Alice Slayton Clark Archives

USCIB Members Celebrate BIAC Business Day at the OECD

Published on October 30, 2015
Rick Johnston (Citigroup), second row, fourth from left.
Rick Johnston (Citigroup), second row, fourth from left, joins other BIAC members at the annual Business Day at the OECD.

On October 28 and 29, member organizations celebrated the annual Business and Industry Advisory Committee to the OECD (BIAC) Business Day at the OECD headquarters in Paris. Business Day is the traditional reunion of the BIAC business community, featuring several speakers from the OECD leadership and the BIAC policy groups, including Rick Johnston (Citigroup), chair of USCIB’s Trade and Investment Committee and executive board vice chair of BIAC.

OECD Chief Economist Catherine L. Mann and Chief Statistician Martine Durand spoke about the global economic outlook and the concept of well-being in our societies. OECD Secretary General Angel Gurria gave an account of current OECD priorities, including the importance of an enabling investment and regulatory environment.

“Across the presentations on investment, trade, international taxation, environment, innovation, regulatory policy and health, it was clear that the private sector’s engagement is key for more sustainable growth and productivity,” said Bernard Welschke, secretary general of BIAC. “We take this Business Day and the good feedback from the OECD and participants as an encouragement for the many activities ahead.”

USCIB members that attended BIAC Business Day included Arkema Group, Deloitte, Exxon Mobil, Johnson Controls, McDonald’s, Qualcomm and many more.

 

USCIB Members Lead B20 Digital Economy Forum

Published on October 8, 2015

Digital GlobeUSCIB member companies dominated the agenda at the B20 Digital Economy Forum in Istanbul on October 6. Speakers included representatives from Intel, Boeing, Oracle, eBay, PayPal, Google, AT&T, Facebook, IBM. HP, GE, Ernst and Young and more.

“USCIB ICT Committee Chair Eric Loeb (AT&T) and Vice Chair Joe Alhadeff (Oracle), as well as dynamic local reps from member companies made effective presentations on governmental policies affecting the Digital Economy,” said Shaun Donnelly, USCIB vice president for investment and financial services, who attended B20 meetings in Istanbul this week.

The B20 is finalizing its policy recommendations to the G20 on improving the policy environment for the digital economy. The B20 Digital Economy Policy Paper is online here.

Excerpted from the paper, the B20 priorities on the digital economy are:

  1. Develop alternative policies to data localization
    • Address growing issues concerning the movement of data and adopt alternative policies to data localization.
  2. Improve the global trade system for the emerging digital economy with direct focus on e-commerce and digital trade
    • Discuss trade-facilitation measures to improve customs procedures with a direct focus on e-commerce challenges.
    • Establish one-contact information centers to support SMEs around legislation issues concerning cross-border e-commerce.
  3. Improve access of enterprises to digital economy and infrastructures
    • Commit to improved digital infrastructures and incorporate a five-year universal broadband connection target for G20 countries
  4. Develop and finance programs aimed at reducing skills mismatches in an era of rapid changes in technology and innovation
    • Establish a problem-solving and practice-focused STEM education approach in collaboration with the business community to prevent the expected skills shortage in STEM jobs.
  5. Assure legislative and regulatory support for alternative forms of funding
    • Support the emergence and growth of alternative sources of funding by harmonizing policies, regulations, and standards.
  6. Improve digitization of government processes
    • Increase use of digital technologies to transform key business processes to create greater leaps in efficiency and productivity.
    • Promote integrity in public procurement by instituting digital systems for efficiency and transparency to address issues during the procurement process.
    • Reduce corruption and improve efficiency in trade by moving towards a comprehensive digital environment for customs and cross-border systems through public-private collaboration in all G20 countries within five years.
  7. Establish a G20 governance mechanism to implement measures to improve the digital economy
    • Start a study group, with the inclusion of the World Trade Organization, World Customs Organization, International Trade Center, World Bank, OECD, the Global Commission on Internet Governance and the relevant engagement groups.

