With the Article 50-notification put on the table in Brussels on 29 March 2017, Theresa May has formally started the Brexit negotiations’ process. There is a lot at stake for all parties concerned. What has been aired so far from both sides of the table in preparation of the talks (eg, the drawing of ‘red lines’ such as the link between access to the single market and free movement of people, the EU’s ‘Brexit bill’ of 60 billion Euro, the idea of ‘punishing’ the UK for its decision to leave, the ‘use’ of EU nationals resident in the UK as a bargaining chip, the signalling of a possible race to the bottom with respect to tax rates, etc) looks very much like classical positional bargaining with a clear focus on value claiming. The negotiations are thereby in danger to get stuck amid the negotiators’ dilemma and to turn into a lose-lose game.

As Horst Eidenmueller and I have recently proposed here, negotiations can be understood as a structure of three levels: problem, people and process. Engaging in positional bargaining tactics (instead of focussing on interests) and focussing on claiming value (instead of on creating value) at the problem level often materialize in aggressive communication and negative emotions at the people level. This, in turn, lets the negotiation process often run into deadlocks and be far less smooth and constructive than would be possible. By contrast, a structured and actively managed negotiation process can have positive repercussions both on the people and thereby also at the problem level. Process design and management thus lie at the heart of negotiation management. Process is key.

What can negotiation process design contribute to the Brexit negotiations with a view to re-focus on the interests of all parties concerned and to safeguard as much value creation (or at least protection) as possible, so that the game may be changed into a winning game (or at least into a lose less game) for everyone? There are at least four aspects of process design to consider:

1. Who? First, process design should take into account who will be leading the negotiations. While the UK will be represented by its government, notably by prime minister Theresa May and by Brexit secretary David Davis, things are more complicated on the EU side: The Treaties vest the European Council (ie, the heads of the Member States) with the ultimate negotiation power. It is the European Council who shall issue the EU’s negotiation guidelines, who shall nominate the ‘Union negotiator’ and who alone has the authority – subject to consent by the European Parliament – to finally conclude any Brexit deal on behalf of the EU (Art 50(2) TEU in conjunction with Art 218(3) TFEU). That said, the European Council has chosen the Commission as the EU lead negotiator which in turn has delegated this task to the former commissioner Michel Barnier. Mr Barnier has installed a small ‘Article 50 task force’ whose members will be leading and coordinating the talks on the side of the EU. This setup poses the risk of a classical ‘principal-agent-dilemma.’ On the one hand, the Commission (the ‘agent’) has of course its own interests in the upcoming negotiations, partially distinct from the Member States’ (the ‘principal’s’) interests. On the other hand, it will ultimately not be the Commission (nor Mr Barnier) who will strike or block any deal, but the European Council. The Process should therefore be designed so as to avoid the typical principal-agent-trap of talking to the agent who – at the end of lengthy discussions – hides behind his principal (who then uses his or her leverage and time pressure to push through further demands). Thus, the UK should strive at keeping very close ties to the EU Member States’ governments in parallel to continuing the talks with the Commission’s task force to assure that what is being said at the negotiation table is also ultimately backed by the principal. The same holds true vice versa: it should also be in the interest of the Member States to very closely monitor the work of Mr. Barnier and his task force to make sure that the deal they are preparing is also a workable deal for the Member States.

2. When? A second important factor of process design is timing. Much has been said and written about the two-year deadline of Art. 50(3) TEU, at the end of which, and in the absence of any deal signed by then, the UK will automatically exit the EU ‘full stop.’ Given the necessary ratification process on the side of the UK and the need for consent by the European Parliament and a ‘super qualified majority’ within the European Council (Art 50(4) TEU and Art 238(3)(b) TFEU), the real time-frame will be much shorter, less than 18 months according to Mr Barnier. It is obvious that this is too short a time to find detailed agreements on all issues that need to be resolved. Therefore, process design might consider to alleviate these time constraints. There are at least two possible ways to achieve this: First, Art 50(3) TEU itself allows for an extension of the negotiation period by unanimous decision of the European Council in agreement with the UK. As demanding as this might seem politically, in light of a joint interest in a structured and promising process, the parties should at least consider to use this mechanism to allow themselves more time. The second possibility to do so lies in the notion of Art 50(3) that ‘the Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement ….’. The parties could therefore conclude any form of generic withdrawal agreement within the two-year timeframe and agree therein to suspend its entry into force until other prerequisites are met thereafter (eg until a more detailed agreement on the future relationship was reached or simply until an additional time frame had elapsed). By this token, the parties would automatically create a transition period in which the process of the UK leaving the EU in legal terms could be orderly managed and could happen less sharply.

3. What? Third, and closely linked to the timing issue, process design should address the order in which distinct steps in the negotiation process are taken. If it is true that mere positional bargaining is apt to have the parties lose sight of their interests and to stifle value creation moves, a procedure in which positional bargaining comes last should be agreed upon. Therefore, the parties should agree on a joint ‘roadmap’ for their talks, structuring those in three distinct phases: In a first phase, they should outline their respective interests as a guideline for all further bargains. To that aim, they should first collect and then prioritize all interests they pursue, eg by using a joint scoring system. This should encompass the interests of all stakeholders concerned, those of the UK (and its citizens), those of the EU as an institution and those of the single Member States (and their citizens). On that basis, the parties should dedicate a second phase specifically to value creation. In this phase, they should brainstorm on sources for mutual gains and on areas of possible common losses (‘lose-only items’). Only then should the parties – in a third and last phase – engage in real bargaining over the single issues and thus in claiming value with the aim to reaching an agreement. By following such a structured approach under an agreed joint roadmap, the process could be designed to limit the negative effects of positional bargaining and to safeguard as much interest focus and value creation as possible.

4. How? Fourth, and finally, the parties should agree on the continued joint management of the process. To that end, they could install at the very outset a joint process management and moderating facility (a ‘process steering committee’) which would exclusively focus on the process as such. This facility would keep an eye on the progress made, would evaluate whether the process lives up to the promise of its original design and – if not – would make proposals as to how to amend the process to factor in any intermediate developments. Further, it could monitor that all procedural steps and rules as agreed between the parties are followed and would thus fulfil a ‘housekeeping’ task.

It is obvious that against the background of their potentially conflicting interests it poses significant additional challenges to the parties to manage the procedural tasks proposed herein jointly and on their own. This might be a reason why the parties should consider bringing in neutral third parties to assist as mediators. In any case, the multiple issues at stake in the upcoming Brexit negotiations are even more at risk in a poorly designed and managed process. Therefore, the parties must take on responsibility not only for the problems they discuss, but also for the process which they use to discuss them.

Andreas Hacke is a Visiting Lecturer at the University of Oxford.

This post is part of the ‘Brexit Negotiations Series’, a series of posts based on contributions at the ‘Negotiating Brexit’ conference that took place in Oxford on 17 March 2017.