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What’s at Stake in U.S.-EU Trade Negotiations?
As GW hosts the U.S. Trade Representative, Professor Susan Ariel Aaronson explains efforts to forge what could be the world’s largest free-trade agreement.
December 18, 2013
By Lauren Ingeno
European Union and United States negotiators gathered in Washington, D.C., this week for the third round of talks regarding the Transatlantic Trade and Investment Partnership (T-TIP), an agreement that could increase jobs and provide a significant boost to both the U.S. and EU economies.
Due to the confidential nature of trade information, negotiations have long been secretive. But in an effort to increase public participation and transparency, U.S. and EU policymakers have invited stakeholders to express their views during briefing sessions to accompany the closed-door T-TIP trade talks.
The George Washington University’s Institute for International Economic Policy hosted this round’s series of stakeholder briefings. Representatives from business, trade associations, NGOs, labor unions and environmental groups flocked to the Marvin Center on Wednesday to give presentations, hoping to spark a dialogue and potentially influence policy.
Susan Ariel Aaronson, an expert in international trade and a professor in the Elliott School of International Affairs, said she thinks these briefings are an important step in increasing public engagement, but policymakers must do more to build public trust and increase accountability.
“The dialogue can’t just be one way. There has to be more give and take between the broader public and negotiators,” Dr. Aaronson said during her presentation at the briefing session on Wednesday. “I’m not saying they should be totally transparent. But they should be more open.”
She suggested ways the Internet can be used to make trade negotiations more transparent, up to date and accountable.
Dr. Aaronson talked to George Washington Today about T-TIP, Wednesday’s stakeholder briefing sessions as well as changes coming to future trade policy negotiations.
Q: What are trade agreements?
A: They are agreements among two or more nations designed to encourage trade and do so by reducing trade barriers. From the 18th to 20th centuries, trade agreements "regulated" commercial policies such as tariffs, quotas and exchange controls. However, some agreements dealt with non-commercial issues, such as a ban on the importation of slaves in 1807 or bans on trade in seal fur.
In the 1970s, policymakers recognized that domestic policies (subsidies, health and safety regulations) could distort trade, and they began to include rules governing the use of such regulations. These rules simply said policymakers must apply these regulations and subsidies in ways that don't distort trade flows.
Q: What is the Transatlantic Trade and Investment Partnership?
A: The U.S. and EU are trying to negotiate a free trade and investment agreement among the 27 democracies of the EU and the U.S. It would be the most ambitious trade agreement among democracies ever, connecting millions of middle class consumers. According to the U.S. government, the negotiators aim to open markets, eliminate all tariffs on trade, tackle non-tariff barriers that impede the flow of goods and obtain improved market access on trade in services. Additionally, negotiators would like to develop new rules and principles on global issues, such as intellectual property, the free flow of information, and market-based disciplines addressing state-owned enterprises and discriminatory localization barriers to trade.
Policymakers in the U.S. and EU do not agree on all the topics to include. The U.S. wants free flow of information. The EU is OK with that but wants to maintain its stronger rules on privacy. The U.S. government does not want to include financial services regulation, because U.S. policymakers fear this will water down existing standards.
Q: How could the agreement benefit the United States?
A: It could create jobs and facilitate shared rules, creating an agreement that is a building block for other trade agreements. It could reduce business costs, because if the negotiations are successful and Congress approves the agreement, the U.S. and EU might find common ground on regulation or accept each other’s regulatory decisions. For example, drugs approved in the EU could be sold in the U.S. and vice versa.
Q: What are the concerns about T-TIP?
A: Some stakeholders are concerned that:
- E-commerce and free flow of information provisions will not respect privacy enough.
- EU standards could be lowered, which are higher than the U.S. for food safety, environment and worker rights.
- In times of tight budgets, the trade agreement could prod policymakers to privatize provisions of public services including health care and education.
- The agreement could give too much protection to intellectual property holders.
- Income inequality could be increased.
- The negotiations are secret and such important negotiations should be more open to public comment.
- The agreement would benefit corporations and not citizens.
Some of these criticisms may be correct. Others are exaggerations and may not prove true. But we don’t know because the negotiating text is secret.
Q: What will the negotiators be discussing during this third round of talks?
A: Negotiators will again focus on a broad range of issues, including freer trade in goods and services, making it easier to invest in each other's economies, opening up trade in energy and raw materials as well as market access, regulatory coherence and regulatory cooperation.
Q: What is the purpose of the stakeholder briefings?
A: Trade negotiations’ secrecy can build distrust among the public and insular thinking among negotiators. I believe the process must change. Interestingly, the new U.S. Trade Representative Michael Froman is trying to make some changes to how and when the public can influence the trade talks. He believes that negotiators should hear from representatives of the public during the negotiations, and that is the purpose of the stakeholder briefings, which have taken place during each round of T-TIP talks.
Unfortunately, the briefers only get 10 minutes to make their case, and negotiators are not required to attend the briefings, so there is no real accountability. Moreover, during any 10-minute period, there are four to five other speakers trying to influence the negotiations.
But these briefings are a small start in trying to create a different dialogue about trade and to create greater public involvement. I am optimistic, but I note that they do nothing to create greater accountability.
Q: In a world of instant communication and social media, how can governments develop public trust and increase public involvement without jeopardizing trade secrets?
A: Trade policymakers need to become more proactive and interactive online. They should view trade web sites not just as a dissemination device, but as a tool for civic participation. They ought to develop a web site that clearly delineates the objectives and status of negotiation for each chapter of proposed trade agreements. Moreover, they should seek input and clearly explain how officials will use this input. Trade officials could also experiment with strategies to incorporate public suggestions, for example, by using crowdsourcing to solve trade policy problems.
Trade policymakers could reap significant benefits by embracing a more transparent and accountable approach. First, average citizens are more likely to be enthusiastic about trade liberalization and be more able to resist overblown claims about the costs of freer trade. Secondly, policymakers may find it easier to engage the press and the public in these topics in a constructive manner. Finally, trade diplomats may benefit from unanticipated creative thinking by involving a broader swath of the interested public.