Brexit negotiators failed on the basics of negotiation

Theresa May announced a subsequent collective agreement by her Cabinet. On the following morning it all fell apart, with resignations led by the Brexit Secretary, who had just been a leading negotiator in delivering the deal. More ministerial resignations followed. Jacob Rees-Mogg led an attempt at a vote of no confidence and Michael Gove refused the job as Brexit Secretary amid speculation that he would resign from government. Uncertainty reigns.

Let’s look at this word “negotiation”, get some clear ideas of what exactly it means and examine what went wrong and just how badly the UK’s Tory Government mishandled the exit negotiations. In doing so, I ask you to maintain a sharp distinction between the words principals and principles. Some of the former had little of the latter …

So, what is negotiation? Ask this and a word is likely to surface – compromise. Behind it lies a subtle, complex process. Brexit negotiations are under way with 27 independent sovereign nations and are in the field of diplomacy. Diplomacy has two meanings. Colloquially, it describes the art of handling interactions with others in a sensitive, tactful manner. Used formally, it’s a professional skill in managing international relations.

Negotiation, part of diplomacy, is one of a number of behavioural approaches to reaching agreement – it’s getting as much of what you want as you can from another person, group or nation without sacrificing too much of your ideal position. It may be the only technique used or it may be used with other techniques. Alternatives include selling, persuasion, use of authority, use of the law, elements of compulsion and force. There’s one other alternative – abandoning the objective to reach agreement entirely. That implied threat of a walk away or no-deal option is a crucial dynamic in negotiation.

(Blackmail is a form of negotiation, albeit illegal. Police use trained negotiators in dealing with it, and with kidnappers and hostage-takers in various scenarios in preference to, or as a preliminary to the use of force.)

Negotiating objectives and power assessment

DEFINING negotiating objectives is linked to objective assessment of your power capacity and that of the other party. Power is defined along a spectrum from reaching a deal – and possible

deadlocks – to abandoning the negotiations, the no-deal scenario. The power lies in one party’s ability to induce or compel the other party to accept a deal or penalise them for walking away from it.

An imbalance in power between parties isn’t necessarily a disadvantage to the nominally weaker or stronger party: there are negotiating pluses and minuses at both ends of the power spectrum, but sound strategy requires recognition of the reality of power disparity.

Brexiteers and a number of Remainer MPs (including Theresa May, a Remainer before Brexit) either bought into, or found it politically expedient to adopt the fantasy that the EU was so eager to continue to trade with the UK that it would abandon the Four Freedoms of free movement of goods, services, people and capital across EU borders of member states during the pre-Brexit negotiations on the terms of exit against a deadline of March 2019.

The UK failed to assess power capacity objectively or define realistic opening objectives, a twin failure leading inevitably to their initial rejection by the EU, thus breaching the negotiating principle of “ambitious but realistic” opening positions.

Strategy

THE UK’s failure to analyse its own power capacity and, in that context, formulate realistic objectives for their own negotiators meant there was little chance that they would analyse the EU’s power capacity and anticipate their likely positions, an essential component of negotiating strategy formulation.

Negotiating strategy involves setting a priority for each objective, e.g. crucial, important or desirable, setting measures of achievement quantitatively on the measurable variables, e.g. money, quantity, time frames and qualitatively by verbal descriptions on a scale of satisfaction.

Assessment of risk factors – quantifiable, significant variations to currently assumed future status and events, and of uncertainty, non-quantifiable but conceivable variations – is vital.

The Tory Government failed spectacularly and dangerously to identify key risks and uncertainties until late in the negotiations (witness the secret contingency plans for the NHS and medicines and the movement of goods).

Structural alternatives for negotiations

SUBJECT to acceptance by the negotiating parties, there are alternative ways of structuring negotiations and negotiating interfaces. The most basic form is the so-called distributive bargain or zero sum game mode – a finite pot of benefit where anything one party gains the other party loses. Even when a deal is made, it’s not a win/win outcome but a win/lose.

The alternative is the integrated bargain, where by various means the parties find ways to jointly increase the benefit pot, leaving both parties feeling they’ve achieved their objectives – a win/win.

When the phoney war that followed the 2016 vote in favour of leaving ended with the UK triggering Article 50 on March 29, 2017 – nine months during which Theresa May and her Cabinet dithered and panicked as the enormity of the UK’s Brexit decision and their total unpreparedness dawned on them – the timescale countdown for Stage One of negotiations on Brexit began.

It was targeted to last until October 2018, with an exit deal reached, then presented to the Westminster Parliament, the European Council in Brussels and the European Parliament. Such a process after a provisional deal has been reached is known to negotiators as ratification by principals.

Neither of the two lead EU and UK negotiators are principals – they’re negotiating agents of principals, the powerful people or groups who are not at the negotiating table but have the right to formulate the objectives for the negotiation, set the key strategy, approve or delegate approval for tactical moves, break or maintain deadlocks and ultimately ratify or reject the final deal.

A key guideline for selecting negotiators, in addition to high competence in diplomacy and negotiation, is that they accept the objectives and strategy set by their principals.

But in fact, both negotiators were selected on the political criterion that they were Brexiteers and acceptable to Brexiteers in the government and the electorate. The result is now known – both were unable to accept the necessary compromises. David Davis resigned after deadlocking, Raab was part of the deal, yet resigned after the Prime Minister announce the deal to Parliament and the nation.

