Last chance for a pro-transparency trade legacy for Obama

As the presidential campaign heats up, President Obama continues to press forward with his policy agenda.  High on his remaining “to do” list is his trade agenda.  With less than a year left in office, President Obama continues to urge Congress to approve the landmark Trans-Pacific Partnership (TPP) while pressing forward on an ambitious trade deal with Europe, the Transatlantic Trade Partnership (TTIP). For the moment, according to Speaker Paul Ryan (R-Wis.), it appears the votes aren’t there for TPP approval. Central to the challenge is a problem of the administration’s own making.

Largely due to the secrecy of the negotiation process, the TPP long bred suspicion. When its terms finally became public last fall, opposition to the process quickly hardened into opposition to the agreement’s terms – which both Democrats and Republicans say need improvement before it can be passed. The text has been 10 years in the making, but only recently did the public get access to its terms. Since multiple leaks made most of the negotiated terms an open secret, why did the Administration wait so long to formally disclose the text?

As former members of the administration claiming to be “the most transparent in history,” we can offer a few guesses. Trade negotiations differ in important ways from regulation and legislation.  Trade negotiations are more like chess – if negotiators on the other side knows your moves in advance, they can gain an advantage, particularly if they can also figure out how to lobby your opening moves.  Disclosing positions can make it harder to change them.

While we appreciate these challenges, we are deeply concerned that the secretive and outdated process by which the Office of the U.S. Trade Representative (USTR) develops trade policy is broken. Without fixing it, the same problems with legitimacy that have stymied progress on TPP are likely to also bedevil the TTIP, currently being negotiated. Here’s why:

Quality suffers when there is no free and open debate. Some issues raise complex policy questions that are best addressed though more open policymaking processes.  When this does not occur, tensions can emerge between trade policy and other Administration priorities.  For example, early in the process, USTR negotiators sought 12 years of “data exclusivity” for pharmaceutical drugs during TPP negotiations. But Obama’s domestic budget proposals called for shrinking the term to seven years, to increase access and save taxpayer dollars by making lower-cost generic drugs available earlier.  Pushing for longer periods of exclusivity internationally than the Administration sought domestically also created tension with the Administration’s global health priorities.  When the text was finally revealed, and data exclusivity minima were set to as few as five to eight years, the pharmaceutical industry complained that the term was too short and objected to the agreement on this term. The fact that no one is happy highlights that these issues involve complex tradeoffs best juggled though an open and deliberative process, rather than in secret. While trade negotiators feel they must assure their negotiating counterparts that Congress will not gut hard-fought compromises, holding proceedings in secret to avoid upsetting the deal puts determining what is best in too few hands. 

“Exporting U.S. law” is hard and can lead to unintended consequences.  Negotiators often argue that they are not policymakers, but rather that they are seeking to reflect existing U.S. law.  But exporting U.S. law is fraught with problems. Such efforts can lock the U.S. into positions that we may want to eventually unwind. Congress is preparing to overhaul copyright law, for example, and enshrining current laws could tie its hands. In fast-evolving parts of the economy like the Internet, if the companies of today are the only ones at the table, there is a good chance that the companies of tomorrow will be shut out when terms favorable to incumbents are hard-wired. Moreover, it is not always easy to articulate what U.S. law is. In many domains, U.S. law involves a complicated patchwork of legislation, regulation, and judicially-made case law that is not easily reduced to writing.

Trade policy should reflect our democratic ideals. The secrecy of the TPP text means that there is no accountability to the public, a basic tenet of a democratic society. Even worse, because certain cleared advisors have access and others do not, the final text favors those in the know, in reality or at least in perception. Ironically, even some of these privileged few “cleared advisors” and members of Congress who have some access agree that the system does not work optimally. Even assuming trade texts reflects the best possible deal, secretive processes vitiate their legitimacy, and leave a majority stakeholders feeling shut out of the process.

Fortunately, President Obama has one last chance to get trade transparency right:  he can use the Transatlantic Trade and Investment Partnership, the deal that seeks to optimize our trade policy with Europe, to take a fresh approach to more openness in trade policy development. Here we have only Europe, not 11 counter-parties, and Europe has committed to making text available on limited terms. 

This means that the Europeans can frame the debate in terms favorable to them but contrary to the interests of Americans.  If the U.S. waits too long to share the work in progress, we will not have a chance to defend our positions. Like TPP, TTIP involves challenging topics like intellectual property for which public vetting and input by multiple stakeholders are necessary to determine the right balance.     

In these ways, TTIP offers a golden opportunity to USTR negotiators in which the costs associated disclosing key textual provisions would be low, while to the costs associated with not doing so are high. Longer term, this heightened transparency would set an important precedent, paving the way for a new era of global lawmaking and enhanced public trust.

While they are at it, USTR could give real power and teeth to the new Chief Transparency Officer within USTR. And should convene the Public Interest Trade Advisory Committee  and the Trade Enhancing Access to Medicines interagency group, and appoint more public interest voices on the Industry Trade Advisory Committees relating to intellectual property and pharmaceuticals.

In opening TTIP text, Obama would take a valuable first step in boosting both his trade legacy and his open government legacy, while paving the way for a more democratic model of trade engagement for generations to come.

Chien and Palfrey are former senior advisers to the White House Office of Science and Technology Policy. Chien is an associate professor at Santa Clara University School of Law.