In negotiation, power is often expressed as leverage, the ability of one side to move the other side closer to its own position. If you have significant leverage or have an opportunity to expand it over the other side, should you us it? If, for example, you can greatly improve your BATNA (see post #1) or weaken the alternatives for the other side, should you do so? If time works in your favour, should you take it easy and let the clock run down for a while? If you can enforce a negotiation sequence that makes it easier to take a larger part of the pie, should you fine-tune the process to your maximum advantage?
The intuition of many negotiators is to answer these questions with “yes”, in particular if they feel that the other side will also do anything to increase leverage on their end. And yet, your underlying interests may ultimately be served best by restraint. The hallmark of a good deal, after all, is not the agreement itself but its implementation. If it cannot be sold back home, all the great wins you have secured are worthless. So when faced with an opportunity of significantly expanding one’s leverage in negotiation, a key question to ask is: “what is my counterpart’s victory speech? Can an agreement be sold?”
A key question to ask is: what is my counterpart’s victory speech? Can an agreement be sold?
Much has been written on Brexit negotiation mistakes and most of it focuses on blunders on the UK side. The UK list may be longer (more on this in future posts…) but with the comfort of hindsight, one may just as well conclude that the single largest strategic error was made by the EU.
In process and sequencing, an area where it held virtually all the cards, the EU did not apply any restraint. Early in 2017, Theresa May set out her negotiation objectives as having reached an agreement about the future relationship by the time the 2-year Article 50 process has concluded. The UK logic was clear: finalising both negotiations at the same time would reduce uncertainty and results on the future relationship would politically balance the fact that the UK would have little if nothing to celebrate over a divorce deal alone. On the other side, within hours of the results of the referendum, EU leaders put out a joint statement positioning themselves behind strongly behind a Divorce First strategy.
Ever since, this line became EU negotiation doctrine: “an agreement on a future relationship can only be finalised and concluded once the United Kingdom has become a third country.” The logic in the Divorce First approach was clear: undertaking two negotiations at the same time was seen as a potential trap, a messy and overly complex process, and a challenge to EU unity (in the divorce file, the European Commission would lead, whereas the future relationship is one of mixed competence in which Member States hold diverging interests). Moreover, EU law would formally not allow negotiations with a current Member State on a future relationship. UK insistence that creative means could be found if both sides would be willing to explore made zero headway in Brussels.
On 19 June 2017, in his first official negotiation meeting with Michel Barnier
Behind the EU formal arguments were reasons of negotiation leverage: both process and time would greatly work in the EU’s favour if the two files were sequenced. The EU’s core interests, such as the rights of EU citizens in the UK, the Irish border and settling the Brexit bill, would be far easier to secure if the core interests of the UK were subject to wrapping up the divorce act first. In addition, Divorce First allowed the EU side to focus on EU legal matters alone and thus play on its home turf. On 19 June 2017, in his first official negotiation meeting with Michel Barnier, Brexit Secretary David Davis gave in to divorce talks preceding a new relationship. The separation of the two negotiations, and the need to agree measures on a transitional period between concluding both talks, gave rise to the infamous backstop. Ultimately, the EU’s all-out victory on process -“law above politics”- was a Pyrrhic one as the uncertainty over the future relationship, epitomised by the backstop debate, has paralysed the UK political system.