REPORT:  6TH ANNUAL MEETING

Contents

1) Executive summary
2) Opening plenary session
3) Closing plenary session

Executive Summary

The sixth meeting of the TransAtlantic Consumer Dialogue (TACD) took place amid concern over the organisation’s future with doubts over whether it would continue to receive sufficient funding to carry on its work. Felix Cohen (Dutch consumer organisation Consumentenbond) said there were “dark clouds ahead” as the future of financing was unclear, while Rhoda Karpatkin (emeritus president of Consumers Union, U.S.) hoped that the dialogue would not be “killed” after all it had achieved.

Speaker after speaker praised TACD and the work it carried out bringing together consumer groups from the EU and the U.S. and meeting government officials. EU Health and Consumer Protection Commissioner David Byrne said that the “forum had shown its ability to make a contribution” to effective consumer policy and was highly regarded by him and his staff. Federal Communication Commissioner Mozelle Thompson also praised TACD’s work, in particular on the digital environment, and commented that the dialogue’s work had a greater impact than was sometimes recognised. Another speaker said that, since 1998, TACD had been “the most successful and sustained people-to-people dialogue” while others said its work provided a model for cooperation by other interest groups. Mr Cohen listed the areas where TACD had been active over the last 12 months ranging from agricultural dumping and GATS, to diet and health, GMOs, spam and intellectual property rights.

A succession of speakers remarked that consumer policy was becoming more important than ever and could boost the effective functioning of a market economy rather than being seen as inevitably clashing with business interests. Commissioner Byrne stressed the need to integrate consumer policy into all areas of policy making. Rhoda Karpatkin said that consumer confidence been deeply undermined by recent events such as the mad cow disease outbreak and the collapse of Parmalat. There should not be a “tug of war” between consumers’ interests and those of business. This was a view shared by many other participants including Commissioner Byrne and U.S. Ambassador Rockwell Schnabel. Benedicte Federspiel (Danish Consumer Council) summed up delegates’ views saying that the consumer was in the driving seat and should stay there.

The first day of the meeting heard about key developments and concerns in consumer policy on both sides of the Atlantic. Commissioner Byrne and Felix Cohen stressed their support for the World Health Organisation’s strategy on diet, physical activity and health. Mr Cohen then went on to evaluate how the European Commission and U.S. Government’s had responded to TACD’s recommendations over the previous 9 months since the launch of TACD’s Priorities for Government Action 2003 – 2004:

The subject of genetically modified organisms (GMOs) featured strongly in the day’s discussions with disappointment expressed by consumer representatives at the U.S. decision to challenge the EU authorisation procedures in the World Trade Organisation. The U.S. government representative expressed confidence in a successful ruling but Commissioner Byrne was equally bullish that a satisfactory authorisation procedure would be put in place within a few months. Consumer groups, nevertheless, warned of a “pyrhhic victory” by the U.S. given the reaction of European consumers.

On food labelling, TACD welcomed the Commission’s planned legislation to give consumers’ more information about the nutritional content of food.

On spam consumer groups expressed disappointment that the U.S. had adopted an opt-in system unlike the EU which had chosen the opt-out approach. In the meantime TACD called for a “do not spam” registry in the U.S.

On wider digital issues, TACD warned that consumers’ interests were not being sufficiently protected through the development of copyright law in the digital age.

In the course of the day there was discussion on the EU’s new chemicals strategy. TACD expressed concern about the intense lobbying from U.S. government and industry, and fears that it would dilute the proposals at the expense of the safety of European consumers.

The US government’s representative stressed the importance of the Doha Development Round negotiations in the World Trade Organisation. EU and U.S. governments should show leadership and ensure that 2004 was not a lost year, he said, admitting that a joint EU-U.S. position paper on agriculture had not been enough to form a consensus within the WTO.

The Opening Plenary Session

Opening the first session, Jim Guest (President of Consumers Union–U.S.) said that the meeting was taking place at a “critical moment for TACD” in view of the possibility of losing or having its funding reduced. Since the dialogue’s first meeting six years ago it had been “a resounding success” and decision-makers were urged to “recognise the value of what TACD does”.

