The Real Deal by Alan Smith, Stephen White, and Robin Copland - HTML preview

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Red Lines

 

Within the last few days the Obama administration have made it clear that they consider the use of chemical weapons by the Syrian Assad regime on their own civilians to be a red line. What they mean is thaif the Syrian governmenuses chemical weapons, they will have crossed the red line, diplomacy will have come to an end, and military action will follow. Similarly, in neighboring Israel, Benjamin Netanyahu has chided the US administration for not setting a red line on the subject of the Iranian development of nuclear weapons; implying that as a result there is no real threat which might curb Irans ambitions. Peculiarly, Hilary Clinton said last week that the US does not have a red line diplomatic policy; shortly after that the red line statement about Syria and chemical weapons was issued. Doh!

 

Relines are nothing newIn August 1939  the UK government signed  a pact with the Polish government and made it clear to the German government that their invasion of Poland would be a red line and would trigger a state of war; the German invasion of Poland on September 1st 1939 signaled the start of World War 2.

 

In these examples red lines relate to the boundary of diplomacy and sanction behavior. But they are also a useful feature of negotiating strategy. Dont confuse them with bottom lines, or must avoid’ positions, which describe walk away positions. Normally a negotiator will not reveal his bottom line position to the counterparty because revelation can change the perception of the balance of power. If buyers know that the bottom line for a seller is a discount of x%, and no more, then their power to get that discount is increased. Similarly, if they know that the seller must avoid’ losing the order, their position is strengthened.

 

But there are advantages to revealing red lines. Negotiating red lines relate to future