8th ANNUAL MEETING OF THE
TRANSATLANTIC CONSUMER DIALOGUE

March 12, 2007

MEETING REPORT

Summary
Opening session
Intervention by Catherine Geslain-Lanéelle
Closing session

Summary

TACD's 8th Annual Meeting included a full day of discussions with senior European Commission (EC) and US Government officials. The opening session featured keynote speakers Meglena Kuneva, European Commissioner for Consumer Affairs, and US Ambassador C Boyden Gray, as well as a presentation of TACD's Vision of new consumer issues in 2010. Working group meetings followed, including on food, intellectual property, and the information society. The day concluded with a keynote address from the head of the new European Food Safety Authority, Catherine Geslain-Lanéelle, and with closing remarks from EC and US officials.

A constant theme throughout the day was the scope for improving consumer protection and raising consumer influence on policy. The discussions generated countless expressions of commitment towards the cooperation that could achieve these shifts in consumer power. But a sharp strand of realism also cut through the diplomatic exchanges. Commissioner Kuneva did not hesitate to lament what she saw as excessive US insistence on confidentiality over product safety data, while Ambassador Gray suggested to his audience that the EU was failing to conduct adequate analysis in formulating consumer policy, and was therefore at risk of missing its targets.

The divergences of view served, however, to demonstrate another positive conclusion. TACD is vigorous, valuable, and valued. As TACD Steering Committee Chair, Klaske de Jonge said, "TACD is stronger than ever, and still growing after nine years, with organisations from Bulgaria and Romania recently admitted to membership." Her sentiments were echoed by speaker after speaker - not from TACD, but from EU and US officials.

Opening Session

In her keynote address, the recently-appointed European Commissioner for Consumer Protection, Meglena Kuneva, stressed her desire to maintain close links with consumer bodies. "I want to see consumers in their rightful position as frontline actors of consumer policy", she said. "Consumers have not been sufficiently involved in developments to date", she went on, noting that the European internal market was developed "for consumers rather than with consumers".

Her response is a new seven-year consumer policy programme, aimed at empowering EU consumers, enhancing consumer welfare, and protecting consumers. Her priority fields of actions in support of these aims will include better regulation, better enforcement, and a strengthened role for consumer organisations. She wants to see a consumer scoreboard to monitor progress and difficulties for consumers (and made clear she would welcome TACD input towards developing key benchmarks for consumer policy in a global context), and consumer organisations operating as effective watchdogs of the market, with an influential voice in the decision-making process. Furthermore, Kuneva said she was "in favour of considering possible action on collective redress, both for competition infringements and, for example, for small claims".

The international dimension is also an important element in EU consumer policy, insisted the Commissioner: "It is most valuable to have here today, under the same roof, consumer organisations from both sides of the Atlantic", she said. "EU-US regulatory cooperation is of prime importance", she said, emphasising the importance of cooperation and stakeholder involvement.

Kuneva said she planned later this year to explore opportunities for cooperation with US counterparts on mutual assistance, based on the US Safe Web Act of 2006 which aims to act against rogue traders. And on product safety, she said she planned to discuss how the exchange of data might be eased. "The agreed guidelines under which we communicate allow only limited exchanges of information on dangerous consumer products found on the market", because US legislation allows exchange only of public - and not confidential - information with foreign law enforcement agencies. "We would welcome new US provisions", she said.

The other keynote speaker, US Ambassador C Boyden Gray, suggested that the US was ahead of the EU in assuring public participation. He expressed particular frustration at the lack of scope for non-EU countries' involvement in EU debates. During the development of the EU's REACH legislation for controlling chemicals, he said, the US and a dozen other non-EU countries seeking input set up a "coalition of the excluded" and requested a contact point in the European Commission. But they were told to pick just one country to represent all of them in the forums the EU had established for consulting interest groups - "hardly an ideal procedure", observed the Ambassador.

He was equally critical of the non-availability in the EU of class actions for individuals who share a problem, and he urged the EU to "more careful scrutiny" of how this might be introduced as part of the review of the EU treaty.

