasing understanding of the forces that shape negotiation complexity.

In this article, I first review literature that has explored complex negotiations, which is found primarily in negotiation studies, and studies of international negotiation. I then develop a five‐part theoretical framework for analyzing complex negotiations: (1) identification of negotiation architecture, (2) context analysis, (3) process analysis, (4) structural and relational analysis, and (5) decisional analysis. I then demonstrate the utility of this five‐part framework by examining the U.S.–Australia Free Trade negotiations that produced the Australia–U.S. Free Trade Agreement of 2005. Finally, the article closes with some observations on complex negotiations and their analysis.

We confront a twofold management challenge in complex negotiations. Dependence and independence, competition and cooperation, strategy and tactics, communication and decision making, power and ethics, and a host of other negotiation forces remain significant management challenges, although surrounding these fundamental negotiation forces is a “cloud” of complexity that negotiators must also manage (Winham 1977).

Complexity occurs when too many variables interact (Zartman 1994). Such variables can include: too many parties, too many roles, too many issues, too many norms, and/or too many linked negotiations. Because these variables are managed through communication channels and decision processes that themselves may contain varying degrees of transparency and clarity, complexity increases.

Complex negotiations have been occurring for a very long time (Cohen and Meerts 2008), but until more recently no one has explained their fundamental nature, essential elements, and the relationships among these elements. Multilateral gatherings over the last several centuries (e.g., Treaty of Westphalia, the Vienna Congress, the United Nations) produced monumental change, but the dynamics within these gatherings were not understood at the time each occurred. Bilateral‐multiparty negotiations may be less complex than multilateral negotiations (e.g., the Cuban Missile Crisis, the Strategic Arms Limitation Talks, the Transatlantic Trade and Investment Partnership), but this structural form also challenges our analytical skills. Over the past forty years, however, as the field of negotiation analysis has developed, this “cloud of complexity” has evaporated and has been replaced by greater understanding of complex negotiations.

Negotiation scholars have begun to define the fundamental forces relevant to a complex negotiation through negotiation analysis, which is the study of “how groups of reasonable bright individuals should and could make joint, collaborative decisions” (Raiffa, Richardson, and Metcalfe 2002: xi) in order to “develop prescriptive theory and useful advice for negotiators and third parties” (Sebenius 1992: 18).1 Negotiation analysis is the key to understanding complex negotiations.

Analysis of a complex negotiation occurs in a certain order or at different levels of analysis or abstraction. Before we can build theory or test theory, before we can examine negotiation processes to explain negotiation outcomes, and before we can establish a relationship between key negotiation variables (including causal relationships), we must first describe the negotiation we seek to analyze.

Achieving a “descriptive understanding” involves identifying key information and organizing it so that the overall structure, process, and outcome of a complex negotiation can be conceptualized. Through this process, the negotiation analyst seeks to establish the fundamental nature and the essential elements of a complex negotiation. In this article, achieving a descriptive understanding of a complex negotiation is the first level of analysis.

Accomplishing this first level of analysis is necessary if we are to conduct more advanced analysis, which could include establishing a relationship between key negotiation variables, examining negotiation processes to explain negotiation outcomes, building theory, and testing theory. Fully describing a simple two‐party negotiation may not be particularly difficult, but achieving such understanding in a negotiation with many interacting variables is usually a significant challenge.

Conducting this first level of analysis can be useful for both the theorist and the practitioner, although each will use the conclusions generated from this first level of analysis for her or his own purpose. The goal is to be able to conceptualize a complex negotiation with sufficient coherence so that a case could be prepared if desired or required.

Grounded in the extent literature, the purpose of this article is to present an analytical framework to achieve descriptive understanding of a complex negotiation. My purpose, descriptive understanding, is rather modest, although such a framework has not been proposed previously in the literature that has examined negotiation complexity.

Advances in understanding complex negotiations have developed across multiple literatures, but two research areas have been especially fruitful: the traditional negotiation literature and the international negotiation literature. Other literatures within negotiation and conflict management studies, such as the public sector disputes literature,2 could also be reviewed (e.g., commerce, industrial relations, legal, political, parliamentary–congressional, even mediation in its many forms and settings). The two literatures selected for review are each multidisciplinary and multicontextual, which makes them particularly useful for understanding the fundamental elements that constitute complexity.

In my review of each literature, I have searched for both similarities and differences to build a theoretical foundation for a five‐part framework for analyzing a complex negotiation: (1) identification of negotiation architecture, (2) context analysis, (3) structural and relational analysis, (4) process analysis, and (5) decisional analysis.

This framework also relies on intuitive logic. First, I use negotiation architecture, as a concept, to identify patterns of party association within simple and complex negotiations. The involvement of “multiple parties” is the primary factor that contributes to negotiation complexity. Second, all negotiations include parties that have relationships with each other — with various dimensions — engaged in a decision‐making process within a specific context. Third, I argue that these five elements can be connected together by combining the primary factor that contributes to negotiation complexity with the fundamental elements of negotiation.

