Transparency and Trade Agreements: If the Public Wouldn't Like It, Don't Sign It

by Sofia Plagakis, 7/2/2013

On June 7, a panel of federal judges ruled that international trade deals can be exempted from federal disclosure laws. This decision, coupled with the unprecedented secrecy surrounding the negotiations of the Trans-Pacific Partnership (which kicks off the 18th round of negotiations in two weeks), strips the American people of their voice and overrides the principle that public support or opposition of such agreements should guide U.S. policy.

More than Just Trade Agreements

The nature of free trade agreements has changed significantly over the last 20 years. Prior to 1994, trade agreements dealt primarily with cutting tariffs and lifting quotas to set the terms for trade in goods between countries.

Starting with the North American Free Trade Agreement (NAFTA) in 1994, the core provisions of these agreements expanded to grant foreign investors a remarkable set of new rights and privileges that promote privatization and deregulation of essential services, such as water, energy, and health care. That is, these agreements create legally binding obligations on federal, state, and local governments that have undermined domestic environmental, health, and other quality-of-life standards. At the same time, increased levels of secrecy around negotiations have often blocked the public and sometimes lawmakers from knowing even the most basic content of these agreements.

Court's Decision

Last month, the U.S. Court of Appeals for the District of Columbia Circuit ruled to keep secret a document that revealed U.S. positions on international trade negotiations that impact public health and the environment. The court ruled that the document was "properly classified" in the interest of "national defense or foreign policy" and that these concerns superseded any public interest in the document. The court's decision has dangerous implications for Americans, as it means that the public loses the ability to effectively weigh in on public policy decisions with significant quality-of-life impacts.

The case dates back to 2001, when the Center for International Environmental Law, a nonprofit public interest law organization, filed a Freedom of Information Act request with the Office of the United States Trade Representative (USTR) for documents related to negotiations on investment provisions in the Free Trade Area of the Americas (FTAA). FTAA was a proposed but abandoned agreement to extend NAFTA-type rules and eliminate trade barriers among all countries in the Americas except Cuba. The specific document in question includes U.S. positions on "most favored nation" and "national treatment," which grants foreign investors in countries that are parties to the agreement the same trade advantages as U.S. investors.

Such investor provisions in agreements have been used by foreign corporations to weaken or eliminate federal, state, and local rules over a myriad of issues, such as natural resource management, food labeling, and safety standards, through secret international tribunals. For example, in 2003, Glamis Gold, a Canadian mining company, used NAFTA investment provisions to sue the United States over California laws protecting the environment and cultural sites sacred to a Native American tribe. Though the United States ultimately won, the case dragged on for six years. As a result of NAFTA, the United States has had to battle corporate lawsuits totaling more than $1 billion.

The U.S. Court of Appeals' decision last month overturns a previous federal court ruling from 2012 in which a judge granted CIEL's request. In that ruling, Judge Richard W. Roberts of the U.S. District Court for the District of Columbia said that the USTR had not sufficiently demonstrated that disclosing the document would harm U.S. interests, rejecting the government's third attempt to prevent the document's disclosure.

Trans-Pacific Partnership's Unprecedented Secrecy

The Trans-Pacific Partnership Agreement (TPP) aims to create an expansive free trade zone between the United States and partner countries in the Pacific region. President George W. Bush notified Congress of his intention to participate in the TPP negotiations in 2008, and in November 2009, President Obama pledged that the TPP would result in "high standards worthy of a 21st century trade agreement."

The negotiations now include the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, Peru, Singapore, and Vietnam. Japan has expressed its intention to join the agreement. If Japan participates, the TPP would represent nearly 40 percent of the global GDP and one-third of all world trade.

While trade negotiations have long involved some level of secrecy, the TPP involves unprecedented levels of work being done behind closed doors. In 2011, negotiators signed a special pact to keep all documents related to the talks a secret – despite the fact that the World Trade Organization (WTO) and the recently completed Anti-Counterfeiting Trade Agreement (ACTA) set precedents by releasing draft trade negotiation texts before the agreements were finalized. In fact, leaked documents reveal that the final text of the TPP agreement will remain secret for four years after it goes into effect (or, if no agreement is reached, four years after negotiations end).

Further, reports on the negotiations indicate that 600 corporate representatives have had access to and input on the trade agreement, while only between 12 and 16 labor and environmental representatives have had the same chance for their voices to be heard.

Calls for Transparency

The unprecedented secrecy surrounding the content of these agreements has resulted in campaigns across all the Trans-Pacific countries, including the United States, to educate the public about the potential impacts of this agreement and demand that governments release the working texts of the trade agreement. In addition, advocates have asked for the release of any documents negotiating countries signed to establish the restrictive classification.

In February 2012, over 20 public interest organizations wrote to President Obama, requesting that the administration fulfill its pledge to greater transparency and release draft negotiating texts. This followed an October 2011 public interest letter to U.S. Trade Representative Ron Kirk, asking for the creation of a joint website with other countries that would include all documents related to the negotiations, including contact information for key negotiating personnel.

Congressional leaders have also urged the Obama administration to create mechanisms for broad public participation in the process before negotiations move forward. Last month, Sen. Elizabeth Warren (D-MA) sent a letter to President Obama's nominee to head the USTR, asking the agency to release negotiation documents to the public. Warren made clear that public concerns must be taken seriously in the TPP negotiations.

I have heard the argument that transparency would undermine the Administration's policy to complete the trade agreement because public opposition would be significant. If transparency would lead to widespread public opposition to a trade agreement, then that trade agreement should not be the policy of the United States. I believe in transparency and democracy and I think the U.S. Trade Representative (USTR) should too.

Despite these calls for openness, USTR has not taken any steps to increase transparency.

Health, Safety, Environmental, and Other Risks

If approved, the TPP, like previous trade agreements, has the potential to impact the lives of millions of Americans. A leaked copy of the TPP's Investment Chapter shows that investor protections in the TPP could allow claims that environmental standards in the U. S. and other countries are trade barriers.

For example, in the area of natural gas extraction (namely hydraulic fracturing, or "fracking"), foreign corporations could use investor protections to prohibit states and local communities from establishing moratoriums or strong oversight rules for the process. A U.S. corporation has already used trade agreements to do so. Last November, Lone Pine Resources, a Delaware-incorporated oil and gas firm, filed notice of its intent to sue Canada for $250 million under NAFTA over Quebec's moratorium on fracking. It's possible that the TPP agreement would allow foreign corporations to challenge and possibly overturn Vermont's ban on fracking and the current moratorium in New York State.

In addition, the TPP could impact public access to life-saving medicine. For instance, the agreement could threaten the U.S. Public Health Service Act, which provides low-cost, lifesaving drugs to millions of low-income and disabled Americans.

Conclusion

The TPP agreement (and the upcoming Transatlantic Trade and Investment Partnership agreement between the United States and European Union) could hamstring the authority of democratically elected state and local governments; given this, they require intensive public scrutiny and review.

The texts of the TPP and all other future trade agreements should be made public so that the nation can have a robust discussion of the impacts of proposed treaties on critical quality-of-life issues, including water quality, food safety, access to medicines, product safety, integrity of financial products, biodiversity, and climate change. Americans deserve to have the opportunity to evaluate the effects of all free trade agreements on their lives and the future of our democracy.