The Less You Know:Trade Negotiations, Secrecy and Brexit
This is a post of the ongoing series: "Trade Negotiations, How do they work?" where I provide a glimpse into the inner workings of trade policy negotiations.
Disclaimer: In this post, I will be diving into the secrecy of trade negotiations. This is an emotive, politically charged and contentious issue on which there are many valid view points. I will also briefly be weighing in on Brexit, which is a famously unemotive with no strong opinions on either side.
I will try to be fair and will also try to be interesting. Since rarely succeed at either I suggest setting your expectations low. New Zealand average applied tariff low.
What are you hiding from us, Tradey?
“Trade negotiations must be conducted in secret.”
It’s a phrase repeated so often even those with a strong view rarely unpack it.
When pushed, those on either side can be guilty of platitudes, broad ideological positions, insulting the intelligence of the general public or the motives of negotiators.
In this blog I’d like to get into the mechanics of it all, while obviously still deploying lots of platitudes, laying out my broad ideological position and throwing lots of shade at the intelligence of the general public.
But first, let me address one of the most common and I think least useful arguments deployed by trade negotiators (including myself) when debating this issue. .
Argument: “Trade deals are transparent because the text of any signed agreement is public while the legislatures consider approval.”
Taken at face value, this argument is accurate. For example, the CPTPP full text was available on government websites for months before legislators voted on ratifying it. This is fairly standard practice and has been for a long time.
The problem is having transparency of a closed text is like being invited into the cockpit of an airline after it’s landed. Sure, the buttons and lights are cool but it’s hard to later claim you were an integral part of the flight team.
Consider a parliamentary system. The executive which negotiated the agreement presents it for an up or down vote to the legislature, where the ruling majority is likely from the same political party. For them to vote it down is essentially to turn around and slap across the face the leader of their own party (note to UK and Australian readers where this is basically a national sport: it doesn’t happen as often in other places).
At a more micro-level, publishing an agreement after it has been signed and thus effectively ‘closed’ for changes, makes it very difficult to make amendments in response to public commentary. The conversation becomes binary. You either accept the deal as an entire package, or you reject it... which is the whole point of negotiation secrecy.
Why so secret, squirrel?
The most practical argument for secrecy in negotiations is also the least comforting. They are conducted in secret for the same reason sausage factories aren’t typically built of glass.
If negotiators had to stop to publicly justify the text of a draft agreement at every interim stage instead of when it was complete, it would paralyze discussions completely.
In most negotiations, anyone can ask for any text whatsoever to be added to the draft outcome in square brackets (or some other marking). These brackets indicate the language in question has yet to be agreed.
The brackets look the same regardless of how realistic or close to consensus the language is. As long as one side wants the text and at least one other side doesn’t, it stays in there. Only those in the room know if it represents a minor linguistic quibble or irreconcilable differences on substance.
This means a work in progress negotiating text includes dozens upon dozens of lines no one seriously expects to feature in a final outcome. Revealing these, much like beginning to undress in public, can set expectations unreasonably high or cause widespread panic.
If negotiators know language has no chance of getting up, why are they cluttering up the draft with it?
There are all sorts of reasons negotiators might put forward draft language they know to be utterly unacceptable:
The authority to formally accept a position as untenable rests with someone more senior;
They are trying to create negotiating coin by deliberately inserting problematic elements they can ‘charge’ the other side for agreeing to remove;
Irony alert: they suspect the draft will be leaked, and want to demonstrate to the public they’re making an effort on the issue.
But doesn’t the public have a right to know?
Even the most transparent processes will generally include components out of the public eye. Cabinet meetings aren’t televised and your elected representatives don’t write draft legislation live on Twitch.
Representative government in modern democracies generally relies on a combination of public solicitation of inputs, private development of proposed solutions and then (sometimes) public consideration of those solutions before their implementation.
