Fourth Informal Consultation between the Trade Committee and Civil Society Organisations, 28 October 2002

On 28 October 2002, the OECD Trade Committee held its fourth informal consultation with civil society organisations (CSOs), back to back with its 135th Session. As in past years, this informal consultation offered an important opportunity for a mutually beneficial exchange of views between civil society and the Trade Committee, as a complement to the regular consultation mechanisms established at the national level in OECD Member countries.

This year, participants from over 25 national and international CSOs [ list of participating CSOs] representing a wide variety of interests were present for the consultation, which was divided into two half-day sessions. The first, entitled "The multilateral trading system and sustainable development: finding common ground for shared objectives" included discussion of the social dimension of globalisation, the interface between trade and development, and trade/environment issues, corresponding to the social, economic and environmental pillars of sustainable development. The second session, entitled "Domestic regulation in a multilateral context: a right, an obligation, a necessity?" offered the opportunity for discussion on the right to regulate as regards trade in services, TRIPS and access to medicines, as well as regulatory aspects of the sustainable development issues discussed in the first session. An issues paper, circulated by the OECD Secretariat, set out the issues to be addressed during the consultation and provided questions intended to stimulate discussion. A number of CSOs also circulated documentation in advance of the consultation.

Session 1: The multilateral trading system and sustainable development: finding common ground for shared objectives

In the first session, a number of issues were discussed, many of which were related to the Doha Development Agenda (DDA) and the recent World Summit on Sustainable Development (WSSD) held in Johannesburg. Several CSO participants expressed the view that the social pillar of sustainable development was still too weak and that social issues were not taken into account sufficiently in trade negotiations. Several Trade Committee Delegates agreed with this view and shared CSOs' disappointment with some of the outcomes in Doha. Both CSO participants and Delegates looked forward to the results of work being done in the ILO World Commission on the Social Dimension of Globalisation, a technical commission established in February 2002 to examine the social dimension and social impacts of globalisation, including in the area of trade. Participants welcomed the presence of a representative of the World Commission at the consultation. Several interventions expressed appreciation for past OECD work on trade and labour standards and flagged the usefulness of further studies by the OECD relating to social issues.

The subject of trade and investment was raised by numerous CSO participants. Increased foreign direct investment was seen by some as an important opportunity for improving the situation of populations in developing countries. In this context, most participants agreed that some binding multilateral instrument for investment, containing predictable and transparent international rules, was needed to ensure that private investments work for the public good and to increase social and environmental responsibility and accountability. However, different views were expressed as to the framework and format such an instrument should take.

Concerning environment issues, several participants welcomed the start of discussions on multilateral environmental agreements (MEAs) within the WTO. Several participants expressed the view that the WTO approach must be consistent with commitments made at the WSSD in Johannesburg. However, the polarised views of WTO Members on the environmental issue were highlighted, and concern was expressed that only superficial changes would be achieved in this area.

A variety of development-related issues were raised in the context the DDA negotiations and work on sustainable development. The importance of including gender considerations in the development of trade policy and in the assessment of the impact of trade liberalisation was highlighted. The issue of tobacco advertising was also raised in the context of a call for more international rules on public health. The importance of increased market access for development was mentioned, particularly in the areas of agriculture, textiles and medicines. Some participants referred to and welcomed the new OECD trade project on textiles, which had been suggested at the 2001 CSO consultation. Concerns about the situation of indigenous peoples were also raised. The issue of corruption was identified as a problem that could undermine all the issues mentioned during the discussion.

Trade Committee Delegates welcomed the opportunity to hear a wide range of opinions on these topics and to present the current state of progress in WTO negotiations. There was agreement on the importance of keeping sight of development objectives within the DDA. They felt it was important for governments to be kept under pressure from civil society, but also highlighted the need for realistic expectations about what could be achieved through the DDA.

Session 2: Domestic regulation in a multilateral context: a right, an obligation, a necessity?

Discussions in this session focused mainly on regulation and trade in services, and TRIPS and access to medicines. Concerning services, participants considered that it was difficult to generalise about whether it is preferable to have public or private provision of basic services. They agreed that the need to ensure access to basic services, such as water, to men and women in developing and developed countries was critical. The need for technical assistance to developing countries in the area of regulatory skills was underlined. Other participants added that regulation should not be subject to unpredictable change. The complexity of getting the regulatory balance right between national, regional and local authorities within a single country was highlighted, pointing to even more difficulties with adopting regulation at the international level. Some participants felt that coherence in regulation is essential and that the principle of subsidiarity should be followed as concerns the relationship between international, national and local regulation. It was therefore seen as important to work towards the development of appropriate regulatory institutions at appropriate levels. Some participants expressed concern with what they saw as slow progress within GATS negotiations. They raised the question of finding ways to make regulation more trade-friendly while keeping in mind the concerns mentioned above, and expressed appreciation for OECD analytical work in this area. Others pointed out that corruption is a threat to both regulatory systems and liberalisation.

Trade Committee Delegates expressed surprise at some of the strong positions taken by CSOs in this debate, given the flexibility of the GATS in terms of scheduling commitments. They agreed that it was important to preserve nations' right to regulate in the public interest and reiterated that nothing in the GATS calls for the deregulation of public services. They were of the view that there are still a large number of misunderstandings about the GATS, due in part to a voluntary or involuntary blurring of the GATS and regulatory reform in some countries. They underlined that the GATS and liberalisation of trade in services was not synonymous with deregulation, but rather efficient re-regulation. They praised the role that OECD work on regulatory reform plays in this regard. Delegates acknowledged that in the field of services, WTO Members have different starting points and that there was no single "right" way to proceed; rather, the flexibility and nuances built into the GATS should be exploited.

Concerning TRIPS and public health, the debate centred around access of poor countries to vital medicines. Both CSO participants and Trade Committee Delegates agreed that the public health situation in many developing countries is unacceptable. They agreed that it was vital to make progress in the context of the Declaration on the TRIPS Agreement and Public Health issued in Doha. There was some debate on the role that intellectual property rights (IPRs) play in public health problems in poor countries. Some CSO participants felt that IPRs were the main obstacle in access to medicines in these countries, keeping prices high and hindering the production of low-cost generic drugs. Some CSOs stated that they didn't agree that patent protection was serving as an incentive for pharmaceutical R&D in developing countries. Other CSO representatives and Delegates, while acknowledging in effect that R&D did not take place in every region of the world, were of the view that TRIPS was only one small part of the public health problem, other key obstacles being weak infrastructure and lack of financing, and in some cases high tariffs in importing countries. These participants felt that the AIDS crisis should not be used to undermine the basic arguments for IPR protection and the incentives it offers. Delegates agreed that this issue should not be a pretext for revising existing patent rules or the TRIPS Agreement. It was felt that the OECD could make a potential contribution in this area through analytical work on the subject.