A professional Negotiator’s (that’s me 🙂 ) commentary on Brexit
1) The strength of any negotiation position is always the walk away option: what each side can impose without agreement unilaterally aka what is technically called the BATNA or Best Alternative to a Negotiated Agreement
2) The strength of the UK’s BATNA took a major hit in the last week at G20 meeting, when the US (17% of world economy), Japan (5.6%), India (3%) stated the obvious: that the EU was a higher priority for a trade deal than the UK which was indeed at the back of the line
3) Japan went further and stated the consequences of Brexit if it involved loss of single market access for Japanese investment in the UK
4) Add in Theresa May’s souring of relations with China (14% of world economy) over nuclear power investment and of course the EU itself (12% of world economy without the UK) and 51% of the world economy is not looking very promising for free booting isolated UK
5) and after this 51%, the rest of the world economy is not full of obvious markets for the UK: any takers for South America, Middle East, much of Africa as major markets?
6) The UK is moreover not negotiating with a unified entity able to easily trade off different interests, its component states have, so the reassuring thought that loss of say German export access to the UK will influence EU BATNA is misguided.
7) Any deal will need all 27 members to agree and so Southern Europe resentment of Germany over austerity, and Eastern Europe’s attachment to free movement of labor are unlikely to help drive an acceptable deal for the UK
8) So even though punishing the UK is completely against the EU’s interests, the Prisoner’s Dilemma dynamics will likely lead to this.
9) Ergo the UK is completely screwed by Brexit.
10) But we knew that before the bloody vote….