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Health and Consumer Protection

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Intervention of Mr. Pascal Lamy, Trade Commissioner - Assembly of Consumer Associations in Europe, Conference, 18-19 November 1999

Ladies and gentlemen

It is of course a very great pleasure for me to have the opportunity to address you, just before we leave for Seattle to prepare the next round of international trade negotiations. I feel somewhat at a disadvantage, since you have had the occasion to discuss in depth the topic of consumer interests in the New Round, and I look forward to receiving a copy of all your conclusions, but particularly of the conclusions of that specific workshop. However, I am delighted to be able to present to you my position on the issue, and it is a major issue for me, of how the interests of society as a whole, and consumers in particular, should be reflected in the new negotiations.

Trade negotiators in the past have had a tendency to live in their own little world. We were (and are) convinced that trade liberalisation is a good thing, leading to a higher standard of economic well-being for the majority of people, and on that basis we went ahead with, for example, the Uruguay Round. The implementation of that negotiation, and the creation of the WTO, gave an additional thrust to the increasing interdependence between economies and societies which we now call globalisation.

Let me say very clearly: I am in favour of globalisation. I am convinced that this is a trend which is essentially positive, provided that it is steered in the right direction. There are not only economic benefits, but societal benefits too. The ever-increasing scope of cross-border movements - not only of goods, services and capital, but also of people and of ideas - fosters international co-operation. The civil society of which you form a part, and that we see emerging as a major player on the international scene, is itself a manifestation of this aspect of globalisation. Increasing co-operation across national frontiers is, I am glad to see, not a privilege of business – NGOs, including your organisations, have used the opportunities provided by the demise of national borders to form powerful alliances, influencing the European and the international policy agenda.

Don’t get me wrong – I am not saying that all is well and that we should relax and sit back. Globalisation needs a proactive approach: We need to harness the process, to ensure it produces the results and benefits we want, rather than letting it carry us along. In this respect I believe that a comprehensive round of trade negotiations, with a real focus on sustainable development, and with a strengthening or clarification of the relevant rules is the right way forward.

I know that many of you do not share my enthusiasm for globalisation, and even less for a new round of negotiations. For some, globalisation has become a bad word, a threat rather than an opportunity. Globalisation, free trade and WTO trade rules are seen as impacting negatively on valid societal concerns such as the environment, public health, consumer protection (especially relating to food products) and animal welfare, to name but a few of the major issues.

Still, globalisation is a process that has not least been driven by all of us, as consumers, as we have exercised our right of choice and demanded an ever wider choice of products, better quality and lower prices. Consumers used to see trade liberalisation as an instrument to achieve just that. I assume that this is why, for instance, consumers were in favour of the Uruguay Round. That enthusiasm has either disappeared, or at least diminished substantially, in terms of the next negotiation. Why is this?

It is, I have to admit, partly the fault of the negotiators, the public officials and the politicians who pursued further liberalisation, without taking thought for the need for dialogue with the perceived beneficiaries of the movement: civil society, including you, the consumers. We didn't explain, and we didn't listen. I can assure you that we do not intend to let this happen again. We have already started to listen, and to take on board the very valid concerns you have expressed over the past several years.

The lack of enthusiasm is also partly due to the perception that formal trade challenges under the WTO Dispute Settlement Understanding have resulted in rulings that were unfavourable to issues of concern to you: the hormones panel is cited as a threat to food safety standards, and the shrimp/turtle panel as a threat to the environment. I will come back to these points later.

Finally it is partly because the world has changed, and the WTO has up until now not had the opportunity to face the challenge of finding ways to respond to the societal concerns which have arisen regarding, for example, the relationship between trade and development, trade and the environment, trade and public health and consumer protection, and trade and animal welfare. The forthcoming round gives us that opportunity, and we in the Community intend to make the most of it.

Let me take first the example of trade and the environment. We do not read the condemnation of the US measures against shrimp imports, taken on the basis of a policy to protect turtles, as a threat to measures taken with environmental objectives. On the contrary, we were pleased that although they condemned the US measure because it was applied in a manner which constituted arbitrary and unjustifiable discrimination between Members of the WTO, the Appellate Body made it clearer than any WTO judgement has ever done before that trade measures to pursue environmental objectives are legitimate in WTO terms.

There are, of course, other environmental objectives to be pursued in the negotiations. That is why the Council, in outlining its approach to those negotiations, has stated that one of its concerns is to promote sustainable development and to ensure that trade and environmental policies should play a mutually supportive role to that end. In particular, the Commission should seek greater legal clarity on the relationship between WTO rules and trade measures taken pursuant to provisions of Multilateral Environmental Agreements; should seek a clarification of the relationship between WTO rules and non-product related process and production methods with regard, in particular, to eco-labelling schemes; and should examine the role of core environmental principles, notably the precautionary principle, in WTO rules. Moreover, in the work to prepare the Seattle Declaration we are working hard to ensure that sustainable development is identified as one of the objectives of the negotiation, and that the Committee on Trade and Environment will contribute actively towards ensuring that the objective of sustainable development is appropriately reflected throughout the negotiations.

And this is why the Commission is carrying out a Sustainability Impact Assessment of the Round. The EU is leading the way world-wide with this study, the first of its kind to have been done in relation to multilateral trade negotiations. The assessment methodology which has been created for us is an important tool which will allow us to study the relationship between trade liberalisation, economic growth, social equity and environmental protection. We can then seek to ensure that the Round does have a truly sustainable outcome which is of benefit for developing countries and the environment.

One aspect which is of particular concern to European consumers, in the light of several recent crises in the food sector, is the question of food safety. There appears to be a fear that WTO rules threaten the ability of Members to ensure the highest level of protection in this area. Again, we do not read the rules that way. The most relevant text is of course the Agreement on Sanitary and Phytosanitary measures (the SPS Agreement). This Agreement was not primarily conceived with consumers in mind. It was conceived because many suspicious-minded negotiators feared that as tariff protection diminished, non-tariff barriers based on spurious health grounds would replace them. But in fact that Agreement, as interpreted by the Appellate Body in the Hormones case, strengthens our ability to set our level of protection as high as we wish - even at zero risk, if we so choose - and take the measures necessary to protect that level of protection. The main condition which must be respected is that there should be sufficient scientific evidence to warrant the measure in question, but the Appellate Body clarified that such scientific evidence may be qualitative, if quantitative evidence is not available, and also that measures may be based on minority scientific views, since it recognised that science is not monolithic.

Furthermore, the Agreement specifies that when the scientific evidence is relevant but insufficient, a Member can nevertheless take a provisional measure while pursuing the additional information necessary to make a more objective risk assessment. This is a clear expression of the precautionary principle.

There is a great deal of discussion about the precautionary principle and how and in what circumstances it can be used. In the health field, the SPS gives clear indications. In the environment sector, the situation is less clear . It is our view that in the next round, we should endeavour to clarify the conditions for the use of the precautionary principle, and develop multilaterally agreed guidelines for that purpose.

Those who mistrust the WTO in respect of health concerns point to the hormones case as proof that the WTO can be used to force hormone fed beef, or GMO products, down the throats of unwilling EU consumers even when these products present a health risk. First of all, let me make a clear distinction between hormone fed beef and GMO products.

In the case of beef produced with growth-promoting hormones, the Community has independent scientific advice which suggests that there is a risk associated with beef produced this way. As a result, we have maintained our ban. So the first point is: no one can prevent us from maintaining our ban if we so choose. Why then are we subject to sanctions by the US and Canada? Quite simply because we have not done anything to implement the WTO judgement. That judgement was that our measure was not adequately scientifically justified. We have now had a scientific opinion, and are pursuing further scientific studies. We will then have to decide on the appropriate measures, in legislative terms, so that our legislation reflects the scientific evidence available to us. At that point, if sanctions are still applied by our partners, we shall have to have a panel established to have them removed. But the important point is that nothing in the WTO can ever limit the sovereign right of members to choose their own level of protection. (At worst, if such choice is not seen to be scientifically warranted, then compensation can be paid, or sanctions imposed.)

GMOs are a different matter entirely. Why? Because their sale is not authorised in the Community until Member State and Community level scientific advice clearly indicates that they do not pose a threat. If they are available in the Community, they have been rigorously tested and found to be innocuous. So we are dealing with a product which is safe, but which some consumers do not want. What is the solution? Clearly, labelling. No one can deny the right of the consumer to know what product he or she is buying, to be in a position to make an informed choice.

This is relevant not only for GMOs, but in a far broader context. Consumers not only want to understand the health and nutritional implications of their choices, but in many cases they are interested in the environmental and ethical implications of the way the food is produced. They may want to know if the food is produced in an environmentally friendly way. They may want to know if the production method is animal welfare friendly. And in the Community, the right to know is guaranteed under the Amsterdam Treaty. .

However, the rules about labelling are not clear in the WTO. While in no way intending to use labelling as a weapon to force other countries to accept our values without question, we nevertheless intend to seek clarity on the scope of labelling possibilities within WTO rules, both in terms of trade and the environment, where, as I already mentioned, we wish to clarify the relationship between WTO rules and non-product related process and production method requirements, with regard, in particular, to eco-labelling, and in the context of the TBT discussion, where we intend to seek to agree multilateral guidelines on labelling in general.

There is one other concern which has been repeatedly raised in the past by representatives of civil society: I refer to the need for greater transparency in the WTO, and in particular in respect of the dispute settlement process. We believe that improvements in this area will facilitate a better knowledge of how the WTO functions, and make possible a more informed and more interactive public discussion on its decisions.

I realise that you have other concerns which you would like to have addressed, and I hope and believe that you will find that we are indeed intending to address them in the next negotiations.

In summary, I am convinced that in the New Round, a balance must be struck

  • between the interests of trade liberalisation and the avoidance of unilateralism or protectionism,

and

  • legitimate societal objectives such as health, environment and consumer protection,

NGOs will put in a powerful appearance in Seattle, including consumer organisations. The Commission will be available for regular debriefing on how negotiations are going. Commissioners Fischler, Byrne and I (to the extent that I am not caught up in the negotiation sessions) will be available to provide you the necessary information that will allow you to form your own opinions. We have informed the Council that we were to include a small number of NGOs in our official delegation to the Ministerial Conference, including a representative from the consumer side, who , I trust, will liase with those NGOs that are not part of the official delegation. I think this shows clearly that the trade policy process is changing in the direction of greater transparency and participation. Of course, this dialogue will continue after Seattle and throughout the New Round.

Thank you for your attention.

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