Report of the 4th Meeting of the
Transatlantic Consumer Dialogue

Opening session

The introductory session was chaired by Jim Murray of BEUC, a member of the TACD Steering Committee. His first task was to introduce Ambassador Morningstar who talked of the increasing criticality of the consumer dialogues. It took a long time, he said, for people in the US to realize that questions relating to GMOs, for example, go far beyond trade barriers and protectionism, and actually involve real consumer concerns.

Robert Coleman, Director General of the European Commission's DG for Health and Consumer Protection, talked of the success of the last conference in Washington which gathered 60 consumer organizations, representing over 630 million consumers, and expected this meeting to consolidate the TACD as an influential forum for consumer issues. With the growing global impact of liberalization, Mr Coleman suggested that consumer protection must be considered properly at a global level, and welcomed any input that this conference could make. He also proclaimed the EU's commitment to further development and cooperation with the TACD, including continued financial support, as well as early notice of relevant upcoming Commission issues to facilitate comment, and written responses to the recommendations issued by the conference.

For the US government, Assistant Secretary of State for Economic and Business Affairs, Tony Wayne, commented that consumer input is invaluable in the regulatory and rule-making process, and that the TACD provided a new and good alternative way to constructively discuss diverging points of view. He acknowledged the need for openness and reform in our international institutions, citing the need for world and regional development banks to ensure wide public consultation of policy, and for the WTO to be more transparent.

Rhoda Karpatkin of Consumers Union of the US, speaking for the TACD in the opening session, heralded the significant changes to the TACD since its first meeting, reflecting how differing cultures and varying policies had been overcome to build a consensus. The innovative dialogue has importantly opened fresh lines of communication between consumer groups and the two governments, but the TACD is very disappointed at the absence of any newly appointed officials from the Bush administration. Referring to the increasingly vocal and specific public debate on trade, Ms Karpatkin said that Seattle had become the synonym for citizen anger at the rules and practices of world trade, but that the strongest symbol of all is the decision to hold the next WTO ministerial in the small and mostly inaccessible site of Qatar which offers considerable insulation from civil society. In looking forward to fruitful discussions, she reminded the audience that the TACD's views can help governments avoid pitfalls, and may provide a compass sorely needed today in the complex world of trade policy.

Benedicte Federspiel of the Danish Consumer Council, and also a member of the EU Steering Committee gave the TACD 'State of the Nation' report. She highlighted the discrepancy between governments talking about the need for more transparency in WTO, and then selecting Qatar as the venue for the next meeting; and she also lamented the continuing secrecy in negotiations on trade in services, as well as the failure to conduct a "review and repair" analysis of the WTO as called for by so many groups. The TACD looks forward to the same recognition and treatment that the TABD gets, including for example a replication of the promise given to the TABD that they would be consulted by the US government before the launch of any new challenges in the WTO. Ms Federspiel talked about TACD agreement to develop priority issues, the desire to meet more often with government officials to further understanding, and to work closer with elected representatives and the media. Unlike the business dialogue, the TACD has few resources and these developments represent a significant step that it is hoped can be matched with increased commitment from our friends in government.

In an answer to an interesting question about the precautionary principle, Tony Wayne replied that he thought that Under Secretary of State Allan Larson had been misquoted in saying that the EU is implementing the Precautionary Principle under the sway of radical extremists, but that the US government do believe that the term has been ill-defined and misused by some people. The session closed with a plea from Rhoda Karpatkin that every positive thing the US government says about the TACD needs to be backed up with funding to make these words true.

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Workshop 1 - Open Government

Chaired by Felix Cohen, the Director of Consumentenbond and an EU Steering Committee member, the first workshop looked at how transparency and government can be organized, what we can learn and understand about different systems of open government, and how we can make governments more open.

Stephen Wood, of the US government's National Highway Transportation Safety Administration, gave a presentation on the process of US rule making, carefully underlining the three pillars of public participation, access to information, and accountability.

