High stakes and brinkmanship
The art of negotiation holds that in order to achieve a preferred outcome, both parties must give the impression that they are prepared to walk away. It is a tactic as old as haggling in the market place. In most cases, where there are clear mutual benefits to be had, a point is reached that both sides can live with and a bargain is struck. Occasionally, the strategy fails and one or both are disappointed.
Which is it to be with Brexit? The disclosure that the Government is introducing legislation to “clarify” parts of the Withdrawal Agreement reached with the EU last year is a statement of intent that the UK is ready to leave the transition period at the end of the year with no deal.
Boris Johnson says that this would not be a bad outcome for the country, though in the past he has taken a different view, while insisting that the chances of leaving in such circumstances were “vanishingly small”. Now he says: “I will not back down”, and has set a deadline of October 15 to conclude an agreement, or that’s it. Is this a bluff? Will the EU call it? The stakes could hardly be higher.
Economically, a case can be made for no trade deal and total reliance on World Trade Organisation rules. However, this is evidently not the Government’s preferred option, otherwise why is it trying to negotiate a deal?
Mr Johnson says that the UK should be treated as an independent nation in the same way as Australia, but that country is currently negotiating a free trade agreement and recently completed the seventh round of talks with the EU.
A no-deal Brexit would put huge pressure on the currency, which could act as a corrective for British exporters as they seek fresh markets. But it would not end the uncertainty that businesses hate most.
Given the history of EU negotiations, a deal portrayed as a win for both sides is still the most likely outcome. Many pundits predicted that Theresa May would not do a deal but she did, even if it took a number of concessions to achieve. When the UK was a member state, brinkmanship was a constant feature of negotiations.
But there will always be a time when the expected responses do not materialise. With the rest of the EU preoccupied, as here, with the economic consequences of the Covid response, that time may have come.