The document discusses principles, phases, and strategies of trade negotiations. It outlines five principles of negotiation: separate the people from the problem, focus on interests not position, invent options for mutual gain, insist on objective criteria, and focus on interests not position. It describes the three phases of negotiations as the pre-negotiation, negotiation, and post-negotiation phases. Finally, it discusses four common negotiation strategies: integrative, competitive, flexibility, and passivity strategies.

1. 14
TRADE NEGOTIATIONS
Principles, Phases & Tactics
Trade Operations
Regkli Effrosyni
Maria-Georgiana Iacob
Jérôme Bauché
Omar Vargas
Miriam Denise Lara
Jan Dembinski

2. 1
SUMMARY
Introduction................................................................................................................................................................................2
PRINCIPLES OF NEGOTIATION .................................................................................................................................................4
Separate the people from the problem ............................................................................................................................4
Focus on interests, not position.........................................................................................................................................4
Iinvent options for mutual gain..........................................................................................................................................5
Insist on objective criteria...................................................................................................................................................5
PHASES OF TRADE NEGOTIATIONS.........................................................................................................................................5
General factors of influence................................................................................................................................................6
The conditions of negotiation.............................................................................................................................................6
The pre-negotiation phase..................................................................................................................................................6
The actual negotiation phase..............................................................................................................................................6
The post-negotiation phase................................................................................................................................................7
STRATEGIES AND TACTICS OF NEGOTIATIONS .....................................................................................................................7
STRATEGIES ............................................................................................................................................................................7
Integrative Strategy (Win-Win)......................................................................................................................................7
Competitive Strategy and Distributive (Win-Lose).....................................................................................................8
Flexibility Strategy (Lose -Win).......................................................................................................................................8
Passivity Strategy (Lose-Lose): .......................................................................................................................................9
TACTICS ...................................................................................................................................................................................9
Conclusion.................................................................................................................................................................................10

3. 2
INTRODUCTION
Negotiate is to have the will to find a solution satisfactory to each of the parties concerned.
It confront ideas and feelings to prevent people continue to face or faced. It is a necessity to
the emergence of a conflict between two parties. Each party has the power both to deter the
other to achieve its objectives, and to help her get them. And these situations we find them in
our daily lives all the time, explicitly or implicitly.
Another nuance to be taken into account to differentiate the negotiation of bargaining is
the possibility of future relationships. When we are willing to negotiate and accept what we
give concessions in mind that the relationship will not end in this deal. We can not damage
relations as much as to preclude future contacts.
When negotiating, agents seek to achieve, through some kind of interactive process-which
can be both tacit and concrete-recognized as ignored, a more valued than their unilateral
alternatives, anything better than what each could get on your own. But negotiating
situations arise as strategic interdependence situations, ie situations in which our best result
depends not only on our own choices, but also the election of other people who also pursues
a specific objective and also up to us to get it. And, within this overall strategic framework,
these bargaining situations simultaneously incorporate factors of conflict and cooperation
factors, in varying proportions and often indiscernible. The management of this strategic
framework of conflict and cooperation can be very complicated if you enter with your eyes
closed, in innocence and no analytical method for recognition and interaction.
The behavior of the negotiators, and the outcome of the negotiation have much connection
with certain strategic models where information is incomplete and uneven, and that the rules
and incentive structures, often predefined or imposed a priori, play a role that is usually
more important and decisive expressed the negotiation itself. The art of negotiation, if any,
would especially be able to identify and select these models and acquire the ability to design
them or avoid them in the light of all of the interests at stake in each case. And also know that
cooperation is rational and necessary, even from the selfish point of view, and different
interests that are compatible and can be found in agreements intelligent simultaneous
satisfaction obtained through creative negotiation.
Negotiation skills go beyond offering a price at a given time. Negotiation means
exchanging elements of different nature but of a similar value. “Enter price” is a strategy that
should be avoided. Otherwise, management becomes a mere “bargaining”. A good negotiator
will work many aspects before raising the issue of price. This resource is used in the final
moments of the process.
The elements to develop before entering the price for acceptance and enable a better
proposal are:

