Industry Group Urges Congress to Move on Colombia Trade Agreement Citing Countrys Clear Progress on Labor Rights

President Bush and Colombian President Alvaro Uribe at the White House in 2004. (White House photo)
President Bush and Colombian President Alvaro Uribe at the White House in 2004. (White House photo)

New York, N.Y., April 16, 2008 – The group that represents American business in the International Labor Organization and other major multilateral bodies voiced dismay at efforts in Congress to delay a vote on the U.S-Colombia trade agreement, noting the Colombian government’s clear progress on improving labor rights in the country.

The United States Council for International Business (USCIB) called on Congressional leaders to “show leadership” and approve the trade pact, pointing out that a recent ILO report found considerable progress in Colombian government efforts to protect trade unionists.

“We are dismayed and profoundly disappointed at efforts to block or delay consideration of the Colombia trade agreement,” said USCIB President Peter M. Robinson. “Not only does it needlessly stall implementation of an important market-opening bilateral agreement, it sends the wrong message to our trading partners around the world and our allies in the hemisphere, at precisely the wrong time.”

Under President Alvaro Uribe, Colombia is making key strides in reducing violence against trade unionists and in improving labor rights in general, with murders of labor activists falling sharply, from 196 the year he took office to 26 last year. Progress has also been documented by the ILO.

In March, following a high-level mission to Colombia, the ILO stated that “significant” progress had been made to protect labor rights in the country. ILO experts met with some 90 officials from the Colombian government, trade unions and business groups, and cited numerous areas of progress. These include:

  • the signing of a tripartite agreement on freedom of association and democracy in June 2006;
  • establishment of a tripartite national commission on wage and labor policies to oversee implementation of the agreement;
  • efforts to strengthen a special committee on the handling of conflicts referred to the ILO, which covers both the public and private sectors;
  • ILO projects in Colombia to promote fundamental labor rights, employment for women and youth, and local economic development;
  • agreement on a priority action plan including support for Colombia’s attorney general and special judges, registration of trade unions, collective bargaining and public service employment legislation, and new procedures for consultations with unions and employers on draft legislation.

The ILO report called this agreed plan of action a “significant step forward” and noted “a considerable increase in the flow of information on measures taken to protect workers against anti-union violence.”

“The ILO’s report confirms progress on labor issues, and other reports indicate a strong reduction in labor-related violence,” observed USCIB’s Mr. Robinson. “It is difficult to see how further delay of the trade agreement would produce better results, while it does risk undercutting the framework that has enabled this progress.”

“It is time for Congress to show leadership and responsibility,” he said. “We urge leaders to unfreeze the Colombia trade agreement and swiftly bring it to a vote.”

USCIB promotes an open system of global commerce. Its membership includes some 300 leading U.S. companies, professional services firms and associations. As the American member of the leading international business and employers’ organizations, USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade. It is the U.S. affiliate of the International Organization of Employers, which serves as the official voice of business in the International Labor Organization, a tripartite United Nations body with representation from governments, business groups and trade unions. More information is available at www.uscib.org.

Contact:

Jonathan Huneke, VP Communications & Public Affairs, USCIB

+1 212 703-5043 or jhuneke@uscib.org

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ILO website

Member Staff News Spring 2008: Work on Key Legal Issues Spurs Outreach to Corporate Counsel

William Martin
William Martin

By William Martin

USCIB Senior Vice President for Development

USCIB covers a comprehensive set of international policy issues that truly makes us a “one-stop shop” for international advocacy. As such, we touch many different areas of a corporation, including departments such as government affairs, environment, health and safety, tax, legal and privacy. While you may be interested in one or two particular issues that we cover, it is important to note that other parts of your company can take advantage of your membership as well.

Late last year, we created a Corporate Counsel Subcommittee as part of USCIB’s Committee on Arbitration. The subcommittee, chaired by Roland Schroeder of General Electric, provides a forum at which corporate counsel can exchange ideas and gain a better understanding of arbitration and ADR, with a view to making it more cost- and time- efficient and responsive to business needs. The subcommittee provides a forum for members to provide direct feedback on the workings of the ICC International Court of Arbitration and highlights the particular advantages of arbitration under the ICC’s rules.

Besides developing targeted services and communication to corporate counsels, we also want to raise our profile within this community. As such, we are co-sponsoring an intellectual property conference this April in New York, organized by Argyle Executive Forum, at which senior corporate counsel will discuss how their companies are wrestling with global IP issues.