In this article, I seek to establish a five‐part analytical framework for conducting the first level of analysis (description or case development) when examining a complex negotiation. I begin by reviewing relevant literature then introduce the analytical framework. I then illustrate how to apply this framework to a moderately complex negotiation by examining a trade treaty negotiation involving the U.S. and Australia (a too simple case would not demonstrate the utility of the analytical framework and a too complex case could require potentially confusing description). I conclude the article with additional observations about analyzing complex negotiations including discussion of the relationship between the first level of analysis and more advanced levels.

Initially, negotiation scholars focused on simple environments that were cooperative and competitive in nature, although the field eventually ventured into more complex environments.

Classic Negotiation Theory

Richard Walton and Robert McKersie's (1965) theory of labor negotiations includes four subprocesses: distributive bargaining, integrative bargaining, attitudinal structuring, and intra‐organizational bargaining. With their discussion of intra‐organizational bargaining, Walton and McKersie shifted their analysis from a bilateral negotiation to something more complex. They also applied this framework to complex international and civil rights negotiations (Walton and McKersie 1965).

Within the distributive bargaining subprocess, the authors described resistance points and targets, which establish party aspirations and boundaries (Walton and McKersie 1965). “Resistance points” is a party's “bottom line” and refers to a level of achievement beyond which substantial costs become acceptable relative to the party's alternatives (e.g., a party is willing to accept a labor strike rather than accept the other side's wage proposal) and “targets” refer to the ideal or preferred level of achievement or goal.

Building on Walton and McKersie's ideas, Fisher and Ury (1981) further explored the role of alternatives in negotiation, introducing the term “best alternative to a negotiated agreement” (BATNA). A negotiator may benefit from having several alternatives, but it is actually the best alternative that will most influence his or her decision to reach agreement or walk away. But consideration of one party's BATNA is not enough — to comprehend the negotiation's dynamics fully, both parties BATNAs must be considered: “When preparing for a negotiation, it is critical to analyze one's own no‐agreement alternative and to assess how the other parties will perceive the value of theirs [no‐agreement alternative]” (Lax and Sebenius 1986: 47).

In both simple bilateral negotiations and in more complex negotiations, party alternatives have a clear impact on the power available at the negotiation table, but as the number of parties increases, alternatives often become more difficult to identify and analyze. Howard Raiffa (1982), one of the first negotiation scholars to focus specifically on negotiation complexity, examined negotiations involving many parties and presented a framework built upon thirteen negotiation characteristics, including the number of parties, linkage effects, number of issues, time constraints, nature of the parties (e.g., are they monolithic), and so on.3

The first four characteristics (number of parties, linkage effects, single play or repetitive “game,” parties' monolithic or diverse natures) pertain exclusively to complex negotiations. All other characteristics are relevant to both bilateral and complex negotiations. Extending Raiffa's framework, I define a complex negotiation as one that includes two parties in which at least one party is not monolithic (e.g., individuals or groups within the party are not unified in their goals and/or strategies), a negotiation with more than two parties, or a negotiation with linkages (see explanation of linkage below).

Strategic Action: At the Table and Away from the Table

David Lax and James Sebenius (Sebenius 1983, 1992, 2013; Lax and Sebenius 1986, 1991, 2002, 2006) expanded upon Raiffa's groundbreaking work by developing prescriptive advice for negotiators involved in multilateral and/or multiparty negotiations, including those that involve agents, hierarchies, coalitional structures, or networks, as well as negotiations that contain internal and external characteristics often created by multiple parties on a single side (Sebenius 1992).

They also explored the role of negotiation linkage, which, for example, could include:

  • issue linkage (Sebenius 1983), in which separate issues and interests can be linked as goals or demands for the purpose of claiming greater value (Lax and Sebenius 1986);

  • linkage of alternatives to an agreement or other potential interdependencies (Lax and Sebenius 1991); and

  • linkages between public and private processes (Lax and Sebenius 2006), for example, a common linkage in a complex negotiation could include external negotiations between parties that are linked to internal negotiations within each side (Fisher 1989; Sebenius 2013).

Initially, Sebenius (1983) argued that parties and issues are typically the subject of strategic manipulation and should be fundamental to negotiation analysis. In their early work, Lax and Sebenius (1986) also sought to identify critical elements of both simple and complex negotiations processes including: (1) static elements of the game (the parties, their underlying interests, the issues, their alternatives, etc.), (2) creating and claiming value, and (3) changing the game using power to change the bargaining set or perceptions of the bargaining set (the set of all payoff combinations from possible agreements).

Three classes of tactics in a multiparty environment affect bargaining set perception according to Lax and Sebenius (1991): (1) adding and subtracting parties, (2) strategically managing the negotiation process, and (3) strategic sequencing, or the ordering of how parties are approached leading to subagreements or agreement (Lax and Sebenius 1991).

Finally, Lax and Sebenius (2002, 2006), more recently, have focused, in particular, on how parties can change bargaining set perceptions, with a specific focus on entrepreneurial moves “away from the table” to advantageously change the game, which can even add complexity to bilateral negotiations.

