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How to Structure a Deal With North Korea - Dilbert Blog

How to Structure a Deal With North Korea

One of the most useful things I learned in business school was that you can usually make a deal whenever the parties involved don’t want full control of the same limited resources. That’s why a peace deal in Israel is impossible – because both sides want the same land. But that’s a rare situation (fortunately).

The more normal situation is the one we see with North Korea and the United States. The United States doesn’t want the same limited resource that North Korea wants. And China has their own interests. That kind of situation almost always means you can reach a deal if you look hard enough.

At the moment, we have about 75% of what we need for a nuclear deal with North Korea. Both the United States and China are putting unprecedented economic and military pressure on North Korea, and that means North Korea will start to get flexible. But without the remaining 25% of what is needed for a deal, no breakthrough is possible. North Korea is unlikely to agree to anything that makes it seem as if it caved to pressure from the United States. You have to solve for that to get a deal. That is the missing 25%.

So let me tell you how to do that.

I’m about to suggest a somewhat impractical idea just to make the point about how deals get made. This is what I call the “bad idea” that is intended to generate some creativity toward a better idea. 

So here’s the bad-idea form of the deal:

1. North Korea abandons its Nuclear Weapons program and agrees to international inspections.

2. In return, China agrees to provide military protection to ensure the continuation of the current North Korean government.

3. South Korea gives up its side of the Demilitarized Zone and declares it North Korean territory but permanently occupied by Chinese forces.

You don’t need a DMZ buffer zone if China is the military player on the other side of the fence from South Korea. And with this deal structure, the leader of North Korea gets to say he expanded his empire and found a way to keep the country safe from invasion forever.

4. Trade deals and aid would become available to North Korea upon signing the deal.

5. The United States agrees to remove forces from South Korea, as they would be an unnecessary expense once China takes over the DMZ.

I’m guessing there are plenty of reasons why giving South Korea’s side of the DMZ to North Korea, on the condition that it is occupied only by Chinese defensive forces, is a bad idea. But I think you see the deal format.

In my example, South Korea really gives up nothing by gifting its side of the DMZ to North Korea. That land was useless. And once occupied by Chinese forces, tensions should drop to nearly zero. China has no reason to attack South Korea, now or ever.

While South Korea would be giving up nothing of actual value, it would look like a big win for North Korea because they would be gaining territory and permanent Chinese military assistance. And that gives them a story to save face.

In persuasion language, you need to give North Korea a “fake because.” They probably already want peace, but they don’t have a good public excuse for why they would cave to pressure and settle for it. Giving them something that has little value but can be exaggerated to seem like it has great value becomes the “fake because.”

I’m not predicting we’ll see a deal that involves the DMZ land ownership. But any workable deal with North Korea would have a “fake because” in the design. Until you see that, don’t expect much progress.

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You might enjoy reading my book because fake because.