International Business Quarterly: Improving Trade Policy Consultations

March 13, 2017

Trade policy and trade agreements moved to center stage during last year’s election, and many of us who follow the subject welcome the attention. After all, trade affects all Americans as consumers, as well as a sizeable number of American workers and firms as producers.

Now that the campaign is over, the administration must formulate a trade agenda. Whether they seek an enhanced trade enforcement agenda, new agreements, or “better deals” on existing ones, America’s trade negotiators have plenty of work ahead. Their effectiveness will be tied to how well they understand the core economic interests and how they establish legitimacy in the eyes of the public for their policy choices.

Last month, we released a new report on this topic. We conducted interviews and roundtables with trade experts from government, civil society, and the private sector. We examined the consultation process from two angles: the role of cleared advisers, and officials’ engagement with the public.

Up the Hill Backwards

The cleared advisory system was established by the Trade Act of 1974 to allow U.S. trade negotiators access to information and input from the U.S. private sector. The process has since been expanded but not fundamentally altered. In general, we concluded that the advisory committee system can work well for its original intended purpose but is at risk of falling out of step with the real U.S. economy.

First, the system needs management attention. While the advisory system can sustain nearly a thousand cleared advisers, it has nowhere near that number. Representation is also very uneven: there are five committees covering agriculture but none for digital services, even though U.S. digital services exports now exceed agricultural exports in value.

Further, the advisory system has not adjusted to the diffusion of knowledge that has occurred within firms and industries over the past 40 years. While it might have been possible for one person to understand a company or sector in 1974, could a single person speak for the whole of operation of Alphabet, Microsoft, or Intel? Another vital source of expertise, academics, are only allowed to participate if they are designated to represent their institutions, which must be “trading in educational services.” Foreign-headquartered companies with U.S. investments are also not eligible, despite supporting millions of American jobs and possessing substantial technical expertise.

Finally, absent a strong chair and designated federal officer, advisory committees often don’t have enough to do to build trust with negotiators. The only statutory requirement of committees is a report on the operation and effects of a concluded trade agreement; consequently, it can be years between work products, a circumstance that fails to make effective use of the expertise gathered under their auspices. Building trust is key to effectiveness, since negotiators often need advice at the text level.

Wheels of Confusion

For decades, U.S. trade agreements have been negotiated in private and ratified in public. Trade negotiators need confidentiality for several reasons. First, it allows negotiators flexibility and creativity in dealing with their foreign counterparts. Second, confidentiality during negotiations facilitates more candid conversations between negotiators and the private sector: an industry might want 10 things out of a negotiation, but in confidence negotiators can learn which few are the core priorities. Third, opacity can prevent interest groups from putting undue pressure on the process.

However, the information and communications technology (ICT) revolution, and its impact on public expectations of transparency, has changed the negotiating environment. People expect greater disclosure, and from a technical standpoint, maintaining secrecy during a negotiation has become almost impossible. In such an environment leaks are more damaging as public access to partial information undermines trust. Our experts agreed that the best response to changes in the information environment is to use the new tools to expand public engagement.

This means more public engagement at the start of the negotiating process and ensuring that engagement takes place at much more frequent intervals. Officials should engage not only on intent to enter a negotiation, but on potential negotiating objectives—including proposed text, where appropriate—and empower third parties to contribute more to the substance and process of negotiations.

You Can’t Always Get What You Want

Better deals need better advice. Advisory committees should implement balanced membership requirements to ensure that technical experts, public interest groups, small businesses, and frontier industries are represented. Membership and work programs for committees should be realigned to reflect changes in who trades, what is traded, and how trade is managed.

Committees should meet more frequently to establish trust and routine and could publish useful products in addition to required reports on trade agreements. For example, these committees are well-positioned to draft annual reports on foreign trade barriers in their sectors.

Improving public engagement means better utilization of existing methods like notice and comment. New methods, like Internet-based crowdsourcing for feedback, or even model texts on key negotiation areas, could change the narrative on public participation in trade policy. The Office of the U.S. Trade Representative (USTR) could also coordinate with our negotiating partners to release consolidated text more often, and more predictably, after negotiating rounds.

Public engagement is not something to be simply endured; it is something that can improve both the quality and chance of success of trade agreements. Tapping into the expertise of millions of Americans can help generate new ideas, update priorities, and identify areas where engagement is most necessary. Besides this, there is the practical matter that without public support, and feedback, negotiators do not know if the deals they negotiate will be politically saleable.

Americans generally like trade and don’t like the government. Unsurprisingly, trade deals end up somewhere in between. Officials must take steps to restore public faith in trade negotiations. “Better” deals only affect the economy if they make it through the Congress.

International Business Quarterly is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2017 by the Center for Strategic and International Studies. All rights reserved.