[Column] Korean needs int¡¯l negotiation experts

With the failed sales of Daewoo Motor and Hanbo Steel to foreign companies, the ability of the government and business leaders to adequately represent themselves in an international negotiation, its inadequacy and responsibility have been placed on the chopping block.

The greatest blunder made by the creditors bargaining as the sellers of Daweoo and Hanbo was that they failed to ask or include a breach-of-contract clause in the original sales contract. As such, even when the purchaser failed to make good on the purchase contract, the sellers did not have an avenue to seek compensation for the breaches of contract.

In the case of the failed Daewoo sale, many observers point to the lack of skill in international sales negotiations, which led to the creditors dealing with a single potential buyer, Ford Motor Co. If the creditor-sellers had accepted the General Motors and the Hyundai-DaimlerChrysler consortium to stand in line as backups in case of snags in the sales negotiation with Ford, the contract would not have been breached so easily by Ford.

Making public the purchase price offered by Ford was an epitome of ignorance that clearly reveals the lack of even the most common fundamental basics of international sales negotiations. In addition, with the second round of sales negotiation looming, the government and the creditors seemed to be in a race to disclose the supposed facts of the sales negotiations of a "control first, pay later" type of a quick deal, which really had not been agreed on. The government and the creditors only compounded each other's lack in negotiating skill.

It is a truly pitiful situation to think Korea has failed to receive even a penny in compensation for a breach of contract while handing over all information about companies considered as the backbone of our national economy during an international sales negotiation.

In nations such as the United States or Western Europe, where a distinct line is drawn between business and personal considerations, the two parties in a sales negotiation focused solely on the finalization of the sales. Toward that end, they consider all the possible obstacles that might prevent the sales through misunderstanding and put into writing every possibility and response.

Especially in the case of the Americans, whenever a conflict or a dispute arises during negotiations, they are not hampered by personal considerations but are guided strictly by the legal implications and response.

Accordingly, when an American company enters into negotiations, an attorney with expertise in such negotiations accompanies the negotiating team and examines every line of the sales contract to discover any possible problems or disputes.

On the other hand, in nations with customs that place greater weight on personal relationships than on a rigid legal mindset, such as Korea, being strictly business-like could give an impression that the other lacks trust and finesse. As such, rather than looking over each line of the sales contract with care, Koreans are more concerned with establishing a personal relationship with the other company and look toward a party or a night out of entertaining.

Accordingly, Koreans fail to utilize the skills of experts in negotiations and always take the back seat in international negotiations to seal the contract without careful consideration. Then they discover the gravity of the mistakes belatedly and make a whole lot of ruckus.

The attempted sales of Daewoo Motor and Hanbo Steel are over and done with. No matter how much ruckus we make about whose fault it was, it is much like arguing how the ship could have been saved after it sunk.

All of us are somewhat guilty of such behaviors after the fact whenever something grave befalls us. Before Korea becomes even a greater international laughing stock, we must foster and promote many individuals with expertise in terms of language and culture for such international negotiations. Only then, we might find solution to such lack of skill in international negotiations.

Professor Park Myong-Suk, Dankuk University - Culture and Communication