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May 14, 2018

Trump and Iran Negotiations

Part two of the Donald Trump negotiation-style assessment involves Iran. But before we get to that, let’s take a peek at three liberal reactions to what is happening with North Korea.

Part two of the Donald Trump negotiation-style assessment involves Iran. But before we get to that, let’s take a peek at three liberal reactions to what is happening with North Korea.

First, we have former CIA chief and charter member of the #Resistance John Brennan claiming that Kim Jong-un has completely duped Trump. According to Brennan, Kim has advanced his nuclear program to a point where it is proven and ready to go, and only then announced that he would back off. Also, he has outmaneuvered Trump in the PR game by releasing hostages that he never should have taken and further duped Trump into calling him honorable and nice for that. Brennan puts the odds of a successful negotiation at less than 0.01 percent, or about the same as me winning the Preakness.

Then we have The Washington Post also chiming in that Trump has been played for a dupe. You see, he has granted Kim what he has wanted all along — namely a one-on-one meeting with a U.S. president that puts him on the world stage, and Trump has gotten nothing in return. So it’s obvious that Trump will be taken to the cleaners in any face-to-face meeting, and anyone who thinks this will end well will be sorely disappointed.

And finally, there’s Chuck Schumer, who is appalled that Trump would thank Kim for being statesmanlike in releasing hostages with no quid pro quo. Schumer thinks that Kim should not have taken them in the first place and so deserves no accolades for reversing course. Maybe he would have felt differently if Trump had paid North Korea, say, $1.8 billion.

These guys and the rest of the Democrat/#Resistance cadre are either totally missing the point or are so in the Trump Derangement Syndrome tank that they can’t admit the obvious. The only thing that matters is the result. Trump will either get what he wants or he will walk away and go back to crushing North Korea. Giving Kim credit and positioning him as a leader prepared to do what is right for the world is part of the face-saving tactic that makes it easier for Kim to cave and exponentially increases the downside for him if he does not. Exactly how else do you achieve that without a direct meeting? The naysayers are embarrassing themselves and showing their true colors. If Trump succeeds it will be worth the price of admission to see how they rhetoric their way out.

Back to Iran. Negotiations rise or fall based on one’s ability to be honest with yourself about what you want, gain as much insight as possible about what the other guy wants, and then designing tactics to get more of the former than the latter. That may seem like a glorified statement of the obvious, but it’s actually very hard to do well, even for experienced negotiators. Part of the reason is that we all bring biases to the table — some about ourselves, but more often about how we see our counterparties.

I’ve been negotiating merger and acquisition deals for almost four decades, and it has been a tad easier to abide by the above mantra for those types of deals, because while issues with the people involved always matter, most of what we fought over was money. Furthermore, the folks around the table were generally highly skilled negotiating pros, so most of the back and forth was between the 45-yard lines. This is generally not the case with international diplomatic negotiations. There is no doubt that the Iran nuke deal was horrible, and there was virtually no chance that Trump would stay in it much longer. So why was it done in the first place?

I could be cynical and say that Obama simply wanted a foreign policy legacy, the clock was running out, and the Iran deal was the last shot; he didn’t care what the consequences would be as long as he made the history books. Or I could give Obama the benefit of the doubt and look at it as a negotiation in which the principal on our side brought his biases to the game. Obama’s experience prior to being president was as a community organizer and a progressive senator, neither of which prepared him to negotiate major deals. Add to that his liberal worldview bias that essentially all the folks had good intentions, and if only government would set up the right policies then the world would be just fine. With the Iranians, if you accept this alternative non-cynical explanation, that meant that if you just gave them stuff and relied on their good intentions, they eventually would see the light, act responsibly, and everything would be cool. After all, it seemed to work when community organizers gave folks free stuff; they then tended to do exactly what the Democrat machine asked.

Either way, the Iran deal was not turning out the way Obama expected, and Trump really had no choice but to abandon it. The Europeans made noise about doing some kind of renegotiation, but Iran rejected that out of hand, and Trump followed through on his promises. Back to North Korea for a second. We hear repeatedly from the #Resistance cheap seats that walking away from the Iran deal will crater any chance of a deal because North Korea will think America isn’t trustworthy enough to keep its word. But that has it exactly backwards. The Iran deal was not an American commitment; it was not a treaty; it was an Obama order. Any rejection of the deal is simply a recognition that Obama (one man) got it wrong, and it had zero to do with “keeping America’s word.” It will instead add evidence to the equation that Trump will walk away from a bad deal and therefore put that much more pressure on Kim.

So what happens with Iran now? Even though Trump’s bias in negotiations is to approach most from a hardball economic perspective (he did after all grow up in the New York City real estate business), he is smart enough to realize that while economics and “good to be king” matters are a big part of the tactics with both North Korea and Iran, those countries and the circumstances are significantly different. In North Korea, Trump needed both to squeeze Kim financially, and for that he needed to cut a deal with China and to threaten North Korea militarily. Kim took the first shot with the development of nukes that could threaten out interests, so to be credible, Trump needed over-the-top military rhetoric as well.

Trump has no intention of creating a military conflict with Iran. Interestingly, it was Iran that tried to make it appear that military action was linked to the nuke deal withdrawal by firing missiles into Israel just after the announcement. Israel responded with devastating force, and Trump will be content to allow Israel to play that role. Trump’s goal with Iran (which should also have been Obama’s) is to both eliminate its ability to ever get nukes and to change its behavior in the region. His goal with North Korea is simply to eliminate its nuke program forever with credible verification. He couldn’t care less if North Korea prospers economically, only if that advances the cause. His lever with Iran is regime change.

What is going under the radar in Iran is a significant amount of social unrest, much of it tied to unfulfilled expectations by the folks that the economic benefits of the nuke deal would find their way into the regular economy. With the economy and the value of the currency in free fall, the folks are not happy campers, and the nuke deal is being blamed. Once we get our new CIA chief confirmed, I could easily see a return to the good old days of covert assistance in regime change. Obama had that chance as well, but chose to punt and the uprisings were smashed. But history is chock-full of instances where revolutions were started by unfulfilled expectations of positive change for the folks. If they never get a taste of what could be, they tend to stay docile. But if they get a glimpse of what might be and then have the door slammed, the next time around isn’t so kind to those in charge; and that’s what is emerging in Iran.

My guess is that Trump will now turn the economic screws hard and fast. He will block Iran from trading in U.S. currency, sanction Iran companies and individuals, give Europe an ultimatum to stop doing deals with Iran or he will cut them off from doing business with us, and take steps to diminish Iran’s main source of capital — its oil output. This will be coupled with an intensive propaganda campaign to appeal to the folks by linking economic hardship to the nuke deal and Iran’s destabilizing actions in the region. Toss in some CIA support for covert ops among the dissidents and you have the recipe for adding Iran to the plus column along with North Korea.

Trump may have a bias toward using economics as his bargaining levers and believing that others are motivated by the same primarily economic factors. I do too. In spite of the impression that Iran is a religious-centric nation, I think Trump has this one right. The Iran leaders crave power and wealth more than they do Allah’s blessing. It may take some time for the impacts to have teeth; thanks to Obama, $150 billion still goes a long way. But Iran as a country is not North Korea — it has a far more developed and educated population that has been teased with the prospects for a better life and is more ready than ever to seek change. The Trump carrots are obvious. The sticks are not military, but may be just as likely as in North Korea to get to the same result.

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