USCIB Defends Investment Agreements at G20 Global Forum in Turkey

Published on October 7, 2015
istanbul_source
Istanbul, Turkey

On October 5, USCIB Vice President for Investment and Financial Services Shaun Donnelly participated in a panel discussion in a day-long OECD/G20 Global Forum on International Investment in Istanbul.

Along with Donnelly, the following panelists made the case for strong investment chapters in international trade agreements, including investor-state dispute settlement (ISDS): Deputy U.S. Trade Representative Michael Punke; Kurt Tong, principal deputy assistant secretary for the bureau of economic and business affairs at the Department of State; and Bernhard Welschke, secretary general of the Business and Industry Advisory Committee (BIAC) to the OECD.

“Other panelists, including from the EU and other foreign governments plus senior OECD staff, criticized  investment agreements, especially ISDS arbitration procedures,” said Donnelly. “Our ‘gang of four’ and a few other business panelists each in our own way made the case for strong investment agreements.”

Donnelly continued: “We’re counting on Ambassador Punke, representing USTR Michael Froman, to be a strong voice for strong, balanced Investment agreements along lines of U.S. Model Bilateral Investment Treaty.”

USCIB Welcomes Conclusion of Trans-Pacific Partnership Negotiations

Published on October 5, 2015

Golden_GateWashington, D.C., October 5, 2015 – The United States Council for International Business (USCIB) welcomed the conclusion of negotiations on the Trans-Pacific Partnership by TPP trade ministers meeting in Atlanta, saying that a comprehensive, market-opening TPP agreement would provide a significant boost to the U.S. and world economies.

“We have urged the conclusion of an ambitious, high-standard TPP throughout the course of these talks, and we look forward to reviewing details of the agreement to see if they meet these expectations,” said USCIB President and CEO Peter Robinson.” U.S. Trade Representative Michael Froman and his counterparts are to be congratulated for seeing these talks through to their conclusion.”

Robinson continued: “Our future prosperity hinges on expanded trade, investment and job creation. Together, the TPP nations account for some 40 percent of global GDP, with a burgeoning middle class. And of course there is the added potential of other countries signing on now that a deal has been sealed.”

USCIB is a leading member of the U.S. Coalition for TPP, a broad-based group of U.S. companies and associations that supports the negotiation of a comprehensive, high-standard and commercially meaningful TPP agreement.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world. With a unique global network — encompassing the International Chamber of Commerce, International Organization of Employers, and the Business & Industry Advisory Committee to the OECD — USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More at www.uscib.org.

Contact:
Jonathan Huneke, USCIB
+1 212.703.5043, jhuneke@uscib.org

More on USCIB’s Trade and Investment Committee

ICC Banking Commission Global Survey Highlights Impact of Trade Finance Gap on SMEs

Published on September 29, 2015

Cover Page ICC Global Survey on Trade Finance 2015_sourceThe International Chamber of Commerce (ICC) Banking Commission has released the results from its 2015 Global Survey on trade finance – highlighting the impact of the trade finance gap on SMEs, the impact of regulation on correspondent banking, as well as positive trade finance trends, particularly with regards to export finance.

Small and Medium-sized Enterprises (SMEs) are among the hardest-hit by the trade finance gap, reports the Global Survey on trade finance, released on September 29 by the International Chamber of Commerce (ICC) Banking Commission. The Survey received 482 responses from 112 countries around the world and showed that SMEs account for nearly 53 percent of all rejected trade finance transactions. By contrast, 79 percent of the trade finance transactions for larger businesses are accepted.

The trade finance gap is highlighted throughout the Survey, citing compliance as a chief barrier to trade finance. Nearly 46 percent of the banks surveyed terminated correspondent relationships due to the cost or complexity of compliance, while 70 percent of respondents reported declining transactions due to AML/KYC requirements. Furthermore, the percentage of respondents citing anti-financial crimes compliance requirements as a significant impediment to trade finance has increased from 69 percent last year, to 80 percent in this year’s Survey. This trend is expected to continue, as nearly all (93%) of respondents expect compliance requirements to increase during 2015.

