See also TABD: Putting the Business Horse Before the Government Cart, CEO briefing, October 1999.
"I think market forces should have more say in our decision making."
- Commerce Secretary William Daley in a speech at the TABD Berlin Conference. 1
"We know that in the era of globalisation and technological development, it is not easy to regulate the future. A much easier solution is if industries together find their own solutions, in the form of selfregulation [...] or they find solutions in the form of standards."
- European Commissioner Liikanen in a speech at the TABD Berlin Conference 2
The Seattle Ministerial Conference of the World Trade Organisation (WTO) and how to respond to the growing backlash against trade and investment liberalisation were major issues during the annual conference of the Transatlantic Business Dialogue 29-30th of October in Berlin. Apart from the WTO, the over 140 TABD recommendations deal with a very wide range of other policies in the EU and the US. A number of EU environment and consumer protection measures, including the use of the precautionary principle, were added to the TABD's hitlist. The Berlin conference made clear that the TABD in the EU-US 'early warning' system mechanism for potential trade conflicts has found a new tool to obstruct or delay policies which business for whatever reason dislikes. To further tighten corporate control, the TABD demands that trade interests are further 'upstreamed' in the decision making process, for instance through 'trade impact assessments' for all regulatory and legislative proposals.
The conference in the luxurious Intercontinental Hotel was attended by over 120 captains of industry as well as EU Commissioners Pascal Lamy (external trade) and Liikanen (enterprise) and US Secretary of Commerce William Daley and Under Secretary of State David Aaron. Also Mike Moore (Director-General of the WTO), Finnish minister of foreign trade Kimmo Sasi 3 and numerous other high level government officials from the EU and US were present during the two days of workshops and plenary debates. 4 The European Commission (EC) had brought over 50 people to the Berlin conference, the US government even more.
The TABD was initiated in 1995 on the initiative of the US government and then EU Commissioners Brittan and Bangemann, two major architects of the EU's neoliberal trade and investment policies. The mission of the TABD is to identify transatlantic barriers to business activities, knowing that governments are committed to remove these, in the pursuit of an integrated 'transatlantic marketplace' (see also "TABD: Putting the Business Horse Before the Government Cart", CEO October 1999). The Berlin conference made clear that the new European Commission is no less committed to nurturing this corporate-state alliance. Trade Commissioner Lamy, until recently CEO of the French bank Credit Lyonnais, started his speech in the opening plenary with saying that "it really feels good to be back to the business environment for some time". 5 He then assured the assembled industrialists that "the new Commission will be as supportive as the previous one".
Enterprise Commissioner Liikanen invited business "to help us prevent future trade barriers", by identifying potential trade conflicts and feed them into the transatlantic 'early warning' mechanism which was created last June. 6 "Industry clearly is best placed to know what technological process will take place and how markets will develop", Liikanen explained. Commerce Secretary Daley echoed Liikanen's words by challenging the businessmen "not to go home without warning us where you see potential dangers". 7 The early warning mechanism, a transatlantic working group structure to converge conflicting EU-US positions before they emerge as visible trade conflicts, is itself an example of a TABD demand being implemented by EU and US government. 8
The CEOs did not hesitate to use this new instrument: at the end of the conference they came up with at least seven issues for the 'early warning' system to deal with, many of them highly controversial.
The TABD identified the EU's use of the precautionary principle as "the most important example of an early warning issue". 9 The precautionary principle enables policy measures to prevent environmental or health dangers even when such dangers cannot (yet) be fully proven scientifically. The EU has used the precautionary principle to justify several important environment and consumer health decisions, such as the ban on hormone-treated beef.
