Analysis of a Real-Life Negotiation: The Panama Canal Negotiations

Real-Life Negotiation
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Real-Life Negotiation
Introduction
The world is characterized by the integration and interaction of individuals or groups of people with unique and equally diverse beliefs, principles, and ideologies across the social, political, and economic domains. These interactions often transcend the differences in opinions, views, and beliefs of the involved parties towards reaching a compromise that protects the interests of the perceived parallel sides. Failure to reach an agreeable concession between and among the interacting parties may lead to a conflict of interests with potential adverse outcomes such as the civil unrests and wars recorded in human history from the political domain. Business transactions are also characteristic of such concessions or compromises to arrive at the desired outcome for the trading or transacting parties in the economic domain. The social setting of any society around the world also attests to countless cases or scenarios that demand compromising of hard lines and positions on particular issues for the overall benefit of the community. The scenarios highlighted across the social, political, and economic domains find common ground because all the interactions involved function in resolving the potential conflict of interests. These interactions are characterized by individuals, groups, or people with vested interests and extensive communications towards achieving a perceived fair outcome for all the entities involved. Negotiation refers to this process of resolving the existing and identified conflict of interests between two or more entities by engaging in persistent communications CITATION Fis81 \l 1033 (Fisher, 2012). It is a tool that finds its use across all the domains of the global society by creating harmonious coexistence amidst the existing social, political, and economic differences in today’s society CITATION Nel07 \l 1033 (Nelken, 2007). Provided herein is an evaluation of a real-life negotiation highlighting the theories and strategies of negotiation and the perceived obstacles to conflict resolution.
Real-Life Negotiation: The Panama Canal Negotiations
The construction of one of the greatest engineering marvels in the world, the Panama Canal, came at the cost of extensive deliberations among both private and public or state entities. The negotiations began in the mid-19th century with a treaty between the United States and Colombia in 1847, allowing the former passage over Panama’s narrow territory between the Pacific and the Caribbean oceans CITATION Neg21 \l 1033 (Negotiation Experts, 2021). The treaty ensured Colombia’s sovereignty over the region over which the U.S. gained transit passage and that Panama would maintain neutrality over the agreement CITATION Neg21 \l 1033 (Negotiation Experts, 2021). The treaty did not yield any progress or action from the United States, and it was until 1881 that a French company, Compagnie Nouvelle du Canal de Panama, gained the contract to construct the canal CITATION Neg21 \l 1033 (Negotiation Experts, 2021). Nine years later, the company went bankrupt, having lost approximately $287 million and a significant loss of human resources along the way. Coincidentally, the U.S. became convinced that building the canal passage connecting the two oceans was in its best interest CITATION Neg21 \l 1033 (Negotiation Experts, 2021). The U.S. embarked on choosing the best route for building the canal passage through a Commission headed by Admiral John Walker even though the country had shown interest in the route that was being constructed by the French company CITATION Neg21 \l 1033 (Negotiation Experts, 2021). Facing bankruptcy, Compagnie began negotiations with the United States for a buyout to free itself from the ongoing project. Admiral John Walker headed the U.S. negotiations countered Compagnie’s $109 million valuations of its total holdings with a mere $40 million CITATION Neg21 \l 1033 (Negotiation Experts, 2021). The U.S. further hinted at the possibility of building another canal in Nicaragua as negotiations with the French company continued.
On the other hand, the company countered with claims growing interests from Russia and Great Britain to finance the stalled canal’s construction to completion CITATION Neg21 \l 1033 (Negotiation Experts, 2021). The U.S. then leaked information to its press, claiming that the Walker-led Commission preferred building the Nicaraguan route as buying out Compagnie Nouvelle would be too expensive CITATION Neg21 \l 1033 (Negotiation Experts, 2021). The news destabilized the company leading to its president’s resignation and subsequent buy out of the French company’s holding by the U.S. for $40 million CITATION Neg21 \l 1033 (Negotiation Experts, 2021). The Walker-led Commission would later change its recommendation in favor of the Panama route for building the canal. The Panama Canal was completed and opened in 1914 upon resolving further conflicts of interest among the U.S., Panama, and Colombia.
Description of Negotiation Theories Applicable to the Conflict
The Panama Canal negotiations make for a multifaceted approach to negotiation as it involves the resolution of different conflicts among four different entities. The negotiations involved the United States, Colombia, Panama, and the French company. The stated parties are directly involved in the negotiations, including Panama, as it turns to the United States to coerce its way to autonomous rule away from Colombia towards the launch of the Panama Canal in 1914 CITATION Neg21 \l 1033 (Negotiation Experts, 2021). The negotiation begins with shared interests between the U.S. and Colombia. The latter offers transit passage to the former in return for recognized sovereignty over the proposed region for building the canal. In essence, the negotiation takes an integrative approach with both parties focusing on protecting their interests in a win-win conclusion of the bargain CITATION Alf08 \l 1033 (Alfredson, 2008). The initial bargain sets the table for prolonged negotiation between the U.S. and the French company, Compagnie Nouvelle du Canal de Panama, which acquires the contract to construct the canal on the region already under the signed treaty between the two countries. Compagnie’s acquisition of the construction contract raises a conflict of interest between the company and the U.S. The latter also finds it beneficial to construct the canal bridging the Caribbean and Pacific oceans.
The subsequent negotiation between the U.S. and the French compa...