HOW THE US MAKES TRADE POLICY, GETS INPUT, AND HOW WE MIGHT IMPROVE THE PROCESS SUSAN ARIEL AARONSON GWU AND NATIONAL WAR COLLEGE “How” is as Important as “What”

The view from Main Street Many Americans think about trade as a producer or consumer. Don’t think about trade agreements from perspective of taxpayer, citizen, or friend of the earth who may benefit from a shared system of rules. See trade as job destroying, and can’t see its positive effects on job creation. May also confuse job loss from technological change with job loss from trade. Hence, people see trade liberalization as a threat to their economic welfare. 2

The Context in Which We Make Trade (2) By necessity trade negotiations are secretive—while everyone knows the subject of negotiations, they don’t know the specifics. Policymakers don’t talk about trade as a system of rules; still talk about trade as if it is mercantilism-- exports good, imports bad. These factors intertwine—and foster public confusion and antipathy. Little understanding of what trade agreements do. Lead to a perception the process and the results are not good for “little people” and are undemocratic 3

The Process of Making Trade Agreements In most countries the executive is in charge, not the legislature. But in the US, the authority for making trade policy is shared. Although the executive branch initiates and handles negotiations, Congress is supposed to tell the executive what to negotiate – what are the negotiation objective and priorities. But in the end, with White House input, executive branch negotiators determine the compromises. And they do so in secret. 4

Too many cooks? Some further bureaucratic weirdness 5 Trade is increasingly important Congress responsible for trade objectives. USTR negotiates trade agreements but does not own trade policy. At White House, NEC makes final decisions with input from NSC, CEA Other involved agencies… DOS, DOT, DOA, DOC, FDC ITC, DOC, DOA, DOS monitor trade policy

Does the public have opportunities to comment? Is the public truly heard on trade? The savvy public has plenty of opportunities to “comment”  Indirect – through Congress  Direct – Federal Register Notices seeking public comments.  Direct: USTR hearings on trade agreements  Direct – advisory committee hearings or being an adviser. But most citizens are not involved. 6

Who Has the Ear of the US Trade Representative Congress created an advisory body to USG in In 1974, denoted general advisory committee and sector-specific advisory committees. During Clinton, advisory committees on labor and environment. Committees to include views of local and state officials. 7

Today many advisory committees at USTR, DOC Overall- 28 advisory committees with over 700 advisors. USTR Advisory Committees include  Advisory Committee for Trade Policy and Negotiations (ACTPN)  Agricultural Policy Advisory Committee (APAC)  Agricultural Technical Advisory Committee for Trade (ATAC)  Industry Trade Advisory Committees (ITAC)  Intergovernmental Policy Advisory Committee (IGPAC)  Labor Advisory Committee (LAC)  Trade Advisory Committee on Africa (TACA)  Trade and Environment Policy Advisory Committee (TEPAC) Next tier includes 26 sectorial, technical and functional committees on products, sectors, customs, IPR. The Federal Advisory Committee Act of 1972 requires that committee members reflect the mix of the US population, different economic sectors, large and small business, and the diversity of civil society groups. 8

Do These People Give Good Advice? Advisors are often donors or influential individuals. Several court cases on diversifying advisory process. Advisory system is not designed to efficiently and decisively deal with fundamental concerns about the overall open market objectives of US trade policy. USG does not use advisory process to anticipate new concerns. Do not reflect trade agreement chapters or issues of concern (e.g. investor-state provisions and regulatory sovereignty, or privacy and free flow of information). 9

Findings US is open to public comment, yet public engagement is sporadic and limited. Actual negotiations are secret Such secrecy may build trust among negotiators, but… It engenders distrust among public. Policymakers should seek a way forward that maintains the secrecy essential to negotiations with actions that build public insight, involvement, and ultimately trust in the negotiations. Suggestions below. 10

Why is Trust important? Public may perceive policies negotiated in secret as inherently not in their interest. While public accepts indirect democracy, want informed consent. NSA revelations may increase public wariness of policies decided without significant public debate. 11

Goals: How to Involve More of the Public? Increase public involvement by broadening advisory process Change how policymakers talk about trade agreements Engage more often Describe the process as well as the output of negotiations. Do so without dramatically increasing staff time or costs in challenging budgetary environment. IN SO DOING, BUILD TRUST 12

RECOMMENDATIONS for all governments 1 Be honest about the turf of trade negotiations.  Trade agreements are no longer about border measures (e.g. tariffs and quotas)  About supply chains and common ground in regulations (regulatory coherence). Examples: Internet privacy, food and drug safety. 13

Recommendation 2 Expand the advisory process. Create new committees to fit FTA chapters (such as investment) as well as cross-cutting issues of public concern (privacy and free flow of information. 14

Recommendation 3 Create a web page showing how negotiations are conducted and clearly explaining the meaning of key terms in the negotiations 15

Recommendation 4 Make relevant agency web sites more interactive, encourage public comment and feedback, and ask for recommendations on key issues of concern. Show how such feedback will be utilized. (My views were asked for and heard!) 16

17 Thank you for listening. I look forward to your comments and questions.