Please don’t hesitate to contact us to learn how you can get involved.

Alison Hoiem can be reached at (202) 682-1291 or ahoiem@uscib.org.

 

In Memoriam: Bill Eberle, Christopher Phillips

William Eberle
William Eberle

We were deeply saddened to learn of the death of William D. Eberle, the U.S. trade representative in the 1970s who later served as president of USCIB and remained actively engaged with us since then. Mr. Eberle passed away on April 3 at his home in Concord, Mass. at age 84.

A native of Boise, Idaho, Mr. Eberle served as an officer in the U.S. Navy during World War II. He served two terms in the Idaho state legislature, then went on to co-found the pulp and paper company Boise Cascade, and later served as CEO of American Standard. President Nixon appointed him as special trade representative for the United States in 1971.

He was very active in the work of the International Chamber of Commerce, chairing its international trade commission, and serving on its executive board and finance committee. For many years, Mr. Eberle chaired USCIB’s Policy Coordinating Committee. At his death he was a USCIB Vice Chair and Trustee.

“Bill Eberle was an outstanding statesman in every sense of the word,” said USCIB President Peter M. Robinson. “He was steadfast in his commitment to open markets and free trade, and his personal dedication to organizations like ours that he chose to work with was nothing short of remarkable. He will be sorely missed.”

We also regret to announce the passing of another distinguished former president of USCIB, Christopher Phillips, who died on January 10 in Gloucester, Mass., age 87. Mr. Phillips was a career U.S. diplomat who served as executive head of the organization from 1965 to 1969. He returned to government service following his years with the Council, and he was named U.S. ambassador to Brunei under President Reagan.

Member News and Notes – At a March 13 dinner in Paris, Richard A. Johnson, senior partner with Arnold & Porter, LLP and chair of USCIB’s Biotechnology Committee, was presented with the BIAC Leadership Award by the Business and Industry Advisory Committee to the OECD. “Rick’s award is very much deserved,” commented BIAC Chairman Charles Heeter. Mr. Johnson also chair’s BIAC’s Biotechnology Committee. … USCIB’s board of directors, the Executive Committee, is pleased to announce the following elected appointments: Inge Thulin, 3M (Vice Chair); Ron Baukol (Senior Trustee); Jim Quigley, Deloitte (Trustee); Stephen Tritch, Westinghouse Electric Company (Trustee); Dick Crawford, McDonald’s (Executive Committee); Bill Sterrett, Roanoke Trade Services (Executive Committtee); Barclay Resler, Coca-Cola (Executive Committee).

USCIB staff news – Welcome to Bridgett Edwards, who joined USCIB as an Administrative Assistant for the Issuing and Marketing section of USCIB’s Carnet Department. Most recently Bridgett worked in the entertainment practice at the law firm Greenberg Traurig.

Study Recommends New International Pact to Avert Possible Conflict on Subsidized Takeovers

USCIB_FoundationWashington, D.C., April 10, 2008 – Along with the rise of sovereign wealth funds as major actors in global business and finance, recent high-profile takeover bids by subsidized foreign firms have highlighted a number of emerging challenges in cross-border mergers and acquisitions. What are the implications when a foreign company, backed by financial support from its home government, purchases a U.S. firm? And what actions should be taken to ensure a level playing field while keeping markets open?

This is the focus of a new study published by the United States Council Foundation, the research and educational arm of the United States Council for International Business (USCIB). “Investment Subsidies for Cross-Border M&A: Trends and Policy Implications,” by Gary Hufbauer, Thomas Moll and Luca Rubini, investigates several recent cases of subsidized finance in cross-border M&A transactions and suggests corrective measures to head off the possibility of protectionist overreaction.

“While subsidized M&A or non-transparent sovereign wealth dealings do not pose a ‘clear and present danger,’ so to speak, they merit thoughtful consideration well before a political confrontation occurs,” according to Dr. Hufbauer, who detailed the report’s findings and recommendations at the National Press Club here today.

Dr. Hufbauer is the Reginald Jones senior fellow at the Peterson Institute for International Economics. Thomas Moll is a research assistant at the Peterson Institute. Luca Rubini is a lecturer at Birmingham Law School (UK).

