Linking domestic decisionmaking and international bargaining results: Beef and automobile negotiations between South Korea and the United States

We develop an expanded two-level game analysis of trade negotiations between South Korea and the United States, with an emphasis on the important cases of beef and automobiles. The theoretical background of this study is that the chief negotiator is not always an honest agent with no independent motive. We find that small perceived win-sets during the beef and automobile negotiations in the 1990s created problems at the negotiation stage (as already predicted by Putnam), while large perceived win-sets during the Korea-US free trade agreement (KORUS FTA) negotiations produced unexpected, but eventually resolved, problems at the ratification stage. Our analysis shows when and why larger perceived win-sets emerge in spite of the greater risk of failed ratification. During their bilateral negotiations in the 1990s, trade negotiators' autonomy, both in South Korea and in the United States, was institutionally weak, and their policy ideas were subordinated to mercantilism or fair-trade ideas, thus creating small perceived win-sets. By contrast, the empowerment of the Office of the Minister for Trade in South Korea after 2004 and the provision of trade promotion authority in 2002 to the US Trade Representative institutionally strengthened chief negotiators' autonomy vis-à-vis KORUS FTA negotiations, thus producing large perceived win-sets. During this period, the chief negotiators' autonomy, combined with their free-trade ideas, as well as with their own institutional interests, made the domestic constituency's winset as perceived by chief negotiators larger than a Putnam's two-level game analysis would have predicted. The ratification of the KORUS FTA, albeit prolonged much longer than anyone expected, illustrates that the chief negotiators did not 'incorrectly' perceive their win-sets to be larger than they actually were.