Some Tips on Negotiation Skills

Purushottam OjhaSecretary

Office of the Prime Minister and Council of Ministers

Topics of Presentation

• What is Negotiation?• Some Fundamentals about Negotiation• Negotiation Strategies• Trade Negotiations

What is Negotiation?• There has been always competition among the people, groups,

communities, and states to be the master of all amenities, get best out of the bounty of nature and achieve happiness and prosperity. Such achievements are either achieved through force, threat or violence or through negotiations.

• Negotiation is the alternative to the use of force. It is also a self-

sustaining and growth generating human behavior as the parties gain from completion of negotiation and also replicate the success story of a transaction to other parties.

• Negotiation is a process that brings at least two parties together who has different, even completely opposite, interests and enables them to reach an agreement that is acceptable- and accepted- by them.

Some Fundamentals about Negotiation

• People are selfish players in the distribution of goods and services and they prefer their own satisfaction than anybody else’s. But, the need of relying to others for meeting their own requirement demands for maintaining a cordial relationship with others.

• Negotiation is ubiquitous, covers all aspects of a daily life of a person, institution/organization and bears a long history and pre-history.

• It is seldom a zero sum game and a successful negotiation should end up with a win-win result and gain from transaction.

• Value for a product or services may be different for different people and the position of negotiation would depend on the value attached to it by the negotiator. (Example of gas station, tank truck etc).

Some Fundamentals about Negotiation

• Negotiation makes both parties better off than they were before they came to an agreement as there will be exchange of something for something (tangible or intangible).

• Bargaining is an important part of negotiation as there will be give and take between the negotiating parties in bargaining. Hard and soft bargaining approaches are followed depending upon the position of negotiating partners.

Negotiation Strategies• Interest based (or integrative or cooperative) bargaining.

• positional (or distributive or competitive) bargaining.

• hard, soft and “principled negotiation”.

• Roger Fischer and William Ury have suggested four steps for successful negotiations. These are:

– Separate the people from the problem.– Focus on interest, not in position.– Invent options for mutual gain; that is work together to create options that will

satisfy both parties.– Insist on using objective criteria for judging a proposed solution.

Negotiation Strategies• Do not take negotiation as a confrontation with other party. In fact, negotiation is

characterized by the parties working together to find a solution, rather than each party trying to win the contest. Keep in mind that the attitude that you take in negotiation (e.g. hostile, cooperative) will set the tone for interaction.

• Do not be too emotional. It is normal to become emotional during negotiation that is important. However, as we get more emotional, we are less able to channel our negotiating behavior in constructive ways. It is important to maintain control.

• Try to understand the other person's needs, and wants with respect to the issue. If we don't know what the person needs or wants, we will be unable to negotiate properly.

• Focus on issue and not on personality. Particularly with people we don't like much, we have a tendency to get off track by focusing on how difficult or obnoxious the person seems. Once this happens, effective negotiation is impossible.

• Avoid blaming the other person. If you blame the other person for the difficulty you will create an angry situation. If you take the responsibility for the problem, you will create a spirit of cooperation.

Negotiation Strategies• Always try to solicit the other's perspective and state your needs explicitly.• Prepare options beforehand. Before entering into a negotiating session, prepare

some options that you can suggest if your preferred solution is not acceptable. Anticipate why the other person may resist your suggestion, and be prepared to counter with an alternative.

• Consider timing. There are good times to negotiate and bad times. Bad times include the situation where there is high degree of anger on either side, preoccupation with something else, a high level of stress and tiredness on one side or another. Try to avoid the bad times.

• Get adequate information on the subject matter of negotiation. Inadequate information and knowledge on the subject matter will make it difficult for developing strategies once the negotiation process is in progress and the other party will have chances of superseding your objective.

• Keep command on the language of negotiation. The fluency of expression matters a lot in explaining your position in a correct manner. Keep courtesy but use the forceful language to make your position clear and understandable.

Trade Negotiations • World Trade Organization, two regional free trade area (FTAs) arrangements and bilateral

trade mechanism.• Trade negotiations are either held at the bilateral or multilateral level.• July Package• (a) Agriculture

(b) Cotton(c) Non-agricultural Market Access (d) Development:

• Special and Differential Treatment• Technical Assistance• Implementation• Other Development Issues: Least-Developed Countries

(e) Services.(f) Other negotiating bodies:

• Rules, Trade & Environment and TRIPS• (g) Trade Facilitation

Trade Negotiations

• Nepal is also a party to participate in the trade negotiations at the regional FTA. The negotiations in the two FTAs commonly take place in the following areas.

• Rules of Origin• Dispute Settlement Mechanism• Mode and Timing of Trade Liberalization• Reduction in the Sensitive/Negative List• Special and Differential Treatment• Trade Facilitation• Trade in Services etc.

Trade Negotiations (bilateral)

• Taking stock of the bilateral trade and the direction.• Identification of the barriers (tariff and non-tariff) to trade

and investment promotion.• Trade facilitation measures (Customs cooperation, transport

connectivity, test and certifications, use of ICT/EDI, exchange of trade rules etc.)

• Determining the size of sensitive list• Protection against infringement on intellectual property

rights• Safeguard measures for surge in imports and dumping.• Capacity building and trade related assistance.

Trade Negotiations

• Quick Steps to “Win-Win” Negotiation1. Be Prepared.2. Listen Effectively3. Give Credit.4. Compromise.5. Recapitulate the Results.

“Jaw-jaw is better than war-war” -Winston Churchill

Thank you for your attention!!!