When parties sit down to negotiate, there is hope. I have counseled countless negotiations over the years and have learned that great managers, entrepreneurs and statesmen take a “no” as an opening offer. Those who refuse to participate in negotiations are usually afraid of being passed over, and those who leave early leave countless options on the table. Sometimes the key skill of a great negotiator is to get the other party to stay.
In this list you will find the 10 agreements that have a decisive impact on 2020. There are successful negotiations, failures and — most importantly — deals that will still be negotiated in 2020.
10 The Deal Illusion — Civil War in Yemen 2.0
After a four-year civil war that has cost tens of thousands of lives and brought Yemen to the brink of famine, an agreement has been signed between the Yemeni government and southern separatists in Riyadh. This is not an agreement to end the war, but only one that will turn a three-party civil war into a two-party civil war. It will make it less complicated, but no less bloody.
The negotiations were hosted by Saudi Crown Prince Mohammed bin Salman and included Yemeni President Abdu Rabbu Mansour Hadi, Southern Transitional Council Chairman Aidarous al-Zubaidi and UAE Crown Prince Mohammed bin Zayed. The Iran-backed Houthi rebels were not present.
There are three parties involved: the Yemeni government, which is supported by Saudi Arabia; the Houthi rebels, who are Shiite Muslims and supported by Iran; and the southern rebels, who are supported by the United Arab Emirates.
This agreement united the southern rebels with the government forces, both Sunni Muslims. A new cabinet is to be formed that includes the southerners and gives them more representation. No agreement was reached with the Houthis, who took over the capital Sana in 2014. The joint forces will now concentrate their efforts against the Houthis in the north.
Saudi Arabia’s Crown Prince Mohammed bin Salman praised the agreement, saying, “This agreement, God willing, will open broader talks between the Yemeni parties to reach a political solution and end the war.” U.S. President Donald Trump commented on the agreement on Twitter. “A very good start!” Please all work hard for a final deal.”
For now, the fighting will be between only two parties instead of three. But there is hope that the agreement has changed the balance of power so that the new allies will negotiate with the Houthis.
9. Singapore on the Thames — The Exit of an Empire
Finally, light at the end of the tunnel — or at least a lighted tunnel with regard to Brexit: After a landslide victory in the UK elections, Prime Minister Boris Johnson can now “go through with Brexit.” He won with 46 percent — the largest Conservative majority since Margaret Thatcher.
However, the country is still divided, with 52 percent of the vote going to parties that oppose Brexit or are reconsidering Brexit.
With Prime Minister Johnson, however, a revocation or postponement of Brexit is off the negotiating table — Britain will leave the European Union by January 2020. However, there is a one-year transition period during which the UK will be treated as a de facto member of the EU.
Things are getting very interesting because there are essentially two possible outcomes to the negotiations: If there is no deal or agreement to decouple, the UK and EU would trade under World Trade Organization rules. This would cause massive difficulties in transactions, but the UK would be free to impose its own taxes and tariffs. If there were an agreement, the UK would be a junior partner, enjoying the freedoms and securities of the EU but having to play by EU rules.
Brussels will do everything it can to prevent a competitor on its doorstep. The EU’s chief negotiator, Michel Barnier, made it clear that if the UK were to start deregulating, it should expect a “proportionate” response from the EU. He used the classic technique of increasing his leverage with a higher authority, namely the other member states: “Don’t underestimate the difficulties of the ratification process… If it’s not ratified, we go back to zero.” Ursula von der Leyen, the president of the European Commission, made her goal very clear: “Zero tariffs, zero quotas, zero dumping.”
Boris Johnson is weighing his options: Turn the UK into a “Singapore on the road,” a lightly regulated tax haven, or be a de facto EU member without those rights. Will the UK remain close to the EU or other allies, especially the U.S.?
All eyes are on Johnson. Will he keep hardliners like Foreign Secretary Dominic Raab — co-author of “Britannia Unchained” — or move toward a rapprochement with the EU? He must also be wary of Scotland and Northern Ireland, which had rejected Brexit and could use this to fight for their sovereignty. Negotiations between the EU and the U.K. are scheduled to begin on Feb. 1, 2020.