The study examines three recent instances where subsidized finance was seen or alleged to have played a significant role in an M&A transaction: the Chinese state-owned oil firm CNOOC’s bid for Unocal, the purchase of several Ingersoll-Rand divisions by Korea’s Doosan Infracore and moves by Electricité de France to expand into a number of new markets abroad.

The authors contend that subsidized M&A, if not restrained by agreed international rules, might breed costly, wasteful emulation as well as protectionist sentiment in major markets – not least the United States – especially when viewed against the sensitivities raised by the growth in sovereign wealth funds.

The appropriate response, they say, is to move toward a multilateral compact on M&A subsidies. Such a pact would be designed to increase government transparency, while drawing a line around what types of subsidies would spur review and limiting the types of retaliatory actions governments could use to counter subsidies. The authors suggest this year’s Group of Eight summit in Japan as an appropriate forum to begin discussions of such a multilateral agreement.

“Proposals to address M&A subsidies should emphasize the benefits of an open investment climate,” stated Dr. Hufbauer. “A multilateral compact will serve as a bulwark against, rather than an incentive for, protectionist legislation.”

Individual copies of the study are available free of charge from the United States Council Foundation (212-703-5063 or news@uscib.org). The study can also be downloaded in PDF format at www.uscouncilfoundation.org.

The United States Council Foundation is a private 501(c)(3) organization affiliated with USCIB. It was organized to undertake educational activities to promote the benefits of a free market economy, to demonstrate and document the role of the corporate private sector in economic growth and social development, and to advance sustainability in environmental management. More information is available at www.uscouncilfoundation.org.

USCIB promotes an open system of global commerce. Its membership includes more than 300 leading U.S. companies, professional services firms and associations whose combined annual revenues exceed $3.5 trillion. As American affiliate of the leading international business and employers organizations, USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade. More information is available at www.uscib.org.

Contact:

Jonathan Huneke, VP Communications & Public Affairs, USCIB

+1 212-703-5043 (office), +1 917-420-0039 (mobile) or jhuneke@uscib.org

 

More on the United States Council Foundation

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Montreal to Host Second ICC Arbitration Workshop in North America

Spring’s arrival in Montreal should greet those attending the workshop.
Spring’s arrival in Montreal should greet those attending the workshop.

New York, N.Y., April 9, 2008 – Arbitration is increasingly regarded as the preferred way to resolve cross-border business disputes. To help lawyers and business executives better understand the ins and outs of this fast-growing field, the ICC International Court of Arbitration, the world’s best-known arbitral institution, will host a two-day workshop
in Montreal, Canada on international dispute resolution, May 1 and 2 at McGill University.

The court is part of the International Chamber of Commerce, the world business body that has been in the forefront of cross-border dispute resolution since 1923. Designed to provide a better understanding of ICC arbitration and other dispute resolution services, the workshop will showcase practical strategies and tactics for those involved in international arbitration.

Participation from across North America is sought. The workshop will be presented in cooperation with the United States Council for International Business USCIB and the Canadian Chamber of Commerce, ICC’s national committees in each country. A welcoming reception for all participants will be held the evening of April 30.

“This is only the second two-day workshop ICC has ever organized in North America, which makes it an event not to be missed,” said J.L. McDougall of Fraser Milner Casgrain LLP, who chairs the Canadian Chamber’s Arbitration Committee. “It is designed to appeal to anyone involved in international arbitration and dispute resolution, including practicing lawyers, corporate counsel, judges, and business people involved in international trade and dispute resolution.”

The hands-on workshop will feature current and former members of the ICC court, practicing arbitrators and representatives of the Court’s Paris-based international secretariat. It is part of continuing effort by Josefa Sicard-Mirabal, ICC’s director of arbitration and ADR for North America, to expand the court‘s educational programming across the United States and Canada.

“The interactivity of this workshop really sets it apart,” according to Ms. Sicard-Mirabal. She said a highlight of the conference will be a mock case, studied with small working groups where participants will take part in a step-by-step examination of the arbitration process.

Since its founding in 1923, the ICC International Court of Arbitration has handled over 15,000 cases. In 2006, almost 600 cases were filed, involving parties in over 100 countries and independent territories. The court itself has an exceptionally broad representation, comprising members from 86 countries. Over the years, ICC has developed a full range of other dispute resolution rules in addition to arbitration to meet the latest international commercial challenges.

