The Art of The Deal

Smiey DaveDavid Davis is a nice bloke, always smiling despite having to deal with the intractable Michel Barnier Belligerent Barnierand those behind him. Compare him with Donald Trump, widely regarded around the world as a complete oaf. Which of them is the more successful negotiator? Despite the USA being the world’s foremost power it feels it has suffered unfair terms of trade for decades – with China, South Korea and the EU in particular.

Rather than approach negotiators with a smile, a handshake and an offer he thinks is fair to all, Trump makes outrageous demands and gets everyone’s backs up. In spite of this he knows the rules, he wants to stop China dumping state-subsidised steel but threatens the whole world with the same treatment – under WTO you can’t target individual nations (the ‘most favoured nation’ rule). The EU blustered and threatened individual American industries in retaliation – they had to withdraw.

Compromise-1In fact China, South Korea and the EU have all announced compromises, thus showing the world how reasonable they are. Now Trump is stepping back, provided the others carry through their reforms, “nothing is agreed until everything is agreed” after all.

In the Brexit negotiations it is the EU that has hitherto taken a belligerent approach and Britain that has compromised. Eventually the EU has agreed to allow Britain to negotiate with others, which is big of them, and to move one of its road blocks, the Irish border issue, back a few yards (sorry, metres).Fisheries protection 1

If Dave had not smiled but started with a threat to impose 25% tariffs on all car imports, talked about cutting EU fishing nets and invented regulations to harm other valuable EU trade (though applied to all) he might have done a lot better. From the beginning it was said that the UK didn’t have experienced trade negotiators, having outsourced all that to Brussels. We had to hire foreigners but it looks like we didn’t get the best candidate. Truculent Trump

When the UK joined the Common Market in 1973 it still had a substantial manufacturing sector, a relatively efficient agricultural industry and a large fishing fleet. They haven’t exactly flourished since, relative to our neighbours. Yet we are agonising about a trade deal that mainly relates to things that don’t affect most of our workers’ jobs. Powerful voices in the CBI and the City swamp the debate but the majority of our citizens showed in the Referendum that they knew the EU wasn’t doing much for them.

Refuse to budgeIf we threatened the EU with trade on WTO terms we would have to believe it is a better path than the present one and that we are prepared to take it if necessary, if the EU refused to budge. Probably they would give ground, eventually but possibly after we have left. That would be a shock to our system and theirs but we should have gained confidence that our world had not ended so that we need only do deals that benefit us from that position.

 

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