Sunday 17 September 2017

Don't Walk Away, Renee?

Theresa May called her fateful election because she wanted a mandate for 'no deal is better than a bad deal', in other words to walk away from the negotiations if necessary. We are now seeing why she felt that might be necessary. Of course, what she really wanted was for the other side to believe that her team would walk away if it came to a crunch. In which case they probably wouldn't ever have to actually do it.

In all major negotiations both parties will go into the talks with aims, aspirations and red lines. Given that the principals rarely get involved (I thought it was bizarre when May campaigned as if she was actually going to be negotiating herself), positions are set down for the negotiating teams - what they can and can't agree, what they need to refer back on and, usually, what are the drop dead issues when there is no point in continuing the meeting because the gap is so great further input from the principals is required. The walk away points.

Of course, in a negotiation of such importance as Brexit, conducted in the glare of the media and frequent press conferences, either side declaring that we're going away until you've had a bit more of a think/come to your senses would cause hyperventilation amongst the commentariat. But it could easily come to that, especially if the EU side continue to refuse to talk about the full range of issues before the divorce monies are settled. Which of course doesn't make sense, because what the UK will find it can justify paying depends on what benefits, if any, we think we'll get from a future relationship. So that drives us to assuming there won't be any, which reduces the prospect of agreement. David Davies also pointed out a week or two ago that it is impossible to resolve the Irish border issue, another of the items the EU want resolved up front, without knowing more about what the general UK-EU customs arrangements will be. These issues are all linked and only a moron, or someone who doesn't want to reach a deal, would set out to negotiate that way. At the moment I'm inclined to think the EU side are both, though Yanis Varoufakis is sure it's just the latter - they don't want a deal, or at least not any deal that could be seen as giving the Brits anything worthwhile.

A number of commentators have concluded that the Brexit talks are just like any divorce and that Michel Barnier sounded just like a spurned spouse in his some of his recent utterings. The argument about the money blocks out discussion of access arrangements and damages the future relationship. All this was very predictable and many commentators did indeed forecast it would go this way. But only Varoufakis (that I've seen) has made the point that I made: that the EU actually want the negotiations to be a failure because their precious "project" is more important to them than getting a deal which works for both sides. I was saying 10 months ago that the EU's willingness to make its people poorer to protect its project meant that it wouldn't be possible to negotiate successfully with a self-harming psycopath (see Cold Front At Calais, 25 October 2016). And, more recently, that some important people in Brussels, such as Darth Vader - sorry I mean Martin Selmayr, Juncker's Chief of Staff, who was in the press again in the last week having allegedly threatened the Europe editor of Der Spiegel with a "smack in the gob"- have more or less said Brexit can't be seen to be a success (see Has Theresa May saved the Labour party, 19 May).

In negotiating parlance, the talks are in difficulty because the two sides don't have enough shared values. The UK side see it purely in transactional terms, talking about win-win and the best deal for all parties. For the EU side that is secondary and I'm sure that they want the talks to be seen to be a failure from the UK's point of view - an expensive mistake which will weaken us and make us a less attractive country for third party countries to invest in, so allowing EU countries to hollow out the UK by taking business (banking, finance, car manufacturing etc) from us. A future where the UK depends on heritage and tourism, a bit like Greece, would suit them nicely.

I'm not sure how the Brits can play this any differently, though it might be sensible to respond to Barnier's tiresome demands for clarity by stating clearly that we aim to be the EU's biggest external trading partner, outside the single market and customs union but with agreed arrangements to facilitate trade and collaborating closely on defence, security, environmental and research issues. Maybe this has already been said but I haven't seen it summarised that succinctly. However, I expect this would be met with the same response we've had so far - "what you are seeking is impossible". Which is why we must be prepared to walk away at some point.

I was involved in quite a few large and complex commercial negotiations. They would, of course, have been about a thousandth as complex as Brexit and with millions not hundreds of billions at stake over the long term. But the principles are the same. The best participative training courses I ever took part in were on negotiating based on soundly grounded psychology and research work done at Harvard. And there is one point on which Michel Barnier is right. If you want to have an ongoing productive relationship afterwards, rather than screwing the best deal you can and running leaving the other party feeling exploited, both parties need to share the best possible information on the available options, so that informed decisions can be taken with full understanding of the implications and consequences. Then the course that is optimal is usually clear to everyone. So when Barnier said "There are extremely serious consequences of leaving the single market and it hasn’t been explained to the British people. We intend to teach people what leaving the single market means” I wondered whether he was threatening us, as our press interpreted it, or impatiently inviting us to consider the consequences that would flow from various ways forward. It must be frustrating, though, for both the EU negotiators (feeling that we aren't being specific about what we want) and for the Brits (never getting anything coming back on what the EU side think could work).