A brochure and registration form for the workshop is available at: www.uscib.org/docs/ICC_Arbitration_Montreal_Program.pdf.

The United States Council for International Business (USCIB) is ICC’s American national committee. As American affiliate of the leading international business and employers organizations, including ICC, USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade. USCIB’s Arbitration Committee serves as the contact point for the ICC International Court of Arbitration and its multi-faceted dispute resolution services. More information is available at www.uscib.org.

Contact:

Jonathan Huneke, USCIB

(212) 703-5043 or jhuneke@uscib.org

 

USCIB Dispute Resolution Website

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Event Spotlights Doing Business in Africa

L-R: Peter Robinson (USCIB), Michael Klein (World Bank), Alex Cummings (Coca-Cola).
L-R: Peter Robinson (USCIB), Michael Klein (World Bank), Alex Cummings (Coca-Cola).

What are the lessons for African governments, and for global companies, in the latest edition of the World Bank’s benchmark “Doing Business” reports? This was the focus of a high-level World Bank briefing on March 12 at the University Club in New York, co-sponsored by USCIB and Coca-Cola Africa. The event attracted top African diplomats resident in New York, along with business representatives and others from the policy community.

The annual Doing Business report examines which countries make it easiest – and which hardest – to start and run a business. It compares ten indicators of business regulations across 178 countries, analyzing government regulations that enhance or restrain business activity, and it ranks countries on their overall ease of doing business.

USCIB hosted the launch of the 2008 Doing Business report in September of last year at an event featuring World Bank President Robert Zoellick.

The March 12 session featuredl Michael Kein, vice president for financial and private sector development at the International Finance Corporation, the World Bank’s private sector arm, who led an overview of the Bank’s criteria for ranking countries and the factors for success among the African countries that ranked highly in the latest report.

According to Mr. Klein, business conditions have improved in some parts of Africa. In 2006-2007, 28 countries in North and Sub-Saharan Africa implemented reforms that made it easier to start and run a business. Egypt, Ghana, and Kenya were among the top ten reformers worldwide in the Doing Business 2008 report, and they also made the most significant advances in the aggregate ease of doing business rankings among countries in Africa. Overall, Mauritius topped the rankings in Africa on the ease of doing business and placed 27th in the global rankings.

Peter M. Robinson, president of USCIB, also spoke at the event, as did Alexander B. Cummings, president and chief operating officer of the Africa Group at the Coca-Cola Company. Mr. Robinson offered the assistance of USCIB and its global network – especially the International Organization of Employers (IOE), which has a strong African network – in the development and promotion of future Doing Business reports. An IOE delegation met in February with Mr. Zoellick and other top World Bank representatives to discuss this and other cooperative measures.

USCIB will continue its efforts to promote awareness of the Doing Business report by co-sponsoring a high-level seminar and dinner in June, at the New York Stock Exchange, at which the top ten reforming countries will be recognized. Additional information on the Doing Business report is available at www.doingbusiness.org.

Business Leaders Unveil New Strategies to Combat Counterfeiting and Piracy

Top members of BASCAP (Business Action to Stop Counterfeiting and Piracy) met today in New York.
Top members of BASCAP (Business Action to Stop Counterfeiting and Piracy) met today in New York.

New York, March 3, 2008 – Industry leaders from around the world today unveiled new strategies to combat counterfeiting and piracy, including a set of urgent recommendations for a global anti-counterfeiting pact being negotiated by major trading countries.  In addition, they called on heads of G8 countries to lead the way in improving national intellectual property enforcement regimes and announced a set of their own in-country initiatives beginning with Canada, Germany, the UK, Russia, China and the United States.  The CEOs also announced plans for a ground-breaking consumer education campaign that will take a global approach to building awareness of the damages caused by counterfeiting and piracy.

The CEOs and senior corporate executives of the International Chamber of Commerce’s BASCAP (Business Action to Stop Counterfeiting and Piracy) initiative met today in New York with the U.S.  Trade Representative Susan Schwab and top representatives of the World Customs Organization (WCO) and World Intellectual Property Organization (WIPO) to agree on joint efforts to tackle counterfeiting and piracy.  The CEOs called on Ambassador Schwab to move quickly towards completing the Anti-Counterfeiting Trade Agreement (ACTA) in cooperation with its trading partners, and pledged their support to work with WCO and WIPO.

