One aspect of the Trans-Pacific Partnership (TPP) that has come under criticism is the lack of transparency in the negotiating process. Could a more transparent model be used for these kinds of negotiations?
In other areas of official decision-making, recent decades have seen a big shift towards greater transparency. Monetary policy provides an example. The closed-door confidential model of decision-making was universal best-practice until the early 1990s. Policy was set without prior public discussion and then implemented without press release or comment. This was not just for bureaucratic convenience; it was often justified in terms of efficiency.
How things have changed! Now the essence of good policy-making is transparency: an explicit decision model and frequent communication with the public.
In Australia, hardly a week goes by without a senior RBA official discoursing on some aspect of monetary policy. The US Federal Reserve is exerting itself mightily to make sure that everyone understands how it is thinking about the unwinding of quantitative easing. The Bank of England has experimented with 'forward guidance': telling the public its current thinking about its future actions. This flood of information is now regarded as 'best practice' for central bankers everywhere.
How curious, then, that nothing substantive can be said publicly about the TPP until the negotiation is over, when the only choice for the Australian parliament will be to accept or reject the treaty. [fold]
No one is suggesting that the actual negotiations should be open to the public, any more than a RBA policy-setting meeting should take place in public. But what central bankers have attempted to do, with their copious speeches and publications, is to tell the public what their decision-making criteria are. When they decide, they make sure everyone is told at exactly the same time (no one has an information advantage). Shortly afterwards, the minutes of the decision process are released so that the public can confirm that the decision conforms to the framework.
Or take the Productivity Commission. When an inquiry begins, submissions are invited and public hearings are held. In recent months, we've had the Murray inquiry into the financial sector and the Harper review of competition. Both not only had submissions, but also produced a preliminary report indicating what the committee had in mind, open for further public comment.
Contrast this with the TPP. The public framework is bland generalities. If bargaining trade-offs are necessary, we have no sense of the priorities which will guide our negotiators. What horse-trading between the big treaty-partners (say, a special deal between Japan and America to encourage Japan to sign up) would cause our negotiators to get up from the table and leave?
Just as disquieting, we are told that there have been frequent consultations with various domestic interest-groups. This would be like the RBA consulting privately with a few favoured players in financial markets, seeking their input into the decision.
Does the fact that the TPP is a negotiating process prevent transparency? Transparency has more pluses than minuses: our negotiators would come to the table backed up by public opinion. A vigorous public debate in Australia might remind the major players that rules on intellectual property should foster innovation and competition, not simply benefit yesterday's inventors. Debating the industry-state dispute settlement process might show strong resistance to giving foreigners a special right to override Australia's legislative intent.
A transparent process might help to ensure that the rules balance the interests of all parties rather than just benefiting America. When President Obama says 'If we don't write the rules, China will', who does the 'we' include? Will the rules favour creditor countries against net borrowers like Australia? Will they favour IP owners against IP users, like Australia?
The TPP process is too far advanced for such changes. If the US Congress allows it to go ahead, we will sign up. But we might hope for a more transparent process next time.
Photo courtesy of Flickr user Council of Canadians