UK trade policy transparency and scrutiny Contents

5Business and civil society

Current EU consultation mechanisms

86.The European Commission holds extensive consultations and dialogues to help ensure transparency and receive stakeholders’ input in shaping mandates for each negotiation. The Directorate General for Trade runs the Civil Society Dialogue, which:

involves regular, structured meetings to discuss trade policy issues. The European Commissioner for Trade or [Directorate General for] Trade officials attend the meetings and inform participants of the ongoing developments in EU trade policy, and listen to and exchange views with them.101

87.The European Commission also consults with business and civil society through the “Expert Group on Trade Agreements” (other Commission expert groups listed as active in the area of trade policy are composed of Member State officials).102 This group includes representatives from employers’ organisations, trade unions, representative associations, socio-economic interest groups and other civil society organisations. A similarly constituted group, the TTIP Advisory Group, was previously set up during the EU-US trade negotiations, but is currently listed as being “on hold”.103

88.Anna Fielder, of the Transatlantic Consumer Dialogue, told us that, in order to take part in the open Civil Society Dialogue meetings:

you have to be registered in the Commission transparency registers […] [I]t is a way of counting how many industry lobbyists there are and it makes clear who are the people who go to these meetings.

She added that meetings happen about every three or four months, and “you get the Commission officials coming and informing those registered and present exactly what negotiations have been going on, what the policies are and what stage they are at.”104 She noted that a strength of these groups is that they “did get to see the legal text”.105

89.Furthermore, since the EU-Republic of Korea FTA, signed in 2009, each EU trade agreement establishes a domestic as well as a transnational forum of civil society actors, known as Domestic Advisory Groups, which:

provide an opportunity for marginalised actors, such as some trade unions in Korea and Colombia, to express their voice on issues relating to trade and labour rights.106

Rosa Crawford, International Trade Lead for the TUC, told us that these are put in place to “monitor the impact of the sustainable development chapter in place […] [W]e would look to the Government to replicate that structure in future trade agreements”.107

UK businesses’ views on their involvement at EU level

90.Hannah Essex, from the British Chambers of Commerce, informed us of a general feeling at present of distance between the UK business community and the formulation of trade policy at the EU level:

With the trade policies led by the European Union, it can feel quite distant from the day-to-day running of businesses. While organisations like BCC have had the opportunity to be involved, the engagement from the business community more broadly has perhaps not been what it could be.108

91.Ms Essex added that there is also a feeling amongst business that current processes for engaging with trade policy at a UK level are characterised by “ad hoc meetings rather than a structured, formal engagement process”.109

Proposals for engagement with business and civil society

92.In the Government’s July White Paper, Dr Fox stated that:

Our vision is to build a future trade policy that delivers benefits not only for the UK’s economy, but for businesses, workers and consumers alike […] Parliament, the devolved administrations, devolved legislatures, local government, business, trade unions, civil society, consumers, employees and the public from every part of the UK will have the opportunity to engage with and contribute to our trade policy, to develop an approach which maximises the benefits felt across UK society and its regions.110

93.A Trade Model That Works for Everyone stated that:

All stakeholder groups must be consulted at all stages of the process—this includes large and small business, unions, NGOs [non-governmental organisations], devolved administrations and civil society

[…]

Multi-stakeholder forums—dialogue between representative constituencies is an essential step to building trust, problem solving and decision making. Active effort is needed to include the voices of marginalised groups.111

Pre-negotiation consultation

94.In his statement to the Commons in July 2018, Dr Fox gave a commitment that:

a 14-week consultation will run ahead of any new negotiation, allowing any individual or organisation across the UK to give their view. [T]his is longer than other government consultation periods and longer than the EU runs its own trade consultations for, giving the British public more say over Britain’s trading future.90

95.The Government is currently participating in a number of trade working groups, attended by a range of representatives from various departments, looking at future trade relationships with new FTA partners.112

96.TechUK argues that, for deals to be economically effective:

it is crucial that the Government consults in detail with industry to understand the real barriers and challenges they face, as well the opportunities they identify. Before embarking on negotiations, the Government should consult industry in depth to find the real needs from all sectors in a trade deal.113

