Case 114 - Launching the Uruguay Round: Clayton Yeutter and the Two-Track Decision

Kennedy, David M. [case] and Frederick W. May [teaching notes]

In September 1986, U.S. Trade Representative Clayton Yeutter headed for the resort town of Punta del Este, Uruguay, determined to put the issue of liberalizing international trade in services on the agenda of the upcoming round of trade negotiations under the General Agreement on Tariffs and Trade. Yeutter had already rejected a compromise proposal to hold negotiations on services in some other, non-GATT forum, so he faced a difficult choice:  break his word and accept the proposal, thereby alienating his allies, or reject the proposal and alienate his influential opponents. This case study is intended to support discussion of the formation of coalitions, the utility of bluff and brinkmanship, and the nature of compromise in multilateral negotiations.