7 November 2016

Plan with ambition and be clear about your strategic objectives

Persson draws three broad lessons –all related – from the “disappointment” of the pre-referendum renegotiation. He argues that:

First: we under-bid. In fact, though we had plenty of media and party political tactics, we went into the talks without a sufficiently clear strategy for change in Europe… There were definite limits on what we could have achieved, but my view is that we never fully tested those limits. The lesson here for the government is to be absolutely clear about strategy and negotiation objectives before triggering article 50.

I.e. The first mistake in David Cameron’s renegotiation was the lack of a genuine strategic plan. Rather than building on and seeking high-level political support for the themes in the 2013 Bloomberg Speech, the UK Government allowed the negotiations to begin with detailed technical discussions with no over-arching political context or direction (from either the UK or its negotiating partners) over what would constitute a ‘good’ outcome. This meant that “options had already been narrowed down” before substantive political level talks even began.

Persson notes that – much like the renegotiation – the Brexit talks will hinge on the trade-off that can be agreed between restrictions on free movement and access to the EU’s single market:

Fundamentally, the Brexit talks will come down to a clash of two red lines…Any given restriction on people from within the EU will likely trigger an equal but opposite restriction on the UK’s access to the EU market, starting with financial services. The government needs to decide which point on that sliding scale generates the greatest simultaneous benefit for UK economy and society, and negotiate accordingly.

Nevertheless, while this trade-off is real, there are many ways in which this trade-off can be interpreted and this is where strategic priorities are important.

Firstly, it is widely acknowledged that some of the so-called ‘four freedoms’, such as the movement of people, are more free than the movement of services or capital, for example. And if the UK doesn’t actually seek ‘full’ single market membership (we don’t yet know if it will or not), then the trade-off will be different.

Secondly, and as I have argued before, the UK Government should also be making the case that Brexit presents an opportunity to come to a wider European settlement – not simply encompassing the terms of access to the single market but a new basis for UK-EU cooperation across trade, migration, security and foreign policy. In such a broader strategic partnership, the calculus may change on what are seen as obvious and inevitable trade-offs right now. This underscores the point that UK strategic thinking and getting its political arguments across to a European audience is absolutely vital.

Keep the politicians in the driving-seat

Closely related to the first point is that in order to realise ambitious strategic objectives, the arguments are inevitably political and must be won in the minds of the European politicians who will sign off any deal:

The second mistake: we outsourced political decisions to UK and EU civil servants, who, naturally, are more cautious about what’s achievable… Strong expert grounding is of course vital, but we got lost in the Brussels legal jungle even before fully entering frank political talks between elected EU leaders about the stakes involved.

…The government should therefore seek to reverse the renegotiation sequencing: put much more weight on the strategic and political talks early on, which will serve to lay down the parameters within which the more technical talks will be conducted.

The German Chancellor Angela Merkel was not fully engaged in the process until far too late. Statesmanship will be even more important this time and the UK must find ways to engage national leaders on the key issues from the outset of negotiations.

“Control over the clock equals leverage”

With respect to the Article 50 process, Persson acknowledges that time will play a crucial role in the negotiations:

The third mistake: we got timed out. European partners knew we were very unlikely to walk away from the table at the EU summit in February this year as that would kill a June vote. That self-imposed deadline hurt our leverage. The two year time-table contained in Article 50 is, arguably, the government’s biggest challenge in achieving a successful Brexit. Control over the clock equals leverage. The government should jump at any opportunity to build in more time.

Building more time would mean considering an interim or transitional agreement, which would allow more time to discuss any finer or more complex aspects of a bilateral relationship. While it is clear and understandable that the UK Government is seeking to formally leave the EU institutions in 2019, this is not incompatible with a time-limited phased withdrawal that could allow for tempers to cool and generate the goodwill necessary for a sustainable new partnership. Again, this is likely to be easier if there is a degree of shared vision between the UK and key EU leaders about what a long-term relationship might look like.

However, there are also important ways in which this negotiation is different. Unlike before the referendum, the dynamic of the Brexit vote is such that, once Article 50 is triggered and absent a satisfactory new deal, politically, there would be no going back to the status quo.