Transparency in trade negotiations: How much is enough, how much is too much?

1 September 2015

Some critics of trade negotiations allege that the process is too secretive, and draft texts should be made public. This paper argues that more transparency is needed, but that releasing drafts in this way could impede the process.  Instead, transparency should be expanded at an earlier stage, when policy is being formulated, and at the end, when the benefits of completed trade agreements are explained to the public.

Over the past few years, as controversial trade negotiations such as the Trans-Pacific Partnership (TPP) and Trasnatlantic Trade and Investment Partnership (TTIP) have progressed, there has been much debate has about whether trade talks are sufficiently transparent. Critics of trade agreements have stepped up their attacks on the "secrecy" of negotiations. Keeping these negotiations behind closed doors, with input only from corporate advisers, they argue, undermines democracy and the rule of law. As a partial remedy, critics have called for governments to make public the draft texts being discussed.

Governments have fought back against these charges, arguing that, in fact, they have been actively engaged with the public and with other branches of the government, keeping everyone fully informed of the state of trade negotiations.

Which side is in the right here? Are governments doing everything they should to be transparent about trade negotiations?  How much secrecy is possible and desirable in this context?  In this piece, I explore several aspects of the transparency issue that help inform the debate. I then offer suggestions for how governments could more effectively approach the issue.

Trade negotiations in the internet era

People who have been around trade negotiations for decades sometimes suggest that the transparency of trade talks has been getting worse over time. However, when you take into account the emergence of the internet, the current situation is actually not very surprising.

In the pre-Internet era, when trade negotiators exchanged and discussed draft texts, they could be relatively casual in their conversations with outsiders and with their distribution of documents. If a government official passed along a text to an interested party, that text might get circulated to a handful of other people, and perhaps published in a specialised news source.  But that would usually be the end of it.  No matter how controversial the substance, it is unlikely that the text would spread broadly and lead to any mainstream discussion and criticism.

Now, by contrast, documents that are given out in this way will, inevitably, be posted on the Internet, where they will be dissected by bloggers and activists immediately. This can impede sensitive negotiations because government officials will be overwhelmed by lobbying and criticism right in the middle of their discussions. As a result, governments have become more reluctant to disclose the details of trade talks to outsiders, and thus for some people, negotiating texts are less accessible than in the past.

Trade negotiations in the global governance era

Beyond technological issues, trade negotiations have changed in another important way too. They have evolved from being mainly about constraints on protectionism to involving broad efforts at global governance. In their early years, trade negotiations were mostly about offers and demands for lower tariffs. There were few legal texts to consider. Over time, more law was added to the process. Today, the typical trade agreement is a full-fledged global governance instrument, with wide ranging policy implications, from intellectual property protection, to labour rights, to environmental protection.

The different nature of the rules today has important implications for transparency. It might be unreasonable to expect the government to disclose publicly which of its trading partners' tariff lines it was most interested in lowering, as this has a limited public policy impact and would hinder its negotiating objectives. By contrast, issues such as intellectual property, labour and the environment are core social policies. What governments advocate in this regard affects us all in significant ways.

But full disclosure may cause negotiating difficulties. In each area, there are lengthy legal texts to consider. Governments with an interest in a particular area put forward detailed proposals, which are commented on by others. In this way, law and policy are developed by governments working together. The end result is a compromise from the initial position of each government.

This evolution from initial government negotiating positions to international compromise is a crucial time. Arguably, having a public debate during this process would undermine the whole enterprise. Governments would not just be negotiating with each other, but also with the public at large. If negotiating positions are open to debate during the process, it would be difficult to make any progress.

Towards effective transparency

These various considerations can perhaps guide a better approach to transparency. In an era where there are real time hashtag-based Twitter debates about the nuances of trade negotiating documents leaked by WikiLeaks, and where trade agreements govern a growing number of domestic policy issues, what should we expect in terms of transparency in trade negotiations?

In my view, we should expect transparency to a greater extent than it currently exists, but it should be transparency of a different kind than trade critics are demanding. In this regard, the trade negotiation process should be broken down into three stages: (1) development of a government negotiating position; (2) the negotiations themselves; and (3) domestic ratification of the completed negotiating text.  Transparency should be emphasised at the beginning and end of the process; the middle needs to maintain some secrecy.

At the beginning stage, governments must get adequate input in developing a national negotiating position. It is crucial to cast a wide net in seeking out the views of interested parties. This process must be open to all. 

However, governments need to have a bit of flexibility in finalising a negotiating position based on that input, and in conducting the negotiations. The input should be wide open, but the output should be less so. The negotiating position should not be subject to too much scrutiny at this stage. Once the position has been developed, trading partners should not be given too much information on areas of weakness and dissension.

Finally, the crucial point for transparency should be the end of the process. At the end, governments cannot expect to present a completed package to be rubber-stamped. There must be a convincing explanation of the merits of the compromise that was achieved.

As things stand now, there are flaws in the current process at both the beginning and the end, at least in the US (the system with which I am most familiar). With regard to the input at the beginning, it is not clear the process is working, in the sense that the government frequently takes positions in trade negotiations that are not particularly popular. A number of the major US government negotiating positions appear to generate support mainly from special-interest groups, such as corporations or labour unions, while the broader public has objections.

With regard to the corporate interests, intellectual property has been a particularly controversial issue. For example, ever longer copyright terms are pushed by business groups, while on the other side most ordinary people who are aware of this issue believe that many of the US negotiating positions on intellectual property are misguided.

Similarly, on labour issues, while unions might support the official US government position of strong and enforceable labour protections in trade agreements, popular opinion might be sceptical of tightening labour standards in this way. On the conservative side, many areas of the US are actually loosening these standards; and on the liberal side, forcing developing countries to adopt our current labour standards, when we ourselves had low standards during our development period, smacks of imperialism and imposing our values on others.

Part of the flaw in the input process may be as much about what topics should be included, rather than the substance of particular provisions. To some extent, the scope of trade negotiations seems to have been captured by special interests, who are adept at lobbying for inclusion of their issues.

Turning to the end of the process, the explanations offered by government officials are sometimes very superficial and seem designed to avoid acknowledging the complexities of the rules.  In this regard, trade agreements are often portrayed as simple export initiatives. Almost every provision is touted as a way to increase exports, and as a result provide more domestic high-paying jobs.

That explanation is misleading. For example, it may be true that a longer copyright term would help a few US companies increase export sales. But presenting the issue in this way overlooks the broader policy implications, and does not constitute real engagement on the issue. Real engagement would involve, for example, an inquiry that compares different copyright term lengths and explains why one is better than the other.

Conclusion

Governments are in a difficult position balancing out all the competing domestic interests, and convincing their negotiating partners to move in their direction. They take risks in making choices for what national policy positions to take and how to push them with trading partners. If they choose incorrectly, the whole enterprise may unravel. Transparency is important, but it cannot be taken so far as to make the process entirely unworkable. There are particular stages were transparency can and should be improved, as described above. Now that trade agreements act as tools of regulation and policy-making, the debate needs to be more open at the beginning and more robust at the end than it has been. If done properly, more transparency could actually help to produce better trade agreements, and also to conclude negotiations and pass them in the domestic process.

Author: Simon Lester is a trade policy analyst with Cato’s Herbert A. Stiefel Center for Trade Policy Studies. His research focuses on WTO disputes, regional trade agreements, disguised protectionism and the history of international trade law.

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