“The Global Survey works as a snapshot of market trends, allowing us to compare progress from previous years and gauge global expectations,” said Vincent O’Brien, chair of the ICC Banking Commission Market Intelligence. “This year that snapshot has highlighted the severity of the trade finance gap – which continues to be impacted by regulation, despite the low-risk nature of trade finance – and particularly its impact on SMEs. This is crucial given SMEs constitute over 95 percent of all firms and account for approximately 60 percent of employment worldwide.”

That said, the results from the Survey also show some positive trends in trade finance. Around 63 percent of respondents reported an increase in overall trade finance activity, with 61 percent of banks stating they have increased their capacity to meet trade finance. What’s more, 25 percent of respondents to the Global Survey on trade finance consider trade instruments supporting trade as involving more than 75 percent less inherent risk than conventional lending.

The results from the Global Survey also reflected positively on export finance, with 79 percent of respondents in the industry claiming it remains a profitable business. The industry also observed a significant decrease in pricing, and even more so, fees in 2014.

“While the trade finance industry is certainly facing challenges, and the trade finance gap is a clear issue, the results from the Global Survey on trade finance show that it is not all doom and gloom,” added O’Brien. “The financial landscape is recognizing the importance of trade and, in addition to banks stating they have increased capacity to meet trade finance, we have an array of alternative lenders – such as specialist financiers, export credit agencies, and multilateral development banks – stepping up to fill the trade finance gap.”

Daniel Schmand, chair of the ICC Banking Commission, said: “New players can prove their worth by addressing the shortfall of trade finance; new or alternative financiers may support trade in areas where banks are restricted by risk appetites, regulatory burdens or stakeholder concerns.”

Download the 2015 ICC Global Trade and Finance Survey.

USCIB Statement on China’s WTO Commitments

Published on September 28, 2015

china_flag_largeThe economic relationship between the United States and China is both vital and complex, and U.S. business holds an important stake in this relationship’s success. Since China joined the World Trade Organization in 2001, the United States Trade Representative has submitted a yearly report to Congress on China’s compliance and commitments to its WTO accession. As part of this submission, USCIB is invited to provide a statement to USTR on behalf of its members, providing feedback, comments and recommendations on China’s compliance with its WTO commitments.

USCIB appreciates the significant efforts China has made since joining the WTO to meet its obligations under the terms of its accession agreement. However, there still remain general WTO obligation compliance concerns. Broad business concerns are listed below, excerpted from USCIB’s statement:

China’s Antimonopoly Law (AML): Chinese antitrust enforcement authorities continue to use the AML as a tool to advance industrial policies goals and limit competition by U.S. and other foreign companies. While we support China’s efforts to address anti-competitive practices, Chinese regulators have repeatedly used AML enforcement against U.S. companies absent any proof of market power or anti-competitive harm, and often in disregard of basic norms of fairness, due process, and transparency. USCIB members urge the U.S. government to continue to focus on this issue and its effects on U.S. companies.

National Treatment and Non-Discrimination: Chinese authorities continue to use a variety of policy tools and regulatory measures—including AML enforcement (described above), technology standards policies, IPR enforcement practices, and licensing and investment reviews—to compel transfer of U.S. IP or technologies to Chinese entities at below-market rates and to exclude U.S. companies from full and equal participation in the Chinese market. USCIB members continue to call on China to abide by their WTO commitments of national treatment and non-discrimination and ensure a competitive market that allows for foreign business participation on a level playing field with domestic Chinese firms.

IT Security Measures: Chinese policymakers and regulators have recently proposed or enacted a variety of trade-restrictive and discriminatory requirements on information technology (IT) under the guise of protecting security. These measures, many of which require the use of IT products that are “secure and controllable,” disadvantage U.S. firms by requiring Chinese IT users to purchase Chinese products or suppliers, imposing domestic R&D or content requirements, requiring the transfer or disclosure of source code or other IP, restricting cross-border data transfers, and in other ways. USCIB members urge the U.S. government to continue to press for full suspension of all existing and proposed measures involving trade-restrictive requirements in this area.

