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Category: News, News Startseite, Research News 03/29/2017

Brexit: Negotiation Expert Warns About Lose-Lose Solution

Today, British Prime Minister Theresa May submitted her country's written application to leave the European Union. After triggering the exit procedure in accordance with article 50 of the Treaty of Lisbon, the EU and the UK have two years to negotiate the exit conditions as well as the regulations determining the future of the relationship between the parties. Prof. Dr. Remigiusz Smolinski, Honorary Professor of Negotiation at HHL Leipzig Graduate School of Management, thinks that both parties have important levers to strengthen their bargaining power in a selective or permanent manner. However, he pleads, "If these powers collide, there is the risk of hardening fronts and losing the orientation towards a solution. This could then lead to a lose-lose situation."

The parties' reputation in the public eye is important

Theresa May announced a hard Brexit, i.e. no partial EU membership or association and exiting from the European Single Market, Customs Union and the European Court of Justice. The EU then responded in a very clear way. Against this background, according to the negotiation expert, it becomes obvious that the reputation of the parties in the public eye will be a very important issue. Prof. Dr. Smolinski comments, "I expect the negotiations to proceed similarly to collective bargaining with intense negotiations over many days and nights, hardened fronts with very little movement for an extended period and mutual accusations of little progress." The expert states that while the reputation effects arising from such developments are significant for both parties, they are slightly more important for the government of Prime Minister May. "I would recommend giving those leading the negotiations an opportunity to appear in public and position themselves as good negotiators," says Prof. Dr. Smolinski.

At the same time, one must not forget that reputation alone does not produce solutions for the parties. Prof. Dr. Smolinski recommends quantifying the subjects of negotiation on a monetary basis. "Only then will it be possible to make reasonable concessions which will improve the negotiation situation," says the HHL professor.

He states that since the Brexit will happen for the first and also probably for the last time, there is no default solution, commenting, "A high degree of creativity and unconventional thinking are what is required now. During the upcoming negotiations, it will be important to keep an open mind, to generate new solutions and to review whether they make sense."

"Nothing is settled until everything is settled"

With regard to the actual negotiation process, Prof. Dr. Smolinski comments, "Similarly to the accession negotiations, to me it seems to make sense to divide the negotiation process into chapters, discuss them with experts and search for solutions." With the formula "Nothing is settled until everything is settled" in mind, individual chapters should only be closed temporarily until the entire agreement has been finalized.

Against the background of profound experience and abilities from long complex negotiations in the history of the European Union, Prof. Dr. Smolinski is convinced that the EU and the UK will arrange an agreement at the last minute. According to the negotiation expert, none of the parties will be able to push through all demands; which is why it will be exciting to watch if and how the negotiators will achieve a breakthrough. Regarding the outcome of the negotiations, Prof. Dr. Smolinski comments, "The hard Brexit is presumably just a benchmark which will be reviewed during the course of the negotiations." He could also imagine the parties agreeing on a number of transition periods for the exit. Ultimately, the negotiation expert thinks that a new loose association model between the UK and the EU could be agreed upon.

Prof. Dr. Remigiusz Smolinski is the Honorary Professor of Negotiation at HHL Leipzig Graduate School of Management. Prof. Dr. Smolinski has founded the annual world championship in negotiation, The Negotiation Challenge (http://thenegotiationchallenge.org), as well as the International Negotiation Research and Teaching Association, an organization for researchers from the field of negotiation. He was a visiting scholar at Tufts University's Fletcher School of Law and Diplomacy and Harvard University’s Program on Negotiation and has worked as a lecturer for the subject of Negotiation at high-ranking business schools all over the world. Prof. Dr. Smolinski built and managed eastern European marketplaces at mobile.de (eBay Classifieds) and led a team that was responsible for driving e-commerce innovations at Otto Group. Currently, he works as Vice President for Business Development and Innovation Management at comdirect and has founded the comdirect Start-up Garage (http://comdirect-garage.de).

HHL Leipzig Graduate School of Management is a university-level institution and ranks amongst the leading international business schools. The goal of the oldest business school in German-speaking Europe is to educate effective, responsible and entrepreneurially-minded leaders. HHL stands out for its excellent teaching, its clear research focus, its effective knowledge transfer into practice as well as its outstanding student services. According to the Financial Times, HHL ranks first in Germany and fifth globally for its entrepreneurship focus within the M.Sc. and EMBA programs. HHL is accredited by AACSB International. www.hhl.de

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