Negotiating and Mediating Brexit

The Brexit referendum in the UK has thrown the European Union into a crisis. Crises hold the potential for disaster – but also for a constructive and creative new beginning. Much will depend on whether the exit process can be steered constructively and with a close eye on the interests of the many affected parties. There is a non-trivial probability that Brexit is a negative-sum game.

The ensuing Brexit negotiations are many, and they are very complex. In a recent paper I analyse the negotiation position of the parties (UK, EU, Member States) based on a set of four key negotiation factors: agreement options, non-agreement alternatives, interests, and perceptions (‘Negotiation Analysis’). I show that giving notice under Article 50 TEU changes the bargaining power in the ‘Brexit Negotiation Games’ to the UK’s disadvantage.

I also explore the likely negotiation strategy of the UK against this background (‘UK Negotiation Strategy’). I conclude that it probably will try cherry-picking first (yes to the single market, no to free movement of persons) and go for a ‘Hard Brexit’ with some form of transition arrangement later if the desired outcome proves unattainable.

The article further discusses strategic negotiation moves by the parties already made, and moves likely to be made in the future (‘Negotiation Dynamic’). The negotiation moves by the parties so far are almost exclusively geared towards claiming value (mostly commitments and threats), and the EU has been more sophisticated in its steps by ruling out shadow negotiations before the UK gives notice under Article 50 TEU and by ruling out any form of cherry-picking or ‘Europe à la carte’. We can expect to see more value-claiming tactics, as in all real live negotiations. Indeed, it is a dominant strategy for the parties to apply such tactics (‘Negotiators’ Dilemma’).

Herein lies the potential for ‘Brexit Mediation’: saving value and possibly even helping the parties identify options for mutual gain. Another independent motive for ‘Brexit Mediation’ is process management: the ensuing negotiations are extremely complex, and without a professional and neutral third party it will be difficult – if not impossible – to manage them constructively and efficiently.

I sketch how a ‘Brexit Mediation Model’ could look. It would involve mediated ‘High-Level-Talks’ on a withdrawal agreement between the UK and the EU and a new cooperation/trade agreement (and/or a transition agreement before such new agreement is concluded). The potential for mediation to help preserve value in this very complex multi-party dispute is enormous – as are the obstacles that lie in its way. We are all called upon to remove these obstacles in the interest of the future of Europe, and indeed, the world as a whole.

Horst Eidenmüller is the Freshfields Professor of Commercial Law at the University of Oxford.