SENTIDO DE TRASCENDENCIA

A mix of strategies was developed for the creation of pan-European links from the 1990s but their efficacy is understood to be linked to the previous move towards the individualisation of business representation (Coen 1998). Even though having a government affairs office is not a crucial pre-requisite to succeed in the new environment, firms that have established these departments2 have proved more

efficient in identifying suitable lobbying partners and opening political channels. “The establishment of government affairs provided the potential for political economies of scale3, the creation of political ‘alliances of convenience’ and the development of new functions for existing political channels” (Ibidem, p.80). Government affairs divisions were also important for the strategic decision of which areas to prioritise according to Coen and Willman. They cite the example of British Petroleum who, despite being an important producer of Ethanol, did not lobby for a policy favouring the sector

because, with a new programme in the traditional extraction sector being launched, the firm believed that lobbying for fossil fuels was more important. Siemens has also repeatedly opted to monitor and influence EU policy issues in the electrical and high tech sectors, leaving the environmental directives impacting its furniture division aside (Ibidem, p.83).

2 _{Mitchell, in his study about the British business representation, has found a strong correlation}

between the establishment of government relations divisions and the use of direct government contact in a way that “the politically active firms establish these divisions and the divisions increase their activity”. They also tend to make more use of trade associations contacts. See (Mitchell 1990)

3 _{After the fixed costs of setting their government programmes office up, IBM could reap economies of}

scope across issue areas. The unit proved particularly useful in the identification and pursuing of opportunities, with the convergence of computing and communications, the core of the warfare with AT&T in the US, being the major one. See (Hart 2007)

The most popular strategy to guarantee access is the formation of ‘alliances of convenience’(Coen 1997) or ad hoc coalitions. Vertical alliances with small and medium business, which can and usually do incorporate consumers and public interests groups, help giant firms to establish political legitimacy with the EU institutions and reinforce their role as mediators; ad hoc alliances formed around particular issues bring together groups traditionally in opposite sides. Here again, the idea is to build legitimacy by taking on board broader interests that the ones of business alone. Some of the ad hoc alliances, however, are more litigious and trade oriented in nature: the recent clash between South-European based auto industries Peugeot, Renault and Fiat and the German car makers over carbon emission regulation in the EU is a pertinent example (Reuters, 21st of November 2007).

Another case is the alliance created by Bull, Unisys, Amstrad, Olivetti, ICL and NRC against IBM and Phillips around the issue of software copyright, which evolved into other issues (Pijnenburg 1998).

Ad hoc alliances have also turned into issue-specific business clubs:

multinational companies operating in high-tech areas such as superhighways and telecommunications were particularly good at creating those clubs in the late 1980s, early 1990s (Sandholtz 1992), while some loose cross-border alliances turned into quasi-formal industrial forums. The latter included many of the original European Round Table committee members and the EU Committee of the American Chambers of Commerce (Amcham), which has become an efficient transmission belt for the interests of large American firms (Cowles 1996). While the original function of these groups was to provide the European Commission with quick and reliable (technical) information, some were gradually allowed to join ‘high politics’ horizontal forums about enlargement, environment, US and EU trade relations. The most visible of these were the Bangemann group, with eighteen leading European industrialists working on the European telecommunication policy agenda, and the Christophersen forum on energy and transport (Coen 1997, p.96).

The Transatlantic Business Dialogue (TABD), a European Commission and US State Department initiative set up in 1995 involving 112 top American and European chief executives, was turned into a policy-making body as well, despite questions raised about the accountability and legitimacy of big business forums. This problem became visible in episodes such as the TABD neglect of the European Generic Association (EGA), an ad hoc alliance of 400 small and medium size

enterprises, on the discussions related to intellectual property rights and patent expiry times (Coen and Grant 2001). Arguing that the EGA represented a marginal part of the market, the EC, big pharma companies and the European Federation of

Pharmaceutical Industries and Associations (EFPIA) excluded the Association from DG Enterprise, while corporations like SmithKline and Glaxo kept their insider status. The problem was reversed by the EGA with a vertical alliance with the US National Pharmaceutical Association which, in turn, convinced the FDA not to attend TABD discussions on the subject and threatened to advance anti-trust proceedings.

