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Secretive trade talks aren’t in the public interest

by Michael Sutton

Special To The Japan Times

Both Japan and Australia need to inform the public as to what deal may or may not have been reached secretly during the current trade negotiations. These talks, if successful, would result in an economic partnership agreement (EPA) between the two countries.

A secretive trade negotiation between democracies that results in unpleasant surprises is poor diplomacy and bad regional politics.

On April 8, The Japan Times published a an April 7 Kyodo article titled “Japan, Australia achieve FTA breakthrough on farm products,” describing a “breakthrough” in negotiations between Japan and Australia. This “breakthrough” cited Japanese government sources suggesting Japan would agree to maintain high tariffs on sensitive agricultural goods but permit an increase in the quantity of agricultural produce from Australia in those areas using a quota system. Rice would be excluded from the deal.

If accurate, this deal would be far less than ideal for both countries. For Japanese farmers, it would be an unacceptable compromise. For Australia, the exclusion of rice would herald the end of Australia’s long-term commitment to free trade and a betrayal of agricultural exporters.

Australia’s Department of Foreign Affairs and Trade on April 15 informed me that DFAT cannot comment on speculation in Japanese newspapers, beyond to say that the reports are inaccurate and that negotiations are continuing. Japan’s Ministry of Agriculture on April 22 refused to comment. These two ministries have fought valiantly for every inch of territory in agriculture since the 1980s. Their quick, polite responses made me more suspicious. Kyodo did not retract the story.

Trade negotiations are secretive for obvious reasons: Nothing would ever get done otherwise, but more importantly, ordinary people would know too much for their own good. From time to time, opportunities present themselves in negotiations that may give both sides the chance for genuine compromise. Secrecy enables negotiators to ask questions they could never ask publicly or suggest possibilities openly that in public can only be whispered.

The very reason for the success of secret negotiations is their greatest weakness. Negotiators are not in a position to concede anything. For a secret pact to be made, someone outside the room needs to know and give their approval. But once this privileged information is floating outside the room, who has the right to know and who must not be told? Who is told and who isn’t tells us a lot about the kind of democracy we live in.

Negotiators must gain the approval of their political masters and the public. A good secret deal that is politically untenable can be worse than doing nothing. There has been very little public discussion of the Australia-Japan Economic Partnership agreement or other bilateral trade negotiations. There is a reason for this.

A concerned citizenry is the kiss of death for many trade negotiations. Japan and Australia are negotiating bilaterally because of the successful criticism of multilateral trade negotiations in the late 1990s. The shift to the free trade agreement occurred at the same time representing a strategic retreat as a result of the enormous public outcries during the Uruguay Round of trade negotiations (1986-1994) and up until the end of the century.

The Uruguay Round highlighted the perils of secretive negotiations. Agriculture was an essential part of the final treaty but this was strongly resisted by countries vulnerable to cheaper agricultural imports such as Japan. The end of the Uruguay Round and creation of the World Trade Organization in 1995 was hailed by some as a victory of free trade. It was not. Key constituencies adversely affected by free trade did not forget what was widely viewed as a betrayal.

Some in government felt that making deals without consultation was acceptable behavior. It was not. Sadly, there arose a basic lack of trust in the WTO due to the abrogation of accountability and political integrity within many governments. Protests spilled onto the streets of Seattle in 1999 against plans to start a new global trade negotiation under the auspices of the WTO.

Governments with a love for secrecy had a new problem and this was an interested, informed, politically minded, mobilized, active citizenry.

So what did governments do?

The answer was simple: an economically irrational and discredited trade scheme was revised, reconfigured and reworked, and this became the bilateral free trade agreements or the economic partnership agreement. It was designed to accomplish what could not be done in the WTO. It would take longer and be more complicated but governments could negotiate secretly without those troublesome civil society groups causing a fuss. The more FTA negotiations the better; even the well-equipped nongovernmental organization would not have enough people to keep an eye on everything.

The benefit of this scheme was that the fury of civil society could be extinguished as long as governments focused on smaller, less visible, less important trade negotiations. They could offer lucrative trade access to any country they chose for the right price. Of course, one of the costs was public scrutiny.

Public interest virtually disappeared. It has been on holidays until U.S. President Barack Obama revived the long-discredited proposal now known as the Trans-Pacific Partnership.

Despite the disappointments of the past, it is not yet the time to depart from the WTO. Instead of negotiating a bad deal on agriculture between two developed countries — behind closed doors — why not return to the WTO and negotiate there, promoting a transparent trade deal where all economies can benefit? Provided there is genuine accountability in government and integrity in political leadership, it would not be difficult for governments to win over interested and concerned parties and most importantly, the public.

Michael Sutton, Ph.D., is a research fellow at the WTO Research Center in Tokyo.

  • Stack Jones

    Sutton, as usual at the Japan Times is an interested party chiming in on what is best for the nation of Japan, and its strong ally Australia. Translated into English, what he really means is what is best for the U.S., and their partners in crime the IMF, and the World Bank.

    What has the WTO done for the world except bring poverty, privatization, and monopoly of foreign assets? Hasn’t the world learned anything from Argentina, Brazil, Ecuador, and the banking debacle?

    Nothing good has ever come from the WTO. Just ask the 270,000 Indian farmers that committed suicide after being “Roundup” and “ready” for Monsanto patents.

    India went from the number one exporter of seeds and pulses to the number one importer.

    Wake up!