May 12, 2018

Trump and North Korean Negotiations

Let’s get the caveats out of the way first. No one on the outside knows everything that has been going on behind the scenes, so all pundit opinions are speculative. And while we continue to see promising signs of progress, with the hostage release being the latest entrant, anything can happen, and a deal could go off the rails between cup and lip.

Let’s get the caveats out of the way first. No one on the outside knows everything that has been going on behind the scenes, so all pundit opinions are speculative. And while we continue to see promising signs of progress, with the hostage release being the latest entrant, anything can happen, and a deal could go off the rails between cup and lip.

But there should be no doubt that Donald Trump’s negotiating style is responsible for advancing the ball to this point. Trump has a unique ability to get to the heart of what drives the folks on the other side of the table and then create carrot/stick circumstances to advance his agenda. Part of the game plan that he has used throughout his business career is to make what may seem to be outrageous demands or statements up front, establish credibility that he will follow through on threats, and be clear that he is prepared to walk away if things come up short. More often than not that has resulted in agreements that give him much more of what might have been expected, and even much more of what he might have settled for up front.

This has been on full display with North Korea. Trump has correctly figured out that what drives Kim Jong-un is that it’s good to be king. And he has found credible ways to threaten that on the one hand while dangling ways to take that concern off the table on the other. What are those elements? The first was the “crazy man” rhetoric in response to nuclear weapons and missile testing. The U.S. “establishment” was appalled, but if you are the guy on the potential receiving end, and you know full well that the crazy man has the capability to destroy you in a heartbeat and probably has the will to follow through, it gives you pause. But I don’t think that’s primarily what sold the progress, because it is a truism that all-out war on the peninsula would not be in anyone’s best interests.

When the history of this exercise is finally written, my guess is that you will find some sort of behind-the-scenes agreement between Trump and China to put a real economic squeeze on North Korea. Again, the U.S. establishment has dismissed this factor on the theory that Kim doesn’t care about his people, and so economic sanctions have little teeth. But that’s not where the sanctions have been aimed; instead, they have targeted the good life of the North Korean military and elites in government. The only thing worse for Kim than getting destroyed militarily would be to be deposed by his high-level comrades. What good is it to be king if you can’t benefit from the goodies? There would have come a time when, with China’s economic pressure, the elites would turn on Kim as the obstacle to the good life. Kim knew it because he believed the crazy man and became convinced that China was not going to save him.

When Trump perceived he had the upper hand, he pushed Kim further, demanding the hostage release as a condition for the summit to happen. He also waited for the North-South Korea meeting to pressure Kim to follow through. In the PR battle, the conventional wisdom is that Trump will give away the ranch because he is now so invested in a deal, any deal. But what is being missed is that Kim is in the exact same boat, and in the battle of perception about who has more to lose if a deal craters, it is Kim, not Trump. Because if Kim plays games and Trump walks, Trump merely continues the pressure with the same credible threats, but Kim has nowhere to go.

Trump also has a history of pushing his counterparties to the brink, and then relenting enough to let them save face while still getting more of what he thought he would at the outset. The North Korean negotiation has been set up precisely that way. Kim has signaled that regime continuity is paramount, perhaps in the form of a treaty or other guarantees not to invade or attack, and even including some mutual reductions in troop strength. As long as Trump gets the entirety of what he wants, which is a total, irreversible elimination of all of North Korea’s nuke program, along with verification protocols to ensure it, giving away a guarantee that Kim can stay in power (and even offering him piles of economic goodies) is the poster child definition of an ice-in-winter negotiation outcome. Trump has even allowed China to take credit for dialing back the crazy-man rhetoric as a sign of respect for Kim, and Trump has hinted at positioning Kim as a great world statesman if he completes the deal — a no-cost SOP to ego and face-saving in grand Trump tradition. (Wouldn’t sharing a Nobel Peace Prize with Kim be an interesting outcome?)

To go back to square one, there is obviously a greater than zero chance everything will fall apart, and the fear that each party’s definition of “denuclearization” will pass in the night will be realized. But we would never be this close without Trump’s negotiating skills. Maybe if Kim has read the Art of the Deal, he understands what is happening to him. But if Trump is correct (and I think he is) that what matters most to Kim is to continue to be king, there is plenty of room for a win-win.

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