NAFTA Negotiations: Framing the Problem Constructively

Introduction
Consider a negotiation where a land developer is negotiating with a building contractor to build a development of townhouses to rent or sell. Negotiations are going well until the developer demands a clause for an enormous liquidated damages penalty if the project is not completed on schedule. The contractor now feels exploited and pushed towards what he perceives to be an unfair and unbalanced contract. The developer is adamant that because of previous experiences with contractors and losses he has suffered due to delays, he will not agree to a contract without a heavy liquidated damages clause.

The contractor will likely see his current problem in the negotiation to be how to eliminate the liquidated damages clause, while the developer sees his problem as how to convince the contractor to accept an unreasonable liquidated damages clause.

Typically, as in this example, there is no joint, intersecting definition of the problem to be solved, but rather parallel and polarized definitions as each sees his problem from his particular perspective. Furthermore, both contractor and developer in this case, have framed their respective problems in very narrow, limited and zero-sum-like contexts which often leads to sub-optimal outcomes at best and impasse at worst.

How we frame and define the negotiation problem that needs to be solved if parties are going to agree, can frequently make the difference between agreement and impasse.

NAFTA - A Live Case Study
This week, the NAFTA (North American Free Trade Agreement) renegotiation is entering its fourth round of talks in Washington D.C.

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NORTH KOREA AND NEGOTIATION: Have Diplomatic Efforts Been Exhausted

Introduction
As North Korea threatens the United States and the world, the National Security Council of the UN considers options available that might deter them. There are two options currently being debated, a military option or economic sanctions.

The military option is problematic, because it would likely result in horrific loss of life in South Korea, the very partner we have pledged to protect by way of treaty. Furthermore, if just one North Korean nuclear weapon survives in such an attack, the results could be devastating.

The sanctions option comes with its own challenges. To stand any chance of success, it would require a reluctant China to stop all trade with North Korea. Additionally, we have no precedent to date where sanctions delivered a decisive blow to cause a swift lifting of hands in surrender. The time that it will take for sanctions to take meaningful effect will be too long, by which time time North Korea will have already developed a nuclear capability to hit the US mainland. Furthermore, Putin, who understands the North Korean mentality better than we in the West do, has stated categorically that they would “prefer to eat grass, rather than to give up their nuclear program” – an opinion we should consider seriously.

This leaves us with the nagging question: Has diplomacy been exhausted?

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NEGOTIATING NEW CLIENT RELATIONSHIPS (or the "Differentiation Dilemma")

As service providers or in any sales, one of the more intimidating, but inescapable aspects of the business, is meeting with prospective clients and trying to obtain new accounts. We are not taught how to do this effectively in school, nor do we deliberately go out and seek training or coaching to improve our skills (although that would be money well invested). We attempt an ad-hoc approach without a road map and process, which results in unpredictable and hit-or-miss outcomes.

One of the more threatening situations that we often encounter, is what I call the "differentiation dilemma". In this column, I will equip you with an approach and process to respond to this potentially perilous encounter with a greater rate of success.

While attempting to win over a new client, we may think that we are impressing them with our professional knowledge and acumen. All seems to be perfectly aligned as we begin to feel quite proud of our salesmanship and performance.

However, that euphoric feeling can be rather abruptly shattered when the prospective client says: "So, tell me, why I should hire or buy from you over the other hundred providers/suppliers who called my office last week?"

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DEALING WITH DISHONESTY

When confronted with apparent dishonesty, we feel betrayed, angry, anxious and disappointed. We are also confused as to whether we should confront it or ignore it, or how to confront it if we need to. If we ignore it, we are at risk of allowing it to continue, and if we confront it we risk the relationship - hence the conundrum or the "Dishonesty Dilemma".

A dilemma by definition does not allow for elimination of risks and dangers, and the best we can do is to mitigate the risks while curtailing potential damage and harm.

Although there is not one answer for all situations, in this column we offer guidelines to apply and a thought process to work through to ensure an effective and constructive response.

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CONSULT BEFORE DECIDING TO MAINTAIN TRUST AND CREDIBILITY

With our allies today feeling less sure of our support, U.S. foreign policy is faced with a credibility issue among our alliance partners. Other countries may be less inclined to trust our promises, commitments and pledges and therefore less likely to enter into trade agreements, nuclear anti-proliferation deals and defense treaties with us.

I was recently watching a rerun of Firing Line from circa 1970 in which William F. Buckley Jr. was debating (a very young) John Kerry as to whether or not the U.S. should cut their losses and pull out of Vietnam unconditionally.

Buckley argued that if the United States were to proceed along that course of action, it would send a negative message to our SEATO (South East Asian Treaty Organization) partners that we cannot be relied upon and trusted. Kerry argued (not very compellingly in the opinion of this author) that although the negative message issue was a general concern, it did not apply in the case of Vietnam.

In listening to the debate, I found it astonishing that both Buckley and Kerry failed to suggest the obvious solution to this dilemma. Let us consult with our SEATO partners (or at the least inform them), before making the decision. Consultation means that I inform my relationship partners about decisions that may affect them, that I solicit their thoughts and concerns and listen to them.

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