4. 3
a. Motivation. In line with the above skills, enthusiasm, self-confidence negotiator in the
success of the operation, this ensures a high success rate.
b. The assessment of the conditions of the product or service. If the customer
appreciates the product or service, the complete offer, be willing to pay more for it.
c. Customer relationship. Many have touched this in terms of skills: the need to tune into
the client, gain their trust, collaboration. Customers are willing to accept a higher price for
those managers who offer trust, with whom they have a good relationship.
d. The image of the company. One aspect that sets customer confidence and therefore
influences their decision. We all pay more for products from certain companies and others,
we find it difficult to consume even still being given away.
e. The Desire to Purchase. good negotiators convinced the client before entering the price,
and handle more resources argue that manage to persuade the customer.
Speaking of Commercial Negotiations could begin by stating the twelve presented Basic
Skills Business Skills Map. These skills come into play, to varying degrees, at different points
in the process.
 The Relationship: Tuning and Trust. The tune is a bonding tool and customer approach.
Trust is an essential element of all relationships, including commercial.
 Self-control: Enthusiasm and Tenacity. Enthusiasm means that you do not weaken or
lose your temper in front of a difficult situation. Ability to consider stimulating daily
activity and very likely the success of the negotiation. As for the tenacity, both business
management and the negotiation has to be persistent, insisting again and again until you
get what is intended.
 Perception: Observation and Intuition. Perceiving continually watch for signs.
Realizing the difficulty of making a good listener in order to improve. Intuition allows
quickly discover customer opportunities. Questions allow information to sense the needs
of the customer.
 Influence: Argumentation and Persuasion. Using arguments unfold the customer
obtains advantages. The client sees its satisfied interest through construction of
arguments images, examples, not only technical data. Be aware that the persuasiveness
has a component of “perceived” by the interlocutor. Therefore, we must ensure that
customers listen to and follow our advice.
 Decision: Resolution and Speed. We have an opportune time to undertake the closing of
a sale and endure to get the client itself. When developing a commercial work and
negotiating, the speed can take advantage of many opportunities that the delay had
cooled.
 The Organization: Time allocation and prioritization. A good business manager and
negotiator is able to organize their time well. It is necessary to seek efficiency in the
organization and use of time. Clear and realistic plan, prioritizing tasks and applying
different execution times depending on the degree of importance of the tasks.

5. 4
PRINCIPLES OF NEGOTIATION
Influencing and negotiating are things we all try to do all the time. For instance, we
want to influence people around us such as friends, family, coworkers and so on. This is
part of us, but there are different ways to express it. For example, parents try to educate
their children to behave according to codes and values we feel are appropriate or we want
our partners to choose the holiday we want.
There will be many occasions where we want to influence colleagues or partners to adopt
a specific course of action, persuade our peers or stakeholders to take part in joint projects
or work with us towards a particular goal or negotiate to secure funds for projects.
The principles of negotiation or also called sometimes “principled negotiation” can be
separated in 5 fundamentals “ground rules”.
SEPARATE THE PEOPLE FROM THE PROBLEM
The first point is one of the most important ones, basically, it’s better to be hard on
the problem and soft and the person. Also, separating the people from the problem means
separating relationship issues (or "people problems") from substantive issues, and dealing
with them independently. It’s important to negotiate with a professional eye and trying to
put away the personal issues we can face.
While there is an "objective reality," that reality is interpreted differently by different
people in different situations. When different parties have different understandings of
their dispute effective negotiation may be very difficult to achieve.
People problems also often involve difficult emotions — fear, anger, distrust and anxiety
for example. These emotions get intertwined with the substantive issues in the dispute
and make both harder to deal with.
FOCUS ON INTERESTS, NOT POSITION
Negotiating about interests means negotiating about things that people really want
and need, not what they say that want or need. Often, these are not the same. People tend
to take extreme positions that are designed to counter their opponents’ positions.