The US ambassador also made clear that he perceived deficiencies in the intensity of EU analysis. The US' superior analytical process had enabled it to provide more effective responses: he instanced the influence of the US' gradual appreciation of factors in oil emissions in its leadership role in removing lead from petrol. By contrast, he claimed, the EU suffers from air pollution because of its early adoption of diesel. Similarly, the consequences of the EU Emissions Trading Scheme had not been adequately thought through, he alleged, and carried risks of undermining the Montreal Convention on fluorocarbons: "Better analysis and cooperation is needed to take fuller account of trade-offs and substitution risks, and of secondary and tertiary impacts", he said. "Analysis doesn't hurt you, it helps you", he insisted.

By contrast, Gray admitted, the EU was way ahead of the US in consumer protection in the financial services sector: "The shareholder rights system in the EU is better than ours", he said. But he said he took offence at the notion that the US is any less concerned about privacy rights than the EU.

His conclusion was that it was important to work together, on climate change, environment, consumer protection, to share strengths and compensate for deficiencies. "I don't think we should be trying to shoot each other down on either side of the Atlantic. We should sit down and talk and find the best approaches. And we should stop trying to score points off each other", he warned. "Consumers are indistinguishable in almost all respects", he said. "We're all in this together - we all come from the same place intellectually and we're all heading to the same place which is a better world for all of us if we work together".

Ed Mierzwinski of TACD welcomed the high-level official engagement from both sides as confirmation of the recognition that the TACD now enjoyed. He also expressed satisfaction at Commissioner Kuneva's call for a strong consumer movement - but he was cautious that recent calls for full harmonisation might lead to a reduction of protection. "TACD has long found that consumer welfare is enhanced when the federal level is a floor and not a ceiling to regulation", he said.

Similarly, the EU's insistence on "better regulation" might prove counterproductive if it were to follow the US experience, where business pressure to roll back regulation has repeatedly weakened consumer protection. It threatens "paralysis by analysis", the replacement of health-based standards by a cost-benefit approach, and the substitution of political review for scientific review. "It's easier in the US to get rid of regulations than to enact new ones".

Rhoda Karpatkin, of the TACD Steering Committee, set out the TACD vision for 2010, in light of the trends on both sides of the Atlantic that could drastically change the transatlantic marketplace and the problems consumers will face in their daily lives. She said governments' responses on key themes will determine whether consumers are protected or left vulnerable: the potential for global pandemics of new diseases; climate change; fundamental breakthroughs in the ability to manipulate chemicals and life forms; advances in communications technology; and changing political relationships.

In disease prevention, where intellectual property issues directly affect the financing and prioritization of drug development and influence availability and affordability, the current regime of intellectual property protection "is not a viable means of ensuring the access to drugs that will be a paramount need between now and 2010 and beyond". Access to drugs looms not only as a concern for individual consumers, but also as a public health issue, said Karpatkin. In addition, "As Consumers International addresses improper promotion practices by pharmaceutical companies, TACD also will consider how that work can strengthen our work in the transatlantic economic partnership", she said.

A powerful response is needed to global warming, and in the EU and US, the pace-setters for consumption styles for much of the rest of the world, changes in consumer behaviour are critical. "We need a proactive plan with buy-in from consumers before we reach 2010".

On new technologies, the TACD Vision sounds a cautionary note. "Technological breakthroughs may enhance our lives, and may even help us address some looming catastrophes, but they also have the potential to create new hazards and possibly disasters of their own. We urge the EU and US to start to work with TACD and others on these issues before the economic stakes by investors make rational conversation more difficult".

On information technology, the rapid and dramatic advances "also have the potential to enhance our lives or to make them worse". For instace, while RFID chips may be handy for paying bridge tolls and controlling store inventories, the potential also exists for them to be used by criminals to steal information or by governments as a spying device.

