Why the U.S. and UK suck at making deals

Today it seems neither country could come to an agreement on anything and even if they did they would get the short end of the stick.

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October 1, 2019 15:01
Why the U.S. and UK suck at making deals

U.S. President Donald Trump holds a bilateral meeting with British Prime Minister Boris Johnson on the sidelines of the annual United Nations General Assembly in New York City, New York, U.S., September 24, 2019. (photo credit: REUTERS/JONATHAN ERNST)

The US is roiled by how it will respond to Iran’s aggressive behavior following the decision by US President Donald Trump to walk away from the Iran Deal. The UK is on the verge of political crisis as Prime Minister Boris Johnson has fought with parliament and can’t figure out a deal with the European Union over Brexit.

How did it come to this. The US and UK seemed like the great dealmakers of previous centuries. Treaty of Versailles, the Atlantic Charter, Congress of Berlin, NATO, founding members of the UN. Today it seems neither country could come to an agreement on anything and even if they did they would get the short end of the stick. Emblematic is the failed nature of the Iran Deal and the nature of the Brexit negotiations the UK embarked on after the 2016 referendum.

Let’s look at both these agreements and how their problems were sown into them. At the heart of the Iran Deal was the decision by the Obama administration that it wanted a deal. It was clear as negotiations continued that the western powers wanted the deal more than Iran. That gave Iran a lot of leverage. It was already under sanctions, and it understood that European powers wanted to open trade with Iran.

The most interesting aspect of the Iran Deal was that it had to be sold by the US to the US. This meant that Iran largely could just sit back and wait while its narrative was pushed by western media and governments. To package the deal the US government pushed a narrative that either the US had to get the deal or there would be war. This put opponents in an odd position of being portrayed as “pro-war” if they opposed the deal. There was no concept that there could just be no deal, and no need for war. If one is told that they must sign a deal or fight a war it doesn’t sound like a good deal. What kind of deals are signed under the threat of war, except surrender? Why negotiate with a country that is so warlike that one needs a “deal” with it to make it be peaceful.

The nature of these negotiations gave Iran a “right” to nuclear weapons if the western powers walked back on the deal and also only kept Iran from enrichment for a certain number of years, usually between 10-15 years. This gave Tehran a kind of carte blanche to do what it wanted after a certain number of years, to have a right to do what it wants if the US wavers on the deal, and continue to hold the “do this or there will be war” card over the region. The US painted itself into a corner here. In order to get the deal, critics say that Washington went soft on the Assad regime and Hezbollah, two Iranian allies. But that’s not the worst of it. The whole nature of the deal made Iran’s bluster and warmaking transactional on the western powers and signatories being nice to Iran. Iran didn’t have to do anything. Ostensibly Iran just put o hold its nuclear program. What did Iran have to do to adhere to the deal? Not much. Meanwhile it stood to gain everything, including billions in trade and also freedom to do whatever it wanted in the region, such as attacking and invading neighbors with proxy militias.

The nature of the deal was also such that it was stretched over several US administrations. The deal signers could celebrate and walk away. This was a short term gain for those policymakers but put the US in a long-term contract that was not really in favor of the US. Iran didn’t have to change any of its rhetoric or behavior. While US media pushed a narrative about Iranian “hardliners” and moderates the Iranian regime did what it always does and have a “good cop, bad cop” approach to the west, holding up the bogeyman “hardliners” every time it wanted more. Oddly westerners helped sing the Iranian narrative, not even making it difficult for the regime. There was no quid-pro-quo such that Iran must stop its anti-US rhetoric or stop threatening Israel. Iran got everything. The rest of the signatories got almost nothing, except vague promises not to build a bomb for fifteen years. A bomb that it wasn’t even clear if Iran wanted. Iran may have used threats of the bomb to engineer its own narrative so as to pressure the western powers into the idea of “sign the deal or there will be war.”