As traditional negotiation scholarship developed, specific scholars in this area shifted their focus from simple to more complex negotiation analysis. Scholarship in international negotiation, on the other hand, began with negotiation complexity as its primary focus.

Classic International Negotiation Theory

Scholars of international negotiation developed stage‐based process models: first a two‐stage process model — formula and detail (Ikle 1964) — followed by a three‐stage process model — diagnosis, formula, and detail (Zartman 1978). William Zartman argued that, regardless of discipline, the basic analytical question is: “How are negotiated outcomes explained?” (Zartman 1988: 32). To answer this question, analysis must be driven by an understanding of negotiation process.

Christopher Dupont and Guy Olivier Faure conceptualized negotiation process as: (1) a series of sequences or phases, (2) concerned with power relations (structural analysis), (3) a “persuasive debate” to counter power, and (4) a strategic analysis through game‐theoretical matrices (Dupont and Faure 1991). Jeffrey Rubin took a different analytical approach by examining actors and context, arguing that negotiation process can be understood only by understanding the mix of individual actors and the contexts within which the actors function (Rubin 1991).

Taking another approach, Zartman argued that, once determined, structure (number of parties, value of potential outcomes, sources of tactical possibilities, and so on) explains outcome, as structural analysis (distribution of power) forms the basis for causal analysis. Managing complexity is thus a structural problem that has three types of solutions: coalition analysis, leadership analysis, and procedural analysis (Zartman 1991).

P. Terrence Hopmann (1996) focused on symmetrical and asymmetrical power relations, the role and nature of individual negotiator(s), organizational behavior including bureaucratic politics, interactive processes within a negotiation (bilateral and multilateral) including third parties, and the impact of the environment on negotiation process. Finally, in separate studies Arild Underdal (1991) and John Odell (2006) recognized that “negotiation outcome” is the ultimate dependent variable and includes at least five dimensions: agreement, efficiency, stability, distribution of costs and benefits, and the distance from opening positions (Underdal 1991; Odell 2006).

Multilateral Conferences

This initial work in international negotiation theory established the foundation for developing analytical tools directly focused on the processes that occur during multilateral international conferences. Fen Osler Hampson with Michael Hart (1995) used an inductive approach to identify elements of a multilateral conference, including prenegotiation, crisis management, consensual knowledge, formal negotiation phases, coalitions, leadership, focal points, issue decomposition, sequencing, compliance, and verification.

Zartman (1994) adopted an integrative approach, concluding that multilateral negotiation is about managing complexity (the existence of a large number of interacting variables with no dominant pattern). A multilateral negotiation represents “organized complexity,” but without any apparent simplifying assumptions. He concluded that the primary tools for managing complexity include simplification, structuring, and direction. Ultimately, “managing complexity is a paradigm, not a theory … It is the context for theorizing but more basically a way of thinking about multilateral negotiations in order to achieve a better comprehension of the full process” (Zartman 1994: 221–222).

Daniel Druckman (2001) suggested applying a “turning points” analysis (identification of precipitants, departures, and consequences) to multilateral conference dynamics. Turning points analysis can be applied to many settings — although this specific methodology offers exceptional utility in integrating a substantial amount of complex phenomena into a single conceptual framework (Druckman 2001). A turning points analysis of multilateral trade conferences illuminates the relationship between negotiation context and negotiation process, between coalition structure and negotiation process, as well as the strategic use of reframing to seek competitive advantage (Crump and Druckman 2012), the relationship between organizational conference structure and negotiation process, and the ways in which multilateral conferences can evolve toward a deadlock (Crump and Druckman 2014). A turning points framework can be particularly useful for complex negotiations because it focuses attention on critical decisions that occur within a three‐part causal relationship.

Negotiation Linkage

Finally, the international negotiation literature has also focused on the role of negotiation linkage (the way in which one negotiation influences another). The most common kind of link is between the negotiated issue and the parties' best alternatives or BATNAs, although I have previously identified four other unique types of negotiation linkage found within the negotiation literature (Crump 2010). Watkins and Passow (1996) developed the first linkage framework, which includes competitive links, reciprocal links, synergistic links, and antagonistic links. Each linkage type offers parties unique opportunities and challenges.

Negotiation linkages within the same issue area (such as international trade) can be competitive or noncompetitive (Crump 2006), and can occur consecutively (Crump 2007) or concurrently (Crump 2010). Other forms of linkage occur when two or more venues host negotiations in the same issue area, such as international, regional, or bilateral venues (Crump 2011). Each linkage provides a negotiator with an opportunity to gain strategic advantage or minimize disadvantage.4

With this literature review I have attempted to build a theoretical foundation for analyzing complex negotiations. From this knowledge, I seek to develop a simple framework that can guide negotiation analysts as they examine specific complex negotiations — what is known as the first level of analysis, which is primarily a descriptive exercise.

This first level of analysis supports case construction, and also provides the foundation for more advanced levels of negotiation analysis. I have sought to use the literature discussed earlier to identify essential elements of this framework, which consists of five parts:

  • identification of the negotiation architecture,

  • analysis of context,

  • analysis of structure and relationships,

  • analysis of process, and

  • analysis of decision making.

