Traditionally, international negotiations were conducted by diplomatic or governmental representatives behind closed doors, with few official documents being released to the public afterwards, and limited public participation in political debate. Investment agreements were, and to a certain extent still are, no exception to this rule.
This was partially justified by the facts that states’ relations were chiefly focused on peaceful coexistence, trade and investment were far less important than today, and citizens believed that governments would negotiate in their best interests.
Things have changed dramatically. Globalisation and the digital revolution have made it more difficult to limit the public release of information. The Internet, in particular, has sped up the exchange of information related to international negotiations, often leaking secrets documents, as recently happened for the EU-Japan FTA.
Acknowledging this ‘cultural shift’, the EU has adopted a “tailor made” approach to the Brexit negotiations, which will be conducted in a “transparent and open manner”. The UK has not, probably persuaded that secrecy would give more room for manoeuvre. This move, however, does not seem particularly smart, and is likely to give the EU more legitimacy and negotiating strength.
How did we get here?
One of the key moments in the history of greater transparency in international negotiations probably was at the beginning of the 1990s, when the OECD launched the negotiation of the Multilateral Investment Agreement (MAI). The OECD’s main purpose was to set high standards for the treatment and protection of investment, with a view to finally reaching an agreement which would have strengthened and ‘multilateralised’ existing bilateral investment treaties.
The intention was, at least in principle, praiseworthy but the MAI negotiators largely underestimated the need to further publicise and explain the benefits of such an agreement to the public and these proved to be critical mistakes. During negotiations, strong opposition to the agreement came from NGOs, which among many other things, directed their criticism at the lack of transparency during the negotiation process. These protests, along with the lack of internal cohesion in the OECD, were fatal to the agreement. In 1998, negotiations were officially abandoned.
While it would be too naive to believe that the MAI collapsed because of NGOs, the episode is nonetheless particularly telling of the weight the public can have during negotiations.
Galvanised by the MAI result, it is unsurprising that, in a relatively short period of time, civil society groups significantly began to step up advocacy on investment law-making by scrutinising treaty negotiations, or even seeking to intervene in the negotiation proceedings.
Since then, transparency has quickly become one of the hottest topics on the global scene. This growing interest has culminated in the public debate we are currently witnessing around the negotiation of mega-regional agreements like TPP, and even more recently around the ‘ambitious’ EU-UK agreement.
Have we moved forward from the MAI fiasco? Yes, but…
Despite the MAI failure, states still find quite attractive to keep the negotiations of their investment agreements closed. They often decide to release the texts of their treaties only after an agreement has been reached (see for instance the 2010 UK-Colombia BIT), but even more often they deliberately avoid the transparency path, failing to release any document in the public domain (see the 2009 UK-Zambia BIT).
This ambivalent attitude left the public demands for more transparency largely unheard, and fuelled suspicion of these trade secrets. It is not by chance that the above examples refer to the UK, which is not traditionally as open in policy making as other countries. This is probably an aspect likely to attract public criticism, especially in the light of Brexit, triggering further difficulties for the Government.
A significant contribution against this trend came from the recently established EU-led investment policy, which introduced new transparent practices.
The EU lessons
The EU came to realise the importance of transparency during negotiations relatively quickly, given that in August 2014 the German media outlet ADR leaked and released secret parts of the CETA consolidated text, and called both sides to urgently make publicly available the official texts of the negotiation.
The EU learned from this mistake and after this episode made a radical about-turn in its transparency agenda. It began publishing online the text of the treaties under negotiation and for which an agreement had been reached between the contracting parties. This has been the case for the CETA agreement, the EU-Singapore FTA, the EU-Vietnam FTA, and, to a lesser extent, the EU-Japan FTA, for which only certain chapters have been made publicly available online.
Complementary to this, the Commission has also clearly simplified the negotiating process so that even those unfamiliar with Article 218 TFEU can picture how the decisions are taken.
Lastly, another important contribution on the transparency front came from the declassification of all Council mandates, the documents that contain the instructions the Commission has been given by the Council to conduct negotiations on behalf of the EU Member States.
Is this enough?
It depends on how much transparency in international economic agreements we want and need for legitimate decision making to take place.
From a purely theoretical standpoint, transparency is a good thing, especially if one considers that secrecy and confidentiality have been long-standing and firmly defended hallmarks in the fields of international trade and investment. This approach, however, largely ignores whether transparency is beneficial to the efficacy of negotiations. There might be problems of (intentional?) selection of information i.e. which documents should be made public and when. Or, even more alarmingly, if talks are conducted under intense public scrutiny there might be a serious risk of appeasing public criticism by saying what the public wants to hear –the ‘people have spoken’ mantra.
This is not to say that the baby should be thrown out with the bathwater, rather that more thoughtful consideration is needed. The question of greater transparency in investment negotiations is quite a new topic. It is only recently that people have started to perceive investment and trade agreements as an intrusion in a wide range of domestic policies and sovereignty sensitivities, with a potential impact on them. And that explains why they attract so much public scrutiny. If what we want is the public to participate and provide feedback on trade matters, then transparency becomes a precondition for participation. But that’s another story.