Joan Claybrook, Public Citizen, asked where these three pillars were in the international organizations such as WTO and NAFTA where domestic regulations protecting health and safety have been overruled as barriers to trade by unaccountable panels. She also questioned the whereabouts of Stephen Wood's three pillars with regards to the European trend towards soft law and self-regulation (or regulation lite as it might be called), and decried the corporate assumption that self-regulation or voluntary standard setting works best.

Jérôme Vignon is the Chief Advisor on the European Commission's White Paper on Governance reminded the audience that not only is Europe a young democracy, but it is also not a federal state, and consequently while inspiration can be taken from American experiences, the EU is by no means identical in its democratic needs and structure. Referring to recent food crises, Mr Vignon urged the re-establishment of the balance between consumers and industry. With regards to consultation with civil society, he talked of the introduction of a grading system based on responsibility and representation that will allow for various levels of participation in the decision-making process.

Director of the European Policy Centre, John Palmer, was the final speaker of the workshop. While accepting that there were positive lessons to be learnt from the US, he said there were also negative ones, such as avoiding the very intimate relationship between corporate power and wealth and the political process that is seen in the US. Regarding openness in the EU, Mr Palmer reserved his major criticisms for the Council and the secrecy that still surrounds its decision-making. He also stated that the formal position of NGOs as dialogue partners should be made specific in the EU treaties.

Notably, in the ensuing question and answer session Jim Murray criticized the almost complete lack of Commission officials present to discuss the issue of openness and transparency, and was disappointed with what he considered a lack of enthusiasm for transparency in Mr Vignon's presentation.

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Workshop 2 - Liberalization of Trade in Services

Niel Ritchie, of the Institute for Agriculture and Trade Policy, chaired the session. He opened by applauding Tony Wayne's affirmation of the need for more transparency and inclusiveness in policy-making, and noted that nowhere was there more need for that than in the GATS negotiations, where many fear a negative impact on public services.

The first speaker was Pascal Lamy, the European Conmissioner responsible for Trade who began by pointing out that the EU's interest in these negotiations lay in it being the largest importer and exporter of services. He looks forward to a final meeting to make a decision based on these on-going negotiations, and said that there is now a much better idea on how to put across a period of liberalization than there was 18 months ago. Commissioner Lamy said that the EU is under no obligation to make concessions on public services that it doesn't or can't make. He finished by giving a list of the sectors in which the EU has put forward commitments: professional and business services, telecommunications, construction and engineering services, postal, environmental and financial services, tourism and transport. He said that health and education were very clearly not part of this list. The Commissioner explained that he cared about public services, and that due to this and to his position as the mandated EU negotiator, he would protect public services.

Agnès Bertrand, of ECOROPA, strongly disagreed with Commissioner Lamy's interpretation of the GATS negotiations, quoting from various articles of the GATS agreement and a restricted paper to make her point, and claiming that, due to its ambiguities, the language used in GATS was dangerous to the point where it could threaten all government services.

Ed Mierzwinski, Director of the Consumer Program at PIRG, was the next speaker, and he expressed much concern about plans by the working party on domestic regulations to import into GATS requirements of governments to prove that their regulations are necessary or the 'least trade restrictive measure' they could have taken. He also worried that the language in GATS was likely to accelerate privatization that will benefit private entities at the expense of the provision of basic and necessary provisions. Mr Mierzwinski railed against the non-transparent and closed-door manner in which the GATS negotiations have been carried out, preventing civil society from providing any scrutiny. Finally, he called for GATS to be amended to include an article explicitly recognizing the governments' right to regulate, as this right currently expressed in the preamble does not have the same weight. Otherwise, he fears that virtually any regulation could be challenged on trade grounds and determined not by a panel of experts on consumer health and safety, but by a WTO trade body without such expertise.

Questions were raised from the floor and Ellen Gould, a researcher on GATS, was encouraged to hear from the Commissioner's presentation that the Commission no longer appeared to be calling for necessity tests, and also that, whereas before it had said that GATS should apply across the board, it now seemed to be saying that it would apply on a sector-by-sector basis.

