Brexit Negotiations: How to make the impossible deal (part 1)
In a previous blog, we explained some of the reasons the Brexit negotiations are so difficult. In brief:
- the negotiations are with 27 parties,
- the negotiations and the deal should not encourage anyone else to leave the EU,
- the process for negotiation is not well defined and has never been used,
- the negotiations will be during 2017 when there are elections in the Netherlands, France and Germany.
Imagine for a moment, that you have been given the job of leading the negotiations. How would you prepare? Let’s start at the end. Assuming we have a deal, who has to approve it?
The technical answer is the EU council where the deal would need to be approved by a qualified majority. For the UK, a qualified majority is when 16 out of the other 27 countries vote in favour and these countries represent at least 65% of the EU population. Or to take a different perspective, the deal could be blocked by 4 or more countries representing 35% of the population.
For those interested, this 3-minute video explains:
So, to get the deal approved the UK have 2 objectives:
- Prevent a blocking coalition of at least 4 states and 35% of the population
- Get a qualified majority to approve: at least 16 countries and 65% of the population
To understand the challenges of achieving these objectives, the UK needs to understand the population of the EU countries. Looking at the population data, remember the UK cannot vote. Therefore excluding the UK, the deal needs 16 other countries to approve.
So, to get a deal approved the UK needs to prevent at least 35% of the EU by population blocking the deal. If the UK could get the top 8 countries by population to support the deal, then it would take all the other 19 countries to form a blocking coalition. In these circumstances, there would be little chance of this.
Therefore the negotiation team’s first priority is to examine the interests of the top 8 countries: Germany, France, Italy, Spain, Poland, Romania, Netherlands and Belgium. Understanding their interests will be critical to getting a deal. (Remember as we mentioned above it makes it more complex because in 2017 there are elections in Germany, France and the Netherlands.)
As part of the planning process, the UK needs to consider what happens if one of these top 8 were not to approve the deal. Looking at the maths of getting 65%, the top 6 are very important because it is hard to make up their share of population. For example, if Germany disapproved, they would need as many as 17 of the smaller populations to make up their share of population. Or, for example, if Poland disagreed, then they would need as many as 12 of the smaller populations to make up their share of population.
If you can get 65% of the population from the 8 largest countries, then to achieve the 16 countries you need to find 8 more countries from the 16 possible countries.
So, from this simple analysis, we can set priorities for countries (using the table above):
A. Countries 1, 2, 4, 5 and 6
B. Countries 7, 8 and 9
C. Countries 10, 11, 12, 13, 14, 15 and 16
D. Countries 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 and 28
From the above discussion, clearly the biggest issues will be political: finding a deal that suits enough countries to get the deal across the line. Some commentary on the negotiations suggests the negotiation team leader needs to be an experienced trade negotiator. We disagree. The ideal team leader would be an experienced diplomat used to managing diverse interests of different countries and used to presenting information to suit the domestic interests of different countries. In particular, because of the strong emotions associated with these negotiations, we suggest the team leader should be experienced at delicate political multi-party negotiations.
If all the negotiating parties were from the same cultural background it would be a complex negotiation. However, the negotiating parties come from different cultural backgrounds. So, this adds another layer of complexity. For those involved in multi-cultural negotiations, have a look at the ‘Cultural Matrix Tool’ in the second edition of Stephen Kozicki’s book, The Creative Negotiator.
In this blog, we have completed the first critical step: understanding the process for decision-making. In the next blog we will explore in more detail how to prepare for these complex negotiations. Also, we will discuss the different roles in a negotiating team.