Thursday 30 April 2020

Heading for a game of 'chicken'

While we're in a sort of phony war as far as the talks on the future relationship are concerned and still in the dark about what sort of deal we want (stll less about what we're going to get) I thought this article from Professor Simon Usherwood on the UK in a Changing Europe website as a timely one. It's about negotiation theory.


The professor says the test of a successful negotiation is not really about getting one over the other side, or about finding an agreement at any price, "but about whether all involved have improved their situation, or at least not damaged it."

"As long as the agreement produces a better outcome than a non-agreement, then it’s rational to pursue the agreement."

He says, and this is perhaps obvious, that a non-agreement outcome is your fall-back and represents the worst that can happen to you by walking away. In which case improving fall-back means you have a better result from the process, however it goes.

"At the very least, strengthening your fall-back protects you against pushy negotiators from the other side, because you can show them you have an improving alternative. Improve your fall-back enough and you might even be able to ask more of them, because the gains of agreeing become more marginal for you."

This then leads on to the question about what the government is doing to improve its fall-back position. Unlike the EU which released updated notices to stakeholders this week (HERE) across a range of sectors from aviation safety to VAT, we seem to be doing precious little. And although the professor doesn't mention we are in the unique position of having a fall-back which is seriously less than the status quo.

Usherwood suggests there are only two explanations for why the government is not activating any of its contingency plans. One’s rational and merited; the other is not, he says and I think he's right.

"The rational reasoning would be that you have conducting a review of the objectives you’re trying achieve, where the negotiations are at, and what your contingency currently looks like, and that you’ve concluded you are already in an optimal situation.

"Even if the negotiation fails – and remember that will never be entirely in your hands – the UK will not suffer at all from that, so no further work is needed.

"Given that the almost entire weight of analysis points to a significant disruption to the British economy in a no-deal situation, this must point to a very substantial political or social gains. But even then, it seems odd to be saying that the economic dislocation requires no attention at all."

If we assume that is not the case, and I again think he is quite right; we aren't doing any real no-deal planning and the cost of disruption is huge, then Usherwood says the second, and much less rational, line of argument would be that the negotiations are a game of chicken. As he puts it:

"Dumping the contingency plan is akin to throwing away your steering wheel as you hurtle towards the other lot, to demonstrate that you’re set on your course and if any[body] is going to give way, it’ll have to be them."

I am afraid this must be the conclusion. Johnson is intent on taking the negotiations to the wire but he will sooner, or more probably later, much later, make every concession on governance, LPF measures, the ECJ and everything else and he will almost certainly have to extend if he wants anything more than a very damaging bare-bones deal.

It is the testing to destruction of the Tory mantra of they need us more than we need them.

Even Daniel Hannan who I posted about a couple of days ago seems to be changing his tune. Scram News claims he is calling for a free trade deal with the EU . This all comes from an article in Conervative Home. He doesn't quite say what Scram News claims but he does call for free trade as way of growing us out of the covid-19 crisis.

This is the man who last week called for us to leave the EU without a deal thus erecting barriers to free trade with our largest trading partner. And he still thinks we should pursue a FTA with America and get it settled by the end of the year. An election year in the middle of a global pandemic. It's a strange world this Brexit isn't it?