Issue 2 October 1998 TABD: Who's Keeping Score?
During the last EU-US Summit in May, the Transatlantic Business Dialogue (TABD) presented the EU and US governments with a mid-year report evaluating the progress of government action on TABD recommendations.[note 1] The report was presented as a 'scorecard', setting 'priorities' for governments to focus on, and even going so far as to give 'deadlines' for completion. The scorecard indicates that the TABD expects half of its recommendations to be implemented by December 1998 or even sooner. The audacity of the 'scorecard' approach reflects the cosy relationship the TABD enjoys with governments and the TABD's conviction that its recommendations will be carried out.
The TABD has reasons to be confident. More than half of the TABD recommendations made since its last annual meeting in Rome [note 2] are currently being actively discussed by business and government. Recent government action on both sides of the Atlantic to create structures to speed up implementation of TABD recommendations, such as the Interagency Group in the US Department of Commerce and a similar mechanism being set up in the EU, are further indications of government's willing attitude towards industry.
In an introductory letter to government leaders and representatives at the EU-US Summit, the co-chairs of the TABD (Lodewijk J.R. de Vink, President and Chief Operating Officer of Warner-Lambert, and Jürgen E. Schrempp, CEO and Chairman of Daimler-Benz) offered their 'analysis of progress' to the EU and US leaders. In their letter, they praised the 'significant, concrete action' taken by the EU and US on more than a third of TABD recommendations for trade and investment liberalization.
Specifically, they pointed to recent government action on:
- Mutual Recognition Agreements
The signing of the Mutual Recognition Agreement (MRA) between the EU and US covering six industry sectors. This paves the way for the TABD's ultimate goal of 'approved once, accepted everywhere.' [see previous article]TABD's Priority Action Plan
- Specified Risk Materials
The 'elimination' of a potential import ban by the EU on 'Specified Risk Materials' (SRMs) related to 'mad cow disease' (BSE). Much to the dismay of the US livestock industry, the EU threatens to restrict the import of animal products such as tallow and gelatine to protect public health in the wake of the recent BSE crisis. The TABD's actions demonstrate a complete disregard for any initiatives impeding transatlantic trade, even if they are intended for the public welfare.
- WTO Agreements
The conclusion of the WTO Financial Services Agreement, the Telecoms Agreement and expansion of the Information Technology Agreement (ITA) and the opening of new negotiations on further removal of barriers and tariffs in an ITA II. The TABD also praises recent declarations by government officials assuring industry that they will maintain a policy of no tariffs on electronic transactions in anticipation of the ever-increasing importance of electronic commerce in the global markets.
De Vink and Schrempp proceeded to call on governments to take 'prompt action' on a number of 'overarching issues' which will be the primary focus for the TABD's working groups in terms of developing recommendations and seeing them through to implementation.
The co-chairs called for all recent agreements, such as the MRA, to be implemented as quickly as possible. Many of the 'deadlines' that are given in the scorecard are centred around upcoming TABD events, such as the annual meeting in November in the US, and others 'as soon as possible' or even 'immediate'. Despite the already marathon pace of transatlantic trade and investment liberalization, industry is still not satisfied.
The TABD, not unlike the impatient planners of a construction project, specifically called for speedier progress on completion of the Transatlantic Economic Partnership (TEP) and the development of further proposals for liberalization in the Transatlantic Marketplace (see article on the TEP elsewhere in this CEObserver).
Consistent with industry strategy of late, the co-chairs stressed the importance of allowing industry to regulate itself through voluntary action rather than by abiding by government regulation.[note 3] Such self regulation would also extend to electronic commerce and data and privacy protection on the Internet, where the TABD advocates "an industry-led, market-driven, self-regulatory approach". This approach comes in advance of the prospect of tightened regulation on privacy protection, as more and more personal data is being transmitted through electronic media. Industry wants to be entrusted with this responsibility rather than being regulated by government.
Despite the generally acknowledged success of the international boycott of the South African apartheid regime, the co-chairs appealed to the leaders not to use economic sanctions (unless awarded via dispute settlement in the WTO!) as a political tool.
"We reiterate our support for the objectives of promoting democracy, combating terrorism, and safeguarding fundamental rights. The TABD is, however, firmly convinced that economic sanctions -- notably those which may include secondary boycotts or extraterritorial effects and which are decided unilaterally and not in a multilateral forum are not the most appropriate means for governments to ensure that these objectives are reached and generally observed".
