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Ambassador Boucher, who has been tasked with spearheading the OECD’s
enhanced engagement and accession processes, sat down for an interview with
USCIB in Washington, D.C., earlier this month. Participants included Charles P. Heeter, Jr. (Deloitte),
chairman of the Business and Industry
Advisory Committee (BIAC) to the OECD, Timothy E. Deal,
USCIB’s senior vice president for Washington, Jonathan Huneke, USCIB’s
vice president for communications and public affairs, and Jill Schuker,
director of the OECD’s Washington office.
Q: What brought you to the OECD?
A: I’ve always had a tangential
relationship with the OECD, from my early days in the State Department’s
Economic Bureau. I worked on Chinese
economic reform throughout my career.
And the last couple years I spent working with India, including
economic subjects such as an investment treaty. I’ve had a career in international economics, even though I’ve
often deviated from that to do public affairs or other things. So one of the things that appealed to me
at the OECD was this is the
organization that knows the most about how economies work, and that at a
moment when we’re all scratching our heads again, and talking about how
economies should work better, this was the place to be.
Q: What from your background have you
brought with you to the OECD?
A: A sort of world-wide view. Whether it was public affairs or some of
the other jobs that I’ve done, I’ve worked in all major areas of the
world. I’ve tried to maintain a global
outlook. So what I’d like to get from
the OECD is the perspective on how economies work around the world. And what I’d like to bring to the OECD is
to keep the global picture in mind, and to make sure that we stay relevant on
a global scale.
Q: How
do you explain the OECD’s relevance to Americans, especially business people?
A: It’s relevant on a bunch of different
levels. Whether it’s chemical
standards or tax treaties, or international bribery standards, it has a
direct effect on how business operates, and how economies operate around the
world. It’s the place where policy
experts come together. And it’s where
people who are doing regulation – in taxes, financial services, corporate
governance –come together and compare experiences. They try to come up with best practices, standards and
policies. It’s founded on
experience, on what works. And if we
want a world that’s based on real experience and not theory, I think the OECD
is the best place to share that experience and come up with answers to the
problems we all face in managing economies, managing companies.
Q: With the G8 giving way to the G20 as
the primary high-level forum for global economic discussion, what is the role
of the OECD?
A: We don’t know for sure. As the G8 evolves, as the G20 evolves, the
OECD is going to evolve as well. What
we’ve found so far is because we have the expertise, the shared policy
experience of now 31 OECD members, and a substantial outreach effort to the
bigger economies around the world, those organizations turn to the OECD and
say, for example, “We need to look at fossil fuel subsidies, can you help
us?” And, the answer is yes, we can
help do that. Interested in
innovation strategies? Well, that’s
something the OECD is working on already and bringing countries
together. Interested in labor? We’re working with the International Labor
Organization on putting together a G20 ministerial on labor. We’ve got expertise in all these different
areas, and we can develop new expertise as needed. And I think we’ll see people turn to us. That doesn’t mean we’re the only
ones. Obviously, the IMF has a role,
the World Bank has a role, the Financial Stability Board has a role, because
there are financial issues and regulatory issues or development issues. But I think the core of economic
management is at the OECD, as are the social impacts. How do you deal with some of the jobs and
the employment problems caused by the crisis? How do you reestablish the structural potential of economies
that might have been lost during the crisis?
Those are issues we can help people with, bring people together. So what we’ll find is that these
organizations turn to us in areas that we have the particular expertise or
can develop it quickly, and they’ll turn to others where others have the
expertise, and hopefully all this will work pretty well together.
Q: What
can you tell us about the OECD’s accession and enhanced engagement efforts?
A: Chile is the first of probably four
economies in the next six months that will come in. And Chile has done a bang-up job getting ready for membership,
not only adjusting its own economy to meet the highest possible standards of
economic management, but also bringing something to the table. We will learn a lot from Chile. We’ll look
at Chile’s pension plans to enrich our understanding of aging societies. Slovenia, Estonia and Israel also seem to
be on track. A couple more meetings
and committees have to discuss the issues, but it looks like we’ll have them
in by next June. Russia’s on a slower
timetable. We all know there’s a lot
for Russia to do. The fact that
they’re interested in accession is good.
I think it’s good for everybody in the business world. The more Russia does to bring itself in
line with global standards, the better off we all are. They sent a very substantial delegation to
the bribery meeting that was held in December, which is great. Everybody knows they’ve got a long way to
go. But the fact that they’re serious
and showing serious interest, that’s good for all of us. And the more they do, the better we all
are.
Beyond that, we’ve got five
enhanced engagement countries that we’re actively working with: China, India,
Indonesia, Brazil and South Africa.
And those are countries that have substantial weight in the world economy,
that need to have substantial input into future world standards and best
practices. We need their
understanding to enrich our discussion.
And we bring a lot to them as they face policy choices. How do different countries do these
things? That’s what we can share with
them. So my job is to “enhance” the
enhanced engagement as much as we can, make it meaningful to those countries
and to us. Beyond that, there is a broader
outreach, to the Middle East, North Africa, Latin America, Southeast Asia,
other places where OECD experience can contribute to countries that want to
develop market economies, but where we can also learn from them as they face
different development challenges.
How they’re going about it, what they’re trying to do, and how some of
them are succeeding.
Q: In Latin America, Chile is in line to
join the OECD, and of course OECD Secretary General Angel Gurría is from
Mexico. Has that increased the
organization’s influence in the region?
A: The fact that we have Latin American
members means we now have a different kind of experience coming in. As I said, Chile brings some really unique
experience to the table. So does
Mexico. It means that there are
things for others to aspire to in the region. Others can look at those countries and say, “Hey, they got
their act together and did it right, maybe we should too.” We’ve got programs with Argentina, Brazil
and others. We need to show people in
the region that the market route works.
Q: BIAC has observer members in nearly
all of the enhanced engagement countries as well as in the accession
countries. Can this network be
helpful to you?
A: What we look to BIAC for generally is
even more important in the enhanced engagement countries: What are the
challenges people are facing? What
are the problems, and how are they trying to solve them? It’s business people from those countries
who, on a very practical level, must contend with unemployment insurance, or
pension schemes or economic regulations.
Also BIAC members who operate in these countries know the problems we
need to solve in different places.
Countries say “We want to be more competitive, we want to have a
better investment environment.” Well,
if we’re going to help countries achieve a better investment environment, you
know the investors, as well as the host countries, the recipients. So that’s where the rubber meets the road.
Q: What specifically is involved in OECD
accession? What do countries have to
do to make the grade?
A: Each of the OECD’s 20-odd major
committees goes through the practices of the country in its particular area
of expertise. The tax people go
through tax practices, bribery people go through what steps they take on
bribery. And in areas where they
think the country ought to do more to come up to standards – for example,
passing intellectual property legislation, as has happened in one or two of
the present accession candidates – they say, “Look, we’ll give you a positive
recommendation if you do this.” The speed
of accession is governed by the speed with which they are able to come
through on those things. So just the
process of accession has led to upgrading the quality of law and
implementation. OECD doesn’t just say
“You’ve got to pass these laws,” but “You’ve got to show us you can implement
them, too.” A lot of really important
social issues come through it as well.
Enhanced engagement is more with a view to possible membership. We would love those countries to come in,
but they’re going to come in when they’re ready. And what we need to do in the meantime is, as I said, make it
meaningful for us and make it meaningful for them, meaning that when we have
policy discussions we benefit from their experience, and when they face
policy choices they get the benefit of our experience and our expertise. If you go back 30, 40 years, the OECD was
at least 80 percent, if not more, of the word’s GDP. If we’re going to be the world’s premiere
economic management organization, we’ve got to have that relationship with
the countries that now constitute a significant portion of the world’s GDP.
Q: One USCIB member referred to China’s
enhanced engagement as a “regulatory shopping cart,” meaning the OECD
provides a supermarket of sorts where countries can choose the polices that
best fit their needs. Is this how it
works?
A: Well, if you’ll forgive the analogy,
we don’t do enhanced engagement like a Chinese menu, where you’ve got to
chose one from column A and one from column B. It is indeed more like a supermarket, where you go in and say
“What do I need today?” It has a lot
to do with the state of your economy.
But it also has a lot to do with what you’re trying to
accomplish. If you’re trying to
attract investment, build long-term stability, go through structural reforms
and changes, address currency issues, then you tend to go in the aisles where
those products are.
Q: You have a unique perspective, having
been in the government at high levels for a number of years, and then going
into the OECD. What’s your
perspective on how the OECD figures in U.S. policy making? Is it an important organization?
A: I think it’s always been
important. It’s always been a part of
our international economic picture.
Where I think it’s becoming more important is on the domestic economy. We’re facing some fairly big economic
challenges, and the people who are making domestic economic policy want to
know what are other countries doing right now. I was really struck when we had a full-day review of Chinese
economic policy. They face a lot of
problems that are unique to their situation.
But they also face the question of pulling back on the stimulus and
going to more demand-led growth. At
what point do we all have to slow down the expansion of monetary policy and
credit in order to avoid inflation?
How do they start unwinding state ownership? They face a lot of the same questions as we do. And I think we have policy makers here who
understand we face a lot of the questions that others do. That doesn’t mean we’re going to grab
somebody else’s method and use it. But
you can learn from people’s experience without trying to mimic their
ways. And I think this administration
has a commitment to looking at the global picture. That means that the OECD is a very important organization to
face those challenges.
Q: Has the fact that the economic
downturn was so heavily centered in the United States and Western Europe led
some countries to question the value of open markets or some of the other
things the OECD stands for?
A: Not fundamentally. It’s interesting to look at people’s
reaction to the crisis around the world.
There are a few places that say, “We were protected because we were
protectionists,” but not that many.
Everybody’s wary. Everybody
remembers the experience of the 1930s, or at least learned about it in
school. And so one of the things on
the G20 agenda is to watch out for trade and investment protectionism. We’re also learning to look for it in more
subtle forms. I think countries by
and large are committed to the global market economy, but they’re all
watching each other pretty carefully.
But the fundamental issue of markets, market incentives, tracking
investment, developing jobs, productivity, technology, education, better
labor policies, better competition – nobody’s really questioning those. They still believe that getting better at
the fundamentals of economic management is the way to satisfy your
population.
Q: How is OECD managing the planned
revision of its guidelines for multinational enterprises?
A: We just had a big forum with a lot of
corporate, NGO and labor input on where we go on the guidelines. I found it interesting; it was my first
real introduction to the area, and there was enormous attendance and
enthusiasm. Many pointed out the
similarity of interests of local and international businesses in a given
economy, the fundamental importance of national treatment, and that you may
need guidelines that can apply to everybody.
Companies want to be contributors to the long-term health of economies
and societies. And so having a standard
set of rules, a standard set of guidelines for everyone really does benefit
everybody. We’d like to see everyone
adopt more or less the same practices.
We did that with the anti-bribery convention, and I think that was a
very successful all around.
Q: The OECD convention on bribery just
marked its tenth anniversary, correct?
A: Yes, and the history of that is very
illustrative. When we passed the
Foreign Corrupt Practices Act, U.S. companies had restrictions on them that
nobody else did. Now we’ve come out a
lot better because everybody is meeting certain standards. As new countries join the convention, that
makes it better for business and for the countries themselves. I read that the Chinese government put out
a report saying there was $35 billion in illicit payments in China last
year. We now are moving to another
level not just of recommendations, but of implementation and review. Countries will be reviewed for not just
whether they passed a law but whether they’re carrying it out. It makes the business environment, the
economic environment, and frankly the political environment so much more
healthy in countries to have the process underway. It’s gone global, beyond the OECD, to a huge number of countries.
Q: Should the OECD be doing more
treaty-making?
A: There are definitely a lot of areas
where it doesn’t have to be treaty-making, but rather standard-setting. And sometimes maybe it’s just
experience-sharing. But sometimes taking
these things global really makes sense.
Corporate guidelines would be an example, where perhaps we should try
to have an international standard there that everyone can adhere to. Or on taxes, an area where the OECD has
informed and helped create the international standard, but it’s also gotten
bigger than us. I think there are a
number of areas where we ought to do that to some extent, looking for advice
from BIAC and others – what are the areas that would be most meaningful? And that’s where the work we do with big
economies outside the OECD – with China, India, Brazil, South Africa,
Indonesia, and Russia – can be really important, because this lets them get
involved in the setting of future standards.
They complain sometimes, “Why should we be expected to meet standards
we didn’t have a hand in making?”
It’s in our interest to have them involved in standard setting.
Q: What is the OECD’s involvement in the
climate change debate?
A: I think energy and climate change is
one of the most interesting areas we’re involved in. We’ve already done a lot of work on green
growth. Everybody wants to know how
to manage an economy so that it grows greener over time and is
sustainable. How do you measure
economic success? It’s more than
GDP. It’s the ability to sustain the
viability of your economy and population over time. We had a big meeting in Busan, Korea last fall on this. So a lot of these pieces come together –
green growth, innovation, structural reform, measuring progress, and a number
of other things – into the idea that people want to manage their economies
better for the long term. I think the
OECD has a lot to contribute, and is a good place for countries to get
together to discuss, what kind of taxes work on energy, what kind of
cap-and-trade systems work, what ways are there to give the right incentives
to grow greener rather than just making rules about it.
Q: What’s the role of the International
Energy Agency in all this?
A: There’s an incredible amount of
expertise to draw on in a symbiotic relationship with the IEA. They have the annual World Energy Outlook,
they have real experts in the use and development of energy, and we have a
lot of the expertise on how that filters into the rest of the economy, and
how you build your economy in the future.
Having the IEA as part of this is a good way to look at the mandates
that we’re getting from governments, which is: tell us how to grow greener
without losing our growth potential.
Q: Last question: What can business do
to make your life easier?
A: Give me ideas I can steal. Really, I think we’re all looking for good
ideas these days. And tell us what we
should be doing. We’ve got to be an
organization that responds to the needs of our constituents – member countries,
non-member countries, business, labor.
Everybody who’s working on the world economy these days needs to come
forward with ideas and on things we ought to look at together.
More on the Business and Industry Advisory
Committee to the OECD
Brochure: The OECD Means
Business
OECD website
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