By Andrew Chen
“You don’t go into a poker game with your cards laid out on the table.”
– National MP Chris Bishop (at the AUSA politics week debate, 14 August 2015)
Apart from the obvious issue of comparing trade negotiations with gambling, this response creates an interesting train of thought. The proponents of the TPP have long argued that “international trade agreements are always negotiated in secret”, as if tradition can never be challenged. They argue that this is because negotiators cannot do their jobs effectively if their every move is questioned by the public. They argue that negotiators cannot achieve the best outcome for their respective countries if they reveal too much information. Maybe two months ago I would have agreed with them, but over the last few weeks I thought a little bit more about why those arguments might not hold up.
There are two key flaws with these arguments that rely on traditional models of negotiation. Firstly, international trade negotiations are a vastly different beast to confidential business-to-business negotiations, because so much information is available in the public domain about each of the parties. It is no secret that New Zealand wants better access to sell dairy in currently highly tariffed or subsidised markets. It is no secret that the United States wants to extend intellectual property protection on medical drugs in order to better incentivise pharmaceutical development. It is no secret that Vietnam and Malaysia want to keep their state-owned businesses that provide lower cost services to the majority of their populations.
These negotiation positions and bottom lines are known because we have a multitude of data with which to understand the background and context of each country. Each party to the negotiations is a government that debates in their respective houses publicly about the trials and tribulations facing their countries almost every day. It’s difficult to see how any of the parties to the negotiations could have secret bargaining positions that are unknown to the others. At a broad level, everyone knows what everyone else wants. Everyone knows what the overall goals of each state are, and everyone knows what the bottom lines of each state are. There may be some details left to quibble over, but what a state is willing or not willing to give up is largely known, and therefore not worth trying to keeping secret from the other negotiators. The lack of commonality between the bargaining positions is probably what is causing the negotiations to endlessly go on (they were started in 2009), which leads us to the next point.
The second key flaw is the assumption that there is something to be won over the other parties. When there are so many people in involved, and so many eyes scrutinising any deal, any party is going to know if they’re getting shafted pretty quickly. In traditional models of negotiation, the goal is often to come away with an agreement that is a win for you, even if that means less of a win or a loss for the other party. You can rely on underhanded tactics, from psychological manipulation to lying in order to convince the other party to take a deal that is in your interests and probably not really in theirs.
These tactics are much less likely to work when entire countries are involved. A government that agrees to and signs a deal that is detrimental to their country is likely to get hit with a referendum or voted out, and the legislation required to ratify any agreement would be not passed or later repealed. Government and trade negotiators know this – they have to push very hard not to lose in these negotiations. So there are two endgames here. One is that we follow the traditional model, and everyone pushes for their self-interest in order to “win”. If we follow that strategy, then perhaps withholding information to create an asymmetric situation to hold power makes sense. But with twelve rather diverse parties, it seems increasingly likely that this means that there are areas with no common ground, making it difficult for all parties to win.
The other endgame is that everyone pushes for compromise, in order to achieve the best deal for all parties involved. This utilitarianistic thinking would mean that some parties (probably the bigger ones) take more of a hit than others, in order to create an even and fair agreement that benefits everyone a little bit, rather than benefitting a few parties a lot. This is ultimately what should really be happening if the parties want to be able to pass a deal, because they know that a deal passed with all parties involved is much stronger than a deal passed with only half the parties on board. To do this, the parties have to co-operate, much like an anti-competitive cartel. The parties have to trust each other, and work together to find the solution that optimises towards a good deal for everyone. In this case, it doesn’t actually make sense for negotiators to withhold information from each other, because it makes it harder to achieve that optimal deal if they don’t know what each party wants.
Lastly, there’s one more important point to bring up. It is argued that if the trade agreement is not negotiated in secret, if the public is able to follow the negotiations, then the deal will fall apart. This can be argued ideologically, but to see if this stands up we only have to look at the reality. The fact that chapters of the draft agreement have been leaked has already at least partially compromised the secrecy of the agreement. The fact that the public is talking about the agreement, and that there are rallies and protests in the various countries, means that the secrecy surrounding the agreement has not been effective at preventing the public from scrutinising the deal and challenging their governments. Most importantly, despite the failure to keep the TPP out of public discussion, the negotiations have gone on undeterred. The main asserted harm of losing the secrecy of the negotiations has not eventuated.
I am not necessarily opposed to there being a trade agreement. I am not necessarily opposed to free trade, and like many TPP supporters, I will withhold judgement on the actual deal until we have seen it. But the secrecy surrounding the deal is something that I have issue with, and I am yet to read or see a good reason why that secrecy should continue. If the benefits of secrecy have not accrued, then what is the real reason for keeping the negotiations secret?