The UK also failed to recognise that the principals who set the objectives and strategy were not just the Prime Minister and her divided Cabinet, but Parliament, the three devolved nations and the divided Remain/Leave electorate, with strong views on Brexit itself and on the negotiating objectives and strategy, and would demand a right to amend key objectives and ratify in various conflicting ways.

Setting and prioritising negotiating objectives

THE setting of negotiating objectives and prioritising them has to be done by those who have ultimate control of deciding on the objectives and how important they are. A useful definition of red lines comes from the Foundation pour la Recherche Strategique:

“Although its increasingly frequent use is a recent trend, the term refers to a well-known political phenomenon: preventing an event or occurrence that is deemed unacceptable...”

Such a statement in diplomacy and negotiation is referred to as an anchoring statement. There are two types of anchoring statement – identifying a non-negotiable item and identify an opening position on a negotiable item. The first signals items or positions that one party won’t accept as negotiable: the second states an ambitious entry point for an item, but one that is negotiable.

Anchors are of two kinds – ones that the negotiators believe are ambitious but closely achievable and loaded anchors, set at a deliberately unrealistic level to intimidate the other party and widen the scope for movement and settlement. Loaded anchors carry high risks of deadlock and breakdown. A key determinant is that of deal-breakers, i.e. items that must be in the final deal or there’s no deal at all.

Almost all of the UK’s stated anchor points were loaded, and utterly unrealistic in the face of the EU’s Four Freedoms.

The EU’s reiteration of the Four Freedoms – of movement of goods, services, people and capital across borders – is a true red-line anchor. The opening positions of the UK and EU on the Brexit bill for UK commitments made during its EU membership (“the 50 billion”) were not red lines but entry anchoring points for negotiation designed to set expectations of where negotiations would commence on movement by both sides – the process of mutual movement and concession – to a point of agreement that is the essence of negotiation. As crucials, they were totally unrealistic.

The Irish Border question and the backstop exemplify a red-line principle – the borders of an EU member state, Ireland, with a soon-to-be non-member state, the UK – but also a negotiating anchor with possible movement, not on the red-line principle, but on the means by which the red-line could be satisfied. The UK’s total failure to understand the significance of this item, and also partial failure by the EU to understand it in the context of byzantine UK politics with Northern Ireland and the DUP, now looks like being the rock Brexit will founder on.

Ratification

THE Brexit negotiation ending in Nov/Dec 2018 – the EU Withdrawal Agreement – is only the preliminary to the crucial trade negotiations that follow the March 2019 exit in the 21-month transition period: a deal is the pre-requisite of such negotiations. The stark alternative is no deal and the UK trading under World Trade Organisation (WTO) rules, a far from ideal scenario for it.

On Tuesday and Wednesday, a deal was reached with the EU and what negotiators call a “heads of agreement” was announced by the Prime Minister, but with much fine detail standing behind it. She moved swiftly to interview each member of her Cabinet – the first group of principals she had to seek ratification from – prior to the full Cabinet meeting on Wednesday, where she secured the backing of the Cabinet.

This was a major hurdle to be jumped, since the Cabinet undoubtedly contained about 10 members of the ERG, the influential 50-strong European Research Group plotting to oust Theresa May. Believing she’d succeeded in convincing the Cabinet ERGs, by a mix of appeals to the national interest and to self-interest, she hoped they’d convert some of the

non-Cabinet ERG rebels. These hopes were dashed by Thursday’s resignations and her grilling by the Commons.

She must now get the UK Parliament to ratify the deal: if Parliament doesn’t accept the deal, they must either send Britain back to the EU negotiating table, or face either a no-deal Brexit or a re-run of the Brexit referendum – a People’s Vote.

An attempt to secure amended terms by re-negotiation with the EU, assuming clarity and consensus can be achieved on the new negotiating objectives, might well be rejected by the EU at the November 23 summit of EU leaders.

There’s no requirement for the withdrawal agreement to be ratified by the 27 member states individually: what’s required is approval by the European Parliament by simple majority and approval of the European Council (the leaders of the EU member states) by qualified majority vote (20 of the 27 Member States representing at least 65% of their combined population) is required. The EU Withdrawal Act requires the UK Parliament to have a meaningful vote on the draft agreement before it’s considered by the European Parliament.

Theresa May has 315 MPs, seven short of a majority. (The Commons has 650 MPs, but seven Sinn Fein MPs don’t take their seats.) That leaves 643, and minus the Speaker – who only votes in dead heat votes and then by convention for the Government – leaving 642. With DUP support, the Prime Minister has a potential working majority of four. But that assumes all Tories vote with her. Unless she had a Cabinet and party totally united behind her and persuaded the DUP, she is dependent on some members of opposition parties to make up the shortfall.

The arithmetic is against her. She opposed a People’s Vote, but to date has not had the political, advocacy or negotiating skill to sway Parliament and the electorate in the national interest – and there’s no consensus on where the national interest lies.

The UK’s total failure to understand the diplomatic and negotiating processes, in its greatest social and economic challenge in more than 70 years, one leading all the nations of the UK into a social and economic disaster, has been total.