David Byrne (European Commissioner for Health and Consumer Protection) referred to TACD members as “my friends” and complimented the group as a “forum which has shown its ability to make a contribution”. The work of the dialogue is useful to him and the people who advised him. While the Commission and TACD do not see eye to eye on every point it is important to maintain a constructive dialogue.

Commissioner Byrne summarised his achievements and priorities since taking office in 1999, the main objective having been modernising and overhauling food safety legislation, with over 84 pieces of legislation passed (including the establishment of the European Food Safety Authority). He is aiming to revise current labelling rules and improve ease of consumer recognition, and  outlined a current proposal on health and nutritional claims as well as a Regulation on vitamins and minerals. The Commissioner also stated his support for the World Health Organisation’s initiative for a Global Strategy on Diet, Physical Activity and Health.

Turning to the EU’s legislation on Genetically Modified Organisms (GMOs), he said that the Union had set up the most rigorous pre-marketing system in the world as well as establishing clear arrangements for tracing and labelling GMOs. Although the final elements of the system would not be in place until April, he predicted that the World Trade Organisation would back the EU in the challenge lodged by the US and other countries against the EU’s authorisation system. He also mentioned a number of other policy initiatives which would benefit consumers including the EU’s new chemicals strategy, legislation on unfair commercial practices and planned revisions to the consumer credit Directive which would ensure that all modern forms of credit were covered.

Summing up, the Commissioner stressed the need for consumer interests to be integrated on in other policies. “Sound consumer policy is key for the effective functioning of the market economy”, he stated.

It was clear to U.S. Ambassador to the EU Rockwell Schnabel, since the World Economic Forum in Davos in January, that the atmosphere between the EU and the US had “turned around”. Consumers ultimately wield the most power. Ambassador Schnabel was delighted to see the work that TACD did. While there are differences of opinion with the Europeans, for example on GMOs, the input from the dialogue is very important for decision-makers.

Federal Communications Commissioner Mozelle Thompson has always been impressed with the candid dialogue around the TACD table. He welcomed TACD’s continuing attention to issues concerning the digital environment, and said that TACD’s resolution and survey on spam would help address the global problem. While it sometimes seemed that discussion in TACD was not as high-profile as its participants would like, the work does not go unnoticed and is valued. TACD has served as a useful platform for contacts between governments and consumer groups, even if discussion sometimes led to diametrically-opposed views. The consumer is in the driving seat more than ever and, with economic forecasts built on consumer confidence, shifts in consumer confidence could affect a company’s profitability.

Felix Cohen (Director General of Dutch consumers organisation, Consumentenbond) pointed out that TACD was the most active civil society dialogue and, for a while, the only one, adding: “We’re glad to welcome the TransAtlantic Business Dialogue back to the fold”. He congratulated American and European consumer representatives on their participation and commitment to the dialogue. While TACD’s ideas were sometimes far away from the US governments’, TACD members still appreciated the “give and take of the dialogue” and welcomed governments’ participation.

Turning to TACD’s recent achievements, he listed the position statement on agricultural dumping, the conference on WIPO, the World Intellectual Property Rights Organisation, the TACD two month-long survey on spam, which received over 21,000 responses, and the January position on advertising to children.

TACD had streamlined its agenda in line with governments’ requests and organised one-day conferences on two priority issues: diet and health, and intellectual property rights in the digital age. Stressing the urgent need for action on obesity, he pointed out that life expectancy in the US had fallen for the first time in decades. On copyright in the digital era, he explained that, while new technology is supposed to be benefiting consumers, it has actually resulted in new limitations on what consumers can do with copyrighted works, with the interests of corporate media rights-holders rather than the actual creators, being the main beneficiary.

Mr Cohen also mentioned the General Agreement on Trade in Services where TACD had asked for a provision to protect consumers and opposed the proportionality clause. While negotiations were still ongoing it was too early to say if the dialogue’s position would be taken into account. He noted some progress on access to medicines.

Commenting on the U.S. decision to launch a challenge in the WTO to the EU’s authorisation scheme for GMOs, Mr Cohen said it was the wrong way to win hearts and minds and warned that the US could be heading for a pyrrhic victory. EU Member States were on track to implement the provisions of the pre-marketing system, but he expressed concern about coexistence and suggested that GM-free zones, such as are ironically starting to appear in the US, could be the way forward.