The TABD fears that the EU will expand the use of the precautionary principle. The EC is currently preparing a communication defining the scope and the use of the principle (expected in December 1999). 10 Also in the case of the ongoing review of the EU directive on consumer product safety, the TABD is worried about a possible strengthened status of the precautionary principle, "the potential arbitrary use of such a principle", in the words of Sam Gibara, CEO of Goodyear and co-chair of the TABD working group on Standards and Regulatory Policy. 11 The TABD demands to be involved in the EC decision making process on these issues, warning that "arbitrary use of the precautionary principle will cause trade conflicts; add to the cost of doing business; stifle innovation; and drive away investment from those countries that use it arbitrarily." 12 The TABD is also worried about the EU's proposal to discuss the issue within the WTO and concludes that "a misinterpretation of the precautionary principle now threatens to affect trade in sectors other than food". 13
The TABD lists the EU's draft directive on waste from electrical and electronic equipment as a second candidate to be given 'early warning' status, and calls upon the European Commission to withdraw its current proposal. According to the TABD, the proposal (developed by the environment directorate DGXI to reduce waste and resource use) would result in "cumbersome and costly collection and recovery obligations for used products" for distributors and producers. 14 The 'alternative' proposed by the TABD smells like classic corporate diversion tactic: a revision of the EC proposal, based on, among other things, cost-benefit analysis of "social and business consequences" and "industry-driven technical and commercial solutions". 15 According to the Berlin Conclusions, these TABD recommendations "were supported by the EU Commission representatives" present in Berlin. Thomas Hagdahl, TABD Group Manager on 'Standards and Regulatory Policy', explained that the TABD wants the draft directive to enter the early warning mechanism "because it has the seed of contradictory requirements on the US and the EU side." 16 In other words, any differing regulation, legislation or policy in the EU or the US is a potential candidate for 'early warning' treatment.
Another TABD complaint against "differing regulatory approaches" concerns a new EU proposal to accelerate the phase out of ozone depleting hydrofluorocarbons (HFC's), used in refrigerators. The TABD wants the EU's plans, part of the implementation of the Montreal Protocol, to be dealt with in the early warning system as a "fast approaching trade barrier". 17 Business sees the proposed directive as "disruptive", as it "forces manufacturers to set up two production lines - one for sales in Europe and one for exports to the rest of the world". 18 The TABD, complaining that the EC has been "unresponsive to industry input and facts",19 now tries to use the early warning system as an emergency brake, hoping to make the EU postpone the phase out.
The TABD also expressed strong hostility to a possible EU ban on animal testing in cosmetic products, which according to the TABD would "not only dramatically discriminate against the EU Industry but will also seriously impact trade between the US and the EU". 20 The TABD wants the ban postponed at least until EU and US industry and governments have agreed on "scientifically justified alternatives to animal testing", a clear recipe for delaying or disrupting the proposal. 21 Again, industry uses the newly developed transatlantic trade structures to intervene in a case where corporate lobbying in Brussels has not lead to the desired results.
The working group on 'Standards and Regulatory Policy' highlighted three other issues, but there was also an 'early warning' coming from the TABD's 'Global Issues' working group. 22 Bayer's Werner Spinner, European co-chair of this group, announced that he and his colleagues see the UN's draft biosafety protocol (which includes the right of countries to regulate international trade in GMOs) as a candidate for the 'early warning' mechanism to intervene on. 23 "The EU and the US must work together here to come to a common position", Spinner said, referring to the conflict between the US government and industry on the one side and Southern governments on the other, in which the EU has hitherto avoided choosing sides. The biosafety protocol, scheduled to be finalised in January 2000, would give Southern countries more space to restrict trade in GMOs than the industry-friendly WTO rules.
Both EU Commissioner Liikanen and US Commerce Secretary Daley welcomed the TABD's efforts in identifying 'early warning' issues. Liikanen concluded that "the conference has confirmed that non-tariff barriers are far more important than tariff matters". 24"Understanding of what a non-tariff barrier is is also changing," Liikanen observed, referring to the fact that industry now defines any difference in regulations or policies in the two trade blocks affecting business as a potential trade barrier. As the Berlin Conclusions put it: "products and services should not be subject to contradictory requirements at national or international levels." 25 The Commissioner continued to stress that the EC should work harder on implementing TABD demands,26 a conclusion echoed by Daley who during the closing plenary told the captains of industry: "You have done a great job and now it is up to us in government." 27
While industry eagerly makes use of the new tool that the early warning mechanism provides, ambitions are far larger. The TABD's Sam Gibara called for "moving the process upstream", stating that "the real way to avoid future trade disputes is through systemic changes such as cooperation between legislators and regulators on both sides of the Atlantic". 28 Such 'upstreaming' would mean increasing pressure to converge EU and US decision making at the earliest stages of the process. As a step in this direction, the TABD calls governments to finalise 'Guidelines for Regulatory Cooperation' ("a process, which would allow cooperation to be advanced before regulations are developed"), "no later than the TABD Mid-Year Meeting 2000". 29 A new disturbing TABD demand is "the development of a trade impact statement at the cost-benefit stage of regulatory activities and the development of legislation". 30 This proposal mimics existing environmental impact assessment procedures and would mean that all new policies should undergo an impact study on their effects on trade. This would give business another powerful tool for asserting control over the political decision making process.
