trade policy brief
Engaging and consulting on trade agreements
October 2019
A number of trends are contributing to a complex and challenging environment for trade agreements:
Why do consultation and engagement matter?
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They promote greater understanding of trade and the role of trade in national economic policy.
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They help to respond to citizens’ legitimate desire for greater engagement in, and ability to influence, trade policy.
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They help to build relationships of dialogue and trust with key groups; lack of transparency feeds mistrust, which is hard to dispel once created.
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They make for better trade agreements, benefitting from more information about societal interests; the nuances of, especially nontraditional, issues; and public sensitivities.
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They help to build support for agreements, including for legislative passage.
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They help to promote greater awareness, and use, of the opportunities created under new agreements.
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The broader scope of trade agreements, including behind-the-border and regulatory issues, and newer issues related to progressive trade agendas (e.g., environment, labour). Increasingly professional and networked civil society organisations (CSOs), looking to have increased upstream involvement in policy-making. New possibilities for engagement enabled by the Internet, but also greater expectations for transparency; more limited ability to maintain confidentiality; and the potential for even small, local issues to go global. Waning public support for trade and for globalisation more broadly, mistrust of governments and experts, and a feeling among some that trade agreements are negotiated with insufficient transparency and accountability or that their benefits have been oversold. A ubiquitous media cycle, including driven by social media, along with concerns about misinformation, “fake news” and “echo chambers” where existing beliefs are reinforced, irrespective of evidence.
All this suggests the need to think again about how to make trade policy-making a more open conversation where more people can inform, and be informed by, the debate. This places new demands on the process of trade negotiations, including in terms of time, resources and skilled staff. Many countries are updating and expanding their processes for consultation and engagement, moving from passive styles of consultation (such as posting texts online for comment) to proactive efforts to engage continuously with a wider range of stakeholders using a broader range of tools, including workshops, town halls and roadshows. Engagement is becoming more systematic and more continuous, before, during and after the negotiation of agreements. This note draws on discussions at the OECD Trade Committee to highlight some observations and approaches regarding consultation and engagement on trade agreements.
Better process leads to better outcomes There is wide recognition of not just the need for, but the benefits of, greater engagement. Transparency leads to more accountability, and greater legitimacy for any deal. By contrast, secrecy can lead to greater criticism, with negative consequences, including for legislative passage of the agreement. www.oecd.org/trade
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Consultation is a two-way process of information sharing and education, and helps sustain support for rules-based trade. Inputs from stakeholders lead to better decisions. Private sector input highlights issues for business and informs negotiating priorities. Consultation with stakeholders can also help new governments get across trade issues. Some systems for engagement and consultation are evolving at the initiative of trade ministries, or at the urging of stakeholder groups. Others are legislatively mandated, setting out the processes to be followed and establishing specific consultation mechanisms within government, with legislative bodies and with stakeholders. There is a risk that consultation can be dominated by vested interests, but broad engagement, over time, can help to avoid capture. Broadening the conversation is key.
WHO: Broadening the conversation The much broader scope of trade agreements enlarges the group of stakeholders, both within and outside government, that need to be included in engagement and consultation. This reflects the need for wider and more specialised expertise, as well as questions about the legitimacy of trade negotiators to lead discussions on newer issues (such as environment and labour) for which other national or international forums exist.