Commissioner Lamy confirmed that the Commission had changed its position on necessity tests, and had instead moved towards the concept of proportionality. He also replied, when asked if the Consumer Dialogue could have the same access to documents as the business dialogue, that he has always said that the five pillars of transatlantic dialogue (business, consumer, environmental, legislative and labour) are equal for him. If the TACD can reach out and have the same sort of substantial hard-working based influence as the TABD, then that is fine with him. He said that, while the business dialogue seemed to be more influential for a long time, things were now balancing out, and he was happy with that.

After the break the other two panellists gave their presentations, beginning with Mark Linscott, Attaché for Trade in Services, US Trade Representative Permanent Representation to the WTO. Mr Linscott said that he has a negotiating mandate that reflects an inescapable objective to further liberalise trade in services, but that the WTO provisions make it clear that liberalisation should take place with great sensitivity to regulatory priorities, and with flexibility in terms of what it is and is not appropriate to liberalise in which countries. The negotiating guidelines and procedures reaffirm the role of national policy objectives, the right to regulate, and the flexibility for developing countries. The Attaché wanted to encourage NGOs, despite difficulties with lack of resources, of the beneficial impact of coming to Geneva to have discussions with individual delegations.

Jill Johnstone, Head of Policy at the National Consumer Council, and new EU Chair of Trade Working Group, was the final panel speaker. Ms Johnstone illustrated the importance of regulation, citing the double aims of ensuring that there is effective competition, and achieving public policy objectives such as consumer protection or universal access to essential services. Recognising the work done by the WTO to improve access to information, she said that the process was still very slow and some information never appears in the public domain. The closed nature of the meetings is something that should be changed, and the lack of transparency only serves to accentuate the TACD's sensitivity about what rights may be given away in negotiations.

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Round Table with David Byrne, European Commissioner in charge of Health and Consumer Protection (DG SANCO)

David Byrne kicked off the discussion by saying how important it is that he has close contact with both EU and US consumer organizations to facilitate the whole question of policy development at DG SANCO. The Commissioner thought that the BSE crisis showed the clear need for an authoritative voice that the consumer can trust in this issue, and that, if people can see that there is a plan which is working, consumer confidence in beef will raise. He also stated the importance of retaining the ban on meat in bone meal to cattle. Commissioner Byrne admitted to not being confident that all contaminated animal feed has been eradicated from the system, but said that the Food and Veterinary Office are currently conducting visits to test on the levels of control on these feeds in all member states.

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Plenary Session on Consumer Protection as a priority in the US-EU partnership - delivering results

Before the plenary session on consumer protection as a priority began, the floor was given to Jamie Love (Consumer Project on Technology) to explain the very important work he had done to help the South African government achieve compulsory licensing on the patent medicines for AIDS and other diseases. Mr Love talked about the obstacles put in place by drugs companies, and by the EU and US governments who have now changed their policies. He also complained about the misreporting in the western media of what had actually happened. South Africa's attempts to enact simple legislation to get a cheaper supply of much needed medicine was no different to what the US does with generic drug substitution or the EU does on parallel imports of drugs. At the TACD's 4th meeting the Trade Working Group adopted a resolution on global access to health care (Trade-10-01).

The plenary session was chaired by Agne Pantelouri, Director of Consumer Affairs at the European Commission's DG for Health and Consumer Protection. She wasted no time in introducing the first speaker.

Hans Eric Holmqvist, the Swedish State Secretary, began his presentation by stating that in the information age you need to have transatlantic cooperation to ensure proper protection of consumer rights. The State Secretary said that one aspect of promoting the consumer interest is of course access to the policy-making process, and he believes that the EU's moves towards establishing a new transparency will fulfil that goal. Furthermore, he insisted that without consumer confidence there is no market, and so the stakeholders must be given the possibility to participate in the regulating process. With regard to the increasing trend for more flexible regulation Mr Holmqvist stressed the importance of enforcement systems and the necessary safeguarding of legal certainty. In conclusion he recalled that a sound market economy is always dependent on the accommodation of active and strong consumers and accountable business operators, and it is important that the views of consumers are well heard in the debate about the future of Europe.

