Even The Experts Screw Up: 7 Years Of Wasted Negotiations

by drjim on August 1, 2008

The World Trade Organization failed to negotiate a new global trade pact

The World Trade Organization failed to negotiate a new global trade pact

What would you expect the very best negotiators in the world would spend their time doing? Whatever it was, it would have to have something to do with money and lots of it. We’re probably talking about billions and billions here. Well guess what, a whole bunch of them work for the World Trade Organization (WTO) which is located in Geneva and they just screwed up big time: a 7-year effort to forge a new global trade pact collapsed on Wednesday. There now – don’t you feel better about your negotiating abilities?

First Microsoft and Yahoo couldn’t find a way to make a deal and now this. What happened and why couldn’t the big boys resolve this issue? In a nutshell, the negotiations had dragged on for so long that the priorities of the 30 or so players involved had changed. Specifically, what was being negotiated was for developing countries such as China and India to lower their tariffs on industrial goods from the West while the West would cut tariff and subsidy’s on farm products. Sounds simple enough, doesn’t it? What caused this train to come off its tracks was that the developing countries wanted the ability to raise tariffs on imports if there was a sudden surge in imports. The big deal was not if this could be done, but rather how best to define a “surge”. China and India wanted to set the trigger at 10%, the U.S. wanted to set it at 40%. Neither side could agree, and so now the whole deal is off.

So what really happened here students of the negotiating arts? Clearly both sides of this deal felt that they had a better option than the one that was on the table. The experts say that individual countries will now go on negotiating bilateral trade deals. However, one downside to this is that the WTO may now be seen as being weaker and may be less able to help resolve issues that show up in existing agreements.

What can we eager learners learn from all of this? Two things: you should always make sure that you research and fully understand what the other side’s alternatives are. This will help you to better understand just how firm you can stand on a given issue during the negotiations. Secondly, you must realize that the more parties that are involved in the negotiations, the longer and more drawn out the negotiations will be. Do your research and only negotiate at a short table and maybe you’ll be able to complete your next negotiation in less than 7 years and with better results!

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{ 1 comment… read it below or add one }

Ted Linklater April 16, 2009 at 1:09 pm

Another way of putting it is that:

one party didn’t feel that the relative benefits offered, weren’t strong enough and the other side was not persuasive enough to convince the other party that their offer was, in fact, a relatively good one.

Coming from a sales background, and trying to break into a Supply Chain), it is very difficult to present Value if politics and/or a reluctance to change are omnipresent.

In fact one could say that negotiations are not even taking place but rather a discussion to gather information from both parties.

Could it be said that negotiations should really be defined as a situation where the final details are being taken care of?

Anything other than that is really only “foreplay”.

(I better stop there, the analogy has no end…!! 🙂 :))

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