7th ANNUAL MEETING OF THE
TRANSATLANTIC CONSUMER DIALOGUE

April 18, 2005, U.S. Department of State, 2201 C Street, NW, Washington D.C.

REPORT

1) Opening session
2) Closing session

Opening Session:  Building on the Stakeholders Consultation - the Transatlantic Marketplace that consumers need

The state of U.S.-E.U. economic relations, the prospects and structure of the forthcoming reinvigorated Transatlantic Economic Partnership, and TACD's role within it.
Moderated by James Guest, President of Consumers Union

Mr. E. Anthony Wayne, Assistant U.S. Secretary of State for Economic and Business Affairs (Acting as Under Secretary of State), opened the meeting with several thoughtful remarks regarding the TransAtlantic relationship, based on his personal extensive experience in this matter being one of the negotiators for the new transatlantic agenda. Mr. Wayne highlighted the importance of taking into account consumer views in the trading system and the necessary cooperation between the U.S. and the EU.

He noted that both the EU and U.S. share a mutual respect for the commitment to provide health and safety for consumers. Europe and the United States have many reasons to cooperate, as they share historical and cultural ties, are the most integrated economies in the world and each others' largest investors, and also share common values, such as the benefits of promoting a free market. He also underlined his commitment to deepen the bilateral relation between both sides of the Atlantic in the future.

Moreover, Mr. Wayne emphasized the importance of initiatives like the TransAtlantic Consumer Dialogue (TACD), a forum that directly represents more than 20 million consumers. In his opinion, these discussions are productive because the U.S.-EU dialogue should not be restricted to the governments but should also incorporate the stakeholders that are in a better position to transmit what the people want.

Throughout the whole intervention, Mr. Wayne strongly advocated for a closer partnership in many areas like research, capital markets, and health policy. He highlighted that an U.S.-EU dialogue will help both regions to find new approaches to common problems; it will promote growth on both sides of the Atlantic, and a freer, more prosperous and more secure environment. He also noted that this dialogue could have further influence because the U.S. and the EU could share the acquired innovation with other parts of the world. (See here for full speech.)

Markos Kyprianou, European Commissioner for Health and Consumer Protection, highlighted the two main targets in the European Union regarding consumer protection: prevention and enforcement. Enforcement is essential because there is no point in having good laws if, when needed, they are not enforced. But it is even better to be able to prevent problems before they occur. In his opinion, the most efficient tool to prevent consumer harm is education, which enables consumers to make informed choices.

Mr. Kyprianou underlined the importance of a sound and effective consumer policy, not only for the rightful protection of individual citizens, but also more broadly for the economic and societal benefits it has the potential to deliver. Furthermore, he emphasized that he intends to work towards the proper integration of consumer concerns as far as possible in all relevant European policy areas.

Commissioner Kyprianou underscored the importance of EU-U.S. cooperation to reach similar solutions to consumer protection matters because, as he noted, the U.S. "have the same problems and the same products".

It is also important to have cooperation between governments and stakeholders that can lead to plans to solve and prevent consumer related problems. In this context, there are four key problems that should be addressed: nutrition and obesity; consumer product safety; international co-operation as regards enforcement of consumer protection laws; and consumer detriment.

The Commissioner focused particularly on nutrition and obesity, stating that the rising levels of obesity are a problem of common concern to both the U.S. and the EU. It is now a headline issue as over 200 million adults and some 14 million children in the EU are overweight or obese, and the situation is getting worse, particularly with regards to children. There is growing awareness of the gravity of the situation and a growing sense of shared responsibility for finding effective solutions.

The European Commission had launched a new initiative - the European Platform for Action on Diet, Physical Activity and Health - which aims encourage healthier diets and greater uptake of physical activity as a result of the actions of a range of interested parties. Participants include the key EU-level representatives of the food industry, advertisers, retailers, fast-food restaurants, the cooperative movement, the consumer movement and health NGOs. Over the next few months the Platform will establish a baseline, mapping what each of its members is currently doing to promote healthy eating and regular exercise.

Summing up, the Commissioner stated that the strategy for future transatlantic relations should be to prevent rather than to cure, and this can only be achieved by regularly exchanging views between the EU and the U.S. TACD's work is vitally important in this regard and will act as a facilitator and catalyst in pursuing the protection and enforcement of consumer interests on both sides of the Atlantic. (See here for full speech.)

Ms. Rhoda Karpatkin, President Emeritus of Consumer Union and U.S. member of TACD's Steering Committee, thanked Mr. Wayne and Mr. Kyprianou for their presence and support for TACD. She also emphasized the importance of the annual meetings of the TransAtlantic Consumer Dialogue as part of the ongoing stakeholder consultation process. TACD has carried out its function by submitting recommendations to the EC and the US and now, she noted: "it is time to see if anyone was listening".

Ms. Karpatkin presented four important reasons why the U.S. and EU should pay serious attention to TACD's recommendations to enhance U.S.-EU economic integration and increase consumer confidence and protection.

First, both countries should recognize that consultation with stakeholders is not a one-shot exercise but should be institutionalized and supported effectively.

Second, Ms. Karpatkin encouraged both the U.S. and the EU to create new procedures for partnership work. This should include the definition of consumer groups and other interested stakeholders as accredited observers, entitled with the right to attend and listen to the negotiations without voting on them.

Third, the U.S. and the EU should put in place regulations to prevent fraud and ensure public health and safety, in order to foster consumer confidence in the integrity and fairness of the transatlantic marketplace. Both sides should approach harmonization from the point of view of advancing "best practices" of consumer protection.

