What a Trade Negotiator Needs Most

Less than 24 hours have passed since the EU-UK Withdrawal Agreement failed to pass the House of Commons by a colossal margin of 230 votes. The immediate reaction from many self-appointed experts on whatever will get them on a BBC panel is that this humiliating, historic defeat, somehow means the government of Prime Minister Theresa May now has the upper hand in negotiations with the European Union. The European Union, which has repeatedly stated they consider the negotiations concluded, would probably be shocked to learn they are now on the ropes.

This is apparently what having the upper hand looks like.

This is apparently what having the upper hand looks like.

Following discussions on Twitter and in the opinion pages, I have determined that in the popular imagination an effective trade negotiator is a table thumping sociopath with anger management issues. I think people imagine trade negotiations to be Peter Capaldi from In The Thick of It and Ice Cube from 21 Jump Street screaming at one another until one of them passes out from a rage induced aneurysm.

I have written before about how this mythical notion of ‘toughness’ is largely escapist fantasy by blubbery Etonian schoolboys, and not in fact the sole determinant of whether one is a successful trade negotiator. There is however something which, unlike Clint Eastwood style toughness, a negotiator cannot function without: clearly defined authority.

Respect (what I say is) my authority!

Whether you are a lowly junior public servant working on a minor footnote or the Prime Minister, you are understood to be channeling a portion of the collective authority of your country and its government. In dealing with you, the other side needs to understand the extent of that authority… and its your job to make that clear.

Good negotiators are obsessive about not overstating their authority. The junior public servant above would take pains to say that while they can hammer out draft language, it will need to be considered and approved by their chapter lead, the legal team and even the Chief Negotiator before it can be considered ‘agreed language.’ They will do this even on language they’re certain won’t face objections.

… but we understand you will need to run this past Admiral Obvious and the Joint Chiefs of Obviousness before we can consider the matter closed.

… but we understand you will need to run this past Admiral Obvious and the Joint Chiefs of Obviousness before we can consider the matter closed.

But I’m a white male in a suit, can’t I can overstate my authority and importance the way I do on dates?

First, stop lying to your dates. They will figure out you’re not the “CEO of France” eventually.

Second, you under no circumstances want to overstate your authority. It is the one guaranteed way to lose the trust, goodwill and cooperation you need to get the job done.

Let me explain.

A trade negotiation inevitably involves hard choices for both sides. Whatever the final deal looks like, there will be things you have offered up or decided not to push for. These will have loud, passionate constituencies back home. At the start of a negotiation, both sides will say that all of these represent their ‘red lines.’ Much of the ‘art’ of negotiating comes from sussing out which of those the other side is in actuality willing to trade off.

Offering such a trade is a big risk for a negotiator. If yesterday I was saying I couldn’t reduce my beef tariff at all and I now say I’d be willing to consider a 5% cut if you drop your 10% tariff on cars, I have effectively told you beef is something I can move on. That’s critical information I’m giving away for free.

Nailed it.

Nailed it.

With you so far, but how does overstating my authority come into this?

Picture the scenario. After multiple negotiating rounds of insisting you can’t move on beef, you take a deep breathe, lean across the table and table that offer. Beef for cars. They’ve been saying all along they can’t move on cars, but here you are putting yourself out on a limb and asking them to join you on it.

They’re cautious but excited. This could be a breakthrough. They leave, confer with their Chief Negotiator. She makes a call back to the Trade Minister. They confer. They get the okay. They walk back into the negotiating room, reach out and shake your hand. They’ll move off their red line on cars. Beef for cars. It’s a mooving (don’t cringe, we both know double puns are why you’re all here) moment.

One small problem. You didn’t have the authority to offer so much as a hoof on beef tariffs.

Daisy knew. She knew all along.

Daisy knew. She knew all along.

Oh no, what have I done?

You have royally screwed everyone on the other side of the table, friend.

Let us count the ways:

  1. You have essentially tricked them into revealing that a previously stated red line wasn’t immovable after all;

  2. You have embarrassed almost everyone in their negotiating team in front of their superiors;

  3. You have wasted the time of their Chapter Lead, Chief Negotiator and potentially Trade Minister;

  4. If this ever leaks, their government will have to explain to their auto industry that it was willing to sacrifice their interests… but without anything to show for it. This may be directly contrary to public statements Ministers have previously made: a scandal.

So, what happens now?

In addition to being furious, the other side will cease to believe your voice is an accurate reflection of what your country wants or is willing to do. You may as well go home. You are now dead weight.

Make some guacamole while your friends change lives.

Make some guacamole while your friends change lives.

So, the Prime Minister isn’t now empowered to crush Brussels?

I’m not in the predictions business, but I simply can’t see how new negotiations could play out.

For a government to sign a deal is to say to the other side, “I can get this agreement ratified.” The Prime Minister was unable to carry much of her own party, let alone the broader House of Commons, in that endeavor. Other parties can forgive an unanticipated hiccup like a single Belgian region (Wallonia) blocking CETA for a bit, but a 230 vote annihilation in the House is something else.

If the Prime Minister could be so badly mistaken for so long about the balance of concessions required for ratification, how and whom is the EU to trust? Who can sit across from Mr Barnier at the negotiating table and ask for a (reasonable) concession saying, “If you give us this thing you previously said you couldn’t, the House will totally accept the deal, pinky swear promise.” Barnier has heard that before. He offered a UK wide customs union instead of a Northern Ireland only one. 432 ‘nay’ votes say that was an error.

Once Britain, twice shy.

While responding to recent Brexit events in the US House of Commons, this post is also part of the ongoing series:  "F'kn Trade Negotiations, How do they work?" where I provide a glimpse into the inner workings of trade policy negotiations.

Disclaimer: Approaches to trade negotiations are inherently subjective. Please consider these the musings of one person with one set of experiences and not a definitive or exhaustive guide.  

Note: The original version of this article listed Wallonia as a small village instead of a giant region. This is because I am a stupid person. I also confused Peter Capaldi and David Tennant for largely similar reasons.