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Corporate Europe Observer

TABD: Tiptoeing Toward a Transatlantic Market

Over 100 corporate leaders and government officials met in Rome last November for the annual conference of the Trans-Atlantic Business Dialogue (TABD). The TABD -- a government-business initiative established three years ago with the mission of reducing trade and investment barriers between the EU and the US -- prepares recommendations for the semi-annual EU-US summits.

Detailed Deregulation

he Rome conference (6-7 November 1997 in the luxurious Hotel Excelsior) was chaired by Jan Timmer (former CEO of Philips) and Dana Mead, chairman of the US-based Tenneco. The main government representatives were EU Commissioners Sir Leon Brittan (Trade) and Martin Bangemann (Industrial Affairs) and US Under-Secretary of State Stuart Eisenstadt. In the spirit of the two previous TABD summits in Sevilla (1995) and Chicago (1996), talks at the Rome conference were about specific, detailed recommendations for transatlantic deregulation. The conference for instance made proposals for both partners to establish common standards for laboratories and risk assessment in the chemical industry. Another issue taken up at the conference was global electronic commerce, upon which the TABD "reached unprecedented consensus promoting an industry-led, market-driven, self-regulatory approach".[1] The conclusions of the Rome conference stated that the TABD will "continue to advocate pragmatic steps to achieve its overall objective of an improved transatlantic marketplace".

Biotechnology Barriers

An area in which the TABD has identified "barriers to trade" concerns the use of biotechnology in the agri-foods sector. The TABD ultimately wants mutual recognition of genetically modified products, so that once a product is approved somewhere it can be marketed everywhere in the transatlantic marketplace.[2] As a step in that direction, the conclusions from the Rome conference urge governments to agree on "compatible regulatory requirements leading to full consensus on and mutual recognition of safety assessments". The TABD recommends "the formation of a joint EU-US industry and government group" to make progress in this field. Throughout 1997, European and US biotechnology corporations met regularly within the TABD's biotech initiative, led by Unilever and Monsanto, "to identify potential causes for trade difficulties and propose ways to eliminate them".[3]

Through the Back Door

Shortly before the Rome conference, US Assistant Secretary of Commerce Franklin Vargo stated that "it is difficult to overstate the effect that the TABD has had on trade liberalization".[4] As an example, Vargo mentions the Information Technology Agreement which was adopted at the WTO's Singapore Ministerial Conference in December 1996, "barely more than a year after the TABD made it a priority." He continues: "Former Commerce Secretary Kantor remarked at the Chicago Conference that working with the TABD, we have discovered 'an entirely new way of speeding up trade negotiations'". European Commissioner Sir Leon Brittan also said that "whenever our two business communities can agree jointly that an action is in the mutual interest of our two economies, it is incumbent upon us to seek to implement their recommendation -- or at the very least to sit down with them and explain why we cannot, and to try to work out another approach".[5] "We're in a world in which governments are less important and companies are more important", said Stuart Eisenstadt, US Undersecretary of State for Trade at the TABD's conference in Rome.[6]

US officials say that around 80% of the TABD's recommendations have been turned into official policy.[7] Another major success of the TABD has been the Mutual Recognition Agreements (MRAs) which now cover telecommunications, pharmaceuticals, medical devices and a number of other areas. The TABD is directly linked to the New Transatlantic Agenda (NTA) process between the EU and the US which started in 1995 and is committed to creating a transatlantic marketplace by progressively reducing barriers to the free flow of goods, services and capital. Franklin Vargo, acting assistant secretary of commerce, is jubilant about this "closer and more productive US-European cooperation." In particular, he mentions that the NTA process has "solved obstacles that had prevented US exports of genetically engineered 'BT corn'".

Exclusive and Non-transparent

Neither the TABD nor the 'harmonization' proposals which emerge from it have ever been subject to examination by national parliaments. In its debate about the New Transatlantic Agenda in January of this year, the European Parliament only mentioned the TABD in very general terms.[8] Although many of the issues discussed within the TABD appear to be technical, the process of harmonizing regulations should be given close political scrutiny. The seriously flawed process of harmonization within the European Single Market -- most of which took place in the late 80s and early 90s with corporate lobby groups steering the course -- is apparently being repeated in an even less transparent way.

Small and medium-sized enterprises (SMEs) have long complained that standards set in the Internal Market are shaped by large transnational corporations, meaning a competitive advantage for these industrial giants. Although delegates from SMEs have been included in TABD discussions for the first time this year, the same preference for TNCs is still clear. The Mutual Recognition Agreements, which include pharmaceuticals, was for example pushed through with "the personal involvement of Lodewijk de Vink of Warner Lambert and Ian Leschly of Smith Kline Beecham", two of the largest pharmaceutical companies in the world.[9] Apart from this bias towards large TNCs, there is neither representation of or consultation with trade unions, consumers, or health or environment NGOs. More fundamentally, barely anyone is aware that this transatlantic marketplace is being build step by step. There has never been any public debate about whether or not this is desirable, nor has any research been conducted into its potential economic, social and environmental impacts. Obviously it is high time for emerging transatlantic coalitions of citizens movements to question both the aim and process of the TABD.

Big Issues

The Rome conference also discussed the proposed WTO financial services agreement and the OECD's negotiations on the Multilateral Agreement on Investments (MAI). The TABD urged governments to complete the MAI by the April 1998 deadline, preferably with no language on labour and environment, and with the absolute minimum number of exceptions. If these aims are not achieved, the TABD warned, "the essential WTO work on investment will be slowed, risking damage to the process of transnational investment".
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1. TABD website. http://www.tabd.com | Back to Text |

2. Press Release European Commission, Brussels 4 November 1997: "Commission Outlines Key Issues for Transatlantic Business Dialogue Conference, Rome, 6-7 November 1997."  | Back to Text |

3. "Bio-News", Europabio's newsletter  | Back to Text |

4. Franklin Vargo, House subcommittee hearing on US-EU trade, September 10 1997.  | Back to Text |

5. Ibid. | Back to Text |

6. Wall Street Journal, 10 November 1997.  | Back to Text |

7. Ibid. | Back to Text |

8. The relations Europe -- United States were discussed in the European Parliament on January 13th 1998, on the basis of among other a report by German MEP Mrs. Mann on the commercial and economic transatlantic relations.  | Back to Text |

9. Franklin Vargo, House subcommittee hearing on US-EU trade, September 10 1997.  | Back to Text |

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