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  Félix Peña

INTERNATIONAL TRADE RELATIONS NEWSLETTER
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AN INCREASING DEMAND FOR TRANSPARENCY?
Information and negotiation technologies for preferential trade agreements

by Félix Peña
September 2010

English translation: Isabel Romero Carranza


 

There is a growing demand for greater transparency in the negotiations of preferential trade agreements. This demand is driven by the fact that the development of information technologies will enable access in real time to the information related to the negotiations of such agreements. The tendency towards secrecy and the strong reserve that characterized these negotiations for a long time is increasingly being perceived by those who may be affected by their results as something obsolete and of medieval times. The timely access to relevant information is considered today as a right of the citizenship and of its representative organizations.

Timely information is important in the negotiation of preferential trade agreements because it can have an impact on investment decisions, ways of life and modes of production, sources of labor and the quality of consumption and of the environment, as well as in the scope of action to devise and implement public policies referred to the economic development of a country or a group of countries. A preferential trade agreement generates costs and benefits throughout time and translates into ground rules that determine who will be the winners and the losers among and within the involved countries.

Additionally, the issue of transparency in the negotiation of preferential trade agreements has gained currency as a result of a recent report on the prospective free trade agreement between India and the European Union (EU). This is an issue that will be necessary to keep in mind in the case of the negotiations between Mercosur and the EU. Other precedent that points to the current relevance of this issue is the fact that the texts of the agreements finalized last May between the EU and Colombia, Peru and the Central American countries have yet to be published.


The development of information technologies is generating a growing demand for greater transparency in international trade negotiations and, most particularly, in those negotiations that result in different modalities of preferential trade agreements, especially those foreseen by article XXIV of the GATT.

The tendency towards secrecy or the strong reserve that characterized for a long time such negotiations is increasingly perceived by all those who may be affected by their results as something obsolete belonging to medieval times.

The reason for this is simple. Today it is technologically possible to have access in real time to the documentation and texts that feed and results of a negotiating process. Web pages have become a powerful instrument for the timely dissemination of relevant information. Those who negotiate preferential trade agreements have no more excuses left to keep the public uninformed about the corresponding information, whether a negotiation advances or is concluded. The reasons for not providing this information would need to be very strong indeed and, in any case, exceptional. At least this seems to be the expectation in many of the organizations of the civil society.

Additionally, the quality of a Web page has become one of the most widespread criteria currently used to evaluate the efficiency of all kinds of institutions - be it public or private - and which has the most impact on the image of businesses that offer their goods and services to the world. This is valid as well in the case of the Web pages of government offices responsible for the negotiation of preferential trade agreements and of the respective international institutional ambits.

For this reason, the access to information is increasingly being recognized as a right of the citizenship and of its organizations. This becomes relevant in the negotiation of preferential trade agreements because what is negotiated can have an impact on investment decisions, ways of life, modes of production, sources of labor, and on the quality of consumption and of the environment, as well as in the scope of action to devise and implement public policies for the economic development of a country or group of countries.

This is also so due to the fact that a preferential trade agreement, resulting from a concrete negotiation, generates costs and benefits throughout time and translates into ground rules that determine who become the winners and the losers among and within the involved countries. It may even have an impact on the shift of competitive advantages - for example because of its effects on the relative conditions for the access of goods and services of the involved markets - for businesses from other countries that are not participating in a preferential trade negotiation but that are members of the World Trade Organization (WTO).

The issue of transparency in the negotiation of a preferential trade agreement has gained currency as a result of a recent report - mentioned bellow - about an eventual free trade agreement between India and the European Union.

As is well known, since 2001 India and the European Union (EU) have been negotiating a Free Trade Agreement (for more information go to http://ec.europa.eu/). The objective would be to sign it promptly, possibly in 2011. Some substantial progress in the negotiations, even its conclusion, will expectedly be announced next December at a bilateral Summit. This will not be an easy task since there have been significant differences in relation to important issues, such as those related with intellectual property, sustainable development and the access to the EU for Indian workers, among others. (On the negotiations between India and the EU see the book by Khorama, Perdikis, Yeung and Kerr, mentioned as Recommended Reading in the May 2010 edition of this newsletter).

