INTERNATIONAL THREATS AND INTERNAL POLITICS

INTERNATIONAL THREATS AND INTERNAL POLITICS: BRAZIL, THE ED AND THE US, 1985-1987

J. Odell (1993)

 A Summary

In a Nutshell

Within the context of trade policy and international negotiations Odell looks at when the use of threats and coercion is a valuable tool to influence other countries’ policy choices. Traditionally there have been two schools of thought a) that failure to use the power available to a state simply opens it to exploitation by others b) that coercion rarely pays as it breaks down the networks of trust and thus the beneficial mutual relationships that have been insitutionalised based on a foundation of cooperation and trust. Odell proposes a model that is more subtle and predicts the success or otherwise of coercive tactics on a case by case basis. He acknowledges that the tactics employed by the aggressor (country A) toward the target (country B) as well as the relative harm that can actually be inflicted by country A on country B are important in judging whether coercion could be successful. However he asserts that more important are two other variables: 

  1. Domestic situation in country A – if the constituents of the aggressor government or society do not agree with the threat they may persuade the government not to go ahead, or they may impose political costs if the government goes ahead. Country B knows of opposition within country A and this goes to the credibility of the threat. In this view “some fairly high degree of internal consensus is necessary in order to realise benefits of international power via coercion.”
  2. Domestic situation within country B – assuming the threat is credible, B will not comply with the demands if it faces greater net internal political penalties by doing so than from accepting the consequences on non-compliance. Threats can generate a climate of hostility within the target country (B). 

Application

  • He applies his model to two separate trade disputes. He goes in to a lot of detail regarding the different disputes which will not be summarised here. Only the main conclusions and general evidence seem interesting.
  • Brazil – Reagan in 1985 threatened to retaliate against Brazil if it did not change its program designed to promote domestic computer industries.
  • ED – Reagan in 1985 threatened the EC with trade sanctions if it did not remove feedgrain export barriers between US and Spain/Portugal
  • The results of the trade dispute were very different: the EC capitulated, Brazil did not. Why did the coercive strategy yield less from the weaker country and more from the EC? Brazil was 26 times more dependent on US trade wise as compared the EC, plus it was in the middle of a debt crisis so loss of trade would have been fatal!
  • Tactical differences aside (the threat to the EC was much more specific) how do his two variables explain the differences? 

Brazil

  • Domestic opposition to the threats in country A (USA): support was not large from US computer industry as many had subsidiaries inside Brazil and knew how to operate in the market, and did not want business to be disturbed. In fact the supposed beneficiaries of the Reagan assault were not pressing for coercion and may well have opposed actually carrying out the threat. The threat then was not hugely credible. Some firms even took steps to undermine Reagan and certainly sought to distance themselves from the policy.
  • Domestic opposition to capitulation in country B (Brazil) – there were strong political pressures to stand fast. Brazil refused to negotiate for more than 8 months. Brazilian imports of US computers was only 1% of the total world market and the law under question was merely a codification of existing practices. The program was supported by industry, political actors aligned with industry, the military (wanting to be less reliant on foreign technology) etc. Only once the US pulled back and said it would not go through with the threats did Brazil come to the table. The political costs of capitulation were too high! 

EC

  • Domestic opposition to the threats in country A (USA) – opposition was virtually non-existent. Feedgrain producers were united in furious protest. Joined by the farm lobby  etc. There were no actions taken to undercut Reagan’s credibility.
  • Domestic opposition to capitulation in country B (EC) – Initially the EC stood fast behind its belief that it was in the right. France was especially hard line (hahaha Amandine) as they stood to lose the most from the removal of the restrictions. However, a list of counter-retaliation restrictions was drawn up by the US which covered white wine, brandy, cheese, olives etc. meaning that many of the countries of the EC would have felt the adverse effects of a trade war with the US. Thus voices from Germany and UK etc. were heard in support of capitulation as a trade war would have been too expensive a price for them to pay for protection of French farmers who could be compensated in other ways. The biggest pressures on the commission to reach agreement was from industry. 
  • “In coercive distribution bargaining, if a substantial share of the constituents of threatening government A who stand to benefit from B’s compliance nevertheless oppose implementing the threat, and is state B is aware of tis internal opposition, the credibility of A;s threat will be undermined, other things being equal, even when A has much greater power resources and B is highly vulnerable to them. Second, even when one reading of B’s interests dictates complying, and even when the government executive prefers to do so, B will not do so if the executive faces greater internal political penalties from complying than from accepting no-agreement.”
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