Bloomberg: Conduct trade talks in the open
The following editorial appears on Bloomerg View:
Negotiators meeting this week to put the final touches on what would be the biggest free-trade deal in U.S. history must be wondering if their American hosts are helping or hurting the cause.
The talks concern the Trans-Pacific Partnership, a trade agreement linking several economies those of the United States, Japan, Malaysia, Vietnam and eight other Pacific Rim countries whose output exceeds $28 trillion. Along with an even bigger trade deal under way with the European Union, the TPP would create tens of thousands of new jobs in the U.S. and help spur growth in the global economy. Not incidentally, it could also provide a much-needed salve to a wounded White House.
But both pacts could founder for some of the same reasons President Barack Obama's health-care law is in trouble: the administration's penchant for secrecy and a reluctance to consult lawmakers. The president risks losing both deals unless members of Congress are allowed to help define their contents.
Michael Froman, the U.S. trade representative, calls this week's meeting in Salt Lake City "the endgame" for the TPP, which has been three years in the making. Yet even lawmakers who sit on committees with jurisdiction over trade complain about being in the dark. Some have been allowed to view portions of drafts of the text, but never the entire thing. The information blackout has led 151 Democrats and 30 Republicans to oppose giving Obama the fast-track authority he seeks to ratify the trade deals.
That's a problem. No major trade agreement has been clinched without fast-track legislation, which expired in 2007. It's a powerful tool that lets the president assure trading partners that what the U.S. has agreed to won't be undone by lawmakers who dislike some of the parts. Congress gets an up-or- down vote, but it doesn't get to amend the proposed treaty.
In return for giving up its prerogatives, however, Congress deserves to be clued in. It should play a role in refining the deal's components, which cover everything from pharmaceutical patents to new rules for the Internet. In short, fast-track authority must be earned. So far, Obama hasn't done that.
The lack of openness was apparent last week when Wikileaks released a draft of the TPP's intellectual property chapter, complete with the negotiating positions of all 12 countries. One surprise: The U.S. wants to give brand-name drugs more than 20 years of protection against generic competition, potentially raising the cost of treating HIV/AIDS, malaria and other diseases in low-income countries and alarming some public-health advocates.
The U.S. also wants the signatories to allow patents for surgical procedures, life forms and seeds, possibly raising the cost of food and health care in developing countries. And it wants to extend copyright terms to the life of the author plus 70 years (95 years for corporate-owned works).
The leak also revealed that the U.S. wants tougher legal measures so it can pursue hackers and others who violate digital copyrights. This was the goal of Hollywood's ill-considered pet legislation, the Stop Online Piracy Act, which was thankfully shelved last year.
The administration may cite the controversies such provisions would provoke as a reason for keeping them secret. Yet just because a deal creates tension among competing interests isn't a license to keep them uninformed. And the U.S. has invited more than 500 corporate advisers to help it negotiate a deal.
Corporations and trade groups, however, don't represent the broader interests of consumers, workers, environmentalists and, oh, yes, taxpayers. Theoretically at least, representing them is Congress's rightful role. Keeping it in the dark feeds the perception that the TPP is a special-interest free-for-all.
More trade is, in general, a good thing. It can lead to better-paying jobs and faster-growing economies. At the same time, free-trade deals can result in job losses and pay cuts among blue-collar workers.
Today's trade deals, moreover, aren't just about eliminating quotas and tariffs. Environmental regulations, food safety, public health and worker rights all get wrapped up in modern trade talks, which are as much about shaping global rules of competition as about prying open markets.
The TPP and the EU treaties will have more legitimacy, and the odds of Obama getting fast-track authority will grow, if more transparency leads to more debate. Voters and taxpayers shouldn't have to rely on leaks to find out what's in a trade treaty.