Transatlantic Business Dialogue Presses for More Open Markets

European Affairs

Spring 2000

Transatlantic Business Dialogue Presses for More Open Markets
by Bertrand Collomb

Transatlantic trade is at an all-time high, yet disputes between the United States and Europe, on issues such as bananas, beef hormones, and biotechnology grab the headlines. Global trade is creating tremendous economic benefits for the world's employees, consumers, and businesses, yet the World Trade Organization Ministerial Meeting in Seattle was disrupted by demonstrations and unrest. Globalization, driven by trade and technology, is making the world smaller, but lack of understanding and communication is keeping people, businesses, and governments apart.

The Transatlantic Business Dialogue (TABD) is one avenue for improving our communications. The TABD is a unique process in which US and EU businesses work together to create common positions for governments to address. The transatlantic business community provides recommendations on existing or developing trade problems in order to head off protracted disputes.

Created by the European Commission and the US Government in 1995, the TABD has shown itself to be a lasting and effective forum that CEOs find valuable.

The dialogue is a "bottom-up" process, led by CEOs and focused on obtaining results. Any company, large or small, can raise an issue within the TABD or make a recommendation.

The TABD is currently divided into five working groups, each co-chaired by an EU and American CEO. Under each working group, there are approximately 40 issue committees, co-chaired by US and EU executives engaged in detailing the specific recommendations.

The TABD adds value to the US and EU political process by making recommendations that are neither European nor American, but transatlantic. Five years experience of the TABD has shown that there are more and more areas in which the business communities on both sides of the Atlantic agree, providing an increasingly positive atmosphere for discussion on a wide range of issues. This is reflected in the growing agenda and work plans of the issue groups.

TABD recommendations aim to liberalize trade and investment around the world, simplify and/or harmonize US-EU bureaucratic practices, and facilitate the development of technology policy.

These recommendations are useful to our governments for their business expertise. The TABD can work with governments to ensure that their political goals meet the realities of the working world. Contacts over the year and high level meetings at the annual TABD CEO Conference contribute to these achievements and progress.

Since 1995, TABD has been responsible for a number of successes, including:

Third Generation Wireless: in 1999, the TABD created an industry agreement on 3G wireless standards that prevented a looming trade dispute between the United States and the EU over the 3G market.
Information Technology Agreement (ITA): the TABD worked to create a US-EU consensus that facilitated this WTO agreement and significantly rolled back tariffs on a range of technology products.
Industrial fasteners: The TABD recommended changes to the overly-prescriptive 1990 US Fastener Quality Act, which acted as a bureaucratic impediment to business, particularly for small companies. Following the TABD recommendations, the US Congress passed new legislation in 1999 amending the Act, which helped to ensure unrestricted transatlantic trade in this important sector.

Even with the successes of the last five years, business feels there is still a long way to go before we have a truly competitive transatlantic and global marketplace, free of unnecessary restrictions. The success of the TABD will depend on the proper implementation of its recommendations, all of which we expect to be put into practice.

TABD leaders have identified specific priorities that we feel are of critical interest this year - against the background of the failure of the talks in Seattle to launch a new round of multilateral trade negotiations. With over 130 US and EU CEOs in attendance, the TABD CEO Conference in Berlin in October 1999 made specific and achievable recommendations.

As the joint input from the transatlantic business community, this work can be used to bridge gaps in US/EU political positions. The TABD's goal remains to move the global trading system forward.

The TABD intends to reach out to consumers, environmentalists, and labor to promote the benefits of trade. Progress can be expected in several other key areas in the year 2000, particularly:

Mutual Recognition Agre-ements between the EU and US administrations should be a main priority. Although a number of MRAs were signed in 1998, the implementation process has been less than successful. The TABD looks to our administrations to move forward the regulatory process in order to support the tremendous amount of trade covered in the MRAs. We call on our governments to agree on the "Guidelines on Regulatory Coope-ration" which will provide a systemic solution to regulatory differences between the United States and Europe. The TABD proposes a system of "approved once, accepted everywhere" in the transatlantic market. There is no purpose or "value-added" to separate testing and certification regimes. Why should a pharmaceutical product or a tire tested and accepted for the European Union market not be automatically marketed in the United States, and vice versa? The TABD will fight in 2000 to reduce unnecessary costs and procedures for the benefit of consumers.
TABD CEOs have developed specific recommendations on a framework for public policy initiatives associated with electronic commerce, based on the principle that Internet initiatives should be internationally consistent, market-driven and technology neutral. Our proposed agreement will be consistent with the Global Business Dialogue on e-commerce (GBDe) and provide a truly industry-wide perspective on the needs and opportunities of the digital marketplace.
An improved early warning system is needed to prevent trade disputes. The disputes on which the press focuses account for only 0.5 percent of total transatlantic trade. As much as 99.5 percent of US-EU trade operates on a cooperative basis - creating employment, satisfying consumers and increasing economic growth - although it does often suffer from unnecessary administrative impediments.
Nevertheless, as trade flows increase, and globalization ensures that once protected domestic systems come into more and more contact with each other, an increased number of disputes is probably unavoidable. The 1999 TABD Chairs were therefore asked at the EU-US Bonn Summit to make early warning recommendations; the TABD will continue to respond in two ways:
1. The TABD will produce specific recommendations on potential trade disputes, of which seven were highlighted in the 1999 Berlin TABD conference conclusions. The TABD will raise issues and solutions at the earliest point in the process and at the highest level, in order to resolve trade inconsistencies.
2. The TABD will use regular presentations and meetings with governments to contribute to systematic early consultations or impact studies on potential trade consequences of any relevant legislation or regulation.
The TABD will continue to work on specific sectoral issues such as customs and climate change. After years of discussion, the TABD has six specific recommendations on customs. Through the Joint Customs Cooperation Council, the TABD expects our respective customs administrations to reduce cost and inefficiencies through harmonization of systems. In climate change, the TABD expects to contribute to the COP 6 negotiations to support a realistic, market-driven approach to climate change issues.

A process as successful as the TABD must strive each year to improve on the results that have gone before. This year the task will be particularly challenging, since the TABD has become the leading voice for business input to transatlantic policymaking.

The process will be geared this year towards achieving specific results in a number of key areas, some of which have been outlined above. The TABD will endeavor to include even more businesses from different sectors, including small and medium-sized enterprises. We shall keep participation at the highest level, that of CEOs. They will discuss further ways to remove barriers to transatlantic trade for the good of all sectors of society, at the annual TABD CEO Conference in Cincinnati on November 16-18, 2000. Updates on the information in this article will be regularly posted on www.tabd.com.