8 Talking While Fighting — The Ceasefire in the Trade War between China and the U.S.
China and the U.S. have reached what the Chinese Ministry of Commerce calls “consensus on principles.” However, the two-year trade war appears to be a truce, not the end of the trade war.
The White House said the two parties “have made progress in a variety of areas and are in the process of resolving outstanding issues.” According to the U.S. government, China has agreed to increase annual U.S. imports to $200 billion, specifically promising to buy $50 billion worth of U.S. agricultural products.
What do both sides want? The United States, represented by U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, wants to reduce the high trade deficit of $419.2 billion and wants China to stop subsidizing key industries and forcing foreign investors to transfer technology.
China, represented by Vice Premier Liu He, wants to keep the trade deficit as high as possible and has so far been rather reluctant to meet U.S. demands.
Trump used the tariffs to wield power, and China was hurt badly — which was especially painful at a time when the country is facing its slowest economic growth in nearly 30 years due to a shrinking manufacturing sector and an aging society.
As Fan Gang, director of the Beijing-based think tank, the National Economic Research Institute, points out, this pre-deal will lead to a very fragile peace: The U.S., the world’s technology power, is getting the Chinese to buy goods normally exported by less developed countries.
Given the different tensions that both superpowers have around the world, it seems that the two parties are moving away from each other as U.S. companies move assets out of China. The upcoming negotiations will be very interesting, especially with the US presidential election looming.
7. “No Breakthrough, No Failure.” Saving Ukraine from a Civil War (with Russia)
Ukrainian President Volodymyr Zelensky and Russian President Vladimir Putin have finally begun negotiations on the future of Ukraine, which has been in constant turmoil since 2014, when Russia annexed Crimea. It is the bloodiest conflict in Europe since the Balkan War, which claimed nearly 14,000 lives.
The negotiations began in December 2019 and were led by Emanuel Macron and mediated by France and Germany. It was the first time that Putin and his Ukrainian counterpart met face to face.
There is a cease-fire, but both sides accuse each other of breaking the agreement. In October, Zelensky agreed to the “Steinmeier formula,” named after the former German foreign minister, under which people in the Donbass region can vote on their autonomy. After fierce protests, Zelensky added that there would be no elections until the Russians left. Zelensky is under pressure in a country deeply divided between nationalist and pro-Russian sentiments.
Russia, on the other hand, is still suffering from the EU sanctions, which will remain in place as long as there is no agreement with Ukraine.
The EU wants peace on its borders — and an uninterrupted flow of gas from Russia to Ukraine — in a 2009 dispute, Russia’s Gazprom had cut off its gas supply through Ukraine.
Zelensky, who — against his will — became a central figure in the impeachment proceedings against U.S. President Donald Trump, is a former comedian and has just resumed his post in May 2019. The question is whether he can handle a negotiator as tough and experienced as Putin. However, he held his own in the first round, with a result that the Russian broadsheet Vedomosti summed up as “No breakthrough, no failure.” This is a negotiation to watch, as it will decide the fate of a country.
6 The Sino-British Joint Statement. Britain’s Lose-Lose Scenario on the Hong Kong Question.
A trial that took place more than 30 years ago becomes crucial for today’s Hong Kong, which has been in turmoil since June, when an extradition bill was introduced that could lead to Hong Kong criminal suspects being sent to mainland China to stand trial. The law has been withdrawn, but fierce protests continue.
The Sino-British Joint Declaration of 1984 was the result of negotiations between Chinese leader Deng Xiaoping and British Prime Minister Margaret Thatcher that settled the future of Hong Kong. The United Kingdom, which had occupied Hong Kong since 1840, agreed to hand it over to China on July 1, 1997. The declaration stated that China’s policy toward Hong Kong “will remain unchanged for 50 years” and that Hong Kong’s legal and judicial systems in particular would remain untouched until 2047.
The Chinese consider the agreement null and void because it only covered the period from 1984 to 1997. Chinese diplomat Lu Kang has stated this unequivocally: “We would like to reiterate that the UK has no rights whatsoever in relation to Hong Kong since July 1, 1997.”