Read USCIB’s full statement on China’s WTO commitments.

 

BIAC-B20 Event: Financing SMEs in Global Markets

Published on September 24, 2015
Charles R. Johnston, chair of USCIB's Trade and Investment Committee and Vice Chair of BIAC
Charles R. Johnston, chair of USCIB’s Trade and Investment Committee and Vice Chair of BIAC

Conscious of the financing challenge facing small- and medium-sized enterprises (SMEs) and the consequences for growth and investment, the Business and Industry Advisory Committee to the OECD (BIAC) and B20 Turkey hosted a special event on Business Access to Global Value Chains and Financing SMEs on June 4, 2015 at the OECD Headquarters in Paris. Participants included senior representatives from SME associations, financial firms, multinational companies, governments, international organizations, and business federations. The event sought to pave the way for actions to support SMEs in global value chains (GVCs), in contribution to the G20 Leaders’ Summit in November 2015.

As national economies endure the slowest post-crisis global investment recovery since the early 1970s, there is a pressing need to unlock growth, investment and jobs. More must be done to enable businesses to serve their clients through GVCs, which form the centerpiece of world trade and investment, and thereby enhance companies’ competitiveness, productivity, and propensity to invest.

However, SMEs – which account for about 60 to 70 percent of employment and over 50 percent of value-added in OECD countries – have struggled to access the financing they require to participate in and across world markets, as banks have deleveraged to meet new regulatory requirements.

Following the event, BIAC and B20 Turkey released a publication to convey key priorities to the G20 agenda in 2015. It presents a compilation of chapters by prominent thinkers on the financing of SMEs in GVCs, and draws upon the discussions held at the special event held on June 4. The final chapter of the publication presents three overarching recommendations to G20 Leaders:

  1. Focus on coordination, consultation and impact assessment
  2. Raise SME access to finance and skills through an integrated approach
  3. Maximize the sharing of information through digital platforms

The publication is intended to serve as a key point of reference in preparing the G20 Leaders’ Summit Communiqué in 2015. The publication is below for your perusal.

BIAC and B20 give appreciation to the following co-sponsors of the event and report: Lloyds Banking Group, Toronto-Dominion Bank Group, the Association of Chartered Certified Accountants (ACCA), the SME Finance Forum, and Willis Ltd.

More Effort Needed on Trade for Jobs and Growth, ICC leaders say

Published on September 22, 2015
New Delhi
New Delhi

The shrinkage in global trade flows over the first two quarters of 2015 was highlighted as a major concern for global business by the International Chamber of Commerce (ICC), at its executive board meeting in New Delhi, India on September 16.

Discussing strategic priorities for the international business community, ICC leaders called for a major push to ensure the potential benefits of the WTO’s Trade Facilitation Agreement are realized. This agreement, concluded in 2013, has significant potential to boost global trade flows, up to an estimated $1 trillion over time.

“The TFA has significant potential to support the recovery of global trade flows, by making it easier, quicker and less costly to export,” said ICC and USCIB Chairman Terry McGraw. “Ratifying the TFA must be the starting point for a concerted effort to promote trade as a driver of growth.”

Comprising CEO’s and business leaders from over 20 countries, executive board members discussed a core work program for ICC focusing on four major summits – each of which is expected to have a major impact on business for years to come. Specifically, the 10th Ministerial meeting of the World Trade Organization in Nairobi, the UN Sustainable Development Goals Summit in New York, the G20 leaders Summit in Antalya and the landmark Climate Conference, COP21, in Paris.

The TFA tops a list of four priorities set out by the Business-20 International Business Advisory Council (IBAC), established under this year’s Turkish presidency. The executive board endorsed the IBAC priorities that also include financing for small- and medium-sized enterprises, youth and women’s engagement in the labor force and infrastructure investment.

