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What can we learn about negotiating from the Brexit Trade Deal?<\/h2>\n\n\n\n

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Setting aside politics (this is a \u2018No Politics\u2019 Blog) I have been fascinated by the negotiation of Britain\u2019s exit from Europe.\u00a0 A lot of it took place in the public domain and a some of it behind closed doors and I am very much looking forward to the books that journalists and insiders will write about it once the dust has settled.\u00a0 In the meantime, what can we learn about negotiating techniques from this exercise, or what could both parties learn from the many experienced demurrage negotiators we have in this business?<\/p>\n

It has been four and a half years since the Referendum and the withdrawal agreement and the trade agreement have both been signed off.\u00a0 I hope you do not have such long negotiations of your demurrage claims but for agreements of this size and complexity I do not think it\u2019s bad going, considering the EU\/Canada Trade Deal took over seven years.<\/p>\n

Red Lines<\/strong><\/span><\/p>\n

I must admit I have not kept track with all the red lines on both sides of the argument and which of them have been revised but throughout this process both sides have declared red lines.\u00a0 Is this a good strategy?\u00a0 Should the bottom line be declared at the outset or do you save it for the negotiation table? Clearly these negotiations were influenced by politics and both sides had to keep their respective electorates happy.\u00a0 Maybe the PR at home was worth it.<\/p>\n

I am not in favour of declaring red lines for a couple of reasons.<\/p>\n

Firstly, it signals to the other side how far you can go.\u00a0 I remember a counterparty sending me a list of outstanding claims but had left their own notes in the spreadsheet.\u00a0 Hardly a red line on the same scale but the note said something like \u201ccan accept 50\/50 when we have meeting\u201d.\u00a0 This was a useful piece of information for me and not sure what the outcome of that claim was but by disclosing their position like this I think it gave me an advantage.<\/p>\n

Secondly red lines limit the discussion and if there is nowhere to go it could lead to agreeing an unsatisfactory deal or no deal at all.<\/p>\n

No deal is better than a bad deal \u2013 be careful what you wish for<\/strong><\/span><\/p>\n

This leads me on to the next point.\u00a0 We often heard this from the UK side that no deal was better than a bad deal which inferred that the UK would walk away and trade on World Trade Organization (WTO) terms if they were not happy.\u00a0 Were these threats believable?\u00a0 There are some observers who felt that from the outset when PM David Cameron tried to renegotiate terms that the EU did not believe that UK would ever leave.\u00a0 Cameron obviously did not bring back enough concessions to satisfy the majority in the Referendum so maybe that is true.\u00a0 On the other hand, some observers felt that the EU took it seriously and Cameron got more concessions as a result.<\/p>\n

When Theresa May was in the chair it was felt by some that \u2018No Deal\u2019 was an empty threat and it was only in December 2020 that a \u2018No Deal\u2019 threat was taken seriously by both sides that a deal was struck.\u00a0 Obviously, all this is conjecture and I am waiting for that book!<\/p>\n

What can we learn from this?\u00a0 To relate it to a demurrage claim I have often seen counterparties threaten legal action if they do not get their way in a negotiation.\u00a0 If you are going to use a threat like this you must be prepared to use it.\u00a0 If you consistently threaten legal action but don\u2019t carry it out, then you will be found out and this is not a tool you can use again.<\/p>\n

Thankfully, most claims in this business are settled without the need to involve the courts.<\/p>\n

Fishing<\/strong><\/span><\/p>\n

Fishing was one of the very last things to get resolved and this was clearly a compromise by both sides.\u00a0<\/p>\n

We heard the expression \u201ccompromise is not a dirty word\u201d a few times during these negotiations and the full quote is from Sir Nicolas Winton who said \u2018Never forget that compromise is not a dirty word. Life depends on compromise.<\/em>\u2019<\/p>\n

I am reminded of another quote allegedly by the author Larry David who said of Senator Henry Clay \u201cYou’re unhappy. I’m unhappy too. Have you heard of Henry Clay? He was the Great Compromiser. A good compromise is when both parties are dissatisfied, and I think that’s what we have here<\/em>.\u201d<\/p>\n

Judging by the fishermen both sides of the channel this is a compromise where both parties are equally unhappy.<\/p>\n

The overall trade Deal between the EU and UK is worth UK\u00a3660 billion.\u00a0 According to a twitter thread from @chrisgiles_ Economics Editor at the FT the UK fisheries industry is worth about UK\u00a3437m or about the same as the value added by Harrods.\u00a0 I don\u2019t profess to understand the numbers, but Fishing is a drop in the ocean if you pardon the pun!<\/p>\n

Fishing clearly has a political value that far outweighs the financial value for both sides.<\/p>\n

To equate this to our demurrage negotiations I see this as a point of principle!\u00a0 Have you ever held up a negotiation because of a point in a claim that was not huge in value but to concede it could cost you more in the long run?\u00a0 You need to be aware of these small points and if it is not going to cost you a lot it may be worth conceding as you could gain more value from your opponent in other parts of the negotiation.<\/p>\n

\u00a0<\/p>\n

I may return to this subject in future as negotiation skills are a fundamental part of our business and there are many aspects to the Brexit deal that we could relate to.<\/p>\n

Do you have any views on what I\u2019ve said, or you have got other aspects of negotiating you want to share?\u00a0 Remember please keep party politics out of it and don\u2019t antagonise the Brexiters or the Remainers!<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

What can we learn about negotiating from the Brexit Trade Deal? Setting aside politics (this is a \u2018No Politics\u2019 Blog) I have been fascinated by the negotiation of Britain\u2019s exit from Europe.  A lot of it took place in the public domain and a some of it behind closed doors and I am very much […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50,53,88],"tags":[71,72,89],"class_list":["post-5575","post","type-post","status-publish","format-standard","hentry","category-demurrage","category-laytime","category-negotiation","tag-demurrage","tag-laytime","tag-negotiation"],"_links":{"self":[{"href":"https:\/\/www.hubse.com\/wp-json\/wp\/v2\/posts\/5575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hubse.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hubse.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hubse.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hubse.com\/wp-json\/wp\/v2\/comments?post=5575"}],"version-history":[{"count":15,"href":"https:\/\/www.hubse.com\/wp-json\/wp\/v2\/posts\/5575\/revisions"}],"predecessor-version":[{"id":5590,"href":"https:\/\/www.hubse.com\/wp-json\/wp\/v2\/posts\/5575\/revisions\/5590"}],"wp:attachment":[{"href":"https:\/\/www.hubse.com\/wp-json\/wp\/v2\/media?parent=5575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hubse.com\/wp-json\/wp\/v2\/categories?post=5575"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hubse.com\/wp-json\/wp\/v2\/tags?post=5575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}