Many Europeans start from the view that what the Brits want is either not clear, impossible, or both. For example John Bruton, the former Irish Taoiseach, has said Britain's Brexit vision is not achievable. Hmm, I hadn't realised we had a vision of Brexit....but leaving that to one side, Bruton has said a lot actually, most of it probably self serving from an Irish point of view: that, to make Brexit work, Britain must show the EU that it cares (a two way street, that one!), that the UK government and DUP must spell out exactly the sort of Brexit they want (only to have Barnier pooh pooh it? Why won't Brussels list options they would accept in parallel?), that the divorce will leave scars (tell us something we don't know!) and that Ireland needs to try to stop Brexit happening.  The last of these comments, with its implied suggestion of interference in the result of an election in another sovereign state, is as popular with me as it would no doubt be with him if I said the Brits should be trying to overturn Ireland's medieval laws on abortion and campaigning for the rights of victims of egregious Catholic priests and young mothers whose babies were taken from them and made to suffer Jane Eyre conditions or worse. A period of silence on his part would be welcome, while he works to put his own house in order.

Of course, there is a genuine Irish question in Brexit, about the future border arrangements. I've been saying since the referendum that I can't see a solution that keeps the non-border between the north and south and the porous border (I mean free travel area) between the Irish Republic and the UK. To be honest I probably need a history lesson on the latter but, having been perplexed that the free travel area concept survived the troubles (I'd have scrapped it unilaterally in a hearbeat in 1993 when the Warrington bomb went off 20 minutes after I'd been on Bridge Street with one of my young sons) I remain perplexed on this one. There have to be borders somewhere if we are to "take back control". It can be between the north and south parts of Ireland or it can be between the two parts of Ireland and the UK - an option laden with political and emotional implications. The problem for the UK is that this is an important issue because of the history and its implications for the future - those volcanoes don't feel extinct to me - but, from a UK economic prosperity viewpoint, this is all second order. Nevertheless, it could be the tail that wags the dog, if only because of May's disastrous election punt and the resulting disproportionate power which came the way of the DUP.

Brexit means the age old Irish question has a new angle - so does it look more like the Gordian knot than ever? I think it does. Of course, the Irish border question isn't difficult for movement of goods if we stay in the customs union, or for the movement of people if we stay in the single market. But, as this would mean we can't make our own trade deals with other countries, it's pointless unless, of course, you really want us to stay in the EU. Some arguing for that have a position of principle - they explicitly want us to stay in. Others, like Keir Starmer and the Labour party, use their weasel words to advocate being out in name but not actually being out i.e. in the customs union, in the single market, unable to enter into our own trade deals, making contributions to the bloated EU budget, under the yoke of the ECJ, etc, etc. The Soft Brexit, or Hotel California option as I've called it (i.e. you can check out but you can never leave).  You accept the EU's migrants and its regulations and you don't have the slightest influence over either. You pay a contribution to the EU budget but you don't have a vote on it and can't monitor what it's being misspent on. Niall Ferguson summed this option up well: "Some divorce. It would be more like becoming a child bride under sharia".

