The ongoing Wikileaks concerning international relations have a fascinating impact on diplomatic negotiations.

Revelations as to Saudi Arabia’s real views about Iran and the USA’s true views about the leaders of a range of allies including Britain and Italy have to a certain extent rocked the normally genteel world of international diplomacy. Diplomacy has often been referred to as “lying in State”, so in some ways the revelations of hypocrisy in the conduct of international relations could scarcely be regarded as surprising. And yet there is still something a little shocking in hearing explicitly that nations and governments which pretend to be cordial or neutral in fact loathe each other.

From a negotiation point of view this kind of exposure makes deals a bit harder to do going forward. Effective negotiation depends on trust for two reasons. Firstly a lack of trust tends to create a “hostile” or “cool” negotiating climate in which it may be more difficult to make progress. Furthermore, this loss of trust often takes a long time to recover. Secondly, effective negotiation requires that each side believes that the other means what it says. If the other side’s statements are not believed, then any proposals based on those statements will carry no credibility. Lack of conviction or credibility in making proposals means they are unlikely to be accepted, which in turn makes deals harder to conclude.

Politicians are often thought of as a cynical bunch and to a certain extent this may help them discount the impact of the leaks. Nonetheless, the next time affected parties such as Iran sits down to negotiate with Saudi Arabia, or the US sits down to negotiate with any number of its allies, (or indeed Mervyn King sits down with George Osborne!) expect a slightly chilly atmosphere and a deal that is that bit harder to do. Wikileaks has changed these kind of negotiations from the normal game of Poker to a game of Unhappy Families.