With more than 8,000 member companies in over 130 countries, the Paris-based ICC is the largest, most representative private sector association in the world.  It is represented in the United States by the United States Council for International Business (USCIB), its American national committee based in New York.  Top USCIB member representatives took part in today’s BASCAP meeting.

U.S. Trade Representative Susan Schwab and USCIB President Peter M. Robinson.
U.S. Trade Representative Susan Schwab and USCIB President Peter M. Robinson.

ICC has pushed for business to become more involved in developing ACTA, which was introduced in October by the U.S., European Union, Japan, Canada, Mexico, South Korea and other countries.  The new agreement would focus on filling the gaps not covered by existing multilateral agreements, including stronger enforcement measures, improved international cooperation and a strong legal framework for intellectual property protection.

“It is a positive step and very encouraging that the U.S., EU, Japan and many other major developed countries have recognized the need for a new multilateral agreement dealing with this critical issue,” said Bob Wright, vice chairman and executive officer of General Electric and co-chair of BASCAP.  “It now is essential that the parties keep the momentum going and move quickly to the next stage of developing a process and drafting the ACTA framework agreement.  BASCAP members and others in the private sector are committed to working closely with governments to support this process.”

ICC and the International Trademark Association (INTA) have teamed up to support ACTA.  “Expectations for ACTA are high,” said Alan C. Drewsen, INTA’s executive director.  “This proposed agreement has the potential to deliver significant improvements in establishing stronger international guidelines and standards, and providing national governments with clear directives for action.”

The two global business organizations today presented a paper outlining their recommendations to Ambassador Schwab.  ICC and INTA will distribute the paper to the leaders of the EU, Japan, Korea, Mexico and other governments, and will work with business organizations around the world to press governments to finalize an agreement.

Ambassador Schwab added: “With ACTA we are aiming to set a new, higher international standard for intellectual property rights enforcement, one that addresses today’s challenges.  Private-public collaboration is a vital component in the fight against counterfeiting and piracy.  That’s why we welcome BASCAP and INTA’s support and continued input as we move forward with ACTA.”

ICC Secretary General Guy Sebban said: “Quite simply, there is a need for a new gold standard to guide government performance on IP enforcement.  We hope that ACTA can emerge as this new standard, especially since the existing regimes just aren’t enough.”

Business Leaders Call for G8 Action

BASCAP executives expressed concern that little concrete action has been taken on promises made at G8 meetings in 2006 and 2007.  “The work program laid out today comes at a critical time.  Counterfeiting and piracy are taking a tremendous toll on the global economy.  The situation is getting worse, not better,” said Jean-Rene Fourtou, chairman of the supervisory board of Vivendi and a BASCAP co-chair.  “While some progress has been made, individual governments need to do more.”

“Today we are calling on G8 leaders to respond to the recommendations by BASCAP prior to the Summit in Germany last year by taking immediate actions to shut down flagrant counterfeit markets and to work with us to find appropriate steps on other recommendations,” said Nobuyuki Idei, BASCAP co-chair, representative director of Quantum Leaps Corporation and former CEO of Sony Corporation.

BASCAP will launch country-based action centers to leverage local business voices and push for tangible actions at the national level.  The initiative will begin this year with Canada, Germany, the UK, Russia, China and the United States.

“Our focus is on setting benchmarks for global performance by governments and companies, framing decisions for policymakers, pushing for the allocation of resources at the highest levels in national governments and improving awareness on a global basis,” said ICC’s Mr. Sebban.

WCO Leader Calls for Cooperation to Stop Flow of Fakes

Border control will be a critical element in strengthening each country’s intellectual property enforcement regime.  Business leaders pledged to support the World Customs Organization’s latest plans to strengthen customs efforts to stop the flow of counterfeit goods across borders.

WCO Secretary General Michel Danet cautioned: “Counterfeiting and piracy continue to increase at an alarming rate.  We have to invent our own future; it’s time to step up our action in collaboration with the private sector and the time is now.”

Business/Government to Cooperate on New Consumer Education Campaign

BASCAP today also announced plans for a new consumer awareness and education campaign that could be used by ICC’s national committees and brand protection groups to spell out the dangers of counterfeit and pirated goods.  BASCAP announced plans to work with the World Intellectual Property Organization (WIPO) and seek out other government partnerships on the campaign.

