This piece was first published on ConservativeHome in July 2017. We reproduce it today as an invitation to reflect on how subsequent events have borne out its analysis.
James Arnell is a partner at Charterhouse. He writes in a personal capacity.
Reading the hysterical press coverage of the latest round of Brexit negotiations, are you feeling uneasy and beginning to wonder whether we are going to end up with “no deal”, after all?
If so, then I would argue that our negotiators might actually be doing a better job than expected. Here’s why.
There are fundamental differences between negotiations in the UK and negotiations with our continental European neighbours.
In the UK, parties generally start from a position which is more or less reasonable on each side and move together to a deal relatively quickly, seeking to avoid unnecessary escalation up the chain of command. Negotiators tend to want to demonstrate that they can get a deal done at their level and they tend to like to present an in-principle agreed deal for approval upstairs. Lawyers in the UK help this process by being unusually commercial and pragmatic, making rapid trade-offs of the “usual” legal points and narrowing the issues down quite quickly to help the principals to reach a deal.
Across the Channel, it Is a very different ball game. Negotiations generally start with almost ridiculously extreme positions on each side (an example: a demand for a €100 billion Brexit bill). Concessions are slow to come, and when they do, they are deliberately calibrated so as to ensure that no deal is reached between the parties at the level at which negotiations are being held. Negotiators like to present an impasse to their bosses, in the expectation that, having established at tedious length the main issues in the negotiation and having created an impasse, the negotiation will move up a level in the hierarchy, another impasse will be reached, and so on up it goes. It is not at all unusual for these steps up through the hierarchy to be accompanied by walkouts, requiring bosses to get things “back on track”.
Ultimately, this continental form of negotiation culminates in a relatively rapid final phase of negotiations between the “head honchos”, in which, after months or years of painful posturing on both sides, points are traded embarrassingly quickly and a deal is sealed.
In my experience, the biggest mistakes a British negotiator can make in trying to do a complex deal in Europe are therefore:
1. To start with too reasonable an opening, and expect it to be reciprocated. It won’t be. It will just cause confusion.
2. To seek to negotiate at a senior level too early. The structure of negotiations needs to keep the big beasts out of it until the very end, and to create several levels in the team to allow impasses to be created at the lower levels, to be resolved at the levels above.
3. To try to go quickly. There is no point. The deal will happen at the last possible minute and if you try to go quickly, your counterpart will believe that, whatever you are agreeing, he can get more.
4. To feel uncomfortable about walking out. You need to walk out, probably several times. And the more opprobrium you get for doing so, the better. Your counterparts will see that you are prepared to take the heat because you are at a red line. And they will respect you for it. And, in these Brexit negotiations, which end with national ratification of the final deal, walking out is even more important. National governments will need to see walk-outs before they believe that the deal on the table is the best there is for them.
5. To underestimate the discomfort induced by a British “non”. European negotiators know we are different. They expect us to be less “Latin” and less “histrionic”. So a British walk-out has considerably more impact that a European walk-out. That means you want to let the issues build up before the first walk-out, but make it a good one. You don’t waste this advantage in the early skirmishes.
6. To forget that this is a sport in continental Europe. You can get angry and emotional, but you need to be able to shake hands and have tea with your opponents after the game, so, underneath the posturing and through the back channels, you need to keep the relationship with your counterparties going. After it is all over, they need to respect and, ideally, like you. I think of it like a rugby game. On the pitch, there is a suspension of social norms. Off the pitch, the social bonds are reinforced by the shared experience of the game and you part firm friends.
If you have got this far, you will appreciate that, if our Brexit team is doing a good job, it will all seem very bruising and dramatic as compared to the negotiations we are used to. We are all going to have to suffer a lot more press hysteria as our team reaches impasses, walks out, and so on.
If, on the other hand, we have a smooth ride, then I think one of two things might be happening. Either we will be giving far too much away, or we will be being strung along towards a rejection at the ratification stage as part of a deliberate punishment strategy, forcing us out with no deal.