97.Elaine Fahey, Professor of Law & Associate Dean at City University, London, stated that civil society should also:

be engaged with from the outset as effectively as possible. Clear parameters of how it engages with negotiations should be heavily circumscribed also from the outset.114

This was acknowledged by the Secretary of State:

It is a reality of the age in which we live that the public, the consumers, will take far more interest in trade agreements than they did in the past.115

Consultation methods

98.Concerns have also been raised that the number and variety of consultative mechanisms make contributing to trade policy difficult for business,116 and in the case of small and medium-sized enterprises (SMEs) “trying to understand precisely the mechanisms […] is virtually impossible”.117

99.Hannah Essex argued for more online consultation, with a less fixed set of questions, to address the challenges faced by business in relation to contributing to trade policy.118 Furthermore, she argued that consultation should take place at an earlier point in time, to ensure that “the consultation happens at a time where it is feeding into a live decision rather than feeling like it is going into the ether and not having any purpose”.119

100.The Trade Justice Movement suggests that the USA’s public consultation system, amended to address issues of public interest, should be put in place in the UK:

The USA’s public consultation system mandates that public consultations must be carried for 90 days prior to the initiation of all trade negotiations. This model could be replicated in the UK in order to guarantee the UK public’s right of input. However, in order to redress the disproportionate level of access and influence that business stakeholders have throughout trade negotiations, the Government should ensure that public consultation processes address issues of public interest such as the impact of trade agreements on human rights and labour rights conditions, environmental standards, and public service provisions.120

101.The Trade Justice Movement noted that concerns remain about the “disproportionate level of access and influence that business stakeholders have throughout trade negotiations” in the US system.121

Consultative committees

102.TechUK notes the value of consultative trade committees as a mechanism for Government to receive advice from industry:

It will be an advantage to the Government to have mechanisms to check potentially problematic clauses with industry, based on non-disclosure agreements to enable this to take place in real time during negotiations. Industry consultation should be done through a system of sectoral and overarching committees, operated on a non-disclosure basis, to ensure frank, open and ongoing discussion before and during negotiations.122

103.The Government is taking steps towards this format and is in the process of forming STAG. The group will consist of 14 members representing civil society and business interests, and will include a business organisation, a regional business, an SME, a new entrant business, a Scottish business, a Welsh business, a Northern Irish business, a Think Tank, an academic organisation, two consumer organisations, a development organisation, an NGO, and a trade union. Its “principal purpose will be to advise the government on trade policy before and during the future free trade negotiation cycle, helping to shape our trade policy through high level strategic discussion.”123

104.STAG will have the power to:

set up sub-groups for the purpose of examining specific questions on the basis of Terms of Reference defined by the chair. Sub-groups shall report to the group. They shall be dissolved as soon as their mandate is fulfilled. Where appropriate, the chair may ask stakeholder groups which are already operational within government to act as sub-groups. Where this is not possible, sub-group membership shall be determined by public expressions of interest.124

Mark Summers, Managing Director of Bristol-based SME AVEP, raised concerns that “the devil is in the detail in terms of the practical aspects”125 and further that “there is still not total clarity in respect of where the control gates are and how the subcommittees are going to work […] How you outline a framework for a future trade agreement should have that sort of robustness and approach set out on day one.”126

105.Mr Summers also argued that there should be “an appropriate mix of legislators and subject matter experts” on the STAG sub committees,127 as witnesses suggested that current proposals do not fully allow for the expertise on “practical business problems” of business groups to be utilised during negotiations .128 It was stated that industry expertise is especially important when discussions move from issues around trade in goods to trade in services:

Those [services] barriers require multiple times more research to even understand what the restrictions are, let alone how you might start to dismantle them, which is not in any way to do down the issues with at-border barriers that goods businesses face. There is just a whole additional level of complexity there, which again needs to be explained clearly in normal language.129

