Friday, July 13, 2007

Transparency and Civil-Society Participation in International Trade Negotiations (A Policy Brief)

Sharon M. Quinsaat

This policy brief was prepared as part of the United Nations Research Institute for Social Development's (UNRISD) study entitled "Global Civil Society Movements: Dynamics in International Campaigns and National Implementation." The Philippine country study examined five contemporary civil society movements that deals with debt, international trade rules and barriers, global taxation, corruption, and fair trade.


Like most developing countries, international trade has been a major plank of the Philippine government in its pursuit of macroeconomic growth and development. It is currently a member of two multilateral forums: the World Trade Organization (WTO), the only global international organization dealing with the rules of trade between nations; and the Asia-Pacific Economic Cooperation (APEC), an intergovernmental grouping operating on the basis of nonbinding commitments and open dialogue to facilitate economic growth, cooperation, trade, and investment in the Asia-Pacific region. It is also signatory to the Agreement on the Common Effective Preferential Tariff Scheme for the Association of Southeast Asian Nations (ASEAN) Free Trade Area or AFTA, which seeks to eliminate tariff barriers among the Southeast Asian countries with a view to integrate the ASEAN economies into a single production base and create a regional market.

Alongside these formations are agreements with strategic trading partners, discussed either regionally or bilaterally. In 2005, a Memorandum of Understanding on the Early Harvest Programme was signed between the governments of the Philippines and China, in accordance to the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and the People’s Republic of China. Likewise, the governments of South Korea and ASEAN (except Thailand) signed a FTA in May 2006, which took effect in July 2006. The Japan-Philippines Economic Partnership Agreement (JPEPA), a free trade agreement (FTA) that covers services, investment, human resources development, and other forms of cooperation, was signed on 9 September 2006. As the Doha round of trade negotiations in the WTO is presently under indefinite suspension, more bilateral trade and investments agreements are in the offing. Even countries like Australia and India have jumped into the bandwagon as they are looking into potential EPAs with the Philippines. Similarly, there is a high probability that developed countries will be pushing aggressively for regional FTAs. In response to a widening net of bilateral deals being negotiated by the China-Japan-Korea triumvirate and as an attempt to open up and maintain economic footing in the region, both the European Union and the United States are pursuing expanded trade cooperation through FTAs with ASEAN as a regional bloc or with its individual member-states.

With the proliferation of FTAs and continuing implementation of multilateral, regional, and bilateral accords, all of which impact either positively or negatively on the livelihoods of various sectors, it is appropriate to ask whether mechanisms for transparency and accountability are in place and to what extent civil-society groups are involved in the trade-policymaking process. It should be recalled that during the ratification of the Uruguay Round of the GATT in 1994, civil-society groups criticized the government’s secrecy in its conduct of negotiations. Government consultations with affected sectors took place only when the agreement was already due for ratification, clearly indicating that such exercises were merely perfunctory. In the lead-up to the Ministerial Conferences of the WTO, social movements again clamored for information disclosure and inclusion in formulating and firming up the negotiating strategy of the Philippine government, but to no avail. On the other hand, talks on FTAs have been more surreptitious, with the executive department exercising monopoly of the process and the other branches of government, along with civil society, kept in dark.

In actuality, there are existing means of participation in the process. While the Department of Trade and Industry (DTI) continues to be responsible for the implementation and coordination of trade and investment policies, trade policymaking is done by consensus under the Cabinet-level Committee on Tariff and Related Matters Committee (TRM), which consists of an intricate system of interagency subcommittees and technical working groups, co-chaired by the DTI and the National Economic and Development Agency (NEDA). Each government organization is mandated to consult with the private sector and nongovernment organizations (NGOs) in the various levels of the policy process. Some have gone so far as creating ad hoc bodies for this purpose. For instance, at the DA, a multisectoral task force composed of twenty-eight representatives from farmer groups, industry associations, business federations, nongovernment and peoples organizations, and other relevant government institutions and agencies, was set up in 1998. Called Task Force on WTO Agreement on Agriculture (Re)negotiations (TF WAR), its main responsibility is to consider, develop, evaluate and recommend Philippine negotiating positions and strategies for the new round of negotiations.

