The beef import issue between Taiwan and the U.S. is just one of many international trade cases. Trading partners usually undergo a dynamic process of negotiation before they reach an agreement and it is not unusual for the negotiations to take years.

The beef import issue between Taiwan and the U.S. is just one of many international trade cases. Trading partners usually undergo a dynamic process of negotiation before they reach an agreement and it is not unusual for the negotiations to take years.

You might think the negotiation is unpredictable and intricate—is it? Here, “two-level games,” a political concept, makes the negotiation process and outcome easier to understand and predict.

Simply put, the negotiation could be classified into two levels: international and domestic.

All governments and negotiators need to deal with each other over a trade agreement (international level) and then deal with domestic constituents over their interests (domestic level).

Let’s take US-Taiwan beef imports issue as an example. At the international level, the U.S. government seeks to stimulate its domestic economic growth by expanding beef exports to Taiwan market.

At the same time, the Taiwanese government seeks to initiate more trading opportunities with U.S. business. In return, the U.S. government requests to liberate Taiwan’s beef market first by relaxing some restrictions.

At the domestic level, the U.S. beef farmers surely would love to export more beef to increase revenues; while the Taiwanese meat farmers intend to resist foreign imports due to the competiveness and customers demands for the additives labeled properly due to feed additive regulations.

Domestic interest groups advance favorable policies by influencing negotiators’ decisions, and governments conversely seek support and power by building coalition with interest groups.

The support from domestic groups, known as the “win-set” from the two-level games, becomes very important here. An international trade agreement is a decision not only of governments, but also of domestic individuals. The size of win-set vastly determines the outcome of negotiations.

The beef issue has been controversial between the U.S. and Taiwan since 2007. The reason why they have not gotten the deal done yet is because of domestic resistance and the conflict interests.

Does public opinion always drag the progress of a deal? It depends, and sometimes, domestic opinion can help a government reach a better deal.

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