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Shrinking Transparency in the NAFTA and RCEP Negotiations

DEEPLINKS BLOG
September 14, 2017

Provisions on digital trade are quietly being squared away in both of the two major trade negotiations currently underway—the North American Free Trade Agreement (NAFTA) renegotiation and the Regional Comprehensive Economic Partnership (RCEP) trade talks. But due to the worst-ever standards of transparency in both of these negotiations, we don’t know which provisions are on the table, which have been agreed, and which remain unresolved. The risk is that important and contentious digital issues—such as rules on copyright or software source code—might become bargaining chips in negotiation over broader economic issues including wages, manufacturing and dispute resolution, and that we would be none the wiser until after the deals have been done.

The danger of such bad compromises being made is especially acute because both of the deals are in trouble. Last month President Donald Trump targeted the NAFTA which includes Canada and Mexico, describing it in a tweet as "the worst trade deal ever made," which his administration "may have to terminate." At the conclusion of the 2nd round of talks held last week in Mexico, the prospects of agreement being concluded anytime soon seem unlikely. Even as a third round of talks is scheduled for Ottawa from September 23-27, 2017, concern about the agreement's future has prompted Mexico to step up efforts to boost commerce with Asia, South America and Europe.

The same is true of the RCEP agreement, which is being spearheaded by the 10 member ASEAN bloc and its 6 FTA partners, and which was expected to be concluded by the end of this year. The possibility of RCEP being ratified this year now seems unlikely as nations are far from agreement on key areas. Reports suggest however that the negotiators are targeting the e-commerce chapter as a priority area for early agreement. So far, the text specific to e-commerce has not been made publicly available and the leaked Terms of Reference for the Working Group on ecommerce (WGEC) is the only reference to what issues could make an appearance in the RCEP. We have previously reported that the e-commerce chapter was expected to be shorter and less detailed than the chapters on goods and services. However the secrecy of trade negotiations makes it very difficult to accurately track developments or policy objectives that are being pushed through or prioritized in the negotiations.

Trade Negotiations Are Becoming Less Open, Not More

Far from adopting the enhanced measures of transparency and openness that EFF demanded and that U.S. Trade Representative Lighthizer promised to deliver, the NAFTA renegotiation process seems to be walking back from the minimal level of transparency that civil society fought hard for during the Trans-Pacific Partnership Agreement (TPP) talks. So far, the NAFTA process has had no open stakeholder meetings at its rounds to date. EFF has written a joint letter to negotiators [PDF] that has been endorsed by groups including Access Now, Creative Commons, Derechos Digitales, and OpenMedia, demanding that it reinstate stakeholder meetings, as an initial step in opening up the negotiations to greater public scrutiny.

The openness of the RCEP negotiation process has also been degrading. At a public event held during the Auckland round, the Trade Minister from New Zealand and members of the Trade Negotiating Committee (TNC) fielded questions from stakeholders using social media and the event was live streamed. Organizers of earlier rounds of RCEP held in South Korea and Indonesia had facilitated formal and informal meetings between negotiators and civil society organisations (CSOs). But at recent rounds the opportunities for interaction between negotiators and stakeholders has dropped. The hosting nations have also been much more restrained with their engagement and outreach. For example, at the Hyderabad round there was no press conference or official statement released by the government representatives or chapter negotiators.

A Broader Retreat from Stakeholder Inclusion?

This worrying retreat from democracy in trade negotiations mirrors a broader softening of support by governments for public participation in policy development. From a high point about a decade ago, when governments embraced a so-called “multi-stakeholder model” as the foundation of bodies such as the Internet Governance Forum (IGF), several countries that were previous supporters of this model seem to be much cooler towards it now. Consider the Xiamen Declaration which was adopted by consensus at the 9th BRICS (Brazil, Russia, India, China, South Africa) summit in China this month. Unlike previous BRICS declarations which supported a multi-stakeholder approach, the Xiamen declaration stresses the importance of state sovereignty throughout the document.

This trend is not reserved to the BRICS bloc. Western governments, too, are excluding civil society voices from policy development, even while they experiment with methods for engaging directly with large corporations. In January this year, Denmark in recognition of technological issues becoming matters of foreign policy has appointed a "digitisation ambassador" to engage with tech companies such as Google and Facebook. This is a poor substitute for a fully inclusive, balanced and accountable process that would also include Internet users and other civil society stakeholders.

Given the complexity of trade negotiations and the fast-changing pace of the digital environment, negotiators are not always equipped to negotiate fair trade deals without the means of having a broader public discussion of the issues involved. In particular, including provisions related to the digital economy in trade agreements can result in a push to negotiate on issues before they can form an understanding of potential consequences. A wide and open consultative process, ensuring a more balanced view of the issues at stake, could help.

The intransigence of trade ministries such as the USTR to heed demands either from EFF or from Congress to become more open and transparent suggest that it may be a long while before we see such an inclusive, balanced, and accountable process evolving out of trade negotiations as they exist now. But other venues for discussing digital trade, such as the IGF and the OECD, do exist today and could be used rather than rushing into closed-door norm-setting. One advantage of preferring these more flexible, soft-law mechanisms for developing norms on Internet related issues is that they provide a venue for cooperation and policy coordination, without locking countries into a set of rules that may become outmoded as business models and technologies continue to evolve.

This is not the model that NAFTA or RCEP negotiators have chosen, preferring to open the door to corporate lobbyists while keeping civil society locked out. This week’s letter to the trade ministries of the United States, Canada, and Mexico calls them out on this and asks them to do better. If you are in the United States, you can also join the call for better transparency in trade negotiations by asking your representative to support the Promoting Transparency in Trade Act.

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