The sections that follow briefly review each part of this framework and then I will apply the framework to a complex multiparty case.

Negotiation Architecture

Party, multiple parties, and sides are the elements that establish negotiation architecture and are prominent concepts in each literature reviewed. “Party” has been identified as one of the most basic elements of negotiation (Wall 1981; Diehl, Druckman, and Wall 1998), but within a complex negotiation, the existence of “sides” and the parties contained on each side provides greater analytical understanding. An examination of sides reveals the architecture of a complex negotiation; the three basic forms of this architecture are (1) bilateral, (2) bilateral‐multiparty, or (3) multilateral (Crump and Glendon 2003). A bilateral negotiation involves two parties (a dyad) that have unitary decision makers on each side (Raiffa 1982).

Just as two parties are the focus of attention in a bilateral negotiation, the analyst will initially focus her or his attention in a bilateral‐multiparty negotiation on “sides” before examining the parties operating on each side. When an organization is involved in a negotiation, it may not immediately be clear how many parties that organization actually comprises because organizations operate with varying degrees of unity. If entities within that organization are in conflict with each other, they may pursue contradictory goals and/or inconsistent strategies (Crump 2005). The sides in a bilateral‐multiparty negotiation may or may not behave with unity, although they typically have sufficient unity to continue working together.

Aligned parties on each side are often clearly distinguishable, although parties aligned through coalitional arrangements are usually easier to distinguish than parties aligned through hierarchical arrangements. A range of roles may exist or emerge on either or both sides, including primary parties or constituents, agents and/or representatives, and various kinds of third parties such as mediators, arbitrators, and so on (Crump and Glendon 2003). A bilateral‐multiparty negotiation can be as simple as one individual negotiating with two individuals who are attempting to cooperate as a group, and as complex as the European Union–Mercosur free trade negotiations, which involved twenty‐eight European nations and four Latin American nations engaged in a fourteen‐year bilateral treaty negotiation. Clearly each side cannot be understood as a single party in this case, although the twenty‐eight nations on the European “side” seem to have had much more unity than the four Latin American nations (Crump 2011). (The disparity in unity may arise from the regions' differing organizational arrangements — the European Commission is a more established entity than the rotating presidency that represented Latin America in these negotiations.)

At a minimum, a multilateral negotiation involves at least three unitary decision makers who are engaged in solving a problem or pursuing an opportunity. Adding a third primary party to a bilateral negotiation transforms a bilateral encounter into a multilateral encounter, and coalition dynamics then emerge as a salient force, a phenomenon that is typically observed in international multilateral negotiations (Zartman 1994; Hampson with Hart 1995).

Context Analysis

Although I seek here to develop theories relevant to all negotiation settings, those theories must take into account that negotiations always exist in a specific context, and understanding that context is essential to understanding the fundamental nature of that negotiation. We must seek clarity about the general and specific context within which a negotiation is embedded to understand the specific nature of a negotiation. For example, understanding a free trade agreement requires international trade policy knowledge. Understanding the historical, cultural, and evolving social and legal systems that created the context within which a negotiation is actually embedded is also essential.

Structural and Relational Analysis

Structure is the term I use here to refer to relations between parties, especially power relations. These relations are fundamental to each of the literatures reviewed earlier. They have been highlighted frequently within the international negotiation literature. According to Zartman, structure explains outcome and structural analysis (distribution of power) forms the basis of causal analysis (Zartman 1991, 1994). It may be impossible to specifically define the power relationship between two or more parties (or sides), because power is a relative concept, but defining the power relationship between parties (symmetrical or asymmetrical) provides important perspective. Understanding the negotiation context (see earlier) as well as each side's alternatives (BATNA) can contribute to understanding the power relationship between parties or sides.

For example, the number of battleships per nation or the size of a nation's navy (number of sailors) could each serve as proxies of party power in the South China Sea territorial dispute (Chalermpalanupap 2013), but the same measure would have little relevance in trade negotiations involving the same nations (Das 2013). Thus, identifying a relevant proxy for a party's power as well as a method for measuring that power are useful for gaining perspective regarding a specific negotiation.

Understanding the relationship between parties or sides is not only about the identification of power relations. Communication patterns also tell us something about parties engaged in a negotiation. Who communicates with whom? When do parties communicate and why (Walton and McKersie 1965)? Relations between key parties or people on each side are also significant for gaining an understanding of the relationship. What is the degree of attraction and/or rapport between key leaders who represent negotiating parties? Leader attraction and/or rapport and degrees of trust can be highly significant to negotiation dynamics (McAllister 1995; Irmer and Druckman 2009). Finally, what is the breadth of the relationship between parties? How many parties or people on each side are meaningfully engaged with the other side? How many modes are used for communication and interaction (face‐to‐face, telephone, e‐mail, social media, etc.)? What temporal qualities are relevant to the relationship? Has a past relationship existed, and if so what is the nature of that relationship? Is there a perception of a future relationship between parties or people on each side (Greenhalgh 2001)? Answers to these questions also form the basis of relational analysis.

Process Analysis

Each of the literatures reviewed above has focused on the overarching super‐structure of negotiation (beginning, middle, outcome, etc.). To explain the negotiated outcome, the analyst must first identify the negotiation's phases through a retrospective analysis of the negotiation process. This entails identifying the event that established a negotiation and its date, the event that brought closure to a negotiation and the date of that event, and the dates of all other critical moments, which are often highlighted as phases or stages of negotiation process. A temporal approach to negotiation (Ancona, Okhuysen, and Perlow 2001; Mitchell and James 2001; Crump 2007), a turning points analysis (Druckman 2001; Crump and Druckman 2012, 2014) and a number of other process‐focused approaches all offer significant analytical tools for achieving understanding.

Decisional Analysis

Decisions are a fundamental topic in negotiation scholarship. Decision analysis is fundamental to the study of negotiation, and is used for both descriptive and prescriptive purposes (Raiffa 1982).5

Decision rules, or the rules that parties or sides adopt to reach an agreement, are of great relevance to an analysis of complex negotiations. Decisions can be made using variations on the majority rule, such as true unanimity (everyone agrees), consensus (no one disagrees), quasi‐consensus, two‐thirds majority or bare majority (50 percent plus one). In complex settings, parties can make decisions via oligarchy (a dominant minority) and even dictatorship (Brett 1991). Whether the decision acceptance process is seen as legitimate and whether it is binding on all involved parties can also be critical factors (Kahn 1991).

A descriptive analysis will seek to identify decision‐makers on all sides or within each party and determine how decisions are made in a specific complex negotiation. How are such decisions made internally (within a party and/or side) and how are they made externally (between parties and/or sides)?

To distinguish party decision‐making roles on the same side, it is useful to identify “controlling units” and “lead units.” A controlling unit has the authority to establish and/or conclude a negotiation, and a lead unit has the responsibility of managing a negotiation. Sometimes a single person, party, or unit may perform each role, but in complex negotiations, this set of tasks is often divided.

How are decisions made during the prenegotiation stage and after the negotiation has begun? How are decisions made during the final “end‐game” stage? How are decisions made after a complex negotiation has begun, but before it moves into the “end‐game,” as internal and external decision processes transform in the prenegotiation, negotiation, and end‐game stages? In bilateral negotiations between unitary parties, these issues may be less significant, but in a complex negotiation it is not unusual to find that the parties that start a negotiation are not the parties that end it — the fundamental nature of a party or side may change over time.

As noted, my five‐part framework seeks to provide methodology for first‐level descriptive analysis, which will proceed to more advanced levels of analysis that could be involved in, for example, building or testing theory, outcome analysis, or establishing the relationship between key negotiation variables. I focus on the first level of analysis as I demonstrate the use of this analytical framework by examining the Australia–U.S. Free Trade Agreement (AUSFTA) negotiations that occurred from 2002 to 2004.6

Negotiation Architecture

As noted earlier, negotiation architecture may be divided into three categories: every negotiation will be bilateral, bilateral‐multiparty, or multilateral. Single organizations are rarely monolithic or unitary in their decision making, so it is reasonable to conclude that the AUSFTA negotiations included multiple parties on each side. For example, the U.S. Trade Representative (USTR, which is the United States. Trade Department), the American President and the Congress of the United States clearly do not constitute a single party, but rather are multiple parties operating on the same side. Although many parties have been involved in this case, there have never been more than two sides; therefore, this negotiation never evolved into a multilateral negotiation. Thus, according to a simple analysis, the AUSFTA negotiation architecture is bilateral‐multiparty in nature.

Context Analysis

Through context analysis, the researcher seeks to understand the social system in which a complex negotiation is embedded, which requires familiarity with its history and its contemporary nature, including the relevant legal and regulatory frameworks a negotiation exists within, and the legal and regulatory framework that each party operates within.

Although the AUSFTA is a negotiation between two nations, it is fundamentally embedded in the General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO), which govern international multilateral trade policy. The GATT treaty was ratified by twenty‐three nations in October 1947 and has evolved through several major negotiation rounds since then. It has had a significant impact on how trade negotiations occur in global, regional, and bilateral negotiations including the establishment of the WTO in 1995. The GATT and WTO each functions as a social system with its own set of values (free trade, competition, etc.), norms and customs (economic diplomacy), and language (e.g., national treatment, rules of origin, tariff schedules, positive or negative list in services, etc.) (Crump 2013).

In addition to gaining an understanding of the general context, it is also useful for the negotiation analyst to understand the specific context within which a complex negotiation is embedded. This requires identifying and examining other negotiations conducted by each party that are similar to the negotiation under analysis. Initially, this will involve identifying the architecture of previous negotiations.

In the AUSFTA case, all bilateral‐multiparty trade negotiations that have been separately conducted by the U.S. government and by the Australian government would be relevant. These will include the groundbreaking Australia–New Zealand Closer Economic Trade Agreement of 1983, and then Australia's negotiations with Singapore (2000–2003), and Thailand (2002–2003). The U.S. concluded the U.S.–Israel Free Trade Agreement in 1985, followed by negotiations with Canada and then Mexico (which became the North American Free Trade Agreement of 1994), and trade treaties with Jordan (2001), Chile (2000–2003), and Singapore (2000–2003). Some of the treaties concluded by the U.S. may be more political than economic in nature although these treaties are called free trade agreements.

The negotiations conducted just prior to the commencement of the AUSFTA (Australia's separate negotiations with Singapore and Thailand, and the separate negotiations of the U.S. with Chile and Singapore) provide the most salient data. How does the analyst gather this information? Most of the relevant organizations maintain a website with an archive. In this case, the websites of the U.S. Trade Representative (http://www.ustr.gov) and the Australian Department of Foreign Affairs and Trade (DFAT; http://www.dfat.gov.au) are particularly valuable.

Three months prior to the commencement of U.S.–Australia FTA negotiation the U.S. Congress changed its governance structure for trade treaty ratification, as both the House of Representatives and the Senate approved Trade Promotion Authority or TPA (also known as “fast track” authority) through the Trade Act of 2002. Under this arrangement, Congress delegated authority to the president to negotiate international trade agreements that Congress could ratify or not, but could not amend or filibuster.7

Structural and Relational Analysis

The analyst seeks to understand as much as possible about the relative power of each party by examining the negotiation's structure and the party's relationships (achieving a definitive understanding of power relations is impossible). Are relations symmetrical or asymmetrical? And, if they are asymmetrical, then how unequal are the primary parties? In a complex negotiation the relationship between key individuals within each party as well as the communications between parties are both important to consider.

Party BATNA is one measure of power. Within AUSFTA, it is clear that the U.S. has many more potential partners with whom it might negotiate free trade agreements than does Australia, because many nations wish to be aligned with a powerful party in a relationship that offers political and economic security. The United States is able to offer its treaty partners substantially greater tangible and intangible benefits than Australia can offer. But the quality and availability of alternatives is just one aspect of a party's relative power.

The analyst's initial challenge is to determine what is “relevant power” in the specific negotiation and then to gain perspective on that relevant power through some kind of measure, which is often established through a proxy. Within international economic negotiations, measures of income per capita, gross domestic product, or gross national product are often used as proxies for a country's economic power. In international trade specifically, a country's share (as a percentage) of total world imports is a useful measure that has specific relevance to negotiation in a multilateral context.8 The greater the amount that a particular nation imports, the more dependent other nations are upon that country because their exports translate into jobs at home — jobs that are directly supported by an import country.

The dependence of other countries is a nation's source of power. For example, the United States' share of world imports from 1999 to 2004 was 22 percent, while Australia's share of world imports during that period was 1.5 percent (Odell 2007: 32). Within multilateral trade negotiations, many nations depend on American markets because the U.S. supports so many overseas jobs. On the other hand, Australia — with its much smaller population and market — supports far fewer overseas jobs. This particular form of dependence has relevance to multilateral (GATT/WTO) negotiations, although it is less relevant to bilateral‐multiparty negotiations. Nevertheless, in this context, trade negotiations between the U.S. and Australia seem to be very asymmetrical, with the U.S. operating as the more powerful party.

In addition to the power relationships between parties, the personal or human relationships between key individuals within each party can also be relevant to negotiation processes and outcomes. Identifying communication patterns — who communicates with whom, when, and how — can illuminate these relationships. A key personal relationship in this case is the one between the President of the United States and the Australian Prime Minister because no bilateral trade agreement occurs anywhere in the world without the support of the two nations' chief executives. Other relevant key individuals in the case of the AUSFTA are the Australian Trade Minister and the USTR, as well as the Australian Ambassador to the U.S. and the U.S. Ambassador to Australia. These relationships will continue to be important after the trade negotiations have begun, when the relationships between the chief negotiators on each side will also become important.

In the case of the AUSFTA, it is clear that the negotiations would not have begun without the personal commitment of the American President and the Australian Prime Minister. George W. Bush values loyalty to friends and he did see John Howard as a friend (Bush 2010; Howard 2010). Clearly, Bush's personal commitment to the AUSFTA was critical to negotiation commencement because there were strong objections to such negotiations with the U.S. Congress (Crump 2007).

Relations between Australian Ambassador Michael Thawley and USTR Robert Zoellick, and between Australian Chief Negotiator Stephen Deady and U.S. Chief Negotiator Ralph Ives, are equally important in gaining an understanding of a complex negotiation (Crump 2006). Every complex negotiation has key leaders on each side, and these key leaders form relationships that facilitate or inhibit cooperation and conflict. Identifying party leaders and each one's corresponding partner, and then determining the relationship between these key leaders, is critical for understanding a complex negotiation process.

Process Analysis

Process analysis involves identifying critical events and their dates. Often, a timeline is the most efficient means of gathering and communicating this information. The AUSFTA timeline is shown in Figure One.

Figure One

Australia–U.S. Free Trade Agreement (AUSFTA) Timeline

Figure One

Australia–U.S. Free Trade Agreement (AUSFTA) Timeline

Close modal

AUSFTA negotiations were announced in November 2002 and begun in Canberra in March 2003. The second and third rounds were conducted in Honolulu in May and July 2003, respectively, then negotiators returned to Canberra for the fourth round in October 2003. Negotiations moved toward the conclusion on the fifth and sixth rounds in Washington D.C., with negotiations concluding in February 2004.

Process analysis supports decision analysis, and analysts are especially concerned about decision making during three periods: prenegotiation, actual negotiations, and concluding negotiations (also known as the “end‐game”).

Decisional Analysis

Who are the decision makers and how are decisions made in a specific complex negotiation? How does each party or side make decisions? How does decision making change as the negotiation unfolds within each party, within each side and between sides. These are just some of the questions that are the focus of decisional analysis.

Each side had explored the possibility of conducting FTA negotiations before the negotiations were actually announced in November 2002. President Bush and Prime Minister Howard asked Zoellick and Thawley to conduct prenegotiation discussions (see Figure Two) — thus, the controlling units for each side were the U.S. Executive Office of the President and the office of the Australian Prime Minister, while the USTR and the office of the Australian ambassador served as lead units during the prenegotiation stage.

Figure Two

Australia–U.S. Free Trade Agreement (AUSFTA) Decisional Analysis during Prenegotiation Stage

Figure Two

Australia–U.S. Free Trade Agreement (AUSFTA) Decisional Analysis during Prenegotiation Stage

Close modal

Initially, American agricultural groups opposed the FTA, arguing that Australian agricultural markets were overprotected and the USTR received letters from congressional representatives who opposed the negotiations. Both governments responded sufficiently to opposition, eventually announcing that they intended to proceed to negotiation.

Once negotiations commenced, the USTR continued to serve as the lead organization on the American side, but on the Australian side the lead organization shifted to the Australian Department of Foreign Affairs and Trade (DFAT) in Canberra. Ives and Deady became primarily responsible for the negotiation process, as each led a team of fifty to seventy trade negotiators. External negotiations (between the two sides) involved approximately twenty‐three teams — one team per treaty chapter (see Figure Three). These negotiations began in March 2003 and continued for about eight months, from the first round to the fourth round (see Figure One).

Figure Three

Australia–U.S. Free Trade Agreement (AUSFTA): External Decision Making during Negotiation Stage

Figure Three

Australia–U.S. Free Trade Agreement (AUSFTA): External Decision Making during Negotiation Stage

Close modal

In addition to engaging in external negotiations, a complex collection of organizations within each side engaged in internal negotiations (see Figure Four). The American side included representatives of various federal departments working with the USTR (the Departments of Agriculture, Commerce, Justice, State and Treasury, among others), as well as two entities that coordinated these departments, the Trade Policy Staff Committee and the Trade Policy Advisory Committee.

Figure Four

Australia–U.S. Free Trade Agreement (AUSFTA): Internal Decision Making

Figure Four

Australia–U.S. Free Trade Agreement (AUSFTA): Internal Decision Making

Close modal

The Australian side included representatives from the agriculture, communications and information technology, finance and administration, and treasury departments, as well as the attorney general's office and other offices. The Australian Inter‐Departmental Committee provided a coordinating function between the governmental departments.

As the negotiation proceeded, the Australian controlling agency continued to be the Office of the Prime Minister, but the Cabinet was also included because no agreement could be adopted without its support. On the American side, the president no longer played an active role — because the U.S. chief negotiator and the USTR were focused on negotiating a treaty that would be acceptable to Congress, the chairs of the House of Representatives Ways and Means Committee and Senate Finance Committee became the controlling agency.

As negotiations moved toward their conclusion in December 2003 and January 2004, only politically sensitive issues remained unresolved. The negotiation and decision‐making structure that had operated since March 2002 was no longer sufficient to manage the complexity of those issues, so senior administrative officials on each side — some of whom had been involved in prenegotiations (e.g, the Australian ambassador to the U.S.), but had only provided an advisory or guiding role during actual negotiation (first to fourth rounds) –– assumed leadership of these final negotiations (see Figure Five). The American side was led by the USTR, with the participation of the U.S. chief negotiator, relevant assistant and undersecretaries, and team leaders as required. The Australians were led by the Australian trade minister, the Australian ambassador to the U.S., and the DFAT leadership, with the participation of the Australian chief negotiator and team leaders as required.

Figure Five

Australia–U.S. Free Trade Agreement (AUSFTA): End‐game

Figure Five

Australia–U.S. Free Trade Agreement (AUSFTA): End‐game

Close modal

The Australian prime minister, who acted as a controlling agency throughout, was regularly consulted by the Australian negotiation team as the endgame unfolded. The American president was not really involved at all, but Congress was very involved — especially the House Ways and Means Committee and Senate Finance Committee chairs, who acted as controlling agencies. The sixth round lasted three weeks, with negotiations occurring around the clock in the final two weeks. The parties reached agreement in early February 2004.

Undertaking a five‐part methodological descriptive analysis of cases like the AUSFTA negotiation provides sufficient data to allow the analyst to then develop a full negotiation case, which can then be used for teaching or research. This descriptive exercise also establishes a foundation that supports more advanced levels of analysis.

How are negotiated outcomes explained (Zartman 1988)? Our ability to answer this question has continued to develop ever since it was first asked. Substantial advances in our ability to analyze and understand complex decision‐making processes even supports the development of prescriptive theory in complex settings. Such achievements have often been built by researchers, theorists, and analysts who have drawn on real cases to arrive at their conclusions. But before they could arrive at causal or prescriptive theory they had to understand their case data. The present study provided a blueprint, in the form of an analytical framework, to conduct such work.

Each analyst will seek to understand a complex negotiation for her or his own purposes, so analyzing a complex negotiation does not necessarily entail the formal preparation of a case. The negotiation analyst should, however, conceptualize a complex negotiation with sufficient coherence so that a case could be prepared if required. Undertaking this descriptive analysis is a necessary first step before the analyst can conduct the more advanced levels of analysis that could, for example, establish relationships among key negotiation variables, examine negotiation processes to explain negotiation outcome, or build theory. For example, when the researcher gains clarity about the overall nature of a complex negotiation — which can be achieved using the analytical framework I have proposed here — it becomes easier to determine the negotiators' strategic approach (integrative, distributive, bargaining, problem solving, etc.). Theories of negotiation strategy, negotiation turning points theory, negotiation linkage theory, negotiation temporal theory, negotiation leadership theory, coalition theory, and so many other negotiation theories have been developed and refined through this two‐step process.

This proposed five‐part analytical framework, grounded in the literature, is designed to help negotiation scholars analyze complex negotiations by identifying the negotiation architecture and examining the larger context of the negotiation, its structure, the relationships among parties, the negotiation process, and decision‐making processes that occur within and between each side. This framework, like our understanding of negotiation complexity, is a work in progress. Variables may be missing, and concepts might be seen from another perspective, potentially producing additional insight. The true utility of this framework derives from the foundation it provides scholars seeking to conduct more advanced theoretical analyses of complex negotiations.

I am grateful to two anonymous reviewers and an editor who offered critical comments on prior versions of this article, which is now stronger because of their efforts. Variations of this article have been presented before the Australian Department of Foreign Affairs and Trade, the Colombian Ministerio de Relaciones Exteriores, the European Commission, Griffith University (Australia), the Asia Pacific Management Centre (Australia), Universidad ICESI (Colombia), Baden‐Wurttemberg Cooperative State University (Germany), Kyung Hee University (Korea), and other settings. The author is grateful for the questions and feedback received and assumes full responsibility for any errors or omissions.

1.

Negotiation analysis is a field of study related to, but distinct from decision analysis, behavioral decision making and game theory (Raiffa, Richardson, and Metcalfe 2002).

2.

Crump and Susskind2008 offers a comprehensive literature review in the introduction that has relevance to the purpose of the present study.

3.

The complete list of thirteen characteristics that Raiffa identified is as follows: Are there more than two parties? Are the parties monolithic? Is the game repetitive? Are there linkage effects? Is there more than one issue? Is an agreement required? Is ratification required? Are threats possible? Are there time constraints? Are the contracts binding? Are negotiations private or public? What are the group norms? Is third‐party intervention possible? (Raiffa 1982).

4.

Negotiation linkage is an important form of negotiation complexity first recognized by Howard Raiffa (1982).

5.

John Nash (1953) developed utility parameters long before the birth of contemporary negotiation scholarship, but since then, some negotiation scholars have concluded that utility theory is not particularly relevant to complex negotiations. Walton and McKersie (1965: 46) state: “We do not carry through with this analysis here [utility theory] because it does not, in our opinion, contribute to an understanding of purposive behavior in the bargaining process in the same way that game theory and commitment do … theories which predict outcome strictly from the utility parameters without further enlightening the behavioral process, such as the arbitration formulas of Nash and Raiffa, are even less relevant for our purposes in developing a theory of convergence activity.”

6.

A narrative of this case, based on interviews with twenty‐six representatives of the U.S. and thirty‐five representative of Australia (diplomats, ambassadors and other government officials), was published in Negotiation Journal in 2007 (see Crump 2007).

7.

If the Trade Act of 2002 had been passed after AUSFTA negotiations began, then I would have considered it in the section on process analysis because its significance is that great. But in this case, it is just another part of the established legal framework that a negotiation operates within. For more detailed understanding of this development see Devereaux, Lawrence, and Watkins 2006.

8.

“One useful indicator for the [power] structure most relevant for global trade negotiations is the share of world goods imports each member buys. One prominent objective of each negotiating government is to increase its country's exports. If so, the larger the import market a government commands, the more it has to offer or threaten to withhold, as a way to induce concessions from others in market access talks. This is only one indicator. … But this indicator gives us one reasonable first approximation [of power]” (Odell 2007: 10).

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