Why Secrecy in Trade (and Other) Diplomacy is Necessary and Not So Evil


The passage in the US Congress of legislation extending Trade Promotion Authority (TPA), also known since the 1970s as Fast Track, is a significant accomplishment, in that it permits the President and executive branch to make US trade policy in the national interest and to engage in diplomacy designed to achieve US trade policy objectives.  Since Congress first enacted the Reciprocal Trade Agreements Act of 1934, which delegated trade liberalization negotiating authority to the President, successive presidents have been able to steer the United States on a path of trade liberalization that has resulted in huge gains in wealth both for the US economy and for those of US trading partners.  Critical to liberalizing trade was the diplomatic authority granted to the President to negotiate trade agreements with US trading partners that Congress would then ratify.  Fast Track (now TPA), enacted as part of the 1974 Trade Act, facilitated the process of trade diplomacy for an era of much more complex trade agreements by permitting the executive to negotiate a trade agreement and submit it to Congress for an up-or-down vote without possibility of amendment.  As every amendment to a trade agreement made by members of Congress requires acceptance also by the other signatory countries, Congressional amendments to intricately negotiated multilateral trade accords would make it virtually impossible to reach such bargains in future.

As a quid pro quo for granting trade negotiating authority to the President, Congress only enacts Fast Track for fixed periods of time.  This helps to ensure that presidents present and future pay sufficient heed to the interests of members of the House and Senate as they negotiate trade agreements.  TPA has expired without immediate renewal on multiple occasions, most recently in 2007.  Lack of negotiating authority for the President reduces the seriousness with which US trading partners take trade negotiations with the United States.  Hence the restoration of TPA in 2015 was an essential prerequisite for President Obama’s US Trade Representative Michael Froman and his team to attempt to conclude the negotiation of two major ‘super-regional’ trade agreements, the Trans-Pacific Partnership (TPP) with eleven nations in Asia, Oceania and the Americas, and the Transatlantic Trade and Investment Partnership (TTIP) with the European Union.  The Congressional struggle to renew Fast Track this time was one of the most difficult since the legislation was first enacted and the margin of passage dispiritingly slim.  It presages a similarly hard battle for the Obama administration (or its successor) to win passage of TPP and TTIP once negotiations are concluded.  One particular source of opposition to TPA this year came from interest groups complaining that the negotiating positions, offers and counter-offers of US trade negotiators negotiating TPP and TTIP were not made public throughout the process, thus depriving affected interests of the opportunity to comment and to lobby the negotiators in real time.  Critics have noted that the European Union, for example, publishes detailed summaries of their negotiating objectives for each sector addressed in the potential agreement.  This line of public criticism of trade diplomacy is not going to disappear now that TPA has been restored.  It could well increase as the TPP and TTIP negotiations ramp up and approach a conclusion.  Hence at this stage these arguments demand a response, as they raise a more fundamental issue concerning the importance of ‘secrecy’ or confidentiality in trade negotiations and indeed in diplomatic negotiations generally.

To begin, the Obama administration has made public more information about ongoing trade negotiations in real time than any of its predecessors.  For example, for the first time in trade negotiations, members of Congress may view ongoing US negotiating positions at a secure site designed to ensure that they remain confidential.  As much transparency as is practicable in diplomatic negotiations is a good thing: witness the ill consequences of the Ribbentrop-Molotov Pact.  There should be no reason that the US should not publish detailed summaries of negotiating objectives by sector as the EU does.  But the history of trade negotiations, as with the broader history of diplomatic negotiation, has shown that ‘secrecy’ is crucial during the actual horse trading phase necessary to reach complex deals, particularly deals involving tradeoffs in a multilateral setting.  It was the reason for creating Fast Track in the first place.  This is something that Wikileaks and their supporters, some of whom are genuinely well intentioned, just do not grasp.  History is littered with failed trade deals and the negative economic and security consequences that have flowed therefrom.  Such negotiating failures resulted from leaks to the public and rumours, which led to legislators being pressed by constituents to oppose their own government’s leadership on trade before a final deal could be done.  Anglo-Japanese negotiations in the 1880s and 90s, and Anglo-French talks in the 1870s and 80s, are particularly notorious examples.

The industry sector advisory system devised in the 1974 Trade Act was a particularly clever way to address the problem of facilitating constituent input without derailing negotiations.  The Act created Industry Sector Advisory Committees (ISACs) to meet with officials in the Office of the US Trade Representative regularly to communicate each industry’s positions with respect to trade issues under negotiation.  Critics of the existing system have proposed that civil society representatives – trade unions, environmental advocacy groups, for example – participate more widely in these committees.  This seems a reasonable request, as long as the committees remain integrated by industrial sector.  Establishing civil society actors in the process independently would effectively re-create domestic politics within already challenging multilateral negotiations.  The US executive can only carry out their foreign policy mandate effectively if they are shielded from the minutia of domestic political battles between competing interests.  Another proposal made by critics is for negotiators to share with the public the economic models that they use in evaluating the impact of offers made in trade negotiations.  The difficulty with sharing these economic models is that trade negotiators have to balance the findings of the models with their political judgements of the impact of a trade deal on security and other national interest considerations.  That makes for a political-economic model that is very difficult to quantify and even harder to articulate quantitatively to the public.

As with all diplomacy, ultimately some interests have to be sacrificed for others.  Diplomatic agreements are the product of many interlocking tradeoffs.  To allow Congress or the public to sign off on each potential tradeoff as it is negotiated is the best way to ensure that an overall agreement can never be reached.  Once a trade agreement such as TPP or TTIP is negotiated, the job of members of Congress then is to use their judgement to evaluate the overall agreement, weighing its impact upon competing interests, both within their districts and in consideration of the national interest, and to cast a vote accordingly, under Fast Track in the case of trade deals.  Ultimately, that perceptions of secrecy in trade and other diplomatic negotiations have become so problematic with the public is illustrative of how almost all diplomacy has now become ‘public diplomacy’.  Public expectations that they be kept informed and granted input at all stages of a negotiation, aggravated by organizations such as Wikileaks, has made the work of professional diplomats much more difficult.  Helping the public to understand that they are likely to obtain more of their overall objectives if they are willing to allow diplomats to put a deal together, and then delegate to their elected representatives the responsibility of reviewing and passing judgement upon a final agreement, is time well spent.