On the subject of nutrition labelling, Mr Cohen repeated TACD’s call for claims to be consistent between the EU and US. He said he was looking forward to Commission proposals on health claims and expressed hope they would not be not diluted by the Council and European Parliament.

On spam, TACD is pleased with the EU’s decision to follow the opt-in approach but it has territorial limitations and will be largely undermined by the US adoption of an opt-in approach. Until the US changes their position, TACD is calling for a “do not spam” registry there. Mr Cohen expressed hope that work in the OECD would allow for greater international cooperation. 

Finally, he announced TACD’s intention to hold its 2004 Leaders Meeting in the margins of the June 2004 EU-US Summit.

Summing up, Mr Cohen warned that the future of TACD was unclear, saying that “there are dark clouds ahead”. There is a risk of such a significant reduction in funding from the European Commission that TACD may not be able to continue. However, everyone shares an interest in continuing the process.

Discussion

REACH

Jim Murray (Director of the European Consumers Organisation - BEUC) – what are the US Government’s precise concerns about the EU’s proposed REACH chemicals strategy?

Shaun Donnelly (Bureau for Economic Affairs, US State Department) – there is no question about the desire to evaluate chemicals which are very dangerous, but the early version of the legislation was far too broad and would require every product or chemical to be recertified and retested. That would be very burdensome for industry and consumers, and the huge volume of chemicals to test would make it difficult to focus on the most risky ones. Excessively burdensome and costly regulation which was not justified by science should be avoided.

EFSA

Agriculture

Jill Johnstone (UK National Consumer Council, and EU Co-chair of TACD’s Trade WG) – what progress has there been in WTO talks on agriculture?

Shaun Donnelly – it’s a key issue, but the way negotiations are structured nothing will move until agriculture moves. As long as there was a WTO the EU and US would butt heads. Both the EU and U.S. have compromised although neither is giving up its position. The EU-U.S. framework paper is still on the table, but there is no clear consensus in the WTO for moving forward. US Trade Representative Zoellick has made it clear in a  letter to trade ministers that agriculture is key and that there is a need to set a date for eliminating export subsidies and to agree to substantially reduce domestic support. There is commitment in Brussels and Washington to put momentum into the negotiations on agriculture. “We’re trying to find a way to ensure that 2004 is not a lost year”.

Commissioner Byrne - imports of food from developing countries into the EU are also an issue, as developing countries depend on exports. He spoke about recent visits to Thailand and Vietnam to check on progress on reducing antibiotic residues in foods like prawns and chicken. Trade considerations should not affect decision-making. He drew attention to the fact that the EU and U.S. have different decision-making processes, highlighted in the EU by the fact that agreement from all Member States was needed on reform of the Common Agricultural Policy (CAP). In the latest round of CAP reform EU Farm Commissioner Franz Fischler was concerned to ensure that there was decoupling, i.e. that money from production was redirected towards rural development and keeping people on the land. While the alignment of the EU and U.S. ahead of the Cancun meeting has been criticised, the two sides had come up with an agreement on agriculture to further the interests of developing countries while ensuring that farmers in the EU and the US were not thrown to the wolves.

GMOs

Jean Halloran (U.S. Consumers Union) - is the U.S. considering withdrawing its WTO challenge to the EU over GMOs given the negative impact of the decision on European public opinion?

Shaun Donnelly - although the situation is controversial the US view is that a decision based on science-based regulation is needed. “We are confident we will win the case. It’s a fight that is worth taking”. He also highlighted the value of the WTO as place to resolve such disputes.

Commissioner Byrne - the dispute relates to the delay in introducing the legislation, not the legislation itself. Law-making in the EU is slow but he’s determined to put in place legislation which allows consumers to make an informed choice. While he would have liked it to be dealt with more expeditiously, he predicted that the WTO would examine the case in the light of European consumers’ interests and commented that the EU had achieved a very balanced approach while providing for effective authorisation procedures. Any Member State that takes measures which are not in line with this would be challenged.

