In recent Web services research, there are increasing demands and discussions about negotiation technologies for different Web services applications. One of the important topics is the policy negotiation. As many business activities become automated, policy compliance negotiation between human agents can be a bottleneck. In this paper, we focus on the policy negotiation research issues in privacy policy. We adopt the eXtensible Access Control Markup Language (XACML) as a policy description language and explore its potential in privacy policy negotiation. We first formalize the negotiation process in the context of Web services. Then, we illustrate the policy negotiation model by introducing a policy negotiation point (PNP) between the policy enforcement point (PEP) and policy decision point (PDP) in the XACML policy management architecture. We discuss different phases in a privacy policy negotiation and finally we illustrate how PNP can help on negotiating policies through an example scenario.