The Office of the U.S. Trade Representative (USTR) says it is trying to include anticorruption pledges in the proposed Trans-Pacific Partnership (TPP) trade deal. According to USTR, it not only wants “commitments to promote transparency, participation, and accountability” in trade issues (commitments USTR claims it has already had some success securing recently), but also more general “commitments discouraging corruption . . . among public officials.” It’s not entirely clear what USTR means, particularly with respect to this latter suggestion that it is going to push for more general anticorruption pledges in the TPP. Maybe it doesn’t mean much – it might just be feel-good rhetoric, with little connection to what’s actually going on in the closed-door TPP negotiations. But suppose that USTR is sincere, and that it genuinely hopes to include some sort of anticorruption language in the final TPP deal. Is this a good idea? If so, what sorts of anticorruption commitments would be appropriate in a mega-regional trade agreement like the TPP?
The idea of incorporating anticorruption measures into trade deals is hardly novel. (See this panel summary for some high-level background). Last year, Colette’s post on this blog recommended adopting Transparency International’s suggested anticorruption measures for the proposed Transatlantic Trade and Investment Partnership (the T-TIP), though she also opposed addressing corruption through the multilateral WTO regime. Other commentators and civil society groups have pressed for the incorporation of anticorruption measures in other regional free trade agreements (for example, see here and here). With respect to the TPP, these prior discussions suggest several considerations that USTR negotiators should keep in mind if they are serious about pushing for more anticorruption language in this agreement:
- First, it would be a mistake to use the TPP to craft and impose a new set of substantive anticorruption commitments. After all, the participants of the TPP are already members of an array of anticorruption instruments. All have signed the UN Convention Against Corruption (although Japan and New Zealand have not yet ratified it). The OECD Anti-Bribery Convention includes seven of the twelve TPP countries (excluding Brunei, Malaysia, Peru, Singapore, and Vietnam). Australia, Japan, Malaysia, Singapore, and Vietnam are involved in the ADB/OECD Anti-Corruption Initiative for the Asia-Pacific, while Chile, Mexico, Peru, and the United States are members of the Inter-American Convention Against Corruption. There is no shortage of international and regional anticorruption agreements. As Rick noted (in a somewhat different context), it would be a mistake to “[i]gnor[e] the several international anticorruption conventions now in place and the slow but steady improvements these agreements have produced.” Indeed, much as free trade advocates have warned of dilution and waste from a multiplicity of free trade deals, the same concern may apply to a multiplicity of anticorruption commitments. Instead, the TPP could and should work by reference to existing international anticorruption standards. A model for reference might be the draft labor chapter that the AFL-CIO and its foreign counterparts have proposed for the TPP. That plan included provisions requiring countries to comply with their own domestic labor laws. It also referenced existing international labor standards, calling on countries to “give full effect to the OECD Guidelines for Multinational Corporations.” TPP anticorruption terms should take a similar approach and explicitly reference the existing provisions, say of UNCAC, to reinforce current domestic commitments to anticorruption policy and enforcement.
- Second, the TPP could appropriately include some language making explicit demands for fair courts. While most countries have corruption laws on the books, a compromised judiciary can all too often get in the way of punishing and deterring offenders. The TPP should call on countries to ensure due process in court proceedings on trade- and investment-related corruption matters (including bribery, land grabbing, and the like). Again, the AFL-CIO’s draft chapter on labor (particularly Article 17.6) could serve as a model here, as can Transparency International’s proposed T-TIP chapter on transparency issues (in Section A: Review and Appeal). A trade agreement can’t unilaterally fix a failing judiciary, but it could help to up the pressure to do so.
- Third, specifically in the context of government contracting, the TPP could and should include express provisions on debarment of contractors who engage in corruption or fraud. The TPP should endorse some procedures through which countries may debar from government contracting companies caught out in corruption, though it should not mandate such a result. TI’s draft T-TIP chapter called for countries to maintain some mechanism for “denial for a set period of time of access” to certain benefits and contracts, including public procurement. Likewise, the TPP could include the threat of and routes to possible debarment. Public procurement can represent significant income streams. Such a debarment mechanism could threaten loss of business in either the home country or the host country. It could be used by governments to address problematic companies but could also be used by companies, if facing requests for bribes or special treatment, as a justification why their deals and activities must be legitimate.
On the whole, the TPP’s coverage of anticorruption measures should focus on trade-centered matters. TPP provisions asking for transparency in trade related issues—say, public access to information on the domestic trade policy creation process, appointment of trade officials, or setting of domestic trade and foreign direct investment procedures—makes intuitive sense. Although there are reservations to having major economic powers dominating the terms of a major economic deal including some smaller, less developed nations, this is an opportunity to set the bar high in at least one substantive area.