On the political context, Karpatkin said that in order to negotiate new trade agreements and expand free trade, "The EU and US will have to stop viewing trade agreements primarily in terms of advancing the interests of the large corporations headquartered within their borders, and start trying to create a trading system that protects and enhances the lives of all consumers."

Intervention by Catherine Geslain-Lanéelle

The Executive Director of the European Food Safety Authority, Catherine Geslain-Lanéelle, saluted TACD's role as a forum for continuous dialogue on consumer issues of common interest for both US and European consumers. She said EFSA would become globally recognised as the European reference body on risk assessment only if there was close involvement of stakeholders, "in particular consumer groups, with whom I intend to have a close and open dialogue". She suggested that by sharing information and being informed about each other's activities, "we can move towards a more common understanding of the risks that exist at national, EU and international level".

During discussion, consumer opinion from the floor repeatedly insisted on the need to keep the precautionary principle at the core of risk assessment and consumer policy formation, and on the importance of administrations recognising their primary duty to citizens. As Ed Mierzwinski remarked: "We don't want to see administrations protecting companies' secrecy at the expense of consumers' health and safety".

Questions were also raised about the wisdom of aligning EU and US consumer protection if they are currently at differing levels. Jim Murray of BEUC expressed concern that the conditions may not be right for so much EU-US cooperation. "There is a strong US desire for the holy grail of low regulation", he said, querying how much the EU would gain from such an approach. "Do you come up to our level or do we take a different path?", he asked.

Closing Session

In her closing remarks, TACD member Benedicte Federspiel acknowledged the grant assistance from the European Commission and the Rockefeller Foundation. And looking ahead, she listed the upcoming activities and plans of TACD.

The Information Society Working Group (WG) will continue to work on mobile commerce, and will take on surveillance issues, net neutrality, interoperability and open standards. The Food WG will be looking into nanotechnology and country of origin labelling, and will continue work on nutrition. The Working Group on intellectual property rights will respond to the concern that intellectual property is an "evidence-free" zone, by providing real figures and data in its work on the economics of copyright, and will follow up its work on the Paris Accord.

TACD will also continue to work on regulatory co-operation, dealing in particular with impact and risk assessment, the transparency of methodologies, and defending the independence of research results from political interference. Fifteen sectoral dialogues are currently underway, and governments have agreed to provide more transparency about what is being discussed - and the same should be the case for the dialogue on methods of impact assessment.

On climate change and energy efficiency, the now widely-recognised role of consumer organisations in helping consumers to consume sustainably and in an energy efficient way is likely to lead to a number of conferences to promote dialogue.

Senior officials from the European Commission agreed that TACD has been conducting "ground-breaking work", both on the format and on the substance. Véronique Arnault, Head of the Unit for policy analysis & development and relations with consumer organisations in the European Commission, said the present format functions well, with its annual meeting, thematic conferences, and regular Steering Committee meetings with EC and US officials. The substance is characterised by good focus in the agendas selected, high quality of papers (notably on DRMs, where the medium-term perspective is useful for policy officials working more on short-term issue), and the quality in the working relationships.

There was a need for more transparency in the regulatory dialogue between the Commission and US administration (as the TransAtlantic Business Dialogue had also underlined), and the Commission would reflect accordingly. But she strongly defended the concept of analytical impact assessment, which serves to inform policy makers, but which cannot replace political judgement at the end of the process.

Arnault also accepted that more consumer-oriented research was needed: the existing body of consumer research has not been generated with a view to consumer policy. And consumer interests need integrating into other policies - on health, chemicals, environment, or new technologies… "We are looking for your ideas in particular on mechanisms to achieve due consideration of consumers interests in other policies", she said.

Peter Chase, Director of the Office for EU Affairs at the US State Department, was enthusiastic about the meeting: "I had a blast", he said, complimenting the work that TACD does as "really important". He praised the "creative tension" between government and non-governmental actors ("You have to keep governments honest"), but he warned against the risk that creative tension might reduce the effectiveness of TACD's work. "Think carefully about the words you choose in your documents and sessions - and never give someone the excuse for not listening", he counselled.