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Advisory Committee on International Economic Policy: July 10, 1999 Meeting HighlightsReleased by the Bureau of Economic and Business AffairsU.S. Department of State, August 20, 1999 |
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The Advisory Committee on International Economic Policy (ACIEP) met in open session from 9:00 a.m. to 12:00 noon, July 14, 1999, under the chairmanship of Michael Gadbaw. Key discussion topics and follow-up proposals follow:
1. Developments in Southeast Europe - Engaging the Private Sector Under Secretary Eizenstat described efforts underway to support democracy, security, and economic recovery in the region. Key developments included signature of the Stability Pact, support for UN activities in Kosovo, and coordination of assistance by the World Bank and the European Union (EU). The U.S. provided the vast majority of the military resources and emergency humanitarian aid in Kosovo. Key European donors have indicated that they are prepared to offer a large share of economic support for the region. Eizenstat made clear that even in this area the U.S. was prepared to provide significant bilateral assistance, but stressed the severe pressures on the international affairs budget. Chairman Gadbaw asked for further information on the U.S. international affairs budget situation and suggested the topic be on the agenda of the next Committee meeting. For background information
NOTE: The inaugural meeting of the Chamber took place on July 20, 1999, with over 50 companies in attendance. For more information, please contact:
Willard Workman 2. Next Steps on the Anti-Corruption Agenda Nancy Zucker Boswell, Managing Director of Transparency International USA, provided an overview of the international anti-corruption effort, emphasizing the need for unity of message from all major players, including multilateral organizations, in order to assure an effective international response. Boswell proposed that the focus should be on completion of current initiatives rather than seeking out new departures. The Organization for Economic Cooperation and Development (OECD) Anti-Bribery Convention is key to international action on the supply-side of bribery. She proposed concentration on OECD states lagging in their ratification or implementation of the Convention. Progress on the unresolved issues related to the Convention, such as bribery of political parties and candidates, requires yet-to-be-discovered allies. On the demand side of the bribery issue, the Inter-American Convention Against Corruption is a positive development, but Boswell observed that the failure of the U.S. to ratify and the absence of a monitoring provision are critical weaknesses. Full ratification of the Inter-American Convention and concrete progress on implementation should be goals for the 2001 Summit of the Americas. To assist, the U.S. Agency for International Development and other aid donors might direct anti-corruption efforts in assistance programs towards this objective. The Asian financial crisis highlighted the urgent need for governance reform, yet as capital flows resume, the pace of reform has slowed. The Asia-Pacific Economic Cooperation (APEC) Summit provides a forum for restoring momentum. Another worldwide initiative is the World Trade Organization (WTO) Agreement on Transparency in Public Procurement, with the goal of reaching final agreement at the Seattle Ministerial in November 1999. Committee discussion demonstrated significant interest in greater international financial institution attention to anti-corruption activities. Are the IMF and World Bank providing enough technical and financial support to borrowers? Standard rules are necessary. Development aid should be linked to the adoption of anti-bribery measures by borrowers and of corporate codes of conduct. It was suggested that a "tool kit" and web site be organized for use by U.S. Embassies, cataloging ways to combat corruption. After discussion, it was agreed that members of the Committee and other interested parties would coordinate with the Southeast Europe working party (see above) to consider ways to promote anti-corruption objectives in Southeast Europe. Follow-up comments or contributions should be addressed to:
Nancy Zucker Boswell Note: U.S. Department of State First Annual Report on Combating Bribery of Foreign Public Officials in International Business Transactions 3. Biotechnology: Fostering a Science-Based, Rules-Based Approach Nancie Johnson, Senior Vice President, Dupont External Affairs, described the debate on the complex issue of biotechnology, and the need for greater participation among the diverse stakeholders. Within government, interagency groups are addressing the trade, food safety, and environmental aspects of biotechnology. In international fora, these issues are under discussion at the Foreign and Agriculture Organization/World Health Organization Codex Alimentarius, the Biosafety Protocol to the Convention on Biodiversity, the OECD, and the Transatlantic Economic Partnership (TEP) talks with the European Union. The State Department is expanding international outreach, with the intention of increasing understanding of biotechnology issues, particularly in major agricultural export markets. Carole Brookins, Chairman and CEO, World Perspectives Inc., proposed that greater outreach efforts in Asia, Latin America, and Africa were needed to strengthen science-based standards and coordinate approval processes on agricultural biotechnology. Further, building consensus within the APEC forum and the Free Trade Area of the Americas could support a global consensus on science/rules-based approaches for agricultural technologies that could be useful during the WTO Agricultural Round. Discussion in the Committee focused on the need for public diplomacy in foreign countries on biotechnology issues. Opportunities to increase understanding included the September APEC Summit; coordinating a broad-based dialogue involving the Committee, industry and consumers on options for enhancing market acceptance of bio-engineered products--possibly including voluntary labeling--prior to the September negotiating session of the Biosafety Protocol; and improving consumer confidence in bio-engineered foods. It was suggested that public diplomacy efforts be increased and the Committee continue its work in this area. Parties interested in participating in these and other issues related to biotechnology are encouraged to contact:
Agricultural Trade Policy Office 4. Upcoming Review of the U.S. Bilateral Investment Treaty Program Assistant Secretary of State for Economic and Business Affairs Alan Larson said the U.S. Bilateral Investment Treaty (BIT) program supports key international economic policy objectives, including protection of U.S. investments, promotion of market-oriented policies in other countries, and increased U.S. exports. The current BIT model was developed in 1994 and is due for a review. Joan Donoghue, Assistant Legal Adviser, Department of State, gave an overview of the core economic and legal issues involved in the rewrite of the BIT prototype. One is consideration of the impact of significant levels of investment in the U.S. by nationals and firms of treaty partners, which has come up in negotiations on the Multilateral Agreement on Investment and in recent arbitration cases under the North American Free Trade Agreement. Other important issues include the relationship between investment objectives and other public policy goals, such as health and safety, labor, and the environment. Among the issues raised during the Committee's discussion were whether a BIT rewrite would adversely affect previously signed BITs. Donoghue responded that we would not expect to renegotiate existing BITs. This raised the question of the relationship between specific commitments in BITs and the more general MFN obligations. Stephen Canner of the U.S. Council for International Business expressed the view that removing or limiting the "fair and equitable"clause and other proposed changes could weaken the protections that BITs accord to U.S. investors abroad, and make such investments riskier. The Committee agreed to place this subject on the agenda of the October meeting. Comments or suggestions should be sent to: Wesley Scholz [end of document]
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