Every year, the World Economic Forum publishes its Global Risks Report, based on a wide survey of experts and decision makers. From 2008 to 2014, respondents identified a financial catastrophe as the world’s top risk. Last year however, weapons of mass destruction came first. Ditto for the 2018 survey edition, published last month, which revealed that nearly 80 percent of respondents see a growing threat of war involving major powers.

Given these worries among the elite, it is perhaps unsurprising that I am often met with a barrage of questions when people learn about my upcoming negotiation case study on the North Korea conflict.

For business negotiators, studying international conflicts is of great interest. After all, such conflicts are nothing but a really high-stakes application of the same negotiation toolbox (and associated pitfalls) that we use in business. In light of this, I’d like to address the four most common questions I’m asked about North Korea, which can help us understand the depth and complexity of the issue.  

1. What has changed recently in the conflict?

Given the huge amount of news coverage and rumours that often drive debate, many assume that North Korea’s nuclear ambitions are new. But the country has been a nuclear nation since the early 2000s. What’s new is that its long-range missiles may have the capacity to reach the United States mainland or they will be able to do so in the very near future. This capability has been suspected since November 2017.

An important part of answering this question is also to clarify why North Korea appears to continually try to raise the stakes on the international stage. North Korea is afraid. After the collapse of communism, the country’s choice to remain communist isolated it further politically and economically. Continued efforts by the U.S. to contain North Korea’s nuclear programme over the years, as well as the mighty economic and military powers that have grown around it put the country in a vulnerable position from its point of view.

Long-range missiles change how North Korea’s war rhetoric is perceived.

2. Is Donald Trump doing something different from his predecessors?

When Donald Trump became president, he had to do something different as the threat posed by North Korea had already become more concrete than in his predecessors’ administrations. Sending three U.S. aircraft carriers towards Korean waters in November 2017 was a bold move, but to some extent, it was simply in line with a tradition of military drills in the region.

In fact, Trump used an old Cold War negotiation technique: brinkmanship. Brinkmanship consists of pushing the limits of a dangerous situation in order to secure the greatest advantage. The overall North Korean strategy of conducting nuclear tests to increase the credibility of its threats is a classic example of this.

Is brinkmanship a good or bad negotiation strategy? This is debatable. What is clear is that it is a win-lose strategy as it centres around using power. While it makes one look strong and determined, it may propel the other side into an adversarial, conflictual and violent communication pattern. However, the other party may also be forced into giving concessions or appeasement. This was exactly the pattern during the early phases of the conflict: Every time North Korea did tests, the U.S. asked it to come to the table to talk and gave it some concessions. In this way, the U.S. actually trained North Korea to misbehave as it kept rewarding poor behaviour.

3. Is Kim Jong-un crazy?

It’s unlikely he’s crazy. Kim’s behaviour is driven by an ambition to instil fear in his enemies so he’s in a position to issue credible threats. While many argue that he is indeed crazy, it is important to understand the psychology of the strongman. A typical psychological response to conflict is to demonise the counterparty and their intentions. This is easy to do, given regular military drills by its economically and militarily powerful southern neighbour, in partnership with its greatest enemy, the U.S.

It’s also worth remembering, that from Kim’s point of view, bad things happen to strongmen the U.S. doesn’t like. He may feel threatened by the fall of Iraq’s Saddam Hussein and Libya's Muammar Gaddafi. In 1989, Nicolae Ceaușescu, former communist dictator of Romania and a friend to Kim Il-sung, Kim’s grandfather, was executed by his former supporters as the Iron Curtain fell.

There are also many examples of broken trust over the years. North Korea has had a bad experience with the Agreed Framework it signed in 1994 with the U.S. It agreed to dismantle its nuclear power programme, but when it tried to trade missile technology to boost its economy (a legitimate move), the U.S. saw this as an excuse to slow down on providing its own deliverables. Ultimately, the framework collapsed.

If Kim needs any more reason to doubt the benefits of denuclearisation, he can think of Ukraine, one of the few countries that gave away its nuclear weapons. Twenty years later (in 2014), it lost Crimea. And to whom? Russia, the very country that was officially supposed to protect it.

So logically, Kim has little incentive to come into the fold. Rather he needs to make regular shows of strength and have nuclear missiles to deter the U.S. from invading his country. His own survival requires him to issue believable threats.

4. Is there going to be a war?

War is unlikely. It’s doubtful that North Korea will start it. On every occasion, it has directly stated that North Korea would use its nuclear weapons only to defend itself. Indeed, who would it try to conquer? While South Korea may be tempting, it’s hardly a sustainable target as other nations would come to its aid. It’s actually very believable that North Korea has nuclear weapons strictly for defence purposes.

The U.S. is also unlikely to attack first. In the past, a key reason might have been moral leadership. Now Trump’s largest problem may be the fragile coalition with China and Russia. Both have stakes in this conflict, too, but do not wish to become the focus of North Korea’s enmity, especially for the sake of a “frenemy” like the U.S. China, in particular, has nothing to gain from creating instability in a nuclear power that’s just 800 kilometres from its capital. So these superpowers go along with international sanctions to remain in good standing in the global community, but they appear to be playing a double game. If Trump suddenly made a crater out of North Korea, he would risk facing larger problems down the line.

Trust and interdependence

The U.S. keeps insisting that North Korea should not have nuclear weapons, but it’s actually North Korea’s sovereign right to have them. China, Russia and the U.S. don’t always see eye to eye, yet they are not ordering one another to drop their weapons. North Korea may feel targeted simply because it’s small. This feeling of isolation creates fear, paranoia and mistrust.

However, as I wrote in my book, an enduring myth of negotiation is that its most important element is trust. While trust makes for smoother sailing, it’s merely a “nice to have”. A better strategy is interdependence, which happens when both parties share the common understanding that it is in their self-interest to work together. The great advantage of this strategy is that, in the absence of trust, a rational understanding of each other’s interdependence could create enough of a relationship platform so that parties can engage in a productive and hopefully win-win negotiation without the use of power.

Horacio Falcão is a Senior Affiliate Professor of Decision Sciences at INSEAD. He is also the programme director of Negotiation Dynamics, part of the school’s suite of Executive Development Programmes. He is the author of Value Negotiation: How to Finally Get the Win-Win Right.

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