Negotiation Mastery Blog

Brexit Negotiations – Good or Bad So Far?

And is David Davis Macchiavelli’s proud heir?

Negotiation Report Card

Almost exactly nine months from the referendum and with Article 50 to be triggered any day, perhaps it is time to appraise the progress in the Brexit negotiations so far. It’s not quite half-term in the proceedings but perhaps a school report card is in order. How well have our representatives performed in terms of negotiation best-practice, that is, reaching a sustainable value-creating outcome that is beneficial for all parties?

You might counter that the term has not even started yet, the EU have made it very clear that they will not talk about the topic until Article 50 is officially triggered. But, of course, informally they began the day the referendum results were announced.

So let us start our assessment by considering that very lack of formal pre-negotiation negotiations.

 

Talks about talks about talks

If we look at the Northern Ireland Good Friday Agreement, which we can use as an example of a successful negotiation in a highly complex and challenging situation, they had talks about talks about talks: discussions about how the negotiations would take place were themselves discussed at length and agreed by all parties. This proved critical to the ultimate success, it allowed relationship and trust to be built before anything substantive was at stake. In fact, it is standard procedure for any major international negotiation.

So the EU insisting there should be no pre-talks before Article 50 is officially triggered is definitely not best practice. It seems quite unhelpful – of course, pre-talks have still happened but mostly through the media, hardly the best channel for nuanced diplomatic communication.

Why do the EU insist on this? Probably because they believe containing the negotiations within two years gives them a power advantage. Whether it does or not, in practice, we will see later.

 

Inflammatory appointments

But maybe this unhelpful EU behaviour was itself in response to something that happened earlier. When Theresa May announced David Davis and Liam Fox would be leading the UK negotiation team, it was widely considered a clever move to finesse the demands of the ‘Leave’ camp. Whatever its impact on the politics of her party, it was certainly an antagonistic move with regards Europe. And to appoint Boris Johnson Foreign Minister could be considered downright offensive.

No wonder the likes of Jean-Claude Juncker and Guy Verhoefstadt have repeatedly talked about punishing Great Britain or similar. And, of course, their own internal politics demand an aggressive response too.

So, lots of posturing on each side as each has to show to their internal constituency how tough they are going to be. Risky? Yes. Best practice? Definitely not.

 

May and Merkel

One might have hoped for a more reasonable approach with Theresa May and Angela Merkel in charge, formally or informally, of the two parties. And there could still be hope here.

Often the broad basis of an agreement is made at the highest level in a cordial atmosphere and then the bulldogs are unleashed on each other to fight out the details. If it ever gets too bloody, a quick phone call between the principals or a chat over good food and fine wine gets it back on track.

That may be what we will see unfold. May and Merkel’s natural style is much closer to negotiation best practice than what we have seen from most of the other contributors to the conversation to date.

 

Theresa Maybe

Poor Theresa May, it has to be said she has a very difficult job on her hands. Mind you, she did apply for it.

Squaring this almighty circle would be beyond most politicians so she quite cleverly gave herself as much room for manoeuvre as she could. All we knew of her strategy for a long time was the famously vague ‘Brexit means Brexit’. Then, finally, after several months of discussions and consultations, she clarified everything in her speech to Parliament, emphatically announcing that ‘Brexit means Brexit’ actually means ‘Brexit means Brexit’.

Ok, she may have used different words but I don’t think I left out anything important.

From an economic perspective, such vagueness is not an advised strategy – business likes clarity and certainty. But, interestingly, from a negotiation angle, it is not a bad strategy. Being vague in the early stages of a negotiation gives space for many possible outcomes and many possible routes to achieve them.

 

The Plan B

Once Article 50 is triggered, there are two years for the terms of the ‘divorce settlement’ to be agreed. This ticking clock was designed to give the EU the edge in the talks.

But David Davis does not seem fazed – in fact, he also wants the new relationship to be decided in the same timeframe. From a historical perspective, this is optimistic in the least and the EU certainly consider the prospect unrealistic.

So if it doesn’t happen, what then? Davis has announced presidentially that Britain would be happy with WTO rules and we would follow a low taxation competitive economic strategy along the lines of the Singapore model (obviously not including the part of the Singapore model which includes a 40% immigrant population).

In other words, with a smile, ‘Europe, do your worst!’

It is a very good negotiating ploy. It has nullified any power advantage Europe thought they had – if Europe do not offer a deal that suits Britain, Britain will merrily find their own way. In fact, Davis seems so comfortable with his Plan B, one might suspect it is his Plan A and Europe is rather naively playing into his hands.

One other clever ploy from the British government was to leave Westminster out of the conversation. Whatever the political wrongs or rights of this, from a negotiation perspective there are two benefits to this.

Firstly, regularly reporting and justifying their progress to MP’s and the press would significantly undermine the negotiation team’s position so they have been able to avoid this. Secondly, giving MP’s a vote to choose between the eventual negotiated outcome (Plan A) or WTO rules (Plan B), actually supports Davis’s negotiating hand.

 

Marks out of 10?

So, politics and economics aside, overall how well have they done from a negotiation perspective? From a best practice point of view, nobody has covered themselves in glory to date. It may just be posturing but most of the talk so far has been around power and punishment, both quite antiquated terms in negotiation theory.

However, if we drop such criteria (perhaps on the basis that they are politicians so why should we expect good practice?) then maybe David Davis has been quite clever.

There is a reasonable chance that his Plan B is really his Plan A and if this is the case, Macchiavelli would be smiling proudly as he looked down on proceedings.