Dominic Raab, the UK Foreign Secretary, maintains the UK’s position that the agreement “is a legally binding international treaty that remains in force today.” In fact, the treaty specifically mentions dates after 1997. Raab points out, “As a co-signatory to the joint declaration, the UK takes these obligations seriously and supports their implementation under the ‘one country, two systems’ framework.
Margaret Thatcher promised that Britain would not accept any violation of the Sino-British Joint Declaration. And pro-democracy politicians have just won 17 of Hong Kong’s 18 districts. In addition, U.S. President Trump just signed the Hong Kong Human Rights and Democracy Act of 2019, infuriating China.
But the UK is not the US — it simply doesn’t have the clout. With the support of the EU, the UK’s position would have been stronger, but now the UK is on its own. Ruining the relationship with China over an issue that could lead nowhere would be unwise, especially as the UK is looking for allies.
5. breakfast at LVMH — and other M&A deals
Mergers and acquisitions can fail miserably, but they can create value and make companies better and more profitable. According to BCG’s M&A report, M&A deals have done quite well in the recent past. There have been fewer but larger deals in 2019, with the average deal size increasing from $380.1 million to $424.6 million in 2019.
There was the $74 billion acquisition of Celgene by pharmaceutical giant Bristol-Myers Squibb and a $57 billion transaction in mid-2019 when Occidental Petroleum Corporation acquired Anadarko Petroleum Corporation. With the backing of Warren Buffet’s Berkshire Hathaway, Occidental outbid much larger rival Chevron.
A good example of value creation is the complementary portfolio of aerospace company United Technologies, which is merging with defense company Raytheon to form Raytheon Technologies, with a market value of about $125 billion.
LVMH acquired Tiffany for $16.2 billion, or $135 per share in cash, after Tiffany rejected LVMH’s offer of $120 per share. The transaction is expected to close in mid-2020, subject to regulatory and Tiffany shareholder approval.
While LVMH’s $16.2 billion acquisition of U.S. jeweler Tiffany’s is far from the largest transaction of the year, it is the largest deal in the history of luxury. The luxury industry is a reflection of consumer preferences in a world that is becoming increasingly affluent and where consumer tastes are merging in the age of social media.
Tiffany was founded in New York in 1837 and rose to iconic status through the cult classic “Breakfast at Tiffany’s”, becoming the epitome of sophisticated US luxury. Nevertheless, Tiffany had major problems until the turn of the century in 2017 and its expansion into Asia, especially China, is very volatile due to the trade war between the US and China.
The French luxury giant LVMH owns brands such as Louis Vuitton, Moët & Chandon, Dom Perignon, Givenchy and recently acquired the luxury hotel chain Belmont. With a market capitalization of more than 200 billion euros, LVMH is the largest luxury company in the world and the second largest company in Europe after the oil and gas group Royal Dutch Shell.
LVMH’s founder, chairman and largest shareholder Bernard Arnault, Europe’s richest man with an estimated $106.9 billion fortune, applied the 1980s MO Corporate Raiders of Wall Street to the luxury industry. You’ll hardly know any of the label’s designers — there are no Tom Fords working for him. It’s his philosophy to empower the brands in his portfolio, not make them stars. In a world where the luxury sector is constantly growing, his idea has created an empire, and this deal is another cornerstone. It’s a deal that will make Tiffany stronger.
4. waiting for negotiators — saving Venezuela from civil war
Venezuela, one of the world’s most oil-rich nations, is broke. Another failed attempt at socialism started by the late President Hugo Chávez, with laws such as the “Land and Agrarian Development Law,” under which the government can take private land if it believes it is not being used to the maximum.
After Chávez’s death in 2013, Nicolás Maduro became interim president and has remained in office ever since. After a 2018 election that was criticized as illegitimate, the opposition swore in Juan Guaidó, a rival interim president who has since been recognized by most Western countries. Guaidó accuses Maduro of failing to honor 2016 negotiated agreements that called for free elections and the opening of a humanitarian channel. Maduro, on the other hand, considers him a puppet of the United States.
In early 2019, four Latin American and eight European countries formed the “Contact Group on Venezuela” to mediate for the country’s future and called for new elections. However, a subsequent UN Security Council resolution calling for free and fair presidential elections was rejected by China and Russia.