But to what extent can civil society influence the substance of these policies, especially when at the top of the tier, crucial information is withheld by the chief negotiators? International trade is under the realm of Philippine foreign policy. As such, negotiations are pursued behind closed doors, by an elite group of experts in entirely secret diplomatic processes. Information is treated as potentially debilitating to negotiating tactics and thus shielded from public scrutiny. In addition, trade by design is a policy domain where only a handful of actors has control in decision making, mostly economic and legal experts. Protective instruments were instituted to shield these organizations from external influence and particularistic interests, and from the conflicts, setbacks and media assault produced by open consultation. Thus, international trade policymaking has been basically technocratic.

Is a Philippine Trade Representative Office the Solution?

Through the incessant Congressional lobby work of a range of NGOs and even business groups, House Bill (HB) No. 4798[1] and Senate Bill (SB) No. 2236,[2] entitled “An Act Creating the Philippine Trade Representative Office, Appropriating Funds Therefor, and For Other Purposes” were filed in 4 October 2005 and 27 March 2006 respectively.[3] The bills are hinged on three pillars of trade and investment policymaking: policy coherence and predictability, transparency, and accountability. It is also guided by the principles of democratic governance. The proposed office shall be among others the principal agency in-charge of strategizing the Philippine trade position based on a national development agenda and the chief representative of the Philippines for international trade negotiations, whether bilateral, regional, or multilateral. In such a set-up, all final negotiating positions would come from this single agency.

This proposition is akin to the Office of the United States Trade Representative (USTR). It actually mirrors the structure of the USTR. Through an interagency structure, it coordinates trade policy, resolves disagreements, and frames issues for presidential decision. It also consists of a private sector advisory committee to ensure that trade policy and negotiation objectives adequately reflect national economic interests.

While indeed the Philippine Trade Representative Office (PTRO) can remedy the problems emanating from the absence of a clear-cut hierarchy, mandate, and delineation of authority in the trade policymaking structure resulting in what the authors of HB 4798 term as a “tug-of-war” among the different agencies, it may not be able to substantively address the issues of lack of transparency and exclusion of affected sectors and civil-society groups in the trade policymaking process. Some of the reasons are as follows:

1. Under Section 3 of HB 4798 and SB 2236, the PTRO shall be lodged at the Office of the President, and headed by a Philippine Trade Representative with the rank of Ambassador Extraordinary and Plenipotentiary and three Deputy Philippine Trade Representatives, all of whom shall be appointed by the President. This further consolidates the power of the executive, specifically the President, in trade-related matters. If the President espouses a neoliberal agenda, in which key defining characteristics include a technical approach to trade and the exclusion of dissident forces from the arena of policymaking, then the PTRO does not provide a responsive arena for civil society advocating reforms in trade policies that are deemed threatening to the full realization of the President’s economic orthodoxy.

2. The organizational structure of the PTRO is unclear. But it is obvious that like the present set-up with the TRM, it will be dominated by agencies and bureaus from the executive department, which include, among others, NEDA, DTI, DA, and the Department of Finance. What will be the PTRO’s relationship with the House of Representatives and the Senate? HB 4798 and SB 2236 have limited the role of members of Congress to the Advisory Committee for Trade Policy and Negotiations. But it is likewise ambiguous where does this committee fall in the hierarchy of the PTRO. If the PTRO is patterned on the USTR, then it should be emphasized that since its creation, the USTR has maintained close consultation with Congress.

Five members from each House are formally appointed under statute as official Congressional advisors on trade policy, and additional members may be appointed as advisors on particular issues or negotiations. Liaison activities between the agency and Congress are extensive. USTR provides detailed briefings on a regular basis for the Congressional Oversight Group, a new organization composed of members from a broad range of congressional committees. In addition, USTR officials and staff participate in hundreds of congressional conversations each year on subjects ranging from tariffs to textiles. (

The standing of Congress in this proposed body is very important if the issue of transparency and civil-society participation is at stake. To some extent, civil society has leverage in Congress. Through the inquiries, the Congress has become a platform for grievances and a weapon to compel the executive to disclose crucial information pertaining to trade negotiations.

3. The instruments for transparency and civil-society participation in the bills are obscurely phrased. Section 11 of the bills stipulates that the Philippine Trade Representative shall seek information and advice from representatives of the private sector and NGOs working on trade policy on different matters pertaining to international trade. This gives the PTR an option rather than a clear directive to engage these outside actors. Consultation must be enforced.

