You down with OECD?

You down with OECD?
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Colombia’s steady recovery from its decades-long civil war is a welcome reminder that reason and reconciliation can still prevail, even after years of bloodshed. As the country returns to normality, it deserves the support of the international community — but not at the price of the norms that underpin our global rules-based system.

Unfortunately that’s exactly what the Colombian government is seeking to do with its bid to join the Organization for Economic Co-operation and Development (OECD), a forum for countries united by their commitment to democracy, transparency and free markets — principles that Colombia often has failed to uphold. Colombia should be admitted to the OECD, but only after it addresses several key issues.

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Most alarming is the continuing violence against trade unionists, carried out with impunity and obviously intended to intimidate. The OECD recognizes labor’s right to organize as a pillar of economic development and social stability. According to the OECD’s Trade Union Advisory Committee, the Colombian government consistently has failed to protect trade unionists or punish perpetrators of violence. Human rights groups tally at least 143 murders of trade union activists from 2012-2017, despite the government’s promise to tackle the problem in its 2011 Labor Action Plan.

 

Rich country trade agreements include labor rights partly to level the playing field. Exporters in low- and middle-income countries who flout labor laws can undercut competitors with lower prices. Amid growing concern about globalization’s impact on developed and developing economies alike, the OECD cannot appear to reward unfair labor practices, let alone condone murder.

Colombia also falls short of OECD standards regarding conflict minerals. According to the OECD’s own report from 2016, illegal armed groups and criminal organizations have played a growing role in Colombian gold production over the previous decade, with illegal gold mining generating $2.5 billion per year. Criminal groups also have established themselves in informal production of minerals such as tungsten and coltan (the latter used in smartphones).

In addition to organized crime funding, the OECD report warns that illegal mining in Colombia is associated with serious human rights abuses including child labor, forced labor and sex trafficking, not to mention significant environmental damage.

My own research on medicine quality shows that Colombia often has failed to interdict dubious medicines from entering and leaving the country. Furthermore, Colombia has a dubious track record when it comes to respecting pharmaceutical intellectual property rights, the lifeblood of innovation and progress.

The Colombian government has made registration of new drugs contingent on price negotiations — a position rejected by the OECD, which holds that safety, efficacy and quality are the sole criteria for registering new drugs. One reason Colombia has many substandard medicines is that it insists on buying the cheapest medicines, increasingly from India, without checking whether they work properly.

Colombia also lacks a system for resolving patent disputes before copycat drugs hit the market, allowing serious harm to legitimate businesses and discouraging introduction of new drugs to this important market. Colombia’s regulatory data protection for new drugs falls well short of OECD standards, leaving innovative treatments even more vulnerable to knockoffs. And last year Colombia threatened to introduce compulsory licensing for a whole range of innovative drugs — in essence stripping drug makers of intellectual property protections — on arbitrary economic grounds, rather than for true “national emergencies,” as OECD members have agreed.

The implications of these extraordinary policies extend far beyond Colombia. Bringing innovative new treatments to market requires big investments in research and development over many years. Without reliable intellectual property protections from OECD nations, to recoup these costs, pharmaceutical companies may scale back R&D, depriving the world of potential future cures in promising new categories such as biologics and personalized medicine.

While these issues may appear daunting, they are hardly intractable. For example, after more than a decade of damaging isolation, Argentina has made remarkable progress toward restoring transparency and market mechanisms through a combination of clear goals, strong leadership and a well-honed communications strategy emphasizing the benefits of the free market.

Over the past two years, Argentine President Mauricio Macri has revived his country's economic fortunes with stunning speed: after contracting 2.3 percent in 2016, Argentina’s GDP grew 2.9 percent last year, while foreign direct investment roughly doubled over the same period.

Colombia shares many of Argentina’s same advantages: a young, educated workforce; abundant natural resources and renewable energy potential; natural and cultural attractions; and a strategic location. With peace and pro-growth policies, there is no reason Colombia can’t succeed — but first it has to bring its social and economic policies into alignment with other developed countries.

Although Colombia has made admirable progress over the past decade, it isn’t ready to join the OECD. With democracy and free markets under siege, it is the worst possible moment for the OECD to start diluting its standards, sending a message to other aspirants that membership can be had “on the cheap” — or, even worse, that it is a mere formality.  For membership to be meaningful, the OECD must stand for something. That way, when Colombia eventually joins, it will be a real achievement.

Roger Bate is a scholar at the American Enterprise Institute in Washington, D.C. He researches international health policy, with a particular focus on tropical diseases and substandard and counterfeit medicines.