At the end of this week, government trade officials will meet in Brunei to begin the 19th round of negotiations in the Trans Pacific Partnership trade talks. Recently, there have been suggestions that the talks are in the “end game” and will be completed by the end of the year.
With the talks so far along, one might expect a robust public debate on the substantive issues involved. However, much of the TPP discussion so far has been about the alleged secrecy of the talks. Writing in the New York Times in June, activists from Global Trade Watch complained that “the executive branch has managed to resist repeated requests by members of Congress to see the text of the draft agreement and has denied requests from members to attend negotiations as observers.” Along the same lines, Senator Elizabeth Warren wrote a letter to U.S. Trade Representative Mike Froman (prior to his assumption of the position, when he was still the nominee), calling for the release of a version of the TPP negotiating texts.
While transparency is important, these concerns are probably a bit overstated, for a number of reasons. First, a bit of secrecy is necessary to negotiate these agreements; with good reason, governments do not want to give away all of their objectives. Second, looking at other trade agreements that have been signed in recent years, most trade observers have a pretty good sense of what will be in the TPP. Thus, much more is known than the critics let on. Finally, it seems likely that secrecy is not the critics’ real concern. If this agreement secretly said something they liked, we probably would not be hearing these objections. It is the substance of trade agreements that is the real issue here.
With the end supposedly in sight, it is time then for a debate about substance: What do we think of the rules that will be in this agreement? Unfortunately, the answer is not always a simple “pro” or “con.” Views on trade agreements may vary depending on the particular aspect of the agreement. Let’s take a look at the likely subjects to be covered.
The traditional core of trade agreements is made up of efforts to rein in protectionism. The most long-standing trade protectionism issue is import tariffs on goods. These tariffs have come down a lot in recent years, but they still exist, and the tariff peaks on certain products can be quite high. Lowering these tariffs will provide significant benefits to consumers and a boost to the economies of all the countries involved.
Beyond tariffs on goods, liberalization of trade in services will be an important part of the TPP. Services liberalization is much more complicated than free trade in goods, but provides enormous opportunities to open up industries long sheltered from foreign competitors. Some examples of possibilities here include: health care, education, legal services, and insurance. As with lower tariffs, more foreign competition in these sectors would be of great value to consumers.
Another area of liberalization is in government procurement. There is a long history of governments using discrimination in procurement to favor domestic entities over their foreign competitors. Buy America laws are a well known example. Discrimination of this sort is no better than traditional tariff discrimination. It leads to governments (i.e., taxpayers) spending far more than they otherwise would, by keeping out foreign competition. And it leads to our trading partners taking similar actions in response, which reduces our own exports.
These three areas of trade liberalization are at the core of free trade. Their benefits are well understood, and without them, there would be no reason to hold the trade talks. The only real question here is how far we can push the sometimes delicate effort to open industries to foreign competition.
That brings us to a number of very contentious issues which affect trade or economic relations, but are not about free trade as it is traditionally understood:
- Strong intellectual property protection rules, such as for patents and copyrights, have been part of trade agreements for many years now;
- Provisions on international investment have granted foreign investors the right to sue governments directly in international tribunals, on the basis of broad and vague obligations such as “fair and equitable treatment”; and
- Many trade agreements include rules on labor and environment that require enforcement of domestic laws and incorporate international legal standards.
All of these issues are worth discussing. To what extent should international trade agreements establish “global governance” rules on these issues? Are the specific rules being proposed the right ones? What impact do they have on the U.S. and other TPP countries? So far, this issue has mostly been ignored in the public debate. In the coming months, this needs to be the focus.
Most of what is going on in the TPP is not secret, so let’s not get hung up too much on transparency issues. Instead, critics and supporters should talk about the substance.
To take one example, under the TPP, copyright terms for individuals would go from life of the author plus 50 years to life of the author plus 70 years. This is not secret. Each side should weigh in on this. For Elizabeth Warren and other trade critics, a simple question would be: Do you think that the current U.S. copyright term of life of the author plus 70 years should be extended to our trading partners through the TPP? Supporters of such a term should also weigh in: Why is the current term some of our trading partners use — life of the author plus 50 years — not enough? This issue is a straightforward one to start the debate with; there are many others that should follow.
To some extent, allegations of “secrecy” seem like a screen to hide behind in order to avoid the substance. The substantive debate is definitely harder to flesh out and make interesting for the public. But the substance is what the agreement will actually do, and it is what we should be discussing.