6. 5
But when people define their dispute in terms of positions, they often appear to be highly
intractable, since one side wants something that the other completely opposes. Therefore,
rather than describing a dispute in terms of parties' positions about what they want, it is
often helpful to redefine the situation in terms of the reasons that underlie these positions.
By focusing on underlying interests rather than overt positions, apparently resolution-
resistant conflicts often become solvable. This is because, in many cases, interests are
compatible, even when positions are not. Focusing on interests enables the parties to
identify win-win solutions (another principle down below) to problems that might not
have been evident when the issues were described in terms of positions.
IINVENT OPTIONS FOR MUTUAL GAIN
By focusing on interests, disputing parties can more easily fulfill the third principle-
-invent options for mutual gain. This means negotiators should look for new solutions to
the problem that will allow both sides to win, not just fight over the original positions
which assume that for one side to win, the other side must lose.
Mutual Gains Negotiations is a collaborative approach to negotiating contracts. Rather
than the adversarial approach (win-lose) the mutual gains process involves a consensus-
building, win-win approach. In order for mutual gains negotiations to be successful, the
parties need to have a shared understanding of the project scope and complexity, agree to
the goal of a mutually beneficial solution, and the parties must trust one another.
INSIST ON OBJECTIVE CRITERIA
The fourth rule is to insist on objective criteria for decisions. While not always
available, if some outside, objective criteria for fairness can be found, this can greatly
simplify the negotiation process.
If union and management are struggling over a contract, they can look to see what other
similar companies have agreed to use as an outside objective criteria. If people are
negotiating over the price of a car or a house, they can look at what similar houses or
cars have sold for. This gives both sides more guidance as to what is "fair," and makes it
hard to oppose offers in this range.
PHASES OF TRADE NEGOTIATIONS
The negotiation process it`s seen as a way to communicate, as well as a set of factors
influence and conditions that leave their mark on the final results. We define four

7. 6
categories of elements together with relationships dependence between them. The
general framework of negotiations can be structured and analyzed through the
following types of distinct elements:
GENERAL FACTORS OF INFLUENCE
Those factors pre-exist during the negotiating process. These relate to the culture
of the partners , the personality of negotiators and bargaining power of the parties.
For example, in an Islamic country, with specific religious practices and convictions, a
woman will never be sent to the head of the negotiating team, even if he has an
impressive experience, both as a negotiator, as well as professionally. Otherwise Arab
partners "will be offended" and, most likely, the business will not end.
THE CONDITIONS OF NEGOTIATION
The object of negotiation, the available time and agenda, space and place, the
team and the number of participants, number of negotiating parties, the audience,
microclimate, available mental position and the negotiating table.
In this case we can mention like one example, an internal business negotiations are
made by Romanian rules. Negotiations with foreign partners must take into account the
rules of international trade and national laws of the parties who enter into business,
exchange rates and international price levels, risk, distance, quality.
THE PRE-NEGOTIATION PHASE
In preparation of the negotiation, information plays a crucial role. This can be
achieved by conventional ways, such as marketing studies specialized publications,
news and stories from press or any others ways to get information. Here it is important
to set very clear negotiation goals reflecting national/regional trade interests, and clear
and realistic strategies to reach those goals. This depends to a large extent on the quality
of preparations, on the amount of information, and on available research and analyses.
THE ACTUAL NEGOTIATION PHASE
Here effective participation depends heavily on highly specialised skills and
capacities of negotiators and their command of the rules, facts and intellectual
arguments in specific negotiating areas.
Here the example could be a little more complicated, I´m wondering if you know that in
large distribution companies in metallurgical industry, each member of the Sales
department assigns authority to negotiate conditions with various clients’ particular

