Globalisation to be a central issue at OECD meeting

Time was when the annual conclave of finance and trade ministers at the Organisation for Economic Co-operation and Development was barely noticed outside its headquarters in the appropriately luxurious 16th arrondissement of Paris.

Not anymore. The two-day ministerial meeting which begins today will have far-reaching consequences for what we buy, how much it costs, what we eat and how much tax we pay.

The OECD represents the world's 29 most affluent countries, and suddenly public opinion has woken up to the fact that while national governments have lost influence because of globalisation, multilateral economic organisations, including the World Bank, the International Monetary Fund, the World Trade Organisation and the OECD, are the fora where the world's future is increasingly decided.

This became obvious last November when hundreds of thousands of demonstrators engulfed the WTO meeting in Seattle, which was supposed to have launched a new round of international trade negotiations. The chief reason for the WTO breakdown, European diplomats say, was the US presidential election. With US unions demonstrating against any further liberalisation of international trade, US politicians were not going to risk a controversial move.

No agenda was agreed for the next round, which will be discussed in Paris this week. There is little chance of the WTO meeting again before the autumn of 2001, when the new US administration is firmly in place.

Two new issues which emerged at Seattle will be in the forefront of the OECD meeting this week, where Minister of State, Mr Tom Kitt, will represent Ireland. The developing countries in the WTO complained that their needs and opinions are not considered, that they had gained no benefits from the previous round of trade negotiations.

For the smaller developing countries, this was due to a lack of capacity. For the bigger ones, it was more a problem of access to markets.

The sheer number of demonstrators at Seattle - and the disruption they achieved - brought attention to the central theme of this OECD meeting, which is "Shaping Globalisation". The breakdown of boundaries in trade, movement and communications has unsettled people's lives. Many blame the technological revolution for less stable employment in the developed world, and for encouraging low labour standards in the developing world.

New technologies and the liberalisation of trade mean that investment can shift dramatically and swiftly. Public opinion suspects this enables multi-national companies to exploit the poor and pollute the developing world.

Because the OECD represents the world's rich countries, this week's meeting provides an opportunity for soul-searching on these questions.

Sessions on "policies for growth and social cohesion" will ask whether there is a new, technology-based economy. The fact that the US has enjoyed its longest ever period of sustainable, low inflationary growth implies the answer is yes. The "Growth Project" undertaken by the OECD last year, and to be published for this week's meeting, has tried to explain why economies grow.

Ireland, it notes, has the highest growth rate of any OECD country. Fast-growing economies, it concludes, have three things in common - high use of new technology, major investment in education and training and a willingness to deregulate. Even as the meeting takes place, an OECD team will be in Ireland studying the Irish system.

The young and the wealthy have easier access to the Internet and high technology. OECD ministers will discuss how to ensure that the benefits of the technological revolution are shared, rather than widening the "digital divide" between developed and developing countries. The same phenomenon - a sort of "cyber exclusion" - exists within developed countries.

There is disagreement within the developed countries in this great liberalisation debate. The US wants to move quickly to abolish tariff barriers and quotas in agriculture and services, while the EU and Japan are interested in a wider agenda that includes labour standards.

The same divisions mark the OECD debate on biotechnology and food safety, which will forward recommendations, particularly regarding the competence of international bodies, to the G-8 summit in Okinawa next month.

Europeans are more concerned about food safety and take a precautionary approach, preferring not to use new products until they are satisfied there are no risks. If you can't see anything wrong, then why not use it? is the US line.

Discussions on food safety in closed session are likely to be heated, because the US, Canada, New Zealand and Australia see the Europeans' emphasis on food safety as a cover for protectionism, designed to keep their products off the European market.

The OECD summit will try to sketch a future path for multi-lateral organisations after the failure of the Seattle meeting - and to find a way of convincing developing countries that trade negotiations can work to their advantage. In an attempt at openness, a public forum will be held a few miles away at La Defense, where we could again see Seattle-style demonstrations.