This constitutes a relevant trade negotiation due to the size of the two added markets (1,500 million inhabitants which represents one fifth of the world's population) and because of the prominence that both countries have in the global economy. This relevance is accentuated by the fact that India is increasingly being perceived as one of the great emerging economies, that together with Brazil, China and Russia form part of the much publicized BRIC group.

However, it has also become relevant due to the fact that they are being carried out at the same time as the negotiations between Mercosur and the EU (on these negotiations refer to the April, May, June and July editions of this newsletter). Even though they are being developed along separate trails, there are probably certain communicating vessels between both negotiating tables. Each will observe attentively - or at least it would be advisable that they did so - the contents that are intended to be included in both agreements and, in particular, how the most sensitive issues in terms of access to markets and the respective regulating frameworks are being dealt with. They will be particularly alert to any flexibilities that are achieved or that will need to be accepted. The instruments, through which these will materialize, especially those of variable geometry and multi speed, are becoming increasingly relevant for the legal engineering of the respective preferential agreement. The room for maneuver provided by WTO rules is broad and some precedents can be found in similar agreements, for example, in those that were also negotiated by the European Union.

Another issue exposed in a report by Corporate Europe Observatory (CEO, published at the beginning of this month, also deserves our attention (see the reference to this report in the Recommended Reading section at the end of this newsletter). It presents some interesting implications of the key issue reflected by the title "How big business is driving the EU-India free trade negotiations". Among these, the main concern is that referred to the transparency of the negotiating process. Or, more precisely, of what the report considers a lack of transparency. On this regard it mentions the preoccupation expressed by different organizations of the civil society -especially in Europe - regarding the fact that a negotiation that could have negative effects on Indian industry, employment and lifestyle, on the access to services and health care, and that could swipe valuable instruments for the country's development and cohesion policies, is being undertaken with such low visibility. The report presents evidence of the lack of access that the public and its organizations, and even politicians and legislators, have to the texts of the terms that are being negotiated. They corroborate that the precise information on what is being negotiated has not been published on any Web site and point at the paradox that this situation entails, given that this is a negotiation between two great democracies.

The issue of transparency and of the access to the texts of the terms that are being discussed is something that should also be kept in mind in the case of the negotiations between Mercosur and the EU, especially as from the next meeting of the Bi-regional Negotiations Committee that will take place in Brussels on the week of October 11th. It is expected that this meeting produces relevant information on the position of both parties.

The other precedent that helps understand the relevance of the issue at hand is that, until now, the texts of the association agreements that the EU concluded last May with Colombia, Peru and the Central American countries have yet to be published. (For an analysis of a draft agreement and a tentative text see http://www.bilaterals.org/, http://www.tuc.org.uk/, or click here and http://www.tuc.org.uk/ or click here). The reason that has been given for this is that the texts need to be translated, in the case of the EU from English to other twenty-three official languages, and that this task takes time. However, as was mentioned before, the fact that these texts are not available on any official Web page - at least as they were initiated - is not a minor issue, especially if we consider that these types of negotiations result in winners and losers. The lack of timely access to relevant information needed to defend its interests could mean that businesses, producers, consumers, workers and different social sectors, especially the most vulnerable ones, are left on the side of the losers.


Recommended Reading:

  • ALOP, "El Mercosur ciudadano. Retos para una nueva institucionalidad", Asociación Latinoamericana de Organizaciones de Promoción al Desarrollo (ALOP), CLAEH - CCU, Montevideo, Mayo 2009, en http://www.iadb.org/ or click here or see http://www.alop.or.cr/ or click here.
  • ALOP, "La negociación del Acuerdo de Asociación entre Centroamérica y la Unión Europea: Balance y Alternativas", Asociación Latinoamericana de Promoción al Desarrollo (ALOP) - Iniciativa Mesoamericana CID, México, Abril de 2010, en http://www.alop.or.cr/.
  • Archivos del Presente, "Revista Latinoamericana de Temas Internacionales", Año 14, Nº 52, Buenos Aires 2010.
  • Bizzozero Revelez, Lincoln, "Las relaciones Unión Europea - Mercosur. ¿Porqué debería cambiarse el formato de negociaciones para concertar un Acuerdo de Cooperación Estratégico?, Consejo Uruguayo para las Relaciones Internacionales, Estudios del CURI, Estudio nº 4/10, Montevideo, 14 de julio de 2010, en http://www.curi.org.uy/ or click here.
  • Claessens, Stijn; Evenett, Simon; Hoekman, Bernard (editors), "Rebalancing the Global Economy: A Primer for Policymaking", Centre for Economic Policy Research (CEPR), A VoxEu.org Publication, London 2010, en http://www.voxeu.org/ or click here.
  • Eberhardt, Pia; Kumar, Dharmendra, "Trade Invaders: How big business is driving the EU-India free trade negotiations", Corporate Europe Observatory (CEO) - India FDI Watch, Brussels-New Delhi, September 2010, en http://www.corporateeurope.org/.
  • Gamberoni, Elisa; Newfarmer, Richard, "From Market Access to Accessing the Market: Aid for Trade and Program of the World Bank", ICTSD, Trade Negotiations Insights, Issue 09/Volum 8, Geneva, November 2009, en http://www.ictsd.net/news/tni.
  • Gants, David, "Regional Trade Agreements. Law, Policy and Practice", Carolina Academic Press, Durham, North Carolina 2009.
  • Hoekman, Bernard; Wilson, John S., "Aid for Trade: An Action Agenda Looking Forward", The World Bank, Economic Premise, Number 25, Washington, August 2010, en http://siteresources.worldbank.org/ or click here.
  • Horn, Henrik; Mavroidis, Petros C.; Sapir, André, "Beyond the WTO? An anatomy of EU and US preferential trade agreements", Bruegel Blueprint Series, Volume VII, Brussels 2009, en http://aei.pitt.edu/ or click here.
  • Kruger, Paul; Denner, Willemien; Cronje, JB, "Comparing safeguard measures in regional and bilateral agreements", International Centre for Trade and Sustainable Development (ICTSD), Issue Paper nº 22, Geneva 2009, en http://ictsd.org/ or click here.
  • Lugones, Gustavo; Flores, Jorge (compiladores), "Intérpretes e interpretaciones de la Argentina en el Bicentenario", Editorial Universidad Nacional de Quilmes, Bernal 2010.
  • Macmillan, Kathleen E.; Grady, Patrick, "A New Prescription: Can the BC-Alberta TILMA Resuscitate Internal Trade in Canada?, C.D.Howe Institute Backgrounder, Nº 106, Ottawa, October 2007, en http://www.cdhowe.org/ or click here.
  • Maurer, Andreas; Degain, Christophe, "Globalization and trade flows: what you see is not what you get!", World Trade Organization, Economic Research and Statistics Division, Staff Working Paper ERSD - 2010-12, Geneva, June 2010, en http://www.wto.org/ or click here.
  • Motta Vega, Pedro da, "Trading Food. Food Security Policies in Latin America, Southeas Asia and Southern Africa and Their Implications for Trade and Regional Integration", Trade Knowledge Network (TKN) - International Institute for Sustainable Development (IISD), Winnipeg, Manitoba, August 2010, en http://www.tradeknowledgenetwork.net/ or click here.
  • Resico, Marcelo F., "La Estructura de una Economía Humana. Reflexiones en cuanto a la actualidad del pensamiento de W.Röpke", Educa, Buenos Aires 2008.
  • Vasconcelos, Alvaro de (director), "Quelle Défense Européenne en 2020?, Union Européenne Institut d'Études de Sécurité, Paris, Mars 2010, en http://www.iss.europa.eu/ or click here.
  • Vasconcelos, Alvaro de (editor), "A strategy for EU foreign policy", European Union Institute for Security Studies, Report N° 7, Paris, June 2010, en http://www.iss.europa.eu/ or click here.
  • Woolcock, Stephen, "European Union policy towards Free Trade Agreements", European Centre for International Political Economy (ECIPE), ECIPE Working Paper - Nº 03/2007, Brussels 2007, en http://www.ecipe.org/ or click here.

Félix Peña Director of the Institute of International Trade at the ICBC Foundation. Director of the Masters Degree in International Trade Relations at Tres de Febrero National University (UNTREF). Member of the Executive Committee of the Argentine Council for International Relations (CARI). Member of the Evian Group Brains Trust. More information.

http://www.felixpena.com.ar | info@felixpena.com.ar


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