’If the US can offer TPP transparency, so can we’
ABC | 13 Jul 2015
If the US can offer TPP transparency, so can we
OPINION
By Kate Carnell
After stakeholders in the US were allowed to view the Trans-Pacific Partnership negotiating text, Australia should follow suit. If our businesses can have meaningful input then it is far more likely the deal will be a success, writes Kate Carnell.
On Thursday businesses and other stakeholders in the United States were reportedly given the green light to view the Trans-Pacific Partnership negotiating text.
Rumours of the content of the TPP abound, but this process, overseen by the US Trade Representative, gives stakeholders a chance to see the text and give feedback to their country’s negotiators. It’s a standard process in the United States, and one that Australia should consider emulating.
Demands for greater transparency are common in public discussion of trade agreements. Usually the calls involve an appeal to principles - that citizens have a right to know what their governments are negotiating on their behalf.
That argument may be correct, but there’s another major objection to opaque trade deals - it means businesses end up with deals they cannot easily use. The practical benefits of transparency mean we must improve the way our trade negotiators engage with the business community, the group whose embrace or rejection of a trade deal is fundamental to its success.
Too many trade deals have failed to live up to the hype. The improved prosperity many of these deals purport to bring is only achieved if exporters actually take up the opportunities created. If businesses find these deals too complex, too inconsistent with other arrangements or too prescriptive, their enthusiasm for new markets will be greatly tempered.
The latest annual trade survey conducted by the Australian Chamber of Commerce and Industry reveals the extent of the problem. The 227 businesses surveyed identified "complexity of rules and red tape for international trade" as their third biggest trade issue (behind overall competitiveness and a high exchange rate). Asked about 10 trade deals to which Australia is a party, the most common response was "I don’t understand it at all and don’t use it". Clearly there’s room for improvement.
The Department of Foreign Affairs and Trade recently stated that it had engaged in more than 1000 stakeholder briefings and consultations on the TPP between May 2011 and mid-2015. This was surprising for the many people in the business community who feel shut out of the process. Even if the quantity of stakeholders consulted is correct, the lack of detail on the proposed text would make it difficult for them to offer useful input.
The reluctance to undertake genuine consultation was reinforced last week when it became clear that a Productivity Commission review of intellectual property, which could include the principles underpinning IP in trade deals, would likely not report until after a deal is struck on the TPP. This timing flies in the face of the recommendation by the Ian Harper-led Competition Policy Review that "such an analysis should be undertaken and published before negotiations are concluded".
We believe Australia needs to set in place a formal mechanism to ensure the business community has meaningful input into our trade negotiating position.
The United States provides an interesting model that Australia should consider. The US Trade Representative, which oversees the country’s trade negotiations, has 28 advisory committees, with a total membership of about 700 "citizen advisors" - mostly businesses and unions. The advisory committees, established in 1974, each specialise in an aspect of trade, including agriculture, labour and the environment. The Trade Representative’s Office of Intergovernmental Affairs and Engagement "frequently speaks with outside groups in order to build support for a robust trade agenda", it says on its website.
The outcome of this process is that the US negotiating position is configured in such a way that its export businesses are more likely to utilise the opportunities created.
Of course it is essential that there is some level of protection around draft texts, so that negotiators can speak their mind more freely. To achieve this discretion, it is fair and reasonable that confidentiality agreements are in place for those stakeholders who are given access to draft texts. This sort of protection is in place under the US arrangements.
In the Australian context, what would more thorough consultation with businesses and business organisations reveal?
For starters, it will find that trade treaties often contain provisions that are unclear or vulnerable to being misunderstood. No one knows an industry better than a business operating in it, so it is unsurprising that our trade negotiators sometimes lacks awareness of the nuances of each sector covered by an agreement.
More thorough consultation will also find that businesses are frustrated at grappling with the regulatory divergence between some of the 1800 treaties to which Australia is a party. The divergences, which might relate to rules for country of origin, intellectual property or e-commerce, creates red tape and a need for work-around solutions. This problem can be reduced if we ensure that older bilateral treaties overlapped by subsequent regional treaties are either consolidated within a regional treaty or terminated where the benefits within the former treaty are bettered by the newer regional agreement.
The consultation will also find that many Australian businesses are concerned about the way trade agreements may create obligations on matters such as investment protections, local content provisions, government procurement and movement of people.
The free trade agreements Australia has recently signed with Japan, South Korea and China could have benefited from this more thorough consultation. It is important they are assessed for their national welfare benefits before they are ratified. A decade on from the signing of the Australia-US Free Trade Agreement, it is clear that deal could have achieved higher take-up from Australian businesses if they had a chance to influence proceedings.
Australia appears on the cusp of signing the TPP and the South-East Asia-focused Regional Comprehensive Economic Partnership. Before the negotiators reach for the flags and the chunky pens, they should take the time to ask their businesses whether the deals deliver the outcomes they are seeking. We need deals that support trade, not trophy cabinets.
Kate Carnell is the CEO of the Australian Chamber of Commerce and Industry
