No one expected Brexit negotiations to be simple. The talks, aimed at setting the terms of the United Kingdom’s departure from the European Union, got under way in mid-2017, with Michel Barnier representing the European Union (E.U.) and David Davis leading the U.K. delegation. Negotiators have two years to come to agreement. After a few months, the negotiating teams had made little progress, and Barnier publicly warned that the E.U. was preparing for the possibility that the talks would collapse altogether.
At the heart of the Brexit impasse is a fundamental disagreement about how the negotiations should unfold—namely, whether to limit or expand the number of issues up for discussion. The conflict highlights the fact that in negotiation, the process parties choose to follow can dramatically affect their outcomes.
What’s the right sequence?
To try to ensure a smooth separation, the U.K. and E.U. must reach agreement on a daunting array of complex issues, including trade, Britain’s financial obligations to the E.U., air travel, security, and the open border between Northern Ireland and the Republic of Ireland, which is set to become the only land border between Britain and the European Union. What’s more, both parties know that ending the negotiation in impasse likely would inflict chaos on both sides, making the stakes—and the pressure to reach a satisfactory agreement—especially high.
Before the start of the negotiations, the 27 E.U. member nations minus Britain agreed that the talks should be carried out in two phases. In the first phase, the parties would negotiate the terms of British withdrawal—above all, how much the U.K. should pay the E.U. to cover debt obligations, such as funding for British pensioners living in the E.U.
When negotiators agree up front that all issues will remain unresolved until the end of a negotiation, they maximize their opportunities to find value-creating tradeoffs.
E.U. leaders agreed that only after such issues are decided should talks proceed to the second phase: hammering out a trade agreement with the U.K.
Why negotiate trade separately from withdrawal? E.U. officials reportedly believe member nations will veto any withdrawal agreement that’s accompanied by potentially painful new trade terms with the U.K. on issues such as taxes and employment. The E.U. thinks it can gain more leverage by focusing narrowly on price haggling.
By contrast, U.K. prime minister Theresa May wants to negotiate trade and withdrawal simultaneously to improve the odds that Parliament and the British public will support the agreement.
“We are very conscious of the time sequencing of this,” British foreign secretary Boris Johnson said in a television interview in May 2017. “We’re also very conscious of how [the E.U.] will use that time sequencing to pressure us. And we’ll avoid that at every turn.” Johnson also argued that it would be difficult to resolve the issue of the Irish border without also simultaneously negotiating agreements on customs, tariffs, and other trade issues.
After talks kicked off in the summer of 2017, the two sides failed to make much headway as they argued about the sequencing issue. In a speech, May offered 20 billion euros to the E.U., which rejected the offer as far too low. By October, May reportedly had privately promised to double the figure to 40 billion euros, still well below E.U. demands, according to Business Insider. At our press time, E.U. officials were due to decide in mid-December whether enough progress had been made on the terms of withdrawal to move on to trade negotiations with the U.K.
Dealmaking moves: Desk or no desk?
A key process choice that negotiators must make is whether to add more issues to the table. Another is whether to use a table in the first place.As part of his redecoration of the Oval Office upon becoming the U.S. president, Donald Trump had chairs added to the opposite side of the famous Resolute desk. “Used to be they never had chairs that anybody can remember in front of the desk,” Trump said in an interview with CBS. Instead, he explained, other recent presidents would usually sit on the sofas in the room when talking with guests.
When negotiating business deals at his Trump Tower office in New York, Trump was accustomed to having visitors sit across his desk from him. Speaking of the imposing symbolism of a large desk, he told CBS, “I think it gives you great additional power, if you want to know the truth.”
Whether a large desk enhances power hasn’t been proven, but it is likely at least to give the impression of power. Desks can be a “looming presence” that inhibits others, particularly those with less power, from speaking up, write University of Texas professor Ethan Burris and University of Virginia professor James Detert in the Harvard Business Review. Sitting behind a big desk “creates a psychological distance that can create a more difficult environment to speak truth to power,” Burris told the Washington Post.
Negotiation experts further caution that sitting across a large table or desk from others conveys a competitive attitude that can head off collaboration. Most business negotiations will benefit from promoting joint problem-solving rather than a win-lose mentality. In these situations, negotiating side by side at a round table or with no table at all between you is likely the best choice.
Capitalizing on complexity
Throughout the negotiations, the U.K. contingent has repeated a familiar negotiating principle, “Nothing is agreed until everything is agreed.” The argument may have self-serving motivations, but it is rooted in sound negotiation theory.
When negotiators agree up front that all issues will remain unresolved until the end of a negotiation, they maximize their opportunities to find value-creating tradeoffs.
Take the simple example of a customer and supplier negotiating the terms of a new purchasing agreement. If they agreed to a price per unit near the start of a negotiation, they would lose the ability to later make small concessions on price in return for important gains on other issues, such as delivery, contract duration, dispute-resolution terms, and so on. By moving beyond simple “split the difference” price haggling, this type of logrolling can give everyone involved a better deal.
The Brexit negotiators’ disagreement on the sequencing of the negotiation process is not only worsening their conflict; it’s also keeping them from adding an issue to the discussion that could create significant value. Yes, putting trade on the table would make talks exponentially more complex. But in negotiation, complexity— in the form of added issues—is almost always a plus for all parties. Any leverage the E.U. loses by reducing the immediate pressure on the U.K. to agree on a debt payment plan is likely to be outweighed by the benefits the parties could jointly create by identifying tradeoffs across issues such as tariffs, borders, security, and price.
In negotiation, a lot of factors remain out of our control. But one factor that we can at least try to control is the number of issues up for discussion.
3 ways to expand the discussion
1. Explain the logic of tradeoffs. If a counterpart balks at the idea of putting particular issues up for discussion or wants to discuss issues separately, describe various ways that you might create more value by making tradeoffs across issues based on your different preferences. Your counterpart is likely to become receptive to “complicating” the conversation when you show him what he stands to gain.
2. Beware sequencing plans. Discussing issues in phases might seem like an orderly way of proceeding with a negotiation, but it risks walling off tradeoff-rich issues from each other. If you do decide to negotiate in phases, at the very least, agree that “Nothing is agreed until everything is agreed.”
3. Present multiple offers simultaneously. One way to promote value creation is to make several offers at a time rather than just one, ensuring that you value each offer equally. Each offer should include a suite of proposals across issues. The other party’s reactions will help you determine what she values most while assuring that no important issues are neglected.