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Engaging and consulting on trade agreements Some governments invest in ongoing relationships with key interest groups (the private sector and, increasingly with CSOs) to build understanding, information channels and dialogue. However, both resources and incentives to engage may be limited outside of a live negotiation. A key issue for all consultations is how to ensure representativeness. There is often a perception that some groups enjoy better access than others; even within groups, who represents the group is not straightforward. Private sector input is important to inform negotiating positions For the private sector, representativeness can mean involvement of Small and Medium sized enterprises (SMEs) in addition to large companies, and can rely on the existence of well-organised industry bodies. SMEs can be less aware of the opportunities under trade agreements, or much less able to take advantage of them. They can also be less able than larger firms to provide the detailed knowledge that negotiators require. Governments need a close relationship with a broad spectrum of the business community to understand interests, while avoiding capture by vested interests. This balance can be difficult, in particular when technical knowledge from industry is essential for effective policymaking. Inclusion of local branches of foreign companies can also be an issue. In some countries, private sector input takes place via legislatively mandated formal processes; in others, ad hoc advisory bodies or other consultation mechanisms are used. Engaging with CSOs is a core activity but is changing For civil society, similar issues arise regarding how to ensure representativeness, beyond federations or other collective bodies (such as councils of trade unions or coalitions of CSOs). Issues also arise on the resources to devote to engagement with single-issue groups, or with those implacably opposed to trade. For some countries, the influence of well-resourced international CSOs also needs to be balanced with that of local groups. The dialogue with CSOs is also changing, with greater expectations by CSOs of closer engagement earlier in the process, access to a greater range of information and even direct access to negotiations (either as part of the delegation or through side rooms). There is increasing use of formal Advisory Groups to enable CSOs to provide ongoing feedback during negotiations, often bringing together a range of stakeholders and covering a broad agenda. By-invitation advisory bodies are generally supplemented by open mechanisms. Efforts are also being made to intensify links between CSOs and academia, for example through conferences and seminars. Consultations are broadening There is an increasingly expansive view of stakeholders, with a growing focus on indigenous peoples, women, academia and youth. Consumers are diverse and hard to engage. Major consumer groups are often more domestically focused and their organised engagement on trade issues is a work in progress. There is also a need to engage in a broader public dialogue to respond to growing interest on trade, using public consultations, outreach events and social media. www.oecd.org/trade
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However, engagement can be challenging when interest has been triggered by “hot button� issues, or negative campaigns. Intragovernmental consultation processes vary Beyond external stakeholders, issues or trade-offs can span several ministries and reaching agreement within government can be a challenge. Processes for reaching whole-of-government views need to build on an ongoing dialogue, as Trade ministries rely on the expertise and networks of colleagues in other ministries during the negotiations. Consultations within government can involve formal structures, sometimes with different levels to allow differences to be escalated and resolved, or less formal arrangements for as-needed consultations. For federal systems, there is also a need for a process to consult closely with sub-federal authorities, especially when competence on key issues is shared. Engagement with Parliamentary bodies is critical The role of parliaments varies. In some cases, legislative bodies approve mandates prior to the commencement of the negotiations; in others, they approve only the final text. In some instances, the parliament has direct ownership over certain aspects of trade policy (e.g., unilateral preference schemes). Parliamentary approval is required for trade agreements in a number of countries. This often takes the form of an up or down vote, as negotiated agreements reflect a balance between the parties, and changes to any of the provisions would change the balance in the agreement. While up or down legislative approval is criticized for not allowing specific provisions to be revisited, others argue that such changes could lead to an unacceptable level of uncertainty for trading partners — who have their own parliaments. Even where formal approval is not mandated, there is significant value in informing and consulting parliamentary bodies. Ongoing engagement with the legislature (through hearings, or specialist parliamentary committees, or other outreach) can inform negotiations and build understanding of, and support for, agreements. Briefings and consultations are commonly undertaken with parliamentary committees, members or their staff. Additionally, Members of parliamentary bodies, or their staff, can be included in delegations to negotiations or WTO Ministerial Conferences. Parliamentary bodies also have an important role in implementation, including for any necessary legislative change. For some (e.g., Customs Unions) mechanisms are needed to ensure that all necessary legislative changes have taken place. Managing expectations is a challenge With consultations becoming wider, encompassing many different voices, discord is normal, and is often amongst stakeholders. Agreement is not always possible, but information exchange is always valuable. Managing expectations is important. Stakeholders want to see their views reflected, but not all points will be adopted and not adopting does not mean not listening. Where written submissions are invited, some governments prepare responses outlining how different views were taken into account. Putting different groups of stakeholders together in consultation and engagement @OECDtrade
processes is also helpful in exposing them to different views and to the trade-offs that governments have to make. Similarly, engagement processes need to convey a sense of negotiating realism; not all that is sought is achievable. Greater transparency can help build this understanding.