Trade folk argue trade negotiations, while lengthy, still follow this basic approach. Initial consultations are undertaken to solicit input from anyone interested, the negotiators go away for a few years to argue and then present a final product for consideration. You don’t get to observe the argument any more than you get to watch a cabinet discussion or listen in on Mama Ru’s thoughts on which queen sashays away after a Lip Sync For Your Life.
Critics would disagree. Consultations, they argue, solicit views on the public about what’s important to them but don’t provide any insight into how the government goes about trading those priorities against one another and against those of the other side.
Negotiating Brexit Live on Twitter
At the time I’m writing this, the United Kingdom is embroiled in debate over the Withdrawal Agreement, a tentative deal negotiated with the European Union covering the period immediately following the UK’s withdrawal from that bloc. (Note: for forensic anthropologists studying this blog centuries from now: this occurred after the election of President Trump but before the election of President Oprah. I’m only joking about one of those, and it’s not the one you think.)
The level of media scrutiny on these negotiations has been unprecedented. Every word spoken by key figures on both sides is endlessly scrutinized, every tweet forensically studied and every leaked draft treated like the Dead Sea Scrolls.
There are two questions to ask here, both highly subjective:
1. Was this helpful to the final negotiation outcome?
2. Was this helpful to democracy and public participation in governance?
Did it help get a deal?
I struggle to see how.
A case could be made for the negotiation enabling power of public scrutiny if one side or the other side retreats from a previously held red line, enabling conclusion. It doesn’t appear to be what happened here.
Moreover, one could argue that by repeatedly being forced by public scrutiny to lay down immovable red lines, both sides were constrained in what they could trade off to achieve an outcome. The press loves nothing more than demanding leaders unequivocally rule things out, which incentives making declarative statements before you know what the other side offers.
Admit it, if the press had asked you on live television how you felt about Segways before you saw this picture, you’d probably own one right now.
Was it helpful to democracy and public debate?
Yes. Unequivocally yes.
Most trade negotiations are fundamentally of fairly marginal impact. Most economies are already fairly open in most goods, and the level of increased services access in your average FTA is rarely of game-changing scope. Brexit, obviously, is an entirely different animal.
As negotiations over the Withdrawal Agreement continued (largely by civil servants on both sides toiling out of the spotlight), the focus on it led to the most sophisticated debate on trade anywhere ever.
Terms like ‘Rules of Origin’, ‘Financial Passporting’ and ‘Just in Time Supply Chains’ entered the public lexicon. Whatever the final fate of the deal negotiated between the EU and UK, the capacity of the British public to evaluate it on its merits increased exponentially as a direct result of the scrutiny the negotiations were under.
That’s a win for trade and democratic governance.
So is secrecy good? You’re confusing me, nerd.
Where I come down is trade negotiations require a great deal more scrutiny, but publicizing draft texts or letting a BBC4 crew into the negotiating room isn’t the way to deliver it.
The problem with trade policy transparency has rarely been that not enough is said by officials and political leaders. Point a microphone at any trade minister long enough and they will inevitably launch into a paean about the incoming golden age of prosperity their most recent negotiation will surely yield.
If the public wants more visibility the trade agreements their governments are negotiating on their behalf, the media needs to ask smarter questions on their behalf. As I try to prove with this blog, trade is not so complicated that you can’t share a working understanding of its key concepts in an accessible way. Chickening out of that by allowing commentators and leaders to get away with vague platitudes, canned lines and simple untruths does far more damage to the public’s right to know then the fact there’s no video of me spending 3 hours discussing what constitutes ‘emptiness’ as it pertains to shipping containers during a TiSA round.
So in summary, it’s all someone else’s fault.
I hope you have enjoyed this post in the "Trade Negotiations, How do they work?" series. This one was especially subjective so as always I beg you to consider it a solitary glimmer of humble* opinion among a constellation of brighter stars.
As always, if you have any comments, suggestions or puns. feel free to leave them in the comments below or tweet em’ at me.
*Nothing says humility like comparing yourself to a celestial object a million times the mass of your home planet.