Which leaves us needing to negotiate something that works.  So, back to Yanis Varoufakis. You remember - the Greek finance dude who went to meet Osborne at No 11 wearing a leather jacket. Which we all thought was some kind of rebellious statement, till we read that he'd borrowed it because he'd come without his own jacket. But his wife might have been the inspiration for Pulp's wonderful Common People song. Anyway, enough of urban myths, Varoufakis knows first hand what it's like to tangle with the EU, to try to appeal to the EU heads of state - and fail - when faced with intrasigence and to be screwed into the ground. He said:
  • Barnier's teams mandate on "sequencing" (you give us everything we are asking for, unconditionally. Then and only then will we hear what you want) is exactly what one demands when one wants to ruin a negotiation in advance
  • The EU, under the guise of negotiations, is forcing May and her team to expend all their energies negotiating for the right to negotiate
  • The EU will not budge as Brussels' worst nightmare is a mutually advantageous agreement that other Europeans might interpret as encouragement to mutiny
  • Merkel will not step in. She didn't for Greece and she won't for Britain
  • The EU will reject all British proposals as naive or in conflict with "the rule of EU law" when EU law is practically silent on exiting. What they mean is the logic of brute force and their indifference to large costs inflicted on both sides of the channel (which is my self-harming psycopath point)
Varoufakis went on to say "prepare your people for total capitulation - that is your only option". No chum, it ain't. We aren't Greeks. We are British, we are one of the strongest countries in the world and it's time for us to stand up and convince them that we are more determined than they are. And, if necessary crazier than they are. We will go the distance and we won't buckle.

Actually Varoufakis said we have 2 options:
  • Make the EU an offer that, politically, it can't refuse. For example, request an off-the-shelf Norway like EEA deal for an interim period of "no less than 7 years".  He notes that, tactically, this makes Barnier and his team redundant, it offers certainty for business, EU residents here and Brits there, and Merkel will know the problem has gone to her successor so she can relax. Varoufakis says this "respects Brexit" (I'm not sure about that) and gives time for Britain to debate what it really wants in terms of the future EU relationship (I think we could do that for a lot longer than 7 years without consensus).
  • Or, unilaterally withdraw from all negotiations, leaving it for Brussels to come up with a realistic offer on free trade and other matters. If Brussels doesn't, it doesn't. In the mean time take some moral high ground by granting British citizenship to EU residents here and say we'll now see "how our friends across the channel behave". 
Varoufakis vastly prefers the first of these options. I vastly prefer the second and hope that is what we will hear from Theresa May in her forthcoming Florence speech. I hope she says that we will table an offer for what we owe which is the maximum which can be fully justified against our legal obligations. Which will be a tiny fraction of their ridiculous and unjustified demands. Until and unless the EU is prepared to negotiate properly they can take it or leave it.

Sometimes the only way you can move a negotiation forward is to convince the other side that you are crazier than they are, that you have a nuclear button and you will push it. I suspect it's the only way to negotiate with a self harming psychopath. (Even if they aren't all psychopaths, they are petty - stories of Brussels apparatchiks denying the British negotiators drinking water have emerged. If they want to be childish, we should show we can do it much better).

Ideally, this will make the EU blink and decide to actually negotiate. If not, we lose nothing by pushing the MAD (Mutually Assured Destruction) button. It's simply a matter of whether we accept being crushed into the ground in a sham negotiation or whether we threaten to pull them in with us.

We have to make the threat. It's the only way we can get a proper negotiation going. And if we can't? Then we couldn't have done anyway, so we haven't lost anything. And if it isn't possible to get a positive outcome to the negotiation, the sooner we know and can plan for that, the better. So it's time to say "your call Michel, Emmanuel and Angela". If they won't talk like grown ups it's time to Walk Away from Rene.

For the purpose of this blog it's unfortunate that none of the negotiators appears to be called Rene, but never mind!

John Bruton's comments were covered by Andrew Gray on the website Politico on 26 August, see http://www.politico.eu/article/united-kingdom-may-decide-brexit-vision-not-achievable-irish-ex-pm/, but google "Bruton and Brexit" and your screen will practically melt.

Meanwhile the inevitable tales of dirty tricks emerge: see  http://www.telegraph.co.uk/news/2017/08/09/britains-brexit-negotiators-denied-water-brussels-divorce-talks/

Niall Ferguson's article "I was right: hell hath no fury like a spurned EU" was in the Sunday Times on 3 Sept 2017

Yanis Varoufakis's article "The EU wants Theresa May's total surrender - I should know" was in the Sunday Times News Review on 10 Sept 2017

EU's Mr Big 'in threat to belt reporter' was in the Times on 10 September



1 comment:

  1. Don't Walk Away, Renee a hit for the Four Tops, an excellent Motown group but I can't see May having any hits with her Brexit means Brexit song despite the media playing it to us all too often. The problem is Phil that we (the UK) are the problem following our mass suicide vote (well 52% of us) in the EU Referendum. We need an exit from Brexit and whole thing is simply ludicrous beyond words.

    ReplyDelete