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Reports about the UK-Japan FTA negotiations, specifically that the negotiations are not as easy as some hoped, require two comments on negotiation strategy. One of them concerns cognitive bias (thread)
Let’s start with negotaition strategy. I have tweeted before that Brexit exposes partners to the fact that they have to prepare for mutliple scenarios (deal Brexit with transition and end state, no-deal Brexit). The Japan negotiations include another problem.
Namely that the UK wants to both enter CPTPP, a multilateral FTA with Japan as one of the partners, and roll over JEEPA, the EU-Japan FTA. So the UK is engaging in two negotiations with Japan (with the variable deal and no-deal Brexit)
I would argue that one of the possible risks of wanting to enter CPTPP and negotiating a bilateral FTA at the same time is that Japan will regard any liberalisation the UK has to do for CPTPP as a baseline, so it will negotiate from there. Realistic @DavidHenigUK & @DmitryOpines?
@DavidHenigUK @DmitryOpines The second point relates to a report I saw a couple of weeks back in which the government was adviced to out the EU as an outlier on free trade and isolate the EU together with Japan. I cite from memory. No time to look for it.
@DavidHenigUK @DmitryOpines The question is: how can it happen that someone gives such advice shortly before Japan and the EU tout that they have just created the biggest free trade zone in the world? How likely is “isolating the EU” with the help of Japan in that scenario?
@DavidHenigUK @DmitryOpines The reason to me seems cognitive bias. Time and again specific examples of EU protectionism and anti-free trade behaviour have been published in the UK press. What the UK press fails to mentioned repeatedly: the UK has instances of prectionism, Japan does, the US does, ...
@DavidHenigUK @DmitryOpines You can certainly point to instances where the EU is the outlier. But you can do so with other countries as well. The trade world is a multi-issue one. And the reality of today’s world is: the traditionally strongest promoter of free trade, the US, has turned protectionist.
@DavidHenigUK @DmitryOpines That reality of the world has been painted over by the perception bias that “the EU is a protectionist racket”. That perception bias comes back to haunt us.