"If regulatory cooperation goes well, there will be few early warning items", Commissioner Liikanen responded and agreed to speed up the regulatory cooperation. 31 He made no secret of end goal of the process: "this close cooperation should of course inevitably lead to more compatibility and convergence, mutual recognition and then harmonisation."
The biotech issue is an example of the kind of full-blown trade conflicts that the 'early warning' system was established to prevent. A trade war seems unavoidable after the European consumer backlash against biotech food and the de facto EU moratorium on market access for new genetically modified food products. These issues have been on the TABD's agenda for four years (see also TABD: Putting the Business Horse Before the Government Cart, CEO 1999), but were kept very low profile at the Berlin conference. As the British Channel Four News revealed, biotech giant Monsanto was absent in the list of conference participants, but Monsanto's director of governmental affairs Ken Baker was in fact present and actively taking part in the meetings of the agri-biotech working group. 32 Baker refused interviews.
The Transatlantic biotech industries had no interest in being very vocal about their work within the TABD, as their short-term recommendations are already being implemented by the EU and US governments. 33 At their summit in Washington on October 27th, few days before the TABD conference, President Clinton and Commission President Prodi agreed to set up a temporary transatlantic scientific advisory committee on the issue of genetically modified food. 34 This provisional agency will operate until a permanent EU level equivalent to the US Food and Drug Administration is established. Prodi, who favors market access for genetically modified food, has in the last months promoted such an agency to replace those at the national level, hoping this will win back the confidence of European consumers. For the TABD this is a big step towards their long-term goal: "the creation of centralised and simultaneous approval procedures". 35 During the final press conference of the Berlin conference, Commissioner Lamy explained that the transatlantic interim group is "a consensus building effort". 36 Apart from scientists, the interim group will consist of consumer representatives, farmers, regulators and religious representatives. These will work together, Lamy explained, "so that we can solidify some sort of common base which then can be the base for approximating our systems". 37
Despite his warm feelings for the TABD process, Lamy was not entirely satisfied with the results of the Berlin conference. He had come to Berlin to push for transatlantic business support for the EU's ambitions to launch a WTO Millennium Round, including WTO negotiations on new issues like investment, competition policy and public procurement. The EC had in a press release on the first day of the conference encouraged the TABD "to send a strong message on the WTO ministerial meeting in Seattle in favor of the launching of a comprehensive round of trade negotiations". 38
At the end of the conference it became clear that the EU did not receive full support from the TABD for its WTO agenda. US business remains unconvinced of what can be achieved through WTO investment negotiations and negotiations on competition policy are regarded unrealistic by the TABD as a whole. There is however consensus on pushing for a WTO agreement on transparency in government procurement, maybe to be signed already at the Seattle Ministerial Conference. The TABD prides itself to have "successfully urged the action of our respective Governments" on this issue. 39 Mrs. Esserman (Deputy US trade representative) mirrored the US business position on investment negotiations at the final press conference. The US government, she said, is looking for "what is the best means to ensure progress and high standards", and while it does not support the MAI model, it has "some concerns with moving forward with negotiations" in the WTO. Lamy stated that he believed more progress could be made before Seattle "to ensure that investment is on the agenda".