Advancing Multilateral Trade Initiatives
"With the solid support of their business communities, our governments can speed up on international negotiations". — Dr. Horst Langer, Member of the Managing Board Siemens AGto European-American Chamber of Commerce in the US [note 4]
Despite the TABD's focus on business issues in the transatlantic region, it also called upon the EU and US governments to promote and "develop and ambitious and progressive agenda" in the WTO, specifically in the areas of market access, investment, technical barriers to trade, intellectual property, and government procurement. The TABD has called for a new round of negotiations in the WTO by the year 2000 (Millennium Round).
Specifically, the scorecard calls for the EU and US to enforce implementation of the WTO Trade-Related Aspects of Intellectual Property Agreement (TRIPs) in developing countries. One of the most contentious agreements in the WTO, TRIPs threatens the food security of billions of people worldwide by allowing corporations monopoly control over genetic resources and other forms of intellectual property. The TABD also insists that no transition period be allowed for countries now in the process of acceding to the WTO, such as China and Russia. Traditionally, nations have been allowed a transition period which grants them time to implement WTO agreements.[note 5]
While the environmental consequences of a rapidly accelerating international trading regime are well documented, the TABD is vociferously against the introduction of any environmental protection initiatives that would interfere with international trade. They call upon the EU and US to "take strong action to end the analytical phase of the discussions in the WTO Committee on Trade and Environment" by coming up with an agreement that prevents multilateral environmental agreements (MEAs) and labelling regimes from interfering with the free flow of goods and services.[note 6]
Establishing a Global Investment Regime
The scorecard calls for the "establishment of a global investment regime" despite the failure of negotiators to agree on the Multilateral Agreement on Investment (MAI) last April. The TABD urges "US and EU officials to resolve their MAI differences prior to the next TABD conference in November" (following the October MAI negotiations in the OECD). They also call on governments to devote more attention and resources to the WTO's work on investment.
Future TABD Focus: Science a Trade Barrier?
One of the most alarming statements coming from the TABD in recent times was made by US co-chair Lodewijk J.R. de Vink of Warner-Lambert in a testimony to the US House Ways and Means Committee's Subcommittee on Trade. In his presentation on future trends in trade policy, he predicted potential problem areas in the free flow of trade. In particular, he viewed science as potentially problematic and suggested the need for regulatory conventions lest it create potential barriers to trade.
"Appropriately, governments will continue to have the duty to protect the health and safety of their citizens. But scientific facts are just that -- facts. Unless conventions are adopted on the regulation of science, varying systems could create unintentional trade barriers. Worse, others may use scientific standards intentionally to frustrate free trade".[note 7]
The TABD has proven itself very apt in predicting the course of policy-making in the EU and US, and has successfully diverted the flow of any policy discourse that would have posed a threat to its ultimate goal of no barriers to trade and investment in the transatlantic marketplace and beyond.
Many TABD recommendations fall above and beyond democratic processes, with no need for ratification in the European Parliament or the US Congress before they are implemented. According to a US Department of Commerce survey, "roughly half of the TABD proposals could be implemented through simple decree by the Administration, or its departments and agencies".[note 8] While the fight against presidential 'fast track' trade negotiating authority in the US continues to be successful, 50% of trade policy can still be implemented without Congressional approval. While we don't have numbers for the EU, recent history shows us that the situation is similar on this side of the Atlantic.
1. de Vink, Lodewijk J.R. and Schrempp, Jürgen. Message to US-EU Summit, May 1998. |Back to Text|
2. For more on the Rome conference see CEObserver Issue #1, "TABD: Tiptoeing Toward a Transatlantic Market", April 1998. |Back to Text|
3. "The TABD is committed to a dialogue with governments/ administrations regarding issues of public safety, which may not be used for protectionism or trade barriers". "TABD Issue Statement, 1998 EU and US TABD Priorities in Electronic Commerce", April 23, 1998. |Back to Text|
4. Dr. Horst Langer. "Transatlantic Business Dialogue (TABD) -- A Step Toward Better Economic Relations", New York, March 10, 1998. |Back to Text|
5. de Vink, Lodewijk J.R. and Schrempp, Jürgen. |Back to Text|
6. TABD 1998 Mid-Year Scorecard Report. |Back to Text|
7. Testimony of Lodewijk J.R. de Vink, President and Chief Operating Officer, Warner-Lambert Company, on behalf of the Transatlantic Business Dialogue Before the House Ways and Means Committee, Subcommittee on Trade (July 23, 1997). |Back to Text|
8. Dr. Horst Langer. "Transatlantic Business Dialogue (TABD) -- A Step Toward Better Economic Relations", New York, March 10, 1998. |Back to Text|