“We as businesses can’t generate jobs and growth without government support,” McGraw said. “As the voice of business with representation in over 130 countries we are ready to do all we can in the weeks ahead to promote the G20 agenda for growth, jobs and opportunity.”

ICC Executive Board members met in Delhi on the eve of the 2015 India Economic Convention.

Read more: Our 5 takeaways from the India Economic Convention 2015

Bit-by-Bit Won’t Get it Done on US-China BIT Negotiations

Published on September 15, 2015

by Shaun Donnelly, USCIB’s vice president for investment and financial services

When Chinese President Xi Jinping visits Washington later this month for what may well be the final full-blown U.S.-China summit of the Obama administration, there will be a lot of important bilateral and global issues on the agenda – cyber security, South China Sea, democracy and human rights, climate change, Internet freedom, North Korea, Iran, Syria and a whole lot more.  But I want to make a strong plea that the U.S. and Chinese governments also use this upcoming summit to push for real breakthroughs on the long-running U.S.-China negotiations on a bilateral Investment treaty – the “U.S.-China BIT.”

The U.S.-China BIT has the potential to be a win-win agreement to provide broad legal protections, market-opening and dispute settlement mechanisms for foreign direct investment (FDI) flows in both directions. China already has over 100 BITs with other nations, so current and potential U.S. investors are presently at a disadvantage in competing for investment opportunities in China’s fast-growing economy.  And make no mistake, this is not a one-way street; Chinese investors are already investing, and looking to invest more, in the U.S., which we should welcome to help increase investment, jobs and economic growth here at home.

Continue reading the full post on Investment Policy Central.

ICC Launches Global Export Finance Committee

Published on September 11, 2015
The launch of the ICC Global Finance Committee took place on September 7 in Barcelona, Spain.
The launch of the ICC Global Finance Committee took place on September 7 in Barcelona, Spain.

The International Chamber of Commerce (ICC) launched the “ICC Global Export Finance Committee,” an export finance working group supported by many leading banks across the export finance industry.

Operating under the umbrella of the ICC Banking Commission, the committee is the first step towards building a real global export finance community – representing medium- and long-term (MLT) export finance banks.

The Global Export Finance Committee has three key objectives:
  1. To create a credible standing global discussion forum of banking experts in MLT export financing,
  2. To create a representative body to discuss industry matters with various stakeholders,
  3. To advocate for and help develop improvements and efficiencies through the standardization and harmonization of processes and regulations.

“The Global Export Finance Committee fills a much needed role in the export finance industry,” said Eric de Jonge, head of structured export finance at ING Bank, who chairs the working group. “It aims to not only act as a discussion forum and a body to exchange information and views on export finance but also to enable improvements and increase the efficiency of the processes and regulations governing the export financing industry as a whole.”

Although the export financing industry as a whole is relatively small, it serves an important purpose for OECD governments as well as governments in emerging markets, enabling and facilitating international trade and economic activity. Indeed, governments in many countries are exploring how they can more efficiently support exports, investments and trade.

Not only has the industry observed changes in regulatory requirements such as Capital Requirements Regulation (CRR) and Basel III, it also faces changes in the value chain concerning Export Credit Agencies (ECAs). These developments, together with the involvement of the capital markets, mean it is necessary for banks active across the industry to reach a common approach.

ICC has already made a first step towards reaching a common approach through the inclusion of MLT trade and export finance products in the influential ICC Trade Register Report. The dedicated Trade Register working group has successfully evolved into a platform of active banks that are responsible for ECAs, and that supports transaction data gathering.

While the Trade Register working group focuses primarily on data gathering, there are many more topics relevant to the export finance industry. Cooperation with ECAs, advocacy before governmental and regulatory bodies, standardization, and harmonization, as well as the exchange of views and data to the extent allowed under anti-competition laws, are just a few of the areas that can be explored further by the ICC Global Export Finance Committee.

Download ICC Global Export Finance PDF Document here