Another part of big business’ strategy in this second phase of European policy making was directed to the traditional forms of collective representation, namely the revitalisation of the European federations – and, to a lower extent, the national associations as well. The idea was to restructure membership and decision-making systems to allow the influence of individual firms, following an Amcham style

(Cowles 1998). The argument was that direct membership allowed Federations to be a platform in which core issues are distributed among members, facilitating the

monitoring of a greater number of areas with greater level of expertise and low cost. Some sectors, usually the ones dominated by few big players or concentrated geographically, are particularly suitable for firm-driven European federations, as interests tend to overlap and the transaction cost of reaching consensus is much lower (Bennet 1997). Besides the domination of few players and the capacity of direct influence by firms, Grant (2000) also links the effectiveness of federations to the importance of the sector, the extent of its exposure to EU regulation and its

organisational maturity. Chemicals, oil and pharmaceuticals fit the description, and the strength and efficacy of the European Federation of Pharmaceuticals Industry Association (EFPIA) and the European Chemical Industry Council (CEFIC) seem to confirm this assumption. Their structures also hint at a certain tendency of

colonisation by giant firms’ interests, even though the representation of small and medium size enterprises is also in their job description.

The same principle applies for national associations, as the most successful ones tend to represent industries with high concentration or major clout. An example is the Association of the British Pharmaceutical Industry (ABPI), strategically located at Whitehall and with a permanent 60 people staff. Here, again, a great deal of

colonisation by big firms is observed, as full membership is only offered to companies providing prescription medicines to the NHS or researching and developing medicines

for human use in the UK and, at the same time, only full members are allowed to “participate in committees, task forces and advisory groups as appropriate and so have a real influence on the future policy and direction of the industry”, with the other categories pending invitation to join specific committees4. In 2005, the ABPI’s board of management had 16 members, eleven of them representing the major corporations in the sector – Pfizer, Johnson and Johnson, Schering-Plough, GlaxoSmithKline, Merck Sharp & Dohme, Bristol-Myers Squib, Astra Zeneca, Novartis, Roche, Eli Lilly and Bayer. Despite their primarily national interests, this kind of association has also evolved into multilevel players, pursuing various strategies of representation. The ABPI, for instance, deals with the European Federation of Pharmaceuticals Industry Association and the European Union authorities directly, at the same time that it keeps a close relationship with domestic politicians, universities and government agencies and bodies5. According to Eising (2004), 22% of French, German and British associations operate this dual strategy, with some 15% regularly in touch with political institutions in the member states and 41.8% with offices in Brussels.

But the role of the national association has also been rekindled for the less powerful sectors and mostly because of the supranational structural changes (Coen 1997; Wilts 2001; Bouwen 2002). Since the European Commission encouragement to the harmonisation of technical standards, firms are encouraged to monitor

implementation and infringements by rivals – an activity that, given the intense and broad level of competition, is best performed by national institutions. Moreover, a few of the standard setting bodies like the European Committee for Co-ordination of Standards (CEN) offer membership only to national standard bodies. This has meant that, particularly regarding technical issues and implementation, firms are more likely to lobby at national level even if the final target is the European Commission. Another targets usually cultivated domestically are the national representatives working on the Council of Ministers. For the less wealthy association, multilevel strategies are usually too expensive and, as an alternative, most of the associations wishing to establish a Brussels office have tried unorthodox arrangements like sharing a space or using the address of a powerful association, such as the Confederation of British

4 _{See ABPI’s website on http://www.abpi.org.uk/members/benefits.asp#voice.}

5 _{At the time of the writing, the Association of the British Pharmaceutical Industry is intensifying}

domestic lobbying against the proposals by the Office of Fair Trading to overhaul the pharmaceutical price regulation scheme, which would mean that companies will have to justify their prices against the benefit their product brings to patients and the NHS. See (Allen 2003)

Industry, or even of a major corporation. The majority, however, operates at national level, taking advantage of the EC rights to check domestic transposition of EU regulations into national laws to expand and reinforce their power domestically.

Large firms lobbying at European level have, therefore, experienced two different environments since the early 1980s: in a first moment, direct input was not only accepted but welcomed by an European Commission dependent on expert knowledge better found within corporations; after the second half of the 1990s, however, the Commission changed its modus operandi for consultation, seeking a larger input from civil society and prioritising encompassing interests at European and national levels, rekindling the role of European federations and national associations in the process.

In other words, this section brought to the fore not only the importance of new governance structures but also the arrival of new actors able and willing to exercise their power. Central to these new strategies of business representation are the direct interaction and negotiation among actors that are not traditional interlocutors of business and whose interests often clash with corporations’ goals. This relationship is, thus, a key concern for this work. The way this particular literature portrays the interaction between old and new actors, however, leads to an understanding of

business representation and power that leave out of the picture important aspects. This will be discussed in the next section.