The lack of consensus on investment does not mean that the TABD's ambitions for a new round are small. Bayer's Werner Spinner in the closing plenary described the EU-US business consensus for a short WTO round of less than three years, consisting of a complete package to be signed by all countries at the end of that period, but also with 'harvest' before if agreement is reached for individual sectors. Especially for liberalisation of the services sector the TABD demands are very far reaching, including most of the major elements of the MAI, for a sector that constitute 60% of global foreign direct investment flows (including education, energy, health care, tourism, transport, etc.). 40 "U.S. and E.U. service sectors are now highly organized, and working in close concert, to be a major force at the 1999 WTO Ministerial, and to promote successful liberalization of services trade through the Services 2000 negotiations", the TABD self-confidently concludes in its briefing papers for the business participants. 41
"Any proposal to weaken TRIPs are a step into the wrong direction", Werner Spinner stressed when he outlined the TABD's demands on this WTO agreement on intellectual property rights. Civil society groups as well as many Southern governments want the agreement changed to allow countries to block patenting of genetic resources from biodiversity. Business in contrast wants their current rights to patent expanded further. The TABD also repeated its demand for the WTO to narrow down the use of eco-labeling. 42
A very prominent issue of discussion between the businessmen and government representatives gathered in Berlin was the perceived backlash against trade and investment liberalisation and what to do about it. "You want us to move and change policies. We are committed to do so", Commissioner Lamy told the business leaders, "but you have to remember that we need the public to opinion to move too". 43 "Let's not forget that part of the debate is outside of these doors", Lamy said and asked for the support of business. "I believe business also has to speak out and make the case that trade liberalisation as globalisation in general is good for our people", said Lamy. Also Commerce Secretary Daley wanted the CEOs "to speak out and educate people of the benefits of an open and free trading system." 44 Daley also called the assembled CEOs to do more "outreach to your colleagues in the Third World ". WTO boss Mike Moore joined the chorus, appealing to business to "talk more to the employees and celebrate the successes of trade liberalisation". 45 He said that "while there will maybe be ten thousand people outside the hall in Seattle, there is 1.5 billion people who want to join this organisation because they see the values of it", referring to the inhabitants of China and Russia whose governments are negotiating accession to the WTO.
The assembled business leaders, on the other hand, pointed to governments having to do more to defend trade and investment liberalisation. TABD co-chair Monod made an appeal to governments "to show courage, to speak out and to convince public opinion that it is in everybody's interest to work for a successful new global trade round". 46 "Keeping up the overall momentum of trade liberalisation is of far greater importance than any specific local or sectoral concern", Monod said. 47 US co-chair Thoman, on an almost depressed note, complained that the commitment of politicians "to make the case ... in a convincing manner and carry the population with them is less strong today than it has been for years." 48
The cosy atmosphere in the Hotel Intercontinental was almost spoiled at a press conference when Guy de Jonquieres of the Financial Times asked WTO boss Mike Moore if his presence at this gathering of over 100 corporate executives did not confirm the impression that the WTO is "simply a carve-up between multinationals". He also asked why the media were not allowed to attend the debates which Moore was part of. The journalists attending the TABD conferences could only go to the press conferences and the first and last plenary sessions, while the rest of the program was behind closed doors, only attended by business and government representatives. Commerce Secretary Daley quickly replied that "the Transatlantic Business dialogue is one of three dialogues: there is a consumers dialogue, there is a labour dialogue." 49 TABD co-chair Monod explained that when the 'business communities' from the EU and US meet to develop recommendations, "which are given to the representatives of the governments as demands to be pushed through the administration, I think a little bit of discretion is needed." 50
While Monod's response is at least honest, Daley's reference to the Transatlantic Labour Dialogue (TALD) and the Transatlantic Consumers Dialogue (TACD) ignores the fact that these parallel dialogues get an entirely different treatment than the TABD. The fundamental imbalance was obvious during the TABD conference in Berlin, where over 50 high level European Commission and 60+ US government representatives were active participants for two full days in the discussions with business behind closed doors, giving direct feedback on business proposals. The TALD, the TACD and the Transatlantic Environment Dialogue - which Daley seemed to have forgotten - are lucky if a Commissioner comes by to deliver a short speech and answer a few questions. Commission and government staff was present in most of the TABD's workshops, giving input and advice to the debates among the corporate executives. While the TABD is self-confidently setting the agenda, with eager support of governments, the other dialogues are at most supposed to be reactive.
The Berlin conference made chillingly clear how far the construction of untransparent transatlantic corporate-government structures has evolved and how industry aims to use these structures to further strengthen its grip on decision making. This all happens with the active support of government representatives who see business demands as the natural starting point for shaping policies and pretend that conflicts with other interests (whether environmental, consumer, social, North-South or other) are negligible. European Commissioner Lamy is a prime example. In his final statement he once again boosted the TABD's moral, calling it "a crucial process and a central forum for achieving the sort of agreement we need between business and administrations, shaping the right chemistry for change". 51 "We need you, to shape globalisation in the right direction and thus keep the support of our people", Lamy finished.
This article only gives a brief insight to the debates during the TABD's Berlin conference and the demands coming out of it. Some major themes at the Berlin conference are not covered in this article, such as free trade in chemical products, harmonisation of corporate taxation or business involvement in the reconstruction of Balkan after the Kosovo war. In total the Berlin Conclusions list more than 140 recommendations on a wide range of issues. For a full overview see the briefing paper on the TABD issued by Corporate Europe Observatory in October 1999.