Engineers negotiate withdrawal (7)
I believe the answer is:
retreat
'withdrawal' is the definition.
(retreat is a kind of withdrawal)
'engineers negotiate' is the wordplay.
'engineers' becomes 're' (Royal Engineers).
'negotiate' becomes 'treat' (I've seen this before).
're'+'treat'='RETREAT'
(Other definitions for retreat that I've seen before include "care home" , "Back away" , "It may be secluded" , "Tree rat (anag)" , "withdrawal" .)