The United States Wine Gallon Concession: How the Biggest Chip in the Tokyo round was Negotiated
| Published date | 01 December 1981 |
| Author | Gilbert R. Winham |
| DOI | 10.1177/002070208103600408 |
| Date | 01 December 1981 |
| Subject Matter | Money and Markets |
GILBERT
R.
WINHAM
The
United
States
wine
gallon
concession:
how
the
biggest
chip
in
the
Tokyo
Round
was
negotiated
It
is
improbable
that
the
wine
gallon
concession
will
be
recorded
as
a
signal
event
in
international
history.
It
was
just
one
part
of
the
Tokyo
Round
trade
negotiation,
which
was
concluded
in
1979
after
a
period
of
approximately
five
years.
The
Tokyo
Round
itself
was
a
vast,
complicated
negotiation
designed
to
liberalize
trade
and
was
conducted
under
the
auspices
of
the
General
Agree-
ment
on
Tariffs
and
Trade
(GATT).
Its
results
included
an
agree-
ment
on
tariffs
that
was
broader
than
that
reached at
the
Kennedy
Round
in
the
196os. As
well,
the
Tokyo
Round
negotiated
a
num-
ber
of
codes
dealing
with
non-tariff
barriers,
such
as
the
codes
on
custom
valuation
procedures,
on subsidies
and
countervailing
duties,
or
on
government
procurement
practices.
These
codes
amounted
to
constitutional
reform
of
the
basic
GATT
agreement
of
1947
and
were
very
significant
events
in
the history
of
the in-
ternational trading
system.
Within
this
vast
endeavour
the
wine
gallon
concession
appears
simply
as
a
point
on
a
very
large
spec-
trum.
If
any
lessons
are
to be
learned
from
studying
it,
they deal
more
with
the
process
of
how
international
trade
agreements
are
negotiated
than
with
the
substance
of
the
agreements
themselves.
When
Carl
von
Clausewitz
wrote
his
classic
work
on
military
strategy,
he
indicated
he
would
not
entertain
any
abstruse
or
com-
Centre
for
Foreign
Policy
Studies,
Department
of
Political
Science,
Dalhousie
University, Halifax,
Nova Scotia.
Financial
support
for
this
research
was
provided
by
a
Rockefeller
Fellowship
in
International
Relations.
This
paper
was
presented
in
seminars
at
the Center
for
International
Affairs,
Harvard
University,
and
the
Centre
for
Foreign
Pol-
icy
Studies,
Dalhousie
University.
The
author
gratefully
acknowledges
criticisms
and
suggestions
from
his
colleagues
in
these
institutions.
852
INTERNATIONAL
JOURNAL
plicated
definition
of
war.
Clausewitz
simply defined war
as
a
duel.
Admittedly,
it
was
a
duel
writ
large,
and
there
were
many
complicating
factors
that
arose
both
in
the
design
and in
the
exe-
cution
of
warfare.
But
at
its
base,
war
was
a
duel,
and
the
means
of
war
was
violence.'
Now
if
the
student
of
negotiation
were
to
be
led
by
Clausewitz's
admirable
brevity,
he
might
define
inter-
national negotiation
as
a
deal.
Granted,
it
is
a
deal
writ
large, and
there
are
complexities
in
modern
negotiation
that
defy
any
easy
comprehension
of
the
subject.
But
negotiation
is
at
bottom
a
pro-
cess
of
arranging
a
deal
and
the
means
of
negotiation
is
quid
pro
quo.
This
essence
was
clearly
revealed in
the
wine
gallon
conces-
sion
in
the Tokyo
Round
negotiation.
However
else
one
might
have
described
it,
one
would
have
had
to call
the
wine
gallon
concession
a
deal.
There
is
an
argument
as
to
whether
the
wine
gallon
conces-
sion
was
an
important
event
in
the
Tokyo
Round
at
all,
let
alone
whether it
was
the
biggest
bargaining
chip
as
it
has
been
charac-
terized
here.
In
objective terms
it
was
a
very
small
trade
issue,
and
it
was
completely
dwarfed,
for
example,
by
the
government
pro-
curement
code
which
had
the
potential
to
open
up
a
market
of
some
$20
billion.
The
wine
gallon
issue
had
a low
profile
in the
international
negotiation
at
Geneva,
and
it
was
improbable
that
even
the
most
knowledgeable
GATT
staffers
were
fully
informed
on
the
matter.
The
wine
gallon
concession
was
not
the
largest
trade
concession
made
by
the
United
States
at
the
Tokyo
Round,
par-
ticularly
when compared
to
the
overall
benefits
exchanged in
the
tariff
negotiation.
Certainly,
the
notion that
the
wine
gallon
con-
cession
was
the
'biggest
chip'
would
be
questioned
by
many
peo-
ple,
and
especially
those who
might
have
an
interest
in
minimizing
the
issue.
And
yet
the
concession
did represent
an
annual
windfall
gain to
foreign producers
of
$ioo
to
$120
million
per
year,
and
it
commenced
in one stroke
on
I
January
198o,
when
the
United
States
law
providing
for the
taxation
of
spirits
was
changed.
Un-
i
Carl
von
Clausewitz,
On
war,
book one,
chapter
1:2
(Anatol
Rapoport,
ed;
Harmondsworth,
England:
Penguin
Books
1968),
lOi.
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