WIPO Deputy Director Michael Keplinger said: “We cannot afford to ignore the far-reaching and acute threats posed by the spread of counterfeiting and piracy.  A coherent global response requires coordination and cooperation among all stakeholders − governments in developed and developing countries, intergovernmental institutions, the private sector and consumers.” He added: “Joining forces, the public and private sectors can make great strides in changing perceptions about the seriousness of the problem and we look forward to collaborating with BASCAP companies in taking concrete steps to raise public awareness about the issue.”

The BASCAP Global Leadership Group includes some of the world’s largest companies.  Today’s meeting marked the third time the group has met since the cross-sector initiative was launched by ICC in 2005.

Participants at today’s meeting included:

  • Bob Wright, vice chairman and executive officer, General Electric (U.S.)
  • Nobuyuki Idei, representative director of Quantum Leaps Corporation and former CEO of Sony Corporation (Japan)
  • Jean-René Fourtou, chairman of the supervisory board, Vivendi (France)
  • David Iakobachvili, chairman, WBD Foods (Russia)
  • Jean-François Dehecq, chairman, Sanofi-Aventis (France)
  • Doug Morris, CEO, Universal Music (U.S.)
  • Kevin Havelock, president, Unilever United States (United Kingdom)
  • Blair Westlake, corporate vice president, media & entertainment group, Microsoft (U.S.)
  • Andreas Fibig, senior vice president, U.S. Pharmaceutical Operations, Pfizer (U.S.)
  • Marc-Antoine Jamet, secretary general, LVMH (France)
  • Pat Heneghan, global CEO advisor on anti-illicit trade, British American Tobacco (UK)
  • Guy Sebban, secretary general, International Chamber of Commerce
  • Michel Danet, secretary general, World Customs Organization
  • Michael Keplinger, deputy secretary general, World Intellectual Property Organization
  • Ambassador Susan Schwab, U.S.  trade representative

USCIB promotes an open system of global commerce in which business can flourish and contribute to economic growth, human welfare and protection of the environment.  Its membership includes some 300 U.S.  companies, professional service firms and associations whose combined annual revenues exceed $3 trillion.  As American affiliate of the leading international business and employers organizations, including ICC, USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade.

Contact:

Jonathan Huneke

VP Communications, USCIB

+1 212 703-5043 or jhuneke@uscib.org

BASCAP website

More on USCIB’s Intellectual Property Committee

The New York Times: Saving Our Oceans

To the Editor:

Your timely Jan. 21 editorial, “Until All the Fish Are Gone,” correctly underscores the growing negative environmental and social effects of overfishing. What once seemed simply a conservation concern is now a global issue with tremendous social and economic ramifications.

We are fast approaching a critical crossroads in the future of our oceans. But unlike many other global issues, where business and the environmental community are often at odds, here we completely agree on a solution.

Members of the World Trade Organization are now negotiating new trade rules to reduce the government subsidies that promote overfishing. These subsidies provide fleets with money, fuel and incentives to fish longer, harder and farther than ever before. As a result, fish populations are declining, along with the quality of life of people around the world who depend on fishing for food and livelihood.

Reducing fishing subsidies is the single greatest action that can be taken to protect the world’s oceans.

Will the W.T.O. members seize the opportunity to stop overfishing and begin restoring the health of the oceans, and in turn, the health of mankind? That is the question.

Peter M. Robinson
Andrew F. Sharpless
New York, Jan. 22, 2008

Mr. Robinson is president and chief executive of the United States Council for International Business. Mr. Sharpless is chief executive of Oceana, an international environmental ocean advocacy group.

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Oceana website

A Green Light for “Green” Tariffs?

New study scrutinizes how international trade rules may impact limits on carbon emissions

3771_image001New York, N.Y., January 25, 2008 – Are efforts to limit greenhouse gas emissions under agreements like the Kyoto Protocol compatible with World Trade Organization rules?  As Congress and many European policy makers weigh the imposition of “green” border taxes to punish more carbon-intensive products from abroad, a new report by a leading industry group raises troubling questions about WTO rules and jurisprudence  and their possible application to climate policy.

The study by the United States Council for International Business (USCIB) looks specifically at the issue of whether countries might decide the U.S. has an unfair trade advantage as the result of its decision not to adhere to the Kyoto Protocol.  It is an update of a 2002 paper issued soon after the Bush administration announced its intention not to sign  the Kyoto agreement.

