TACD Priorities for Government Action 2003-04

April 30, 2003

London, 29 Apr 2003

The EU and US consumer forum has selected the following issues as its highest priorities for action in the trade arena by the US and EU governments in 2003 and 2004.

Trade in Services

The potential expansion of the World Trade Organization General Agreement on Trade in Services (GATS) to cover health, education, water, energy or other basic services raises grave concerns. For this reason, we urge the EU and US to advocate for a binding GATS provision to ensure the rights of governments to regulate as necessary to protect consumers and to guarantee universal access to essential basic services.

Both the US and the EU are requesting commitments of several governments that would entail privatization of essential services (e.g. EU requests for full market access to drinking and wastewater, US requests for full market access to the EU energy sector). TACD therefore believes that the GATS provision on the exercise of governmental services should be changed to make it self-defining. In addition we are concerned that both governments are demanding full market access rights in alcohol distribution of each other and developing countries that would forbid limits on the number of service providers and make it more difficult to regulate this hazardous product.

TACD opposes the imposition through the GATS of proposed new disciplines on domestic regulation that would apply "necessity tests" or "proportionality tests" to determine whether a regulation was "least burdensome" to trade in fulfillment of the regulation's objective. If these new disciplines are adopted in the GATS, regulators will be obliged to draft all rules in a "least restrictive to trade" manner, regardless of the legal or practical consequences of such an infringement on their regulatory discretion. We agree with the US government that no such disciplines are necessary.

TACD believes that the current US and EU GATS consultation has been deficient in assessing the effects of GATS commitments on consumers. The consultation of sub-federal regulators has also been deficient, especially when some aspects of the GATS requests will have significant impacts upon sub-federal regulatory authority. Essential to a thorough consultation process is the timely release to the public of GATS negotiating documents. It is lamentable that TACD's research and policy formulation on the GATS has depended significantly upon leaked documents when the same documents have been readily available to service industry advisors to governments. TACD requests that the EU and US make all GATS-related documents that are available to the service industries, available simultaneously to TACD and the public as well.

Access to Medicines

On November 14, 2001, the members of the WTO agreed by consensus that the TRIPS Agreement "can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all." It was a remarkable moment for trade policy, but also one that could be a meaningless historical footnote unless WTO member countries find a way to give effect to the declaration.

A key outstanding issue concerns the WTO provisions that would hobble compulsory licensing by imposing limits on exports, thus denying producing countries the opportunity to achieve efficient economies of scale, and denying importing countries the benefits comparative advantage and efficiency.

Paragraph 6 of the Doha Declaration on TRIPS promised to address the problems faced by countries that did not have the capacity to produce pharmaceuticals. The 2002 paragraph 6 negotiations yielded a proposed text that was flawed in many areas, but also was blocked by the US.

The EU and US efforts to limit the beneficiary countries and to impose burdensome procedural and substantive restrictions on the paragraph 6 solution undermine the original declaration's promise to protect public health in all WTO member countries, and the US' demands that only some diseases be covered will place the health and well-being of millions of people in jeopardy.

TACD supports solutions proposed by the European Parliament on October 23, 2002, when it adopted Amendment 196, updating the EU Directive 2001/83/EC relating to medicinal products for human use. This would permit the export of medicines without the permission of patent owners in those cases where the consuming country had issued a compulsory license, or where public health authorities certify there is no patent in place. The Amendment 196 approach is consistent with the position endorsed by the World Health Organization and also by a large number of public health and development groups. If the United States does not agree to consensus on paragraph 6 by the June 2003 TRIPS Council meeting, the EU should encourage developing countries to adopt a TRIPS Article 30 approach similar to the approach in Amendment 196, or to adopt administrative mechanisms to authorize exports under Article 31.k of the TRIPS.

Genetically Modified Organisms

In the US two recent incidents involving new applications of genetic engineering have demonstrated the inadequacy of the current GMO regulatory system to ensure safety of the food supply. In one incident, corn experimentally engineered to contain a pig vaccine contaminated a silo of soybeans worth $2.7 million. In the second, pigs which may have been experimentally engineered with growth hormone were sold as food without the government's knowledge or permission. Coming on top of the StarLink contamination, these events not only diminish public confidence in the efficacy of the US regulatory system, but also intensify consumer concerns about the safety of GMO products. TACD recommendations for strengthening GMO regulation would reduce the possibility that such events will continue to occur.

