Democracy and transparency in trade agreements

Democracy and transparency in trade agreements

Overview: why democracy and transparency in trade matter to us all

Impact of trade policy on everday life

Post-Brexit, a major area of policy that will return to the UK is trade and investment. Modern trade and investment deals cover almost every aspect of everyday life: from healthcare to environmental and labour standards and international development. This makes them everybody’s business. Current processes for developing trade deals in the EU and the UK are highly secretive – not even politicians have full access to negotiating texts. This leads to badly designed deals that are not in the interest of people and planet. The UK’s arrangements for public and parliamentary engagement with and scrutiny of trade are woefully inadequate and need to be reformed before full Brexit occurs.

Examples of how trade impacts in these areas include:

  • UK trade relations with developing countries could have a significant impact on their ability to meet their SDG targets, for example if the UK insists on high levels of trade liberalisation that damage local industries.

  • Investment protection provisions within trade deals allow companies to sue governments for policy measures taken to support climate goals, for example Lone Pine are suing Canada for a ban on fracking in a sensitive environmental area.

In depth: lack of democracy and transparency leads to bad deals

There are no clear processes for democratic engagement

Given the broad scope of trade and investment policy and its implications for a range of other key policy areas, it is important that a range of stakeholders are able to engage in its development so that trade is made to work for everyone. It also means that it is crucial for parliamentarians to have the opportunity to scrutinise and influence the direction of trade policy.

Yet trade negotiations currently take place behind closed doors and UK arrangements provide little opportunity for public or parliamentary scrutiny. The texts that are released (currently by the EU) rarely give a clear picture of the implications for important policy areas. Meanwhile a select group of mostly multinational businesses and their lobbying representatives are given privileged access to the preparation of negotiations.

Recent examples of the democratic deficit in trade negotiations include:

  • A lack of access to negotiating texts by parliamentarians: MEPs and MPs alike had to fight for the establishment of ‘reading rooms’ which give limited access to some negotiating texts. These were only established several years after negotiations had begun.

  • The UK signed CETA without any parliamentary debate. When challenged by a Select Committee in October, Liam Fox promised a parliamentary debate but this only happened several months after the deal was already signed.

  • When the UK-Colombia Bilateral Investment Treaty was put forward for ratification, parliamentary whips only allowed for a debate in the Lords after the window for parliamentary action had already passed, there was no debate in the Commons and no vote in either House.

The UK government plans to transfer existing EU trade deals into UK law in the first instance. This could see the UK adopt EU trade deals designed with no public or parliamentary scrutiny. If ministers are then able to amend deals via statutory instruments, the new UK approach to trade could be locked in with no recourse to democratic processes.

Lack of democracy leads to poor trade policy and damaging outcomes for communities

Where only a limited number of perspectives are represented, trade policy will be skewed in their favour, often at the expense of other groups. Services chapters are a good example of this: agreements tend to assume progression towards increased privatisation and lock this in. This benefits companies seeking to run services for a profit but can lead to more limited services and higher costs for end users.

What is TJM calling for?

We believe that we need to fix this now:

  • Once article 50 is triggered, the UK will enter into immediate negotiations with the EU on its future relationship. Theresa May has signalled that a trade deal will be the main plank of this; it will inevitably set the tone for all future trade deals.

  • When the UK officially leaves the EU it can begin formal negotiations with other countries. 15 working groups with key country partners have already been established to start thrashing out the parameters of future trade deals.

  • Despite the major changes afoot, there has been no white paper from the government since 2011 and therefore nothing that sets out the Conservative (as opposed to the coalition) government’s approach. A trade bill is expected but may not be released until 2018.

  • MPs are currently being actively shut out of government thinking on the issue, for example with very little information released in response to parliamentary questions. Theresa May has also suggested that MPs will only be given access to ‘non-sensitive’ issues on the negotiations.

Because full responsibility for trade and investment will be returned to the UK, it is important that civil society and parliamentarians are able influence and scrutinise negotiations in order to ensure that future trade policy is aligned with the UK’s commitment to the Sustainable Development Goals, human rights, environmental protection and action to tackle climate change. Given the scale of the task in hand and the importance of trade to a range of other social and environmental goods, it will be crucial for a broad spectrum of stakeholders to participate in the development of the new UK trade policy.

To ensure effective public and parliamentary participation and scrutiny, the UK should establish a process which:

• Requires parliamentary approval of a negotiating positions before starting the process of formal negotiations with trade partners;

• Ensures full and meaningful public consultation, including public hearings, on proposed negotiations with civil society groups;

• Makes impact assessments and negotiating texts publicly available in a manner that allows for meaningful adjustments to be made, including halting negotiations;

• Requires full parliamentary debate and a vote on agreements before they come into force

Can you support our call for greater democratic scrutiny of trade processes?

We are keen to build broad support for these positions. Can your organisation join us?

Contact TJM for more info.