WHAT AND WHEN: Engagement is needed throughout the entire process BEFORE: Upstream engagement helps build understanding Increasingly, consultation is starting upstream of negotiations, while the scope of the agreement is being shaped. In some cases, this is linked to approval of negotiating mandates by parliamentary bodies, but even without this, there is value in consulting widely upstream to gather views. Negotiating mandates are now published by some countries, and this is not seen as “showing your hand” but as part of building public understanding and acceptance of any ultimate deal. Public consultation papers on negotiating objectives are also increasingly common. There are also calls for more, and more open, cost/ benefit analyses or other ex ante assessments of proposed agreements. National interest analyses — by governments, legislative bodies or think-tanks and allowing for public submissions — can play an important role in informing debate. However, such assessments can be misinterpreted and caveats tend to get lost, giving rise to problems or perceptions of overselling agreements. There is evolving recognition that consultation and engagement needs to be ongoing and that information flow needs to be two-way. While most governments make material available on websites, there is more to do to be visible and engage in two-way dialogues, including via social media. Contact persons or emails can be effective but resource intensive. Some governments use roadshows or town-halls to engage directly with groups of citizens, but this can raise challenges not just of time and resources, but also in combining sufficient technical knowledge and “close to the action” legitimacy with specialist communication skills. DURING: Real time engagement is needed The key issue in the course of negotiations is what information to make available, when and how. While previous agreements can be a good guide to the general direction of negotiations, a common refrain is that materials provided for consultations are insufficient to allow for a meaningful exchange. There are calls for more specificity about what is on the table, including early access to draft text, to enable stakeholders to react. This can raise complex issues of how to combine transparency with effective negotiations. Parties do not generally declare their bottom lines as compromises and trade-offs are sought. While early texts are subject to change, final texts can also be shared for consultation prior to signature, but changes in the final stages can be difficult to negotiate. Moreover, transparency practices vary among trading partners, and while some countries publish legal texts of any proposals as soon as they table them, they are not free to make negotiating partners’ proposals available. That said, countries may increasingly need to match the level of transparency of their negotiating partners, including to ensure that their version of events is adequately represented in the public domain. www.oecd.org/trade
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There are a number of mechanisms for sharing information, with different degrees of confidentiality. Summaries of negotiating rounds are made public on websites or through advisory bodies; or greater access is given to negotiating texts, including redacted text; or, in some cases, Freedom of Information laws have been used to access documents. A common method is ongoing advisory groups with representative membership or deeper upstream relationships with key interest groups. Side rooms for consultation with stakeholders in the course of negotiations are used; in some cases, members of stakeholder groups can be included in official delegations to negotiations. Ongoing dialogue with legislative bodies, including public hearings, are important as negotiations continue. AFTER: More attention is being paid to agreement “aftercare” Increasing attention is being given to ensuring that the benefits of trade agreements are materialising. In addition to making the full texts of agreements available as soon as possible after negotiations are completed, governments are making plain language versions available. There is also growing recognition of the value of continuing consultations in the implementation stage, to surface any issues and understand the extent to which market access opportunities are being used (or any obstacles to their use). This has a number of different aspects. First, it involves ensuring that traders are aware of and able to make use of access under the agreement — especially SMEs, which face particular obstacles in accessing information and entering new markets. It can also mean targeting particular groups for inclusion, such as womenowned businesses. Effective upstream engagement could also help increase use of the agreement — either due to greater awareness of the opportunities, or greater relevance of the access negotiated. Outreach efforts post-agreement include establishment of help desks or online platforms to provide information to traders. Web tools are particularly useful in helping traders understand in some level of detail the new conditions in different markets. These increasingly focus on concrete issues (e.g., how to get certificate of origin), or take the form of a “one stop shop” information portal for traders. Additionally, governments are using roadshows or seminars, including to target particular groups, such as customs brokers or freight forwarders. Stakeholders, including CSOs, can also be involved in the development of implementation action plans. Political level engagement by leadership and local MPs is key in raising awareness of new opportunities. Second, greater attention is also being paid to instruments for monitoring implementation, with governments expanding their efforts to measure the extent of use and by whom. But it can be challenging to assess the utilisation rate of trade agreements. For example, it can be difficult to establish what is genuinely “new” trade and to determine whether companies are not using an agreement because their products are not covered, or because of insufficiently user-friendly rules of origin, or lack of transparency of information. (Aftercare surveys are being used in some cases to identify impediments to businesses using the agreement). Moreover, assessments might underestimate the fact that even traders not using preferential access might have been made aware of the opportunities in a new market and been more confident to enter that market because of a trade agreement. @OECDtrade
Engaging and consulting on trade agreements Importantly, aftercare can also focus on whether anticipated negative impacts, or adjustment effects, are materialising and whether systems in place are able to address them. Assessment of impacts at a sufficiently granular level is a challenge, as is causality with the trade agreement. Indeed, the impact of a trade agreement is likely to be the result of the intersection of a number of factors (e.g., in lagging regions with broader issues regarding alternative employment and housing or credit markets). This also gives rise to the further challenge of ensuring coherence with broader systems of social protection, especially where trade-specific adjustment programmes are used (which can also raise issues regarding equity and timeliness of response). Some governments are undertaking comprehensive ex-post analyses focused on sustainable development issues. For some, these include mechanisms through which CSOs and other stakeholders can raise concerns if they feel that commitments or issues in the agreement (e.g., in relation to core labour standards) are not being observed.