One reason for the failure in the Iran deal concept was that Iranian policymakers study the US and the West and western policymakers seem to often not look at things from Iran’s point of view, preferring instead clichés like “hardliners” that play to Iran’s policies. Another disadvantage for the West is that the media in the West is open and critical, enabling Iran to simply read or even manipulate the West via internal lobbies, whereas there is no quid-pro-quo in Iranian media having to run opeds by pro-US voices. This is convenient. A better deal might have forces Press TV to not only be a pro-Iran channel in English, but to force Iran’s government to enable freedom of expression and use of Twitter and dissident voices in media. After all, how can one do a deal with a regime when one society has criticism and the other society does not. Inevitably the open society faces hurdles if it doesn’t ask the authoritarian society to change its rhetoric. Once one has said “we need the deal,” that side has lost. Inevitably it was not Iran saying “we need the deal.”

On negotiations with the EU the UK systematically eroded its own interests because it was internally divided and the EU negotiators, like Iran, negotiated from a position of strength. That isn’t because the EU is like Iran, but its leaders had message discipline and seemingly no internal dissent in the discussions with Theresa May’s government. Once again the UK needed the deal more than the EU and the EU wanted to drive a hard bargain. It wanted to punish the UK for leaving. Instead of realizing what the EU was doing, the UK was systematically at a disadvantage because it didn’t bother to even imagine what the EU negotiators were trying to achieve.

May’s government was also weakened because it didn’t have a united front. It was known that May had not even supported Brexit. Chosen as Tory leader in July 2016 in the wake of the Brexit referendum May triggered Article 50 to leave the EU in March 2017 and called elections, which she performed badly in. Yet May sought out a deal with the EU leadership, including Jean-Claude Juncker, Donald Tusk, and powerful leaders Angela Merkel and Emmanuel Macron, consistently keeping details of the deal from her own parliament and party. The result in November 2018 was a disaster.

May couldn’t get her deal through parliament in early 2019. This was a set up for failure, trying to force a deal through the UK Parliament meant that, like the US government ended up arguing Iran’s position, May had to argue on behalf of the EU. All the EU had to do is sit back and wait. Brexit had a timetable attacked and was supposed to take place by April 2019. But since the UK never prepared for a non-deal it was at the mercy of the EU. It had to sign the deal or, like Iran, there would be “war.” In this case it wasn’t “war” but chaos and instability. Almost like the UK leadership had wanted to sabotage its own Brexit, the UK postponed Brexit. May resigned in July 2019, once again leaving the country at the mercy of the EU because the next Brexit date was in October.

Unsurprisingly the UK didn’t go to elections but chose a new Prime Minister in Boris Johnson, with new tough talk about Brexit but no plans for how to do it. Johnson once again negotiated from weakness with EU leaders knowing he lacked support at home and driving the same tough bargain. Johnson’s bizarre decision to suspend parliament in August 2019. His decision was ruled against by the courts. Now Johnson lacks support in parliament and can’t get a deal and has not prepared the UK for no deal and can’t even get elections.

All the ingredients of the failed Iran deal can be seen in the failed UK deal. In each case the failed side negotiates from a position of weakness with internal dissent at home. In each case the failed side puts a timetable in place that is not in its interest and needs the deal more than its adversary. In each case the failed side doesn’t prepare for what to do next if there is no deal, making a no deal result seem like “war” so that it can shock its own citizens and then ends up arguing the adversaries position against itself. In each case the failed side is divided internally to the extent that some of its own negotiators actually seem to support the other side at the end of the dealmaking. In each case the failed side has to do everything and there is nothing that the adversary has to do in order to meet the failed side half way.

If dealmakers in the US and UK want to do things right they need to start studying the other side better and also requesting the other side take steps to build confidence. That means that the other side has to give things up as part of the negotiations. Given the internal divisions inside the US and UK there seems little chance this can happen and they will continue to always negotiate from weakness, leaving them at a disadvantage. They might ask themselves whether planning for a “no deal” in the future is a better course of action rather than locking themselves into needing a deal and therefore having to do whatever their adversaries demand.


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