8. 7
delivery? This is due to the special situation of the branch, which requires strong
technical knowledge of the negotiators and, therefore, "sellers" are not economists or
marketing specialists, but metallurgical engineers.
The large international companies have negotiated experts specially trained and
special intervention teams, which are responsible to solve the difficult situations. It is
the case of large consulting firms, for example Goldman & Sachs, Anderson that call
many companies from Romania.
Often, in international affairs, Asians, especially the Japanese, using the time variable
as a weapon in negotiations with the Americans. They are always pressed by time and
with very precise deadlines, once them known by the opponent , become a serious
handicap.
THE POST-NEGOTIATION PHASE
Here the challenge at the national level is to implement trade agreements and develop
policies and measures to take advantage of the new trading opportunities.
The negotiation can take place at their office, at partner`s office or on neutral ground. It
means that the efficacy of negotiations depends on a lot of tactical and organizational
elements. It may be time skins chosen for the meeting, the hierarchical level of the first
contact between the two parties, the negotiating team composition, the order of seating
etc. Among them, the arrangement of the negotiators at the table plays an important role
too.
STRATEGIES AND TACTICS OF NEGOTIATIONS
The strategy is the set of actions to be carried out during negotiations to achieve
the objectives set. Strategies are the WHAT will take place, it means, an action plan
where they will use a set of tactics. (Suárez, 2012)
Tactics are the HOW will take place, it means, are those that address the short -term
maneuvers to achieve the goals. They are part of a strategy options. (Suárez, 2012)
STRATEGIES
INTEGRATIVE STRATEGY (WIN-WIN)
The goal is to find formulas that take into account the interests of both parties
and arrive at a solution acceptable to all. Ideally, two or more parties can obtain the
maximum benefit. For example, under negotiation period for payment of a sale, the
customer can´t pay cash and the provider can´t put it off too long ; reach an agreement to

9. 8
make payment within 30 days , and the customer gives you time to collect the money
and the supplier is not in such a hurry with their obligations.
COMPETITIVE STRATEGY AND DISTRIBUTIVE (WIN-LOSE)
The objective is to obtain the maximum benefits at the expense of the other party.
It is based on the perception of an irreconcilable conflict between the two parties. The
procedure involves making maximum demands, remaining rigid in that position without
compromise. This strategy is the most common at the beginning of any negotiation. The
ultimate goal is not so much that the other perishes but win anyway.
One example for this strategy could be a wholesale trade sells to a retailer who
tries to buy at an acceptable price, but their products are exclusive, take advantage of
this exclusivity for not lowering both the price and the retail end up buying at a higher
price .
The strategies most identified with this mode or styles of negotiation are:
Start asking a lot (if a seller) or very little (if a buyer). Threefold: lower
expectations of the other party, press for concessions; impose the "rules of the
game" in their favor.
Time pressure. Use the “irrevocable deadlines" and, when they have got what
they expected, convey the message that “further negotiations entail higher
costs.”
Use “prominences “. Principles, values, nationalism, company policies, it means,
factors that can´t “violated”, or modified by trading: When to substantiate their
positions, as evoke elements.
Appear firm. Take an image of strength and power. Claim concessions from the
other party, as justified; circumvent his, or grant them as exceptional.
Claim the intervention of a third party (arbitrator). Use this as blackmail or
threat, as a demonstration of the safety in the “rightness “of their position.
FLEXIBILITY STRATEGY (LOSE -WIN)
Consist to reduce both the interest and the explicit demands, leading to major
concessions. It is generally used in situations of friendship between the parties. The cost
of the breakdown of the negotiations or the relationship is perceived as very serious;
clearly above the cost of the concessions made. The lose-win is a long-term strategy. It is
lost or renounced in principle to win, thereby obtaining better profits or benefits. For
example, an agreement between a vendor and a newly established company, where the
provider makes the purchase easy knowing that in the future this will benefit him.