It is therefore urgent that both the EU and US adopt comprehensive mandatory pre-market safety testing and approval systems, and comprehensive mandatory labeling, for genetically modified food. In addition, to enable effective consumer choice, alternatives to GM must be available. Accurate and rigorous labeling requires complete traceability of GMOs throughout the entire production, processing and distribution chain.

The EU is in the process of strengthening its regulatory framework, which will address many of these aspects, but faces the threat of a WTO challenge. We urge the US not to launch a WTO challenge against the EU, either for proceeding in a precautionary manner on approvals, or for its labeling and traceability legislation and rules.

Nutritional Labeling

As consumers become increasingly reliant on food labels, every effort must be made by the US and EU to ensure that the information provided on food labels is honest, user-friendly, presented and used consistently, and not misleading.

To achieve this goal, TACD recommends that the EU should adopt rules for nutrition claims and health-related claims. This effort should include defining within legislation the conditions under which claims may be used on products. Rules for nutrition claims should be made consistent, where possible, between the EU and US.

It is also essential that, in the EU, mandatory nutrition labeling is provided on food products and that it is disclosed in a meaningful, consistent and easy-to-read format, regardless of whether nutrition claims are made.

Unsolicited Commercial Electronic Mail (Spam)

The Internet empowers people to obtain information, exchange views, and make transactions across national borders. To bring the full benefits of the Internet to their all constituents and spur economic and social growth, TACD believes that the EU and US governments must address important policy issues.

TACD is especially concerned about the epidemic of unsolicited commercial email that floods people's inboxes with unwanted, costly, and sometimes fraudulent or offensive messages. Unsolicited commercial email threatens the viability of the Internet as a channel for communications and e-commerce. The EU and US governments should work together to prevent commercial emails from being transmitted without the specific consent of the recipients and to take concerted action against violators. The US and the EU should also have discussions on the development of a uniform and global system of identifying unsolicited commercial email, to assist consumers in screening and managing such mail.

Internet Fraud and Consumer Redress

TACD urges the EU and US to ensure that consumers have redress through electronic payment systems for problems with online purchases. The EU and US should establish strong, uniform dispute rights that provide effective recourse when transactions are made with credit cards, debit cards, and other forms of electronic payment. The EU should revise the draft directive concerning credit for consumers to expand redress through payment methods rather than limit protections provided under joint and several liability of the lender and the supplier afforded by some Member states.

US and EU governments should provide effective methods of obtaining redress for victims of cross-border fraud. In that regard, the OECD Privacy Guidelines should be taken into account when promoting new solutions and better cooperation among law enforcement authorities for consumer fraud investigation purposes. In particular, US and EU governments should actively promote the implementation of the OECD Privacy Guidelines to countries around the world in order for consumers everywhere to be protected from cross-border fraud.

TACD also urges development of alternative dispute resolution (ADR) systems to help consumers and businesses when problems arise with cross-border purchases. The EU and US should promote ADR systems that are easily accessible, inexpensive, quick, fair, independent, and transparent, and that do not deny consumers the right to seek justice. Furthermore, the EU and US should provide for effective monitoring and oversight of ADR systems.

Product Labels and Trade Rules

TACD continues to support the right of consumers to receive information about the products they purchase. Through their work in the World Trade Organization, TACD urges the EU and US to recognize and advocate to other WTO members that consumers have the right to know about the products they purchase, and that both voluntary and mandatory labeling programs that support the rights of consumers to know about the products they purchase are not a priori inconsistent with WTO rules. TACD continues to urge both the EU and the US to refrain from challenges to each other's labeling requirements.

Transparency and Early Warning

TACD has been extremely disappointed in the EU and US governments' response to its multiple requests on transparency and Early Warning. Both governments made Early Warning lists available on their websites but have taken no further steps to create better mechanisms for notifying TACD or the public about Early Warning discussions.

TACD reiterates its call for public consultation in Early Warning and regulatory cooperation discussions. Items that some governments consider to be barriers to trade are frequently public interest laws and regulations, and consumer groups and other interested parties deserve a voice in these discussions.

Priorities for Government Action 2003-2004

Transatlantic Consumer Dialogue

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