Finally, Ms. Karpatin pointed out the importance of establishing parity for consumer input. As she noted "It is neither sensible nor fair to make trade policy affecting consumers, without the proper input from the demand side of the economy." In this context, she stated that consumer organizations should be an active part in the transatlantic partnership, "in parity with the TransAtlantic Business Dialogue". Consumers Associations confer an additional benefit to negotiations: "when we participate we can help create outcomes with broad public acceptance".

Benedicte Federspiel, Danish Consumers Council (Forbrugerrådet) and EU member of TACD's Steering Committee, pointed out that this meeting provides an excellent opportunity for the U.S. Government and European Commission to respond to TACD's ideas regarding the new forward-looking strategy to revitalize the transatlantic economy, that will be launched at the June 2005 U.S.-EU Summit.

With regard to obesity and diet-related illnesses, she stated that the time is ripe for the US-EU discussions on best practices in order to create a unified approach to this trade-related public health problem.

Turning to intellectual property, Mrs. Federspiel called upon governments not only to address the issue of enforcement but also to look at where IP rules are being used against the market, given the fact that IP rules are being used to segment markets and are thereby blocking transatlantic economic integration to the detriment of consumers. Furthermore, in some area IP rules have stifled innovation and have led to higher drug prices for consumers, unresolved issues in the current WTO round, and global tensions in developing and developed countries.

With regard to access to knowledge, Mrs. Federspiel warned that recent trends in IP rule-making threaten to disrupt the balanced copyright system by removing established rights of consumers to fair access and fair use. The EU and U.S. must uphold important limitations and exceptions in traditional copyright laws, and explore ways to support broader access to knowledge and information.

The EU and the U.S. should work towards regulatory convergence based on best practice in online shopping so that both buyers and sellers have defined rights and effective means of redress.

Moreover, the EU and U.S. should cooperate more closely in the area of environment, and specifically on the hazards of chemicals. TACD urges the U.S. Government not to look at the REACH legislation as a barrier to trade, but to acknowledge chemical pollution as a real environmental problem and look to work with the EU.

Closing Session: Wrap-up and look to the future

Peter Chase (Director of Regional Affairs, Director of Regional Affairs, Bureau of European and Eurasian Affairs, U.S. State Department) thanked the participants for sharing their opinions at this extremely interesting and stimulating conference.

He would have liked to be able to give a firm response with regard to policy but it may be the case that there is no fixed policy yet to respond on. This is a good sign as the governments can listen to the concerns now and take them into consideration.

Mr. Chase pointed out that all of the government officials are consumers and it is thus very easy to sympathize with the issues raised during the meeting. Even where the U.S. cannot provide firm policy responses, he encouraged the participants to communicate their concerns. He promised to take the concerns into consideration within the framework of the upcoming summit and to keep TACD informed.

Mr. Chase agreed that consumer health, welfare and safety are matters of regulation, and noted that regulation is the big international policy issue between the U.S. and the EU. Given similar standards of living, consumers on both side of the Atlantic share many of the same concerns. He pointed out that regulators focus on their domestic mandate to protect health, with consequences for business and consumers, and the U.S. is trying to keep a balance between the competing interests involved.

Referring to the security issues raised during the meetings, Mr. Chase stressed that the U.S. is trying to reach an appropriate balance between protecting data privacy and public need. Furthermore, he acknowledged that there is a need for sensible regulation regarding biotechnology. In terms of the discussion on IPR, digital rights management and broadcasters rights, Mr. Chase stated that he had learned a tremendous amount and hopes that the conversation will be continued. He underlined that the TACD inputs are always welcome and always beneficial, and that the international perspective can be better recognized by TACD than by the regulators operating at the domestic level.

Véronique Arnault, Head of Unit at the European Commission's DG Health and Consumer Protection, praised TACDs' recently-adopted written recommendations, which reflect a clear structure by stating the facts, leading in a direction and making concrete proposals. Regarding the equality of treatment, the Commission fought very hard on the level of balance between TACD and TABD, and she emphasized the importance of TACD being taken on board for the June 2005 Summit.

The EC reaffirmed its commitment to providing written responses to TACD's recommendations, and responses to TACD's 2004 Recommendations will soon be delivered.

With regard to a practical approach, Ms. Arnault stated that the Commission is not a priori against legislation, nor does it prefer it one way or the other, but binding regulation can certainly pose a threat for industry. In order to find a balanced, well-accepted solution, the idea of multi-stakeholder consultation is key. A cooperative approach should be taken, involving all players, sharing analysis and best practice.

As to transparency, Ms. Arnault regrets that the Commission is not perceived by TACD as being as transparent and systematic as the U.S. and acknowledged that the Commission still has to work on this issue.

Ms. Arnault acknowledged that Intellectual Property Rights are a key concern for consumers and represent a multi-faceted problem. She promised to take this issue on her to do list and report it to the SANCO hierarchy. Due to lack of expertise in this area, the Commission's work, to date, has been inadequate. She therefore emphasized the need of getting together and meeting more frequently in order to engage in an adequately and more informed discussion.

Summing up, Mrs. Arnault called upon TACD to continue its work, maintaining links and a sustainable dialogue.

Jim Murray, Director of BEUC and EU member of the TACD Steering Committee, expressed his appreciation for the effort of the U.S. and EC to engage, to hear and to support the TACD. TACD's exclusion from the 2004 Summit meeting between the Presidents and TABD abrogated a written commitment to parity between the Dialogues. At this year's Summit the governments must respect their own rules.

Mr Murray explained that the working methods of TACD have been improved. Different members of the Steering Committee have been given different tasks, which displays a move away of a fixed army into a more mobile system capable of attacking different issues.

He noted that the Internet Working Group has now changed its name to the Information Society Working Group to reflect its broadening agenda. As to priorities, the key issue for TACD's work in the immediate future will be to prepare for the Summit.