10. 9
PASSIVITY STRATEGY (LOSE-LOSE):
Consist in consider that our losses will be less than or equal to those of the other party.
Like one example you can image a supplier and a customer are negotiating the purchase
price, both not agree because they want to get the maximum benefit. Finally, yield, and
establish an intermediate price that is not as favorable as expected but that is fine for
both.
TACTICS
Tactics are always an important part of the negotiating process. More often they
are difficult to identify and used for multiple purposes. Tactics are more frequently used
in distributive negotiations and when the focus in on taking as much value off the table
as possible. Many negotiation tactics exist and we will mention below:
Auction: The bidding process is designed to create competition. When multiple
parties want the same thing, pit them against one another. When people know
that they may lose out on something, they will want it even more. Not only do
they want the thing that is being bid on, they also want to win, just to win. Taking
advantage of someone's competitive nature can drive up the price.
Brinksmanship: One party aggressively pursues a set of terms to the point at
which the other negotiating party must either agree or walk away. Brinkmanship
is a type of "hard nut" approach to bargaining in which one party pushes the
other party to the "brink" or edge of what that party is willing to accommodate.
Successful brinksmanship convinces the other party they have no choice but to
accept the offer and there is no acceptable alternative to the proposed agreement.
Chicken: Negotiators propose extreme measures, often bluffs, to force the other
party to chicken out and give them what they want. This tactic can be dangerous
when parties are unwilling to back down and go through with the extreme
measure.
Defense in Depth: Several layers of decision-making authority is used to allow
further concessions each time the agreement goes through a different level of
authority. In other words, each time the offer goes to a decision maker, that
decision maker asks to add another concession in order to close the deal.
Deadline: Give the other party a deadline forcing them to make a decision. This
method uses time to apply pressure to the other party. Deadlines given can be
actual or artificial.
Flinch: Flinching is showing a strong negative physical reaction to a proposal.
Common examples of flinching are gasping for air, or a visible expression of

11. 10
surprise of shock. The flinch can be done consciously or unconsciously. The flinch
signals to the opposite party that you think the offer or proposal is absurd in
hopes the other party will lower their aspirations. Seeing a physical reaction is
more believable than hearing someone saying, "I'm shocked."
Good Guy/Bad Guy: The good guy/bad guy approach is typically used in team
negotiations where one member of the team makes extreme or unreasonable
demands, and the other offers a more rational approach. This tactic is named
after a police interrogation technique often portrayed in the media. The "good
guy" will appear more reasonable and understanding, and therefore, easier to
work with. In essence, it is using the law of relativity to attract cooperation. The
good guy will appear more agreeable relative to the "bad guy."
Highball/Lowball: Depending on whether selling or buying, sellers or buyers
use a ridiculously high, or ridiculously low opening offer that will never be
achieved. The theory is that the extreme offer will cause the other party to
reevaluate his own opening offer and move close to the resistance point (as far as
you are willing to go to reach an agreement). Another advantage is that the
person giving the extreme demand appears more flexible he or she makes
concessions toward a more reasonable outcome. A danger of this tactic is that the
opposite party may think negotiating is a waste of time.
CONCLUSION
As we can notice in the essay, in a globalized world, where economies are increasingly
interdependent, it is necessary to create people capable of interacting with the world in
a successful way. Undoubtedly one of the best alternatives that we must look to achieve
this goal is an optimal trading, according to mutual interests.
Although we are not aware that our daily life is full of agreements and disagreements
that lead us to create mechanisms for consultation and solution, the truth is that all
human beings we find ourselves in this dilemma for most of the time. Few are the times
that we stop to create or implement strategies and mechanisms that allow a joint
solution and consistent solution with mutual needs is obtained in which a win-win ,
eliminating , this absurd idea that trading is a game zero sum (it means, a negotiation in
which one gains another loses ) .
There are many concepts that are on that is a negotiation but few see that rather than
end, is the means or instrument of an end, which as we emphasize in our work ,
negotiation must be viewed as the means by which satisfied interests sometimes some
are larger than others but in the end if a good negotiation is done you can get the
maximum benefit of both parties .