US Ambassador Richard Morningstar, remarked first on the remarkable progress over the past few years with the TACD, and referring to the transatlantic business dialogue (TABD), he does not think that the transatlantic consumer dialogue plays second fiddle to anyone. He believes that the TACD, TABD and other stakeholders can play a major role in working with both the EU and the US in trying to find solutions to many of the transatlantic disputes. For example, before going to the WTO with a case the Ambassador said that the US government should, on a pure trade case, talk to the TABD on any ideas they have for resolving the problem, and if there is a strong consumer interest they ought to talk to the TACD.

Regarding biotechnology Mr Morningstar stressed the importance of the TACD's continued emphasis that GMOs are as much consumer and public opinion issues as they are trade ones. He also agreed with the TACD's point on Chargebacks (Resolution Ecom-23-01) in E-commerce, and on implementing the OECD guidelines on protection in e-commerce. He agreed with Commissioner Byrne that, without ADR (Alternative Dispute Resolution), most consumers will not have the resources to pursue their legitimate claims. Turning to the location of the WTO ministerial in Qatar, Ambassador Morningstar assured the TACD that the US government will carefully consider the issues raised by the TACD, agreeing on the need for balance. He sees the TACD as enhancing the transatlantic relationship by forcing the governments to consider real consumer concerns. He said that meetings with government officials should be more often and with more people, and urged the TACD to try and build coalitions with other stakeholders.

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Working Group Reports

Food
The Food WG used this meeting with government officials to follow up on some of the resolutions already agreed and had interesting discussions. On GM foods, the European Commission talked of the possibility that labeling rules will be changed to require labeling of all derivatives. The US, however, remain unconvinced by mandatory labeling, despite the EU-US Biotechnology Consultative Forum which called of mandatory labeling and pre-market approval for GM foods. Both governments said that they would be responding to these and other recommendations.

In response to concerns about BSE and the level of precaution in the US over food safety, government officials reported that they were considering legislation to ban the use of the spinal column in mechanically recovered meat.

Regarding the principle of precaution an interesting joint discussion was had with the Trade WG and government officials. The Commission are seeking to get clarification of the precautionary principle on the agenda of the next WTO round, and they expressed, in line with the TACD recommendation, the importance of transparency in the involvement of civil society. US consumer groups distributed a legal memorandum demonstrating that the US government does not exercise precaution in all areas of risk management as it has claimed. Rather, the consumer groups pointed out that the US government sometimes exercises high levels of precaution, such as in the area of pesticide regulation, and sometimes exercises low levels or precaution, such as in the area of dietary supplement regulation. The US consumer groups hoped that this information contributed to the ongoing discussion on this matter between governments.

One of the TACD's eight priority items for 2001 is the reduction in the use of antibiotics in animal and food production. In October 2000 the US proposed a ban on the use in poultry of a group of antibiotics called fluoroquinolones because such use is a cause of resistant Campylobacter infections in people. At its meeting, the TACD amended its existing antibiotics resolution (which already called for a prohibition on feeding human use antibiotics as growth promoters to animals - a step already taken by the EU, but not by the US) to also "call for a total ban on the use of fluoroquinolone antibiotics in poultry unless the drug is administered by injection". The EU said that it was reviewing its policy on fluoroquinolones. The TACD asked the EC to report on the status of this review by October.

In the area of food and dietary supplements Consumer advocates were also encouraged by a commitment made by both EU and US officials to hold at least one joint meeting per year. These meetings would coordinate regulatory enforcement efforts aiming at prohibiting false and misleading claims on food packages.

Trade
The Trade Working Group reported some progress in discussions during the meeting, though not enough. The Working Group welcomed the steps taken in recognition of the importance of the access to AIDS medicines issue, and noted that the EU declared the right of developing countries to make their own decisions about how to protect their consumers in instances like this. However, the TACD suggested that the EU and US could go further by entering into agreements with the WHO, UN, UNICEF and others to enable these organizations to use patents that were developed with public funding.

Regarding the forthcoming WTO ministerial in Qatar, the WG was pleased with EU commitments to bring NGOs on their official delegations, but were disappointed that the US could not give the same assurances.

On trade in services the US said that it was looking for clarification of the wording in GATS to make it clearer that public services are excluded, but the Trade WG, along with trade lawyers, insist that preambular language is not enough and would like to see an article inserted on this issue.