Thread: Trust in trade negotiations
Due to a recent announcement, @DavidHenigUK, @mrjamesob and others have warned about eroding trust prior to the Brexit negotiations.
But why IS trust so important to a trade negotiation?
I try to accessibly explain 👇
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Due to a recent announcement, @DavidHenigUK, @mrjamesob and others have warned about eroding trust prior to the Brexit negotiations.
But why IS trust so important to a trade negotiation?
I try to accessibly explain 👇
1/
In a trade negotiation, power to make major concessions rarely rests with the core negotiation team.
The decision to give something you don't want to (defensive interest) or agree not to push for something you want (offensive interest) lies with seniors or other agencies.
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The decision to give something you don't want to (defensive interest) or agree not to push for something you want (offensive interest) lies with seniors or other agencies.
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But if they're powerless, why does trust matter?
First, because they are your best envoys to their decision makers.
You are going to claim certain things are absolute red lines. If their negotiators think you're lying, that's the advice the'll give their decision makers.
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First, because they are your best envoys to their decision makers.
You are going to claim certain things are absolute red lines. If their negotiators think you're lying, that's the advice the'll give their decision makers.
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Second, because many issues in a trade negotiation can be resolved without anyone making a concession by finding language which works for both parties.
That requires a deep knowledge of the other sides system, regulations and legal/governance culture.
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That requires a deep knowledge of the other sides system, regulations and legal/governance culture.
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Their negotiating team is going to know that better than you, so you want their cooperation to find language that works. You can't get that without trust.
Also, they are the ones who will have to fight for any agreed language with their regulators/agencies.
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Also, they are the ones who will have to fight for any agreed language with their regulators/agencies.
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Third, non-binding commitments.
There are going to be certain elements in the negotiations where finding a legally binding middle ground is just impossible.
Best-endeavour type language can be a way to still incorporate these elements. However...
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There are going to be certain elements in the negotiations where finding a legally binding middle ground is just impossible.
Best-endeavour type language can be a way to still incorporate these elements. However...
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For a negotiator, accepting best endeavour language on something they want is a pretty serious concession.
To make it, they have to believe (and convince others) you are serious and will actually make every effort. Otherwise, they'll hold out for legally binding text.
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To make it, they have to believe (and convince others) you are serious and will actually make every effort. Otherwise, they'll hold out for legally binding text.
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Conclusion: The negotiating team on the other side of the table are the only ones in their system whose sole goal is to get to "yes."
If you lose their trust, you lose your most critical advocate behind 'enemy' lines.
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If you lose their trust, you lose your most critical advocate behind 'enemy' lines.
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Bonus: You are going to spend hundreds of hours locked in windowless rooms with these people in states of progressively advanced sleep deprivation. You don't want to spend that time concerned they'll steal your stash of chocolate.
