Brexit negotiations are starting - what happens now?

20 June 2017

With the Brexit negotiations starting this week Sir John Grant, former UK Ambassador to the EU and now special adviser to PwC, offers his thoughts on what to expect, and what not to, from the early conversations in Brussels.

The British media have always relished painting a picture of Brussels negotiations as gladiatorial, political hand to hand combat, good pitted against evil, with British leaders tested in the heat of battle for weakness, and admired or reviled at home as strong winners or weak losers. Margaret Thatcher wanted her money back; John Major won “game, set and match” at Maastricht; and Theresa May, before the last election, told Brussels to expect a “bloody difficult woman”. Shakespeare’s Henry V has a lot to answer for.

In the overheated rooms in the EU’s modern buildings on the Rue de la Loi in Brussels, the reality is somewhat different. And when David Davies finally sits down with Michel Barnier any observer expecting fireworks will be disappointed to find only studied courtesy and steely determination, plus relief on the EU side that the negotiators can settle down to grinding out a deal.  

And grind, at least for now, is the operative word. It would be more exciting if early concessions, compromises and deals were to come from politicians thinking on their feet in the negotiating room, or producing carefully conceived and artfully disguised rabbits out of hats to break a deadlock. But that is not the world as it is.

There is an optimal moment to make a concession in any negotiation, and every good negotiator, whether political or commercial, knows it. Make a concession too soon, and the other side will pocket it and hold out for more. Wait too long, and the moment may pass, agreement slips out of reach and negotiations falter.

The EU has worked out its position laboriously over several months. It has been agreed word for word with all 27 Member States. It has gone further than in any past negotiation and made all its negotiating positions public, including the fine detail of what it will say this week about the rights of EU citizens in the UK after Brexit, and what it expects Britain to pay to the EU budget as part of the agreement about Brexit itself. It has sent those papers to the British Government.

And this week Michel Barnier and the EU negotiators will be working within that framework. They have no mandate to do otherwise – even hints at flexibility would be on Twitter in no time, and the rest of the EU would complain they had overstepped the mark. And the rest of the EU would have a point. It is too soon. They know that any hint of flexibility at this stage would embolden the UK side to ask for more.

So the EU will be dancing a stately minuet, its moves pre-planned and pre-agreed. EU negotiators will already have in their minds the kinds of concessions the EU might accept to find agreement. But they will not reveal them publicly until they know whether those concessions will be enough to bring forth enough flexibility on the UK side to seal a deal. At the right time, they will be ready to move from predictable, carefully choreographed meetings and press conferences to careful, private, informal discussion between UK and EU negotiators who trust one another.

But they will want first to test British tactics and thinking. How much flexibility is there, especially on money? Will the Brits walk out, playing to the gallery at home? If so, how long will it take for them to come back to the table, if at all? And crucially what does the election mean: no change; or a softer, or more open, Brexit?

Expect plenty of drama. But don’t expect it from the seasoned, technocratic professionals in Brussels.

To keep up to date with our analysis on Brexit and Trade issues go to https://www.pwc.co.uk/the-eu-referendum.html and https://www.pwc.co.uk/industries/government-public-sector/trade-matters.html.

 Sir John Grant | former UK Ambassador to the EU and now special adviser to PwC

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