106.Sally Jones, of Deloitte, raised concerns about a lack of representation by large business.130 Mr McKee, Scottish Minister for Trade, Investment and Innovation, noted the lack of devolved administration representation,131 and Rosa Crawford, of the TUC, noted the presence of only a single trade union representative.132

107.Ms Essex, from the British Chambers of Commerce, made clear that STAG should be a conduit for wider business input, and should not be the:

be all and end all of business engagement so that that is a group that oversees all of the evidence that is coming in and that encourages consultation in a much broader sense, rather than just focusing on the people in that group.133

108.She also suggested that the STAG should not be the only means of consultation:

We have an opportunity with free trade agreements to start that process and to say that this is what the process is going to look like and this is the role of the strategic advisory group, but these are all the other opportunities to engage in the way that I have described for an online consultation and focus groups and so on. We have an opportunity to be clear upfront about what that process is going to look like and have a high degree of transparency around it.134

109.David Talbot, Senior Director of International Government Affairs at Eli Lilly and Company, a multinational pharmaceutical company, stated that, while this the case:

The burden upon DIT is going to be enormous. Whatever process is set up has to be as sensible as possible. There has to be an appropriate balance between consultation and getting the work done because you do not have an infinite number of people to do this.135

Participation in / consultation during negotiations

110.A Trade Model That Works for Everyone proposed that beyond consultative dialogue, civil society and business should be represented on negotiation delegations, “to enable decision making that maximises benefits and minimises unintended consequences including business, unions, NGOs, devolved administrations and civil society.”136 Mr Summers, of AVPE, said the value in involving business in trade negotiation delegations was that “they understand particular technical or practical constraints”.137 Furthermore, there should be general consultations after each negotiating round, as there was during the TTIP negotiations at an EU level. Mr Talbot explained how this operated: “As you know, there were many rounds of negotiation that took place in TTIP and I think that there was a lot of time for input. It was very formal and large”.138

111.The concept of a “room next door”, used by countries including Chile and Mexico to involve stakeholders in trade negotiations, was raised by Ms Essex. It would mean that:

negotiators can step away and get a rapid response from experts on particular issues so that they go back into the room better informed and better able to move the negotiations forward. That should include business representation.139

112.Mr Henig also informed us that:

there is some suspicion if you have a room next door about who is in it and who is not in it. To give the impression of fairness, it is probably more important that there are procedures that are open to all and if you have rooms next door you have to show in trade policy that you are open to both business and civil society. I think whatever you do, you have to start with those principles.140

113.The USA’s private sector advisory committee system was established through the Trade Act of 1974. An umbrella body, known as the Advisory Committee for Trade Policy and Negotiations, broadly represents the main interests affected by trade policy, and there are also sectoral / issue-specific committees. The US system was viewed by Mr Talbot as a good example of interacting with stakeholders throughout negotiations:

The US process is setting a set of negotiating objectives and then the end agreement is measured against those negotiating objectives. Updates happen throughout the process. The input that needs to happen to the negotiators needs to be in real time, but cannot be at a technical level that no one can understand. The goals the Government set at the beginning of a negotiation need to be the part where the heavy consultation comes in so the interests of the various parties involved in, or concerned about, the negotiation are taken into account at the beginning.141

[…]

There is a formal briefing process through a number of different business organisations after every negotiating round. It is not perfect, but there are lots of opportunities for input. When they do have these comment periods, they get tens of thousands of submissions and have to, by law, respond in a timely way to concerns and different inputs that are raised.142

114.Ms Fielder, of the Transatlantic Consumer Dialogue, raised concerns that the US had “very secretive, closed advisory groups […] we would not recommend the US system”.143

115.The Trade Justice Movement notes that adapting the US system may help address current perceived weaknesses in the consultation mechanisms:

The USA’s advisory committee system is one of the most consultative mechanisms and consists of 28 advisory committees, enabling approximately 700 citizen advisors to gain access to confidential information and comment on draft agreements. Civil society can provide input into trade policy through this system, but in practice the majority of advisory committee members are from private firms and the recommendations and advice given by civil society representatives are often overlooked.144

Formal and informal mechanisms

116.Mr Talbot, from Eli Lilly, stated that formalising the process for business involvement was seen as important, because “it allows people to understand how their voice is going to be heard”.145 This is part of a broader argument for greater formalisation of consultative mechanisms. A report by the British Chambers of Commerce and the London School of Economics argued for the importance of formal mechanisms in the UK given their general absence at present:

One way to palliate existing deficiencies in engagement mechanisms is through greater institutionalisation. Currently, consultations are based for the most part on ad hoc meetings, which “do not provide clear transparency”, while representation is skewed towards big businesses, which can afford participation costs and thus establish sustained relationships.146

The report did not, however, call for an eradication of informal relations given that formal mechanisms can lead to “tick box exercises”:

Formal mechanisms, though never refuted, are presented as complements to informal, network-based discussions. Finding the right balance that ensures access to discussions and maintain one-to-one negotiation opportunities must be of concern to all parties involved.147

117.While it was seen as important to have a “process very clearly defined upfront”, it was also deemed important to keep the processes for involvement under review.148

Transparency relating to consultation

118.DIT has committed to making STAG’s meeting dates and times, membership, agenda and discussion summaries public (unless it is appropriate to keep them confidential).149 Ms Jones noted that the ability of stakeholders to contribute constructively to the debate has been limited until now due to a lack of transparency from officials:

The largest constraint on our ability to be helpful has been on what the officials can say to us rather than our willingness to engage.150

119.It was also suggested that documentation should be available “to people on particular Committees that are signed up to NDAs [Non-Disclosure Agreements] so they have more freedom of access to those documents”.151 This was supported by Mr Talbot, who pointed to “the system of cleared advisers […] in the United States […] [who] see the text. They do not share it […] [T]hey are simply the technical experts”.152

120.Furthermore, War on Want suggested that disclosure of documents should be fair, to avoid concerns about over-representation of private interests:

If documents and information are released on one set of third party stakeholders, they must be released to everyone. There must be transparency about consultation and lobby meetings.153

121.The business and civil society representatives on the European Commission’s TTIP Advisory Group, a precursor to the Expert Group on Trade Agreements, also had access to the legal text, and a report on how each trade agreement negotiation round had progressed:

There was one that was quite open and confidential, which the advisory group could see and then it would be scrubbed of any strong remarks and go to the general public as well.154

122.In order to support the argument for a cleared system of advisers with privileged access to information, Ms Essex argued that the Government should:

have transparency about who those people are and how they are appointed to that group and be very clear that they are appointed as individuals rather than people who are going to go back and discuss things with their representative group or their membership or colleagues. As long as you have transparency about who they are, then it is not unprecedented that the business would have access to non-public documents in that context.155

123.Furthermore, Ms Fielder suggested that the Government could share the details of those chapters that relate to regulatory issues, as opposed to chapters concerning market access concessions:

I do not think most civil society colleagues would be interested to see the negotiations on tariffs. They are traditional trade territory, and there might be sensitive information there and so on, but you have chapters that deal with regulatory co-operation and coherence; they deal with agriculture, which is vital, and they deal with various rules of intellectual property and so on. Those are of enormous concerns to all stakeholders, not just industry and not just policymakers. They should be seen—not just the initial offers, but the consolidated text.156

Impact assessments

124.The importance of producing and publishing impact assessments was raised repeatedly in the evidence we received.157 In respect of such assessments, Ms Crawford, of the TUC, argued that “trade unions and other civil society groups need to be part of their development […] [This has] unfortunately not been the case in previous trade agreements”.158

125.A Trade Model That Works for Everyone argues that the evaluation of agreements must be based on up-to-date evidence produced ahead of time and regularly, and take a “holistic approach”:

[the] evaluation of agreements cannot be measured on the net benefit of each agreement in economic terms alone. While the perceived economic benefits are usually the main driver of trade agreements, evaluation should also be made of broader socioeconomic priorities including promoting decently paid jobs, labour and environmental standards, protecting public services, addressing inequality, including gender and regional inequality and international obligations on human rights norms and priorities of society, including International Labour Standards and Sustainable Development Goals.159

126.The EU currently develops “sustainable impact assessments”, but:

What we saw with TTIP was a sustainable impact assessment where trade unions were not factored into the analysis. It was mostly business that was consulted, and the way the consultation was done was mostly interviewing businesses about the cost of various non-tariff barriers, quantifying those and then giving the Commission a number, and then that analysis was only published a year after the TTIP negotiations had started.160

127.In order to improve on the EU Sustainability Impact Assessment system, these assessments should “not just look at the economic impact of a trade agreement, but will also look at environmental, social and human rights impacts”.161

128.To provide appropriate business and civil society engagement in trade policy, the Government should adopt similar mechanisms to those used at EU level, where they are seen to be effective, and either dispense with or refine EU mechanisms where they are ineffective. It should not ignore the valuable lessons regarding consultations that have been learnt by the EU in negotiations such as those over TTIP. It is crucial that systems for engagement are open, accessible and understandable, to ensure that the Government receives a wide range of contributions.

129.The Government should be under a statutory requirement to engage in open and inclusive consultation with business, civil society, and the public, on the mandate for, and scope of, future trade deals. The Government should hold regular (at least quarterly) meetings which are open to all interested businesses, organisations and individuals. Government should provide updates on all ongoing trade negotiations and allow attendees to make representations in the presence of negotiators and Department for International Trade officials. The Government should ensure that such a forum, which could in many ways mirror the Civil Society Dialogue at the EU level, is transparent and accessible to all.

130.The proposals for the STAG are a step in the right direction. The current membership of STAG is imbalanced between business and civil society, and does not allow for the breadth and depth of representation necessary for consultation during trade negotiations, as it does not include all stakeholder groups that should be represented. The Government should redress the imbalance between big business, small and medium business, civil society, trade unions and consumer groups, and report back to us on how it has done so.

131.The Government should create a STAG sub-committee for each representative category in the current STAG proposals. This sub-committee should feed its conclusions upwards through the lead STAG member at points where the Government is seeking feedback on negotiating texts and positions. This will allow Government to efficiently receive confidential feedback from an increased pool of expertise. The Government should create ad-hoc sub-committees where there is a need for additional expertise not currently covered by STAG members—for instance, services or digital trade policy.

132.STAG members and sub-committees should be vetted advisors with full access to all negotiating documents to allow them to provide the best advice to Government. The membership and application processes to these groups should be publicly available and fully transparent. The balance of stakeholder groups, and the members of each group, should be reviewed and changed at regular intervals, to avoid concerns about preferential treatment of specific businesses or organisations.

133.STAG should act as a “room next door” during negotiations, allowing it to provide Government with swift advice and calling on the expertise of its sub-committees when doing so. Where STAG identifies that a change in the negotiating position could have significant impacts not covered in the impact assessment, it should have the power to recommend the production of a new impact assessment, which must be completed before negotiations progress further.

134.Business and civil society groups should be involved in the production of impact assessments. These assessments should be produced before negotiations are initiated, as well as following the conclusion of negotiations (before a deal is presented to Parliament). They should use consistent metrics and analyses, and consider economic as well as non-economic impacts.

101 European Commission, Civil Society Dialogue - Objectives, March 2014. For information on the workings of these groups during the TTIP negotiations, please see: Q100 and Q104

102 European Commission, Expert Groups, January 2018

103 European Commission, Transatlantic Trade and Investment Partnership Stakeholder Advisory Group, April 2018

104 Q102

105 Q102

106 European Parliament, TTIP and Labour Standards – study for the EMPL Committee, 2016

107 Q104

108 Q49

109 Q49

110 Department for International Trade, Preparing for our future UK trade policy, Cm 9470, October 2017

111 A Trade Model That Works for Everyone, August 2018

112 See International Trade Committee, First Report of Session 2017–19, Continuing application of EU trade agreements after Brexit, HC 520, Annex 2.

113 techUK (UTP0033)