Summing up the opening session, Rhoda Karpatkin (President Emeritus, U.S. Consumers Union) added her appreciation to the governments for their participation in TACD meetings and to the European Commission for funding, but commented: “Now we’ve done so well, I hope we won’t be killed”. There has been a further erosion in confidence in political processes. The mad cow affair had undermined confidence in the beef supply while the Parmalat collapse followed Enron in undermining confidence in accounting services and investors’ confidence in governments’ ability to protect them. There should be a balance between consumers and business interests, and what consumers want can be good for business.  If consumer recommendations on food controls had been followed the US would still be exporting beef. Commissioner Byrne echoed her final comment that there should not be “a tug of war” between consumers and business interests.

The Closing Plenary Session

Opening the closing session, Benedicte Federspiel (Danish Consumers Council - Forbrugerradet and EU member of TACD’s Steering Committee) said that there had been a full day of frank discussions on EU chemicals policy, food safety, GMOs and intellectual property. She reminded delegates that at the 1998 EU-U.S. summit, US President Bill Clinton and UK Prime Minister Tony Blair invited civil society to create people-to-people dialogues. TACD had been the most successful by creating dialogue between consumers groups and with governments.

Gunnar Wiegand, Head of the European Commission’s U.S. Desk, said that homeland security issues had played an increasingly important role in EU-U.S. relations. Many of TACD’s concerns are on his agenda, ranging from GMOs to chemicals. The list of outstanding issues was much longer than the list of the ones the EU and had solved, he conceded, adding that the last year had been particularly difficult because of strains in the relations and different approaches to key questions of peace and war. TACD has been the most successful and most sustained dialogue of all since 1998. There was a continued commitment by the European Commission to maintain people-to-people dialogues. TACD had brought consumer perspective to the transatlantic dialogue and provided concrete examples to promote EU-U.S. dialogue and cooperation. Aware of civil society’s dependence on external funds, he pointed out that the EC had provided two million Euro to different transatlantic dialogues with more than half going to TACD. The Commission hoped to continue financially supporting TACD but it also wished to encourage and support participation of environmental, labour, media, citizens and human rights groups in transatlantic dialogue. In the coming weeks the EC will launch a call for tender on supporting such events but applicants would have to win support from other sources too. He hoped that the Commission’s US counterparts would also be open to financially supporting transatlantic people-to-people dialogues. He added that it was unrealistic of TACD to expect that every recommendation the dialogue agreed would be taken up but they did contribute to the shaping of discussions.

Shaun Donnelly said it had been “a riveting and productive day” and highlighted the value of the fact that different parties could have a full and frank dialogue even when they don’t agree. He highlighted the work in the TACD Internet Working Group as providing an interesting model for other groups to be equally productive. He suggested that one reason there could be a good dialogue over Internet issues may be because they were new, unlike agriculture or biotech which the parties had been discussing for so many years at government level. He stressed the importance of the TransAtlantic Economic Partnership (TEP), worth $2 trillion to the U.S. and the EU. The U.S. is committed to a positive transatlantic partnership, and while a few issues remain contentious, the EU-U.S. dialogue is not limited to trade and commercial issues and covered international questions like Iraq and North Korea. He stressed the importance of the Doha Development Agenda, saying the stakes were high and governments should make efforts to push forward and provide leadership in 2004. The negotiations on the EU-U.S. open skies arrangements in civil aviation are important in terms of potential benefits for both consumers and business.

Discussion

On food labelling, Mr Donnelly was asked why the US resisted labelling of GM foods on the grounds that they were not different from ordinary substances, but required labelling on irradiated food (which is not different from ordinary food). The US view is that labelling is required when there was something different but they had not seen the science to justify that in the case of GMOs. Although irradiated food is labelled, this does not change the US' fundamental view. 

Asked about teleconferencing both the EC and U.S. representatives said that it could be a useful means of communication in the TACD context.

Summing up, Benedicte Federspiel echoed Commissioner Byrne’s comment that it was important to integrate consumer policy into all policies and that sound consumer policy provided the basis for sound economic policy. She expressed hope that there was the basis for the work of TACD. “The consumer is in the driving seat”, she stated, “let’s keep them there”.