Eventually, the two sides began negotiations mediated by the Norwegian Center for Conflict Resolution. Several rounds of negotiations in Oslo failed. According to Guaidó, “The dictatorial regime of Nicolas Maduro broke off the negotiation process with false excuses.”
In the summer, the United States tightened sanctions, manifesting Western support for opposition leader Guaidó, while Maduro continues to be backed by Russia and China. On April 30, Guaidó led a coup to overthrow Maduro, but it failed spectacularly. Since then, his negotiating leverage has been dwindling: not only did he fail, but his Western backers were alienated by the attempted military coup. The negotiating weight shifted to Maduro.
Dag Nylander, who heads international peace efforts at the Norwegian Foreign Ministry, made it clear that Norway is ready to mediate negotiations if the two parties are willing to return to the negotiating table. An agreement, he said, is essential to save the country from a catastrophic civil war.
3. Make or Break It — Why Greta Couldn’t Save the Deal
The highly anticipated COP25 United Nations climate talks, held in Madrid starting Dec. 3, concluded after 13 long days, but the agreements reached yielded almost nothing.
This is surprising given the attention this topic is attracting — and has attracted only recently. When I worked on climate change for the German delegation to the United Nations in New York in 2009, it wasn’t necessarily a hot topic (excuse the pun). Now that teenage activist Greta Thunberg has become a superstar and hundreds of thousands are marching on the streets of Madrid during the conference, one would expect results.
The aim of the negotiations was to discuss the implementation of the Paris Agreement from 2015, in which 200 countries agreed to limit global warming to less than 2 degrees Celsius.
Among the most important negotiating points was Article 6, which deals with global emissions trading, which can make or break the entire Paris Agreement.
One of the issues is whether countries can use “transferable” carbon credits from the Kyoto Protocol to meet their commitments to the Paris Agreement. Critics worry that this emissions trading could allow targets to be met on paper but not in the atmosphere. Supporters see Article 6 as a way to get the whole world to act on climate.
On the first day of the conference, one negotiator commented that success on Article 6 would be a “miracle.” Well, miracles can happen, but no miracle happened at COP25 — there was no deal. The Association of Small Island States (AOSIS) blamed China, India and Brazil in particular.
The only agreement to reduce emissions reached during the conference was not even part of the COP25 talks, but a pledge by EU leaders to eliminate their carbon footprint by 2050.
With over 27,000 delegates from over 190 nations forming myriad alliances, this is as complex as a multi-stakeholder negotiation can get. Many countries have failed to take action, and the U.S. has even pulled out of the agreement.
Much time has been wasted on the process, arguing about how to label negotiations. They are now called “multilateral informal talks with co-facilitators.” Don’t ask.
António Guterres, UN Secretary General, was very disappointed with the outcome, tweeting, “The international community has missed an important opportunity to show more ambition in mitigating, adapting and financing the climate crisis. But we must not give up, and I will not give up.”
Hopefully, a better agreement will be reached at COP26 in Glasgow in 2020, with only weeks to go before the Paris Agreement begins. Time pressure can do wonders to the dynamics of a negotiation.
2 A new Camp David deal? Negotiating with the Taliban
U.S. President Donald Trump paid a surprise visit to U.S. troops on Thanksgiving, announcing the continuation of peace negotiations with the Taliban: “The Taliban want to make a deal. We will see if they want to make a deal. It has to be a real deal, but we’ll see. But they want to make a deal.” The Taliban quickly responded that they were “ready to resume talks.” And indeed, the talks between the Taliban continued where they ended.
The U.S. wants the Taliban to end violent attacks and commit not to harbor terrorists. For their part, U.S. Secretary of State Mike Pompeo and his chief negotiator Zalmay Khalilzad would offer the Taliban the withdrawal of U.S. troops.
