NEGOTIATIONS

TOPIC: NEGOTIATIONS

LEVEL: DIFFICULT

Read the following short introduction to the topic. Review this important vocabulary below.

·        international policy

·        crucial areas

·        liberalization of the industry

·        elimination

·        government interference

·        lucrative

·        on-again off-again talks

“Open skies” is an international policy concept which allows for liberalization of the airline industry in several crucial areas. Its key provisions include the elimination of government interference in the commercial decisions of airline carriers, free market where competition is key, providing fair and equal opportunity for competition, etc.

The latest “open skies” talks between U.S. and Japanese negotiators set a lot of experts wondering whether U.S. airlines would finally gain access to a promising Tokyo-area airport and lucrative Asian routes (http://online.wsj.com/article/NA_WSJ_PUB:SB125690219975618375.html ) – a major issue in the pact. Although to this day the Unites States has concluded Open Skies agreements with over 90 partners (http://www.state.gov/e/eeb/tra/ata/), the on-again off-again talks with Japan that were finalized in December 2009 after 5 rounds of negotiations, proved to be extremely tough.

1. Read the following article and answer the questions that follow:

http://news.smh.com.au/breaking-news-world/japan-us-reach-open-skies-deal-20091212-kpbp.html

1)   According to the author, the main consequences of the “open skies” deal are: a) liberalization of the Japanese aviation industry, b) lower fares across the Pacific and motivation for alliances to shake things up, c) restriction of flights (answer: b)

2)   The agreement is bound to: a) rush airline alliances to bid and acquire the bankrupted Japan Airline, b) adapt schedules on demand, c) conduct closed-door negotiations (answer: a)

3)   The previous agreement between the US and Japan: a) allowed a preset number of flights to go into Japan, b) allowed certain carriers to organize as many flights as they needed, c) prohibited certain airlines from entering Japanese airspace. (answer: a)

4)   Tokyo’s Narita and Haneda airports are: a) now accepting all flights from the U.S. b) gateways into Japan, c) excluded from the agreement (answer: b)

5)   Once the deal goes through, the consumers: a) will enjoy competitive pricing, b) will enjoy better service on the routes, c) all of the above (answer: c)

2. Answer the following questions to evaluate your understanding of the events:

1)   What was the most crucial point that both parties have been unable to agree upon for a while? (answer: access to the 2 Tokyo airports)

2)   How was the Japanese Transport Minister taking these talks? (answer: he believed it was important to reach an agreement)

3)   What needs to be done before the agreement is finalized between the parties? (answer: some procedures need to be concluded first)

4)   What is JAL’s opinion of the “open skies” deal? (answer: JAL are hoping the deal goes through so that they can apply for antitrust immunity)

5)   What steps are Delta Airlines taking to attract JAL? (answer: they have offered a generous bid to JAL in hope they would switch alliances)

3.  Defining words in context. Find words or phrases in the text that mean the following:

1)   limitations

2)   to reach the highest point or degree

3)   part or share

4)   private talks

5)   sick, or stagnating

6)   to abandon, discontinue

7)   an instance of controversy, debate

Answers: 1. restrictions, 2. to culminate, 3. slice, 4. closed-door negotiations, 5. ailing, 6. to scrap 7. contention

4. Match words to make meaningful combinations (match the columns):

1)   to derail

2)   to reach

3)   a point (of)

4)   closed-door

5)   to counter

6)   a bilateral

7)   to lose

a)   out

b)   a deal

c)   a bid

d)   contention

e)   talks

f)    negotiations

g)   agreement

Answers: 1e, 2b, 3d, 4f, 5c, 6g, 7a

 

5. Use your active vocabulary from the text to fill in the blanks:

1. The rival company was attempting to…………………… ………………. by offering the ailing airline a substantial bid to keep it afloat. (Answer: derail talks)

2. It is yet unclear as to when the new agreement will …………….into……………. (Answer: go into effect), but the management are holding out…………………(Answer: high hopes) that the deal will be finalized by the end of the week.

3. After 3 ……………. of…………… (Answer: rounds of talks) we were still unable to go around the main point of………………..(Answer: contention).

4. It is possible that our competitors will not be able to ………………our bid (Answer: to counter), which means we might reach………………………(Answer: an agreement) with the supplier very soon.

5. There is no way of knowing whether our company will ………..out (Answer: lose) on the deal, but we are hoping to reach some sort of accord.

6. The new agreement is said to have reset………………….(Answer: the playing field) and opened doors to new opportunities.

7. I am familiar with the idea of on-again…………………… (Answer: off-again) talks, but I would prefer to finalize an agreement on these crucial……………….(Answer: areas) as soon as possible.

8. The new venture is offering very……………………….(Answer: lucrative) business opportunities, as Asian routes have just been opened to U.S. carriers.