“When we published our original paper six years ago, the issue was largely speculative,” said Timothy E. Deal, USCIB’s senior vice president and the author of the study.  “Back then it was mainly NGOs like Greenpeace and Friends of the Earth Europe that were pushing for a climate border tax as a way to punish the U.S. and other non-Kyoto signatories.  Now we have politicians on both sides of the Atlantic talking more openly about some form of carbon tax regime.”

Two separate bills currently before the U.S. Senate would combine a national cap-and-trade system for reducing carbon emissions with fees or taxes on imports from countries that do not adequately limit such emissions.  Meanwhile, the European Commission has floated the same idea in proposing a new European emissions regime.  Last October, French President Nicolas Sarkozy publicly urged the EU to “examine the option of taxing products from countries that do not respect the Kyoto Protocol.”

The USCIB study looks at pre-existing GATT/WTO jurisprudence on trade and environment, as well as key WTO rulings such as the 1998 Shrimp-Turtle decision.  According to Mr. Deal, that landmark ruling may have opened the door for the use of trade measures to promote environmental objectives based on the way a product is made.

“This issue could cause an absolute train wreck to the multilateral trading system,” said Mr. Deal.    “Clarification of the relationship between multilateral environment agreements and international trade rules, as called for in the WTO’s Doha Development Agenda, may be necessary to avert such a clash.”

Founded in 1945, USCIB promotes an open system of global commerce in which business can flourish and contribute to economic growth, human welfare and protection of the environment.  Its membership encompasses over 300 leading U.S. companies, professional services firms and associations whose combined annual revenues exceed $3.5 trillion.  As American affiliate of several leading global business groups, USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade.

Contact:

Jonathan Huneke, VP Communications, USCIB

+1 212-703-5043 (office), +1 917-420-0039 (mobile) or jhuneke@uscib.org

USCIB study: “WTO Rules and Procedures and Their Implication for the Kyoto Protocol”

“Trade Can Save the Climate” (column by USCIB President Peter M. Robinson, Winter 2007-2008)

More on USCIB’s Environment Committee

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WTO website

Journal of Commerce: Year-End Essay

The major challenge facing U.S. business is in keeping markets open to investment at a time when many seek to close them, often for protectionist purposes. The U.S. economy benefits enormously from inward investment in terms of jobs created, R&D expenditures and outlays for new plants and equipment. U.S. investors likewise spur world economic growth, ensuring the most productive use of the world’s financial and natural resources.

However, the sheer volume of foreign investment, coupled with the entry of new players often using sovereign wealth funds to place their new-found fortunes, have sparked calls here and abroad for greater governmental control over investment flows. Several governments have tightened regulations regarding foreign investment, while others threaten to do so. Many countries also use informal barriers to restrict outside investment, declaring that certain industries are off limits and must be protected as national champions. Is this the wave of the future? Do we really want investment protectionism?

Congress last year enacted a sensible reform of the process for reviewing the national security implications of proposed foreign takeovers. The Bush administration followed with a major statement – the first in 10 years – reaffirming long-standing U.S. policy of openness to foreign investment. That is the right direction for the U.S. and world economy.

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Shipping Digest: Losing the bigger picture

By Peter M. Robinson

The thing that saddens me at this time of declining confidence in trade is that people are losing the bigger-picture perspective of the benefits of trade, while reaching for the latest and closest facts and figures, many of which are questionable, to supposedly justify their negative opinion.

Two of those bigger-picture benefits are particularly timely in today’s world: peace and climate. In the first case, trade is a deterrent to war. It is the exchange of goods and services that necessarily brings people together from different cultures and bridges political divides. Without trade, the world would be in an even more dangerous state.

In the second case, trade can help save our climate. It is trade that will facilitate the necessary transfer of clean, affordable technology to countries with the biggest emissions problems, a situation that ultimately knows no boundaries and which all the citizens of the world will share.

When we think of the world that we are preparing our children to inherit, I want one that will have as much peace and stability as possible, and one that will be as clean as possible. Trade is a big facilitator of those things and we too often lose that perspective as we go for shortterm, quick-fix solutions in response to the necessary adjustments and changes that trade does involve.

America is the land of innovation, of strength, and the proven ability to compete. Trade clearly benefits our society in the long run. Our leaders need to recognize this and act accordingly.

Peