Hiding in plain sight: why are the UK and US keeping the transatlantic trade negotiations under wraps?
In the current climate of political uncertainty, transparency is fundamental to the negotiation of the UK-US free trade agreement. Coupled with the economic ramifications of the pandemic, which has had a profound impact on both countries, transparency will play an integral role in legitimising the outcome of this agreement and its acceptance from a democratic perspective. Dr Jasem Tarawneh and Dr Nicolette Butler from the University of Manchester recommend that both governments should engage in an open and effective dialogue with stakeholders, including civil society, to ensure that public interest is at the heart of the framework negotiated between these two advanced economies.
- Scholars, businesses, and the public know little about the potential terms of the UK-US trade agreement.
- A comprehensive impact assessment analysis, based on defined goals and targets, should be created and implemented. Particularly in the contentious areas of environment, agriculture and digital services.
- The economic, political and legal costs and benefits of the agreement should be detailed and publicised.
UK economic sovereignty was touted as one of the main benefits of Brexit. Vote Leave supporters wanted to take back control of the EU’s competence to negotiate trade and investment agreements with global partners. The promise of a strategically important and valuable trade deal with the US, concluded at great speed, was the most prized of all the potential deals. Such an agreement would represent an important advantage that the UK would have over its European neighbours, who themselves have failed to secure a deal with the Americans.
The stalled Transatlantic Trade and Investment Partnership (TTIP) would have seen the EU and the US enter into an historic trade pact worth billions of dollars, and created a huge free trade area in terms of market and trade value. Negotiations began in 2013, and were beginning to bear fruit in the form of agreement in key areas. However, in 2016 the negotiations ground to a halt due partly to the change in US administration with the election of President Trump, and partly due to the result of the UK’s Brexit referendum. TTIP was put ‘on ice’, and to date it has not been thawed.
Bureaucracy, secrecy, and a lack of scrutiny
The world has moved on since 2016. Brexit is done and Joe Biden’s administration has entered the White House. There has been some postulation by the UK government and the office of the United States Trade Representative (the US government department responsible for negotiating and signing trade agreements) about the possibility of a UK-US deal. Despite the fact that negotiations are thought to have started even before the UK left the EU in May 2020, the conclusion of the deal is more urgent due to the upcoming expiry of the Trade Promotion Authority (TPA), which will remove the opportunity to fast track the deal through US congress.
Bureaucracy might be a positive thing, at least from the perspective of some stakeholders who have been kept in the dark. Scholars, businesses, and the public know very little about the potential terms of the UK-US trade agreement that is under negotiation. Beyond the results of the 2018 Department for International Trade public consultation, the only documents that have been published regarding the negotiation are both parties’ negotiating objectives, which are vague and lacking in detail.
It is common for trade and investment agreements to be negotiated and implemented without a comprehensive impact assessment analysis. Often, governments do not complete detailed assessments on the proposed agreements’ likely impact in terms of economic costs and benefits, environmental degradation/pollution, and societal impacts. Whilst the secretive nature and lack of impact assessments is par for the course, this is concerning given the risks associated with any trade deal. It is widely accepted that increased trade and investment flows can bring significant benefits. However, it is also understood that the wrong type of trade and investment, or poor accompanying policies, mean that trade and investment can have detrimental effects.
Concerned citizens and powerful investors
In the context of the TTIP agreement, European citizens were concerned about the potential negative effects of an EU-US agreement such as the lowering of regulatory standards across the board, including agricultural and food products. Concerns sparked protests about various aspects of the proposed deal, including the risks of chlorinated chicken and hormone treated beef. The Brits were also concerned about protecting their National Health Service (NHS) from privatisation through sales to US providers of medical services, potentially giving such US companies the status of foreign investor, which attracts a whole host of investor protection obligations through generous trade and investment agreements.
The risk of giving foreign investors control over key national services should not be underestimated; nor should the risk of lawsuits by foreign investors should the UK government ever wish to re-nationalise the system. One of the most contentious aspects of the TTIP agreement was the potential inclusion of investor-state dispute settlement (ISDS) mechanism, which gives aggrieved investors the right to sue the investment host state government. Such disputes can cost the host state government millions of dollars to defend, and potentially billions of dollars in compensation if the investor wins the case.
Democracy and the deal
With trade pacts, the devil is in the detail. This trade agreement is likely to be historically significant and merits close inspection. The global economy suffered a devastating blow in 2020-21 due to the COVID-19 global pandemic. Governments have spent eye-watering sums on health responses, as well as to support businesses and jobs at risk throughout the pandemic. As we emerge from the economic nightmare of COVID-19, national governments will look to trade and investment as a vehicle for economic recovery. The UKUSFTA could play an important role in boosting two battered economies.
It is therefore imperative that this agreement is negotiated swiftly, and in a manner that is beneficial to both parties. Although time is of the essence, the agreement should not be rushed, as the consequences of a ‘bad’ agreement could be catastrophic. Further, this agreement should be viewed as a real opportunity for two world-leading nations to help shape the future of the trade and investment regimes in a time of flux and uncertainty. This agreement could become a benchmark for trade and investment negotiators around the world as a beacon of best practice. It is therefore imperative that any proposed agreement is critically analysed by academics and stakeholders, including members of civil society. This due process will give the agreement the legitimacy and democratic endorsement.
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