A conversation with Angel Gurria.

Position:Organisation for Economic Co-operation and Development secretary general - Proceedings of the One Hundred Fifth Annual Meeting of the American Society of International Law - Discussion
 
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This keynote address was delivered at 5:00 p.m., Friday, March 25, by Angel Gurria, Secretary-General of the Organisation for Economic Cooperation and Development. The discussants were Susan L. Karamanian of George Washington University Law School; and Lucinda A. Low of Steptoe & Johnson LLP.

INTRODUCTORY REMARKS BY SUSAN L. KARAMANIAN

Earlier this week at the George Washington University Law School, we hosted, with the American Society of International Law, a two-day forum that discussed the role of the OECD in the development of legal standards. We looked at how norms are generated within the context of an international body that has as its objective economic growth and expansion. What are the best practices in reaching a productive and valuable consensus? Who should be involved? What information should they gather? Who should have access to this process and, importantly, the information? What can be done with the work product in order to promote consensus to development of legal norms? We also considered the questions: When was this process a success, and when did it not lead to a productive outcome?

Additionally, we looked at specific areas that will be a bit of the focus this evening, and that is in the area of anti-corruption and tax. We had the chance yesterday and again this morning to look at institutions, such as the World Trade Organization and the G20. All of these are topics that deal with areas in which there can be agreement and also areas in which there are differences.

So this evening we will hear first from the Secretary-General, whom I will introduce in a minute. After that, Lucinda Low will help lead the discussion. Many of you, of course, know Lucinda. She heads Steptoe & Johnson's anti-corruption practice group, which is located both here in Washington, D.C., as well as in London, Brussels, and Beijing. She is widely recognized as a leading authority and practitioner in the field of the U.S. Foreign Corrupt Practices Act, and on international anti-corruption standards, including the standards under the OECD, the United Nations, and the European Union Conventions. She is former chair of the ABA section on international law, and, of course, important to this Society as a former vice president and executive committee member.

And now it gives me the great pleasure to introduce Secretary-General Angel Gurria, who came to the OECD following a very distinguished career in public service for his country. He is from Mexico and served in two ministerial posts on behalf of Mexico. First, he was Mexico's foreign minister from 1994 to 1998, where he took it upon himself to focus on dialogue and consensus-building. These are hallmarks of his approach to global issues, and, of course, are important to the work of the OECD. He was also, from 1998 to 2000, Mexico's minister of finance and public credit. For the first time in a generation, he managed to steer Mexico's economy through a change of administration without the recurrence of the financial crisis that had previously followed many such changes.

As OECD Secretary-General since June 2006, he has reinforced the OECD's role as a hub for global dialogue and debate on economic policy issues while pursuing internal modernization and reform. Under his leadership, the OECD has expanded its membership to include Chile, Estonia, Israel, and Slovenia, and he has been very involved in outreach to other important economies, including Brazil, China, India, Indonesia, South Africa, and Russia. The OECD, as you know, is an active participant in both the G8 and the G20 Summit processes.

Secretary-General, it gives me great pleasure to introduce you to the American Society of International Law, to the members and guests who are here today. We look forward to your remarks and then to a discussion after that. So thank you very much for joining us.

[Applause]

SUSAN L. KARAMANIAN, Associate Dean for International and Comparative Legal Studies, and Professorial Lecturer in Law, George Washington University Law School.

REMARKS BY ANGEL GURRIA

Thank you, Susan. And thank you, Lucinda, for joining us. I very much appreciate the invitation to participate in the American Society of International Law's 105th Annual Meeting. I feel privileged to be in the company of so many distinguished members from the legal community, academia, and government. The theme of this meeting, "Harmony and Dissonance," is very fitting indeed. The financial and economic crisis has been a stern reminder that the world is a patchwork of different realities. A key challenge for the post-crisis world is to create a global governance architecture that will be able to accommodate these multiple perspectives. At the OECD, we have 50 years of experience in turning dissonance into harmony. In fact, this is one of the core values of our organization--the belief that through multilateral cooperation, we can overcome our differences and tune our economies to create shared development and human progress. The crisis has actually confirmed the relevance of our mission.

Let me share some of the experiences that we had on this work of turning harmony into dissonance. First, in terms of the role of the OECD as a path-finder and as a policy advisor. We were founded, as Susan mentioned, in 1960, which was when they all signed, and in 1961 the convention entered into effect. We took over the Organization for European Economic Cooperation, whose aim was mostly to administer the Marshall Plan. From its original conception, directing the economic and social reconstruction of a Europe destroyed by war to its current role today as a hub of international globalization and for creating a stronger, cleaner, and fairer global economy, the OECD has been promoting better policies for better lives.

Public policies need to be embedded in appropriate legal frameworks in order to fulfill their role. To pursue our mission, we had to develop many of these frameworks and many of the multilateral tools in an increasing number of policy sectors. More and more of our reality became complex because it was not just about one issue: it was not just about taxes, or nanotechnology, or education, or health. When development and growth became interconnected, all these issues had to come in. We, of course, had to evolve because our tradition was to work with each of the specialists in silos in our organization. And now the need to work increasingly in what we call horizontal projects is becoming almost the way of the future.

Today, the OECD is the only truly multidisciplinary international organization. It covers almost everything governments deal with, from the economy and education, to anti-corruption, science and technology, social issues, and the environment. The only things we don't deal with are military and strategic issues, and, of course, there are enough other organizations that deal with those. There's more competition in that area, unfortunately.

The OECD is a forum where policymakers, economists, scientists, and experts meet to share experiences, identify best practices, find solutions to common challenges, and build reliable international standards. At the OECD, we set out international rules. OECD members can choose whether or not they want to turn them into binding agreements, but as there is no single authority to set the rules in international law, many technically nonbinding OECD standards or OECD norms are adhered to as if they were binding. This is why many refer to this as the so-called power of soft law, and I can tell you that it works.

How does it happen? Let me give you a few examples that can illustrate this. It has to do with the role as a standard-setter. Let's start with the OECD Model Tax Convention as a good example. This has been a crucial tool to help create a level playing field in the world economy. It provided a framework for bilateral tax agreements to avoid double taxation. Its quality led it to acquire international reach. Today, more than 1,500 treaties worldwide are based on the Convention, although only one-quarter of them are between OECD member countries. That means that literally there are thousands of agreements with nonmember countries that are following the same model, and every day there are more that are being signed.

The Model Tax Convention is a benchmark not just because it is increasingly in use today, but because it epitomizes what makes the OECD unique. Again, its use is voluntary. It is a model template for a tax agreement, but individual countries decide whether they want to use it or not, and the result is that they use it more and more.

A second OECD benchmark that has been crucial to turn dissonance into harmony is the Anti-Bribery Convention signed in 1997. The treaty, which makes it a crime to bribe foreign officials, was not easy to conclude. In fact, when negotiations started, bribes were still regarded as a tax-deductible expense in some countries. Today, the Convention includes the OECD's 34 members, plus four nonmembers, and these are some important countries--Brazil, Argentina, South Africa, and Romania. The principle of the Convention has been incorporated into the United Nations Convention Against Corruption, the so-called UNCAC, which is an instrument that is mutually reinforcing with ours. In its anti-corruption work, the G20 has made a strong call to nations which are not parties to the Anti-Bribery Convention to join. The Convention has indeed become a key instrument to promote open markets and fair competition.

But also, in Russia, in China, in India, as we speak, there are similar laws that are being proposed. In fact, in China, it's already in the books, it has been approved, it was done last month; in Russia, it has passed the first reading of the Duma; and in India, it is ready to be discussed by Parliament. In these three countries, this particular...

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