HOW: Communication requires investment How to communicate is not straightforward The quality of consultation matters: information needs to be credible, understandable and accessible, and the technical nature of trade agreements poses communication challenges. Public consultations need plain language materials, combining the basic case for trade with specific issues. The messenger can also matter; messages need to come from sources that the public trust. Third party voices can be important influencers of public opinion – including as critics (e.g., celebrity chefs can have more resonance with the public than government scientists). Negotiating partners can have different stories and different interests, but it can nonetheless be important to work together to tell a consistent story about why concessions in a trade negotiation make sense or are not as harmful as domestic groups on either side may claim. Governments are trying to better understand community views for more effective messaging – for example, by commissioning research into community attitudes to trade and investment, how people access information (web, radio, face to face) and how to reach (both in terms of media and message) different socio-economic and rural/urban groups. Audiences need to be engaged with concrete examples, or stories or visuals that connect trade to everyday life. This can include, for example, highlighting the role of trade in the availability of products such as clothing or affordable cell phones. Terminology also matters – for example, “Free Trade Agreement” can be both inaccurate and unhelpful, as most agreements don’t actually deliver free trade. Finally, negative campaigns which employ simple but distorted messages are raising new challenges for governments in preparing timely and effective responses — a challenge that can be compounded by mistrust of governments and experts and by echo chambers of misinformation. Negative messages can have more impact than positive messages, in particular scare campaigns based on misinformation. Often officials spend much of their time talking about what an agreement is not. While one option is to turn negative messaging to advantage by telling stories about what would happen without trade, www.oecd.org/trade
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success stories can also resonate strongly, particularly examples of how specific companies or communities are benefitting from new opportunities from trade. Resource challenges are not insignificant The resource implications of engagement, both financial and staff time, are growing. The important task of taking consultations beyond capital cities to regional and rural areas is raising new demands on limited resources. For countries with large and still relatively poor populations, consultation poses particular challenges. Specialist resources are also needed. Trade negotiators do not always have the right skills for effective engagement, and communications specialists can tailor messages to reach new groups and the general public. Indeed, some countries are creating specialist trade communications units within Trade Ministries. A key concern is the sustainability of resources for engagement; once expectations for a certain level of engagement have been created, it is difficult to go backwards. At the same time, consultation fatigue is becoming an issue for stakeholders, given the number of negotiations underway and the relatively limited capacity of many stakeholders to participate (especially SMEs). There is a need to consider ways to be more efficient in gathering views, including across different levels of government. For example, where intra-governmental coordination is strong, line ministries can be enlisted add trade issues to their regular consultation processes. Data and evidence still matter Data and evidence still matter, but this is easier for goods and tariffs than services, which are harder to measure. More granular, local level evidence is also needed, but is much more challenging and resource-intensive to generate – although here again, upstream consultation can create networks that may be able to assist with more granular data later on. Governments are also commissioning policy papers or analyses from academics to help inform public discussion. Impact assessments play an important role. Some systems require publication of formal environmental and social impact analyses of agreements, in addition to economic impacts. Assessments of social and environmental impacts, or impacts for specific sectors or groups can also be undertaken throughout the negotiations and give an indication of likely adjustment costs.
Trade agreements cannot be seen in isolation: domestic policy matters In the face of growing skepticism about trade, there is a need for governments to do more to close the perception gap. That said, there is also a need for candour about the fact that some jobs will be lost – and for concrete action and resources to be dedicated to helping those affected to manage adjustment. Governments need to avoid over-selling trade as the solution to a range of economic issues. Domestic policies generally matter much more. Yet much work remains to situate trade policy in the context of domestic policies.
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