Last year, after nine rounds of thorough negotiations in Qatar, a deal between the U.S. and the Taliban was nearly finalized. President Trump invited Taliban leaders to Camp David, the president’s iconic retreat, just days before the anniversary of the 9/11 attacks to dramatically close the deal with himself as dealmaker. But when a Taliban-claimed car bomb in Kabul killed a U.S. soldier and 11 others, Trump canceled the peace talks. Negotiations were on hold-but they were not over. U.S. officials continued to make small deals with the Taliban, such as exchanging prisoners to keep communication channels open. The Taliban, on the other hand, kept a fairly low profile about Trump, demonstrating their willingness to negotiate.
Back at the negotiating table, Trump employs his old negotiating tactic of not showing much interest in the Taliban’s willingness to make a deal: “If they do, they do, and if they don’t, they don’t. That’s fine.”
However, a political solution is America’s only way out of an 18-year war — America’s longest war, outlasting even Vietnam or both world wars combined. Indeed, world powers have a tradition of failure in Afghanistan: at the height of their power, both the British and the Soviet empires failed to conquer Afghanistan, losing men, money and morale. The Taliban, of course, are aware of the American public’s war-weariness, and they know that Trump is inclined to withdraw U.S. troops from foreign wars. However, merely withdrawing U.S. troops would reduce U.S. influence and could lead to the Taliban taking over the entire country.
Afghan elections just confirmed Ashraf Ghani as president, but the Taliban still refuse to talk to the Afghan government and see it as a U.S. puppet. But ignoring Ghani would be a great insult to the head of state, which is why Trump met with him on his Thanksgiving trip.
In light of the U.S. presidential election, the most favorable move for candidate Trump would be to end the Vietnam War of the modern era. The New York Times analyzed why closing that deal would be a matter of the heart for Trump: “the yearning pursuit of the big prize, the endless quest for what no other president has achieved, the willingness to defy convention, the volatile mood swings and the tribal struggles.“
Inshallah. Whatever the motivation, this deal could finally end a long and bloody war.
1. the syrian comeback — how turkey and russia could end a war
The Syria peace talks are a textbook example of the impact of changing leverage in negotiations. And an example of how the real deal happens away from the spotlight.
The official Geneva negotiations — the fourth attempt — under the auspices of U.N. Special Envoy for Syria Geir Pederson, include 150 official representatives: 50 delegates loyal to the government, 50 opposition figures largely supported by Turkey and Saudi Arabia, and 50 civilian representatives.
The opposition bloc known as the “Syrian Negotiations Commission,” however, has little military influence and is deeply divided, but still calls for Assad to leave office and for the introduction of a new constitution. As the Syrian government regained control of nearly all of the country, opposition co-chair Hadi al-Bahra humbly opened the Geneva talks: “It’s time for us to believe that victory in Syria means justice and peace, not winning the war.” Assad made clear how seriously he takes the negotiations by making it clear that his own delegation has no authority: “The Syrian government is not involved in these negotiations or these talks.”
The only force that takes Assad seriously is the Syrian Kurdish militias that still control the oil-rich northeast of the country. But the Kurds have been excluded from the talks because of a veto by Turkey, which considers them part of the Kurdistan Workers’ Party (PKK), the champion of a socialist nationalist state. In a Foreign Policy inquiry, a U.S. State Department spokesman in Geneva confirmed support for the “people of northeastern Syria”-which could only mean the Kurds. However, the U.S. gave up much of its influence when it abandoned its former allies by withdrawing its troops. The U.S. does not want to ruin its relations with Turkey over Kurdish independence.
UN envoy Pedersen called on all countries to leave the Geneva negotiations as an exclusively “Syrian-led process.” It is too late, the Syrian crisis has become a battle between the US, Turkey, Russia and Iran. At least all relevant parties are sitting in the same room.
Assad himself is not very interested in negotiations, because time has made him stronger than ever. The Kurds are forced to negotiate a deal with Assad, but on his terms. This will be the only negotiation that could end an eight-and-a-half-year civil war after nearly half the population has been displaced and 65 % of Syria’s infrastructure destroyed.
As opposition co-chair Hadi al-Bahra rightly said, “Without real political change, Assad’s regime cannot normalize its relations with states, cannot rejoin the Arab League, cannot achieve relief from sanctions, and cannot achieve reconstruction. In fact, Turkey and Russia might actually find a solution to the problem — away from the 150 delegates.