Trade negotiators typically prefer to discuss the details of agreements in secret while negotiations are ongoing, only revealing their handiwork when they are done. Even then, however, the length and legal density of trade agreements mean that only trade lawyers and industry specialists can readily figure out how a particular deal will affect ordinary citizens. For example, the U.S.-Mexico-Canada Agreement, as the revised NAFTA is known, has 34 chapters and is roughly 1,000 pages long, to say nothing of its hundreds of additional pages of specific tariff commitments, annexes and side letters.
In the United States, the law governing ratification of trade agreements requires the U.S. Trade Representative to consult with congressional representatives during the course of the negotiation. But only a select group of legislators typically has access to negotiating document drafts, and they are prevented from discussing them publicly in any detail. American negotiators argue that such secrecy is necessary to allow each party to make the politically difficult concessions needed to reach a final deal. If those compromises are discussed publicly, before the full package is put together, negotiators argue that the whole thing could unravel. Once a trade agreement is signed by U.S. negotiators, there are deadlines for disclosing the full text and reporting on potential impacts. But when the implementing legislation goes to Congress for ratification, the rules require that members vote on the full package on an up or down basis, without the opportunity to amend it.
The view that negotiations must occur behind closed doors, with limited public input, might have had some merit in the days when trade agreements were primarily about lowering tariffs and other border measures blocking trade. Those agreements typically involved carefully balancing of gains for exporting interests against losses for import-competing sectors, and with generally modest benefits for the economy as a whole. Today, however, large portions of trade agreements are about setting rules for regulating services, investment, drug patents and other issues that reach behind borders. Similarly, the rule requiring an up or down vote by Congress, originally instituted in 1974, might have been justified at a time when trade negotiations were mostly multilateral—involving 100 countries or more. It is much less so when many negotiations involve only one or a handful of trade partners.
The issues increasingly addressed in trade agreements involve rules that should benefit all parties involved and should not require trade-offs across sectors. For example, determining the appropriate level of intellectual property protection involves a careful balancing of incentives for innovation—for example, for pharmaceuticals or medical devices—with the public interest in spreading the benefits of new inventions as broadly as possible. Getting that balance right requires input from civil society as well as the pharmaceutical industry, and that requires much more transparency and accountability than currently occurs in trade negotiations.
The shifting agenda triggered growing protests in Europe when the European Union and the U.S. launched trade negotiations several years ago, leading EU policymakers to begin releasing the texts of their proposals in various areas. They also held public briefings after each round of negotiations to summarize what had been discussed. U.S. negotiators, however, prevented EU officials from releasing or describing draft text or proposals from the U.S. side, even when leaks exposed them.
The refusal by U.S. trade negotiators to be more forthcoming undermines the legitimacy of trade agreements.The refusal by U.S. trade negotiators to be more forthcoming, and the relatively greater access that industry representatives have to policymakers, feeds the perception of disproportionate corporate influence and undermines the legitimacy of trade agreements. A recent report to Congress from the U.S. Trade Representative’s office about the revised NAFTA deal offers a glimpse into the problems of inadequate transparency and accountability—as well as indications that they may be somewhat overblown because U.S. trade agreements typically change only incrementally from one to the next.
Under the trade promotion authority, or “fast track,” rules governing congressional consideration of trade agreements, the administration has to submit to Congress a list of the changes to existing U.S. law required by an agreement within 60 days of signing it. The administration did this for the U.S.-Mexico-Canada Agreement negotiated by President Donald Trump at the end of January. The document is only six pages long and would likely be inscrutable to anyone not immersed in the details—and legalese—of trade agreements. But it still offers some important nuggets as to what NAFTA 2.0 could mean.
The first thing to note is the brevity of the report to Congress, which underscores the fact that the United States, due to its overwhelming bargaining power, typically dictates the terms of the trade agreements it negotiates. Beyond the market access component of trade agreements, where World Trade Organization rules require U.S negotiators to lower barriers reciprocally, American negotiators try to ensure that other elements are based on existing U.S. laws and practices so that as few changes as possible are required in implementing legislation.
The second thing to note is that the brevity of the report highlights the degree to which NAFTA 2.0 builds on its predecessor and is not the radical departure from the original deal that Trump claims. And where it does break new ground, it is mostly based on the Trans-Pacific Partnership negotiated by the administration of President Barack Obama and rejected by Trump. The innovations by Trump’s negotiators, if they can be called that, are generally in the direction of more protection for selected American industries—notably automobiles and textiles—at the expense of other sectors and of consumers. Moreover, this new protection is mostly in the form of revised rules of origin that are complex and hard to assess. The core chapter on rules of origin in the new NAFTA is 271 pages long. A separate chapter of 30 pages covers just the textiles and apparel sector.
To whatever degree secrecy and truncated debate for trade agreements might once have had some justification—and that is vigorously debated—the time is clearly past. Trade agreements are reaching into a broadening array of issue areas, with important implications for the domestic distribution of income and influence. The process for negotiating and implementing trade agreements is long overdue for an update.
By Progress PalmSprings who is a senior researcher and fellow with the PalmSprings Institute of International Affairs, based in Johannesburg. He is also concurrently a TV Producer for a plethora of Current Affairs shows with a reach of 790 million viewers on LoveWorldSAT.