Negotiation Lessons from Brexit So Far

Negotiation is both wildly unpredictable and formulaically predictable. In other words, it is the complex product of reactive behaviour and meticulous strategy. Brexit, the hot topic that pops in and out of our headlines and minds, embodies this dichotomy. So let’s check in with the lessons Brexit has taught us so far for our own negotiations.

What You’ll Learn: Three lessons for structuring your negotiation.

Expected Reading Time: 3-5 minutes (~800 words)


In short:

1. Existing relationship models serve as benchmarks for negotiating parties’ positions.
2. Inflexible positions narrow the zone of possible agreement.
3. Separating into distinct phases can assist multifaceted negotiations to achieve incremental outcomes, resulting in better overall gains.

Existing relationship models serve as benchmarks for negotiating parties’ positions.

Unlike many private negotiations, where objectives are kept hidden, the international political nature of Brexit has encouraged both the UK and EU to be moderately transparent with their objectives. The UK White Paper (2017) outlines 12 Brexit objectives. Likewise, the European Commission publishes all negotiating documents on Article 50 negotiations with the UK.

As such, we can match the UK’s stated position with existing positions of countries with varying degrees of ties to the EU for ease of reference. According to Ott and Ghauri, the ‘Ukraine plus model’ best suits the UK’s stated objectives. This is because:

a) it does not apply EU law,
b) there is no free movement,
c) there is access to the internal market,
d) trade agreements are allowed with third countries,
e) and there is collaboration on security and defence.

Each of these issues can be tailored in severity based on the UK’s unique position. The Ukraine Plus Model provides a useful framework for both parties to discuss the best relationship outcome. Other models, such as the Norway and Switzerland models (which allow free movement and no collaboration of security and defence policy), or the WTO model (with the least formal ties) may be useful to serve as Best Alternatives To a Negotiated Agreement (BATNAs) for the UK.

Inflexible positions narrow the zone of possible agreement.

The political nature of Brexit also brings with it reductionism of options. UK parties, such as Nigel Farage’s Brexit party (running in the European Parliament elections), favour a palatable portrayal of a ‘Hard v Soft Brexit’.

A Hard Brexit looks like no free movement of peoples and cutting formal ties with the EU. A Soft Brexit, on the other hand, continues formal ties, including close trade links and participation in the EU single market for a payment in grants.

Pursuing Brexit in a ‘Hard’ manner, as the leading Brexit Party promotes, confines the lowest-valued deal acceptable. It limits the zone of possible agreement (ZOPA), increasing the likelihood that the UK will end up with a WTO BATNA, bringing with it expensive import quotas and tariffs. ‘Hard Brexiteers’ propose that third-party agreements will compensate for the loss in EU trade, like deals with India and China. These counties, however, have existing trade deals with the EU and will likely keep on dealing with this bigger consumer market instead.

The Ukraine Plus model allows for a more flexible mixed strategy approach that focuses on individual issues, including an emphasis on access to the EU internal market. Breaking the negotiation down and addressing each issue in turn, as opposed to leading with a strict overarching position, can aid discussions in a negotiation.

Separating into distinct phases can assist multifaceted negotiations to achieve incremental outcomes.

The EU began Brexit with an offer: step-by-step negotiation. This broke the process first into a discussion on the break, then into discussions on future relationship issues. As the break could be dealt with in a more ‘haggling’ manner, as it concerned hard figures, different strategies could be adopted here which would have been unsuitable for more nuanced policy issues.

The EU started this negotiation with an offer of a €100 billion exit payment, while the UK offered €20 billion. After many offers and counter-offers, both parties reached a €40 billion settlement. With this first portion complete, negotiators could turn their focus to more ‘sticky’ points without muddying them in with the initial exit figures.

Resolving this phase first also enabled the establishment of a negotiating relationship, building a level of trust between the parties. Any degree of resolution promotes the idea that other issues further on may also be resolved, though some may be more controversial. It’s a process of acclimatisation.

Take-Home Message:

1. Establish your benchmarks. They can help you develop your BATNAs and frame the negotiation.
2. Prepare your flexible range. Limiting your ZOPA to a strict, broad goal can make it more difficult to address individual issues.
3. Break down big negotiations into suitable parts. Addressing issues in phases can limit spillage of more controversial points into less controversial points and establish trust.

 

With thanks to: Ursula F Ott and Perzev N Ghauri 

2019-05-14T15:14:15+00:00 By |Tags: , , , |
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