As we come to the end of three and half years of often tortuous negotiations over, first, the terms of the UK’s departure from the EU and, second, the future relationship, we’re still none the wiser as to whether we can get a deal over the line by December 31 .
On some days we see positive signals from both camps, with a potential deal imminent, but on others there appear to be near-insurmountable obstacles — in particular, the extent to which companies can receive government financial support and the access EU coastal countries and their fishing industries will have to UK waters. The latest news is that the EU is under pressure from the French government to tighten up the state aid requirements for the UK.
What is clear, however, is that the whole process has been a mixed bag, if it’s analyzed using the principles of negotiations we teach in our executive programs at Oxford. While we aren’t privy to what’s going on behind closed doors, it’s still possible to make some general observations as to where certain negotiation techniques have been used well and others have not. Here are six highlights and lowlights of the negotiations and what they mean now, as the negotiations reach their conclusion.
Principle #1: Build strong relationships ahead of time. During negotiations, understand what your counterpart cares about.
Flash back four years ago, and you’ll remember David Cameron shuttling between European capitals trying to renegotiate the terms for Britain’s continued EU membership, which he would take to the British public in a referendum. While Cameron still backs what he achieved, it was clear to many that it wasn’t enough, particularly on the issue of free movement.
Where did it go wrong? First, the UK government should have formed durable alliances in Europe much earlier; this kind of advance relationship building is one key to successful negotiations. The last-minute shuttle diplomacy proved to be too little, too late. Second, the EU failed to put itself in the UK’s shoes (another negotiation principle). Had they been even somewhat flexible over freedom of movement, they might have been able to keep one of Europe’s largest and most important countries within the EU family.
Principle #2: Pay close attention to process.
In negotiations, it’s nearly impossible to overestimate the importance of controlling the process. The EU did just that in the first stage of the negotiation, the UK’s negotiated withdrawal from the EU. By insisting that the issues important to the EU — the Northern Irish backstop, the rights of EU and UK citizens, and the UK’s financial liabilities — be agreed upon before discussions about the future relationship were even entertained, they gained an important victory in phase one.
As a result of that early EU success, the UK has had less leverage in phase two (negotiating the future relationship). At this late stage in the negotiations, the UK could really do with having an issue like future financial commitments to use as leverage.
Principle #3: Remember the stakeholders who aren’t at the table.
In negotiations, communicating with those who aren’t at the table is every bit as important as communicating with those who are. There is a vast array of parties who have a stake in these negotiations: individual European countries, parliamentarians on both the UK and EU sides, industry groups, and the general public on both sides of the channel.
Again the picture here is mixed. EU lead negotiator Michel Barnier has been diligent about providing updates on the status of the negotiations to member countries, European ambassadors, and the European Parliament. The same can’t be said in the UK, where industry groups have been kept in the dark.
Many will remember two years ago when, in response to business concerns over a no-deal Brexit, our then-foreign secretary, now prime minister, said “F*** business.” Relationships with important stakeholders haven’t improved a great deal since. Of course, the biggest stakeholder on the UK side is the British public. Has the UK had an honest conversation with the population about the difficult trade-offs which will need to be made in the negotiation? The answer is no. Because they’ve never leveled with the public about contentious issues, it will be all the more difficult to get buy-in for the deal and for concessions that need to be made.
Principle #4: Avoid self-imposed deadlines.
While setting deadlines can help to focus minds and inject a sense of momentum into negotiations, I’ve never been a fan. More often than not, they result in ill-thought-out, sub-optimal deals. That was the case with the Withdrawal Agreement, where the UK signed on to a deal that they had to start unravelling just a few months later, and is likely to be the case with the future trade relationship, which has ridiculously tight deadlines. Already, it’s likely that the European Parliament will have to convene between Christmas and New Year’s if there is a deal to be ratified.
Principle #5: Behave like a trusted partner – or pay the price.
Negotiations, particularly complex negotiations, are built on a bedrock of trust and respect and an understanding that once deals are agreed and signed, there’s no going back unless both sides decide to renegotiate.
So the UK government’s decision to draw up legislation – the Internal Market Bill – that overrides the Northern Ireland element of the Withdrawal Agreement and also breaks international law was a not a good moment (though it may not be terminal).
The EU is now being more demanding about the governance and enforcement mechanisms of a future trade deal, in order to ensure that the UK sticks to its word next time around. At this writing, it looks as if discussions over the legal structures surrounding a future trade deal have gone backwards. The Internal Market Bill contributed to this deterioration.
Principle #6: Don’t let political pressure get in the way of pragmatic solutions.
The fisheries industry won’t thank me for saying this, but it currently contributes only 0.1% to the UK economy and a similarly low figure across Europe. Compare this to services (over 75%) and manufacturing and production (21%) in the UK. Yet it’s quite possible that a future trade deal could collapse over fisheries.
While the right to control one’s own waters has strong symbolic importance and is an issue of supreme importance for many Tory MPs, the really great negotiators tend to put pragmatism before politics and look at the negotiation holistically. Let’s hope that the EU and UK negotiators take that viewpoint in the coming days and weeks.
It’s Time To Be Creative
If I was to make a prediction, I’d say we are more likely than not to have some kind of bare bones trade deal at the end of the year, with many months of future negotiations to come. After the year that Boris Johnson has had, and the worst economic crisis in 300 years, can he really afford a no-deal outcome, which — while unpalatable to the EU — is even more unappealing to the UK? (The EU market is eight times the size of the UK.)
Yet in order to reach agreement, both sides need to be proactive and to take the initiative. When Boris Johnson says things like “the likelihood of a deal is very much determined by our friends and partners in the EU,” it doesn’t help anyone. There is a need for creativity on both sides.
Negotiation impasses can sometimes be broken by heads of state or other senior people outside the negotiating teams speaking directly to one another to help regather momentum towards a deal. We are already seeing this in telephone conversations between Prime Minister Boris Johnson and Ursula von der Leyen, President of the European Commission. This was also the case in getting the Withdrawal Agreement over the line when the Prime Minister Boris Johnson met in private talks with the then Irish Taoiseach, Leo Varadkar, to agree on some outstanding issues relating to customs and the Irish border.
It’s not too late to learn from the mistakes of the past, but time is running out.
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December 08, 2020 at 10:05PM
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Lessons From Brexit on How (Not) to Negotiate - Harvard Business Review
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