The Multinational Monitor

JULY 15, 1985 - VOLUME 6 - NUMBER 9

T H E   F I G H T   T O   B A N   B O G U S   D R U G S

A Blueprint for Consumer Protection

by Josh Martin

NEW YORK, New York - After a 10-year battle, the United Nations has approved a set of Guidelines for Consumer Protection that will encourage developing nations to take advantage of the consumer protection safeguards that have long been law in the West.

The Guidelines - adopted by the General Assembly in April - set out basic objectives and principles governments should follow to better protect consumers and outline ways governments can educate consumers and set quality and safety standards. The adoption of the Guidelines represents a major breakthrough in international consumer protection.

The International Organization of Consumer Unions (IOCU) hailed the Guidelines as "a rallying point" for countries that don't stress consumer protection.

"A lot of countries want and need the types of regulations that the more developed nations have initiated but they do not know where to start," said Esther Peterson, IOCU's representative to the United Nations. "They know where they want to be but they don't know how to get there."

The Guidelines prompted stormy debates between industrialized and developing countries, as well as between consumer groups and industry associations. Strong U.S. opposition weakened the final document which has no enforcement mechanism and does not require that U.N. assistance be given in the implementation of the Guidelines.

Despite the lack of force or funds, consumer activists are convinced the Guidelines will have ramifications throughout the developing world. The United Nations endorsement will bring legitimacy and urgency to the push for consumer rights, and as one diplomat said, they will provide "an important framework for international action."

Many consumer advocates were surprised that the Guidelines were approved at all. On at least two previous occasions, American diplomats had raised such vehement objections that the draft Guidelines were sent back to committee for major revisions.

U.S. delegate, Ambassador Alan Keyes, stressed, however, that the United States "still has reservations ... about both the concept and the specifics- of the Consumer Guidelines.

Murray Weidenbaum, former chairman of President Reagan's Council of Economic Advisors, spelled out those objections in an essay in The New York Times ("The U.N.'s Bid to Play Consumer Cop"), in 1983, concluding that the Guidelines would be a violations of the U.N. Charter. Under the Reagan administration's narrow interpretation the U.N. should only "maintain international peace and security. " The Guidelines, administration officials say, would lead to "international regulation of the production and distribution of goods and services."

Yet a growing number of countries, particularly from the Third World, believe the U.N. Charter provides for some international economic regulation, particularly if that regulation is designed to serve as an educational tool and policy model or improve the quality of life.

Ambassador Keyes reiterated the Reagan administration's objection to the mention in the Guidelines of specific products and industries and warned that the Guidelines "remain biased toward government intervention in the marketplace."

While the United States has made its objections clear, Ambassador Keyes has conceded that "the United Nations has a truly useful role to perform in this and other similar efforts in the regulatory area."

This statement may indicate a subtle change in the U.S. position on the U.N. Consumer Code of Conduct on Transnational Corporations, and the Charter of Economic Rights and Duties of States. There are several factors influencing this shift, not the least of which has been the departure of former U.N. Ambassador Jean Kirkpatrick. More importantly, however, is the perception in Washington that America needs to mend its fences with its economic trading partners abroad (many of whom have urged acceptance of some modified versions of the Code of Conduct and the Economic Charter), and mounting domestic unrest over certain American trade relations, above all because of relations with South Africa.

U.N. officials expect that a number of Third World countries will use the Guidelines as the basis for domestic consumer protection legislation. The Guidelines are also expected to encourage international cooperation in the consumer field, particularly through the exchange of information and agreements on international quality and safety standards.

For developing countries, the Guidelines recommend three priority areas: food, water and pharmaceuticals. Standards for food and pharmaceuticals drew the strongest objections from the United States and other major pharmaceutical producing nations including Great Britain, Switzerland and West Germany. It was argued that encouragement of standards in these two fields might hurt American companies who sell such products in developing countries. Imposition of safety standards, for example, might effectively prevent American drug companies from dumping unsafe or unapproved products, thus reducing profits. The Guidelines also encourage the adoption of the World Health Organization's Essential Drugs Programme, which would limit the number of drugs on the market and ban useless and hazardous drugs.

The Guidelines contain general provisions to promote and protect consumers' economic interests. Among other things, the Guidelines condemn "contractual abuses" such as one-sided standard contracts exclusion of essential rights in contracts and unconscionable conditions of credit by sellers. The Guidelines also call on governments to adopt policies that make producers responsible to "reasonable demands" of durability, utility and reliability.

The Guidelines for Consumer Protection represent a first-step - implementation of standards is left to individual governments and specific legislation could takes years to develop. But the U.N. General Assembly's action this April could lead to a good deal for consumers everywhere.

As Esther Peterson summed it up, "with the TNCs and the multinationals the economy is so global that if we don't develop this countervailing power of the consumer we're just going to get completely out of balance. Consumerism has got to go global ..."

Josh Martin is the Multinational Monitor's U.N. Correspondent

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