Trade Without Transparency

By Amanda Frost
May 16, 2003

Over the past decade the United States has been the standard-bearer in an open government revolution that has led dozens of countries to adopt laws requiring "transparency" in government decision-making.  Yet, when it comes to international trade agreements, the U.S. accepts a system in which policy decisions that must be reached in full public view at home can be reversed by bureaucrats who operate in secrecy and are not accountable to anyone.  

This runs completely counter to the American ideal of openness.  In the late 1960s and early 1970s, in a flurry of legislative activity, the U.S. Congress passed the Freedom of Information Act, the Federal Advisory Committee Act, and the Government in the Sunshine Act.  These laws require government agencies to provide public access to the great majority of their documents and to allow the public to view and participate in important aspects of agency decision-making processes.  In addition, it was long-ago established that the public has a constitutional right to view court records and briefs and attend judicial proceedings.  

But few Americans know that decisions affecting their health and safety, labor rights and the environment are regularly made in secret by international tribunals staffed by unelected bureaucrats.

For example, pursuant to an international agreement, the General Agreement on Tariffs and Trade (GATT), Mexico challenged the United States' law prohibiting the sale of tuna caught using encirclement techniques that imperil dolphins.  A GATT dispute resolution panel concluded that the ban was an illegal trade barrier and demanded that the U.S. change its policy.  A decade of briefs filed by the U.S. and Mexico in this policy fight are not available to the public, the GATT tribunal panel members were selected without any public input, and the hearing itself, like all such proceedings, was closed to anyone other than the panel members and disputing parties.  

The same secrecy surrounded a decision by a panel constituted under GATT's successor, the World Trade Organization (WTO), requiring the US to amend its policy banning importation of shrimp that were gathered using methods that injured or killed sea turtles.  Likewise, the North American Free Trade Agreement (NAFTA), under which private companies can sue the U.S., Mexico or Canada if they believe the labor, health or environmental laws of one of these countries undermines new investor rights to be free of regulatory burdens, does not give the public a right to attend hearings or obtain transcripts of those hearings without the permission of all parties to a dispute.  

The secrecy in international dispute resolution is at odds with democratic principles, and specifically the need for transparency, that have become the norm at the national level.  Compare the process surrounding the adoption and implementation of the Marine Mammal Protection Act — the law establishing the U.S. moratorium on importation of tuna captured without the benefit of dolphin-safe nets — with the secretive process by which the GATT dispute panel undid these protections.  Before enacting the law, Congress held hearings at which members of the fishing industry, as well as environmentalists and animal rights activists, testified at length.  The law was passed by both houses of Congress and signed by the President.  The National Marine Fisheries Service, an executive agency accountable to the President, issued proposed regulations to implement the law, and took public comment before promulgating final regulations.  But when the law was challenged by U.S. trading partners, three unelected bureaucrats sitting on a dispute resolution panel partially reversed, in near total secrecy, what took two branches of the U.S. government, hundreds of elected officials, and years of debate by thousands of interested parties to put into place.  

Unfortunately, the Bush administration's penchant for secrecy at home has only exacerbated problem.  Under a newly-adopted executive order, documents provided to the United States by a foreign government with an "expectation" that the information will be "held in confidence" are presumptively classified and withheld from the public out of fear that disclosure would injure foreign relations.  Apparently, the Bush administration believes that parties to international disputes always "expect" that the information provided will remain secret because secrecy is currently the norm in international trade disputes.  That means that the culture of secrecy that pervades international dispute resolution tribunals now infects internal U.S. disclosure policies as well.  

To give just one example, the Bush administration has refused to release documents authored by the United Parcel Service (UPS) concerning UPS' claim that Canada's public postal service violates UPS' rights under NAFTA.  The case could affect many public services on which we all rely.  Moreover, Canada professed no interest in keeping the documents secret, and did not suggest that the dispute had any impact on its relations with the U.S.  The administration nonetheless refused to disclose the documents on the ground that Canada had an "expectation" that the documents would not be publicly disclosed.

The Bush administration has it backwards.  Instead of citing the widely-criticized secrecy in international trade-related proceedings as an excuse to withhold documents at home, the administration should obey the letter and spirit of our domestic open government laws to push for greater disclosure in international governance.  Transparency has finally become accepted, worldwide, as prerequisite to democracy.  The presumption of openness that now exists at the domestic level should not be subverted by the ever-expanding authority of secretive international institutions.


Amanda Frost is a lawyer in the Public Citizen Litigation Group.