Likewise, Section 13, which identifies the members of the advisory Committee for Trade Policy and Negotiations, has loopholes that can be exploited by individuals and groups seeking to circumnavigate the participation of civil society in the PTRO. According to this clause, “The Committee shall consist of not more than 40 members from relevant national government agencies, both Houses of Congress and representatives of industry, agriculture, labor, small business, service industries, retailers, and consumer interest. The committee shall be broadly representative of the key sectors and groups of the economy, particularly with respect to those sectors and groups which are affected by trade.” Without explicitly stating which type of groups would compose the Committee, agriculture may likely be represented by sugar millers or exporters, given their history of gaining concessions from the government.

The move to centralize trade policymaking through HB 4798 and SB 2236 may not be a wise policy advocacy if the objective is to make the process transparent or participatory. The Discussion Paper of the Philippine Institute for Development Studies, “Does the Philippines Need a Trade Representative Office?,” should serve as a caveat.

“…The unfortunate result of the current political climate in the Philippines is that the shield that is supposed to protect policy from inordinate public influence does not hold. This is precisely the issue that the United States sought to address with the creation of the USTR. The presumption is that government sectoral agencies have the tendency towards ‘sectoral policy capture,’ such that an independent, non-aligned agency capable of doing a more objective processing economic tradeoffs is needed.” (Pasadilla and Liao 2005, 17)

The Philippine Trade Representative Office will, therefore, further insulate the trade policymaking process and make it a more technocratic matter.


There are attendant consequences to centralization. The way HB 4798 and SB 2236 are currently formulated, the Philippine Trade Representative wields too much power. This is perhaps because it was conceived more as a response to policy incoherence in trade policymaking rather than a solution to non-transparency. In the current schema, civil society can take advantage of multiple power centers. Although the different agencies of government have varying degrees of openness to participation of nongovernment actors, civil society may be able to forge alliances with sympathetic departments. For instance, the DA is supportive of small farmers’ advocacies to protect the agricultural sector. This can be used to pressure the DTI or NEDA.

HB 4798 and SB 2236 can, however, be improved through the following:

1. Achieve balance of power by giving Congress a more keen role in the PTRO

In the organizational structure of the PTRO, a joint executive-legislative council can be put in place instead of just an inter-agency coordinating committee. This shall include members of the House of Representatives and the Senate from the majority and minority, as well as party-list groups. This way, the Congress will also play a key function in the formulation of trade negotiating positions. Likewise, the PTRO is also accountable to the legislature.

2. Clarify the role of the Advisory Committee and guarantee representation

It must be stated clearly the position of the Committee in the hierarchy. Will it be independent of the Philippine Trade Representative? Rather than the Philippine Trade Representative appointing the members of the Committee, it is best if the selection process is left to the different departments and Congress. As stated by Section 13, the Chairman will be elected by the Committee from among the members. Also, impartiality of the Committee should be maintained and thus, its Executive Director should not be appointed by the Philippine Trade Representative.

It is important that the bills require that a proportion of the membership of the Committee should come from the marginalized and underrepresented sectors, various NGOs with known track-record on trade policy advocacy, and the academe.

3. Institute mechanisms for regular open consultation and disclosure of information

While the Philippine Trade Representative draws advice from the Advisory Committee, it must hold regular public hearings on matters that have severe repercussions to majority of the population. In addition, procedures on disseminating crucial information, without compromising the official negotiating strategy, should be set up.

Finally, caution should be applied in portraying the institutionalization of civil-society participation through ironclad canons as a way of democratizing the trade policymaking process. Equally important are the openness of the politico-administrative environment and political culture.


Pasadilla, Gloria O. and Christine Marie M. Liao. 2005. Does the Philippines Need a Trade Representative Office?. Discussion Paper Series No. 2005-26. December.

[1] This was introduced by Representatives Lorenzo R. TaƱada III (Fourth District, Quezon), Ronaldo B. Zamora (Lone District, San Juan), Del R. de Guzman (Lone District, Marikina City), Proceso J. Alcala (Second District, Quezon), Rafel P. Nantes (First District, Quezon), Danilo E. Suarez (Third District, Quezon), Emmanuel Joel B. Villanueva (CIBAC Partylist), and Mario “Mayong” J. Aguja (Akbayan Partylist) during the Second Regular Session of the Thirteenth Congress.

[2] This was introduced by Senator Manuel A. Roxas III during the Second Regular Session of the Thirteenth Congress.

[3] It is not the first time, however, that such legislative measure is introduced. In 2002, a piece of legislation to create a WTO Affairs Strategy Office (WTO ASO) was filed by Representative Boboy Syjuco. The WTO ASO, to be lodged at the Office of the President, is to some extent similar to the defunct WTO/AFTA Commission. It has no authority over the trade negotiations.

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