Bargaining with the Strong: New Zealand and Australia's Bilateral Trade Relations With the United States and the European Union

Abstract

This paper utilises a bilateral bargaining approach as an explanatory framework for understanding how New Zealand and Australia have conducted their trade policy towards the United States and the European Union. Though alternatives like neorealism and liberal institutionalism have some value for explaining bilateral outcomes between the strong and the weak, the bilateral bargaining approach takes us further by showing how and why the negotiation process can potentially adjust outcomes in favour of weaker states. New Zealand and Australia have sought to exploit such opportunities through the application of three important bilateral strategies: informing tactics; coalition-building; and the execution of formal agreements. Differences in their bilateral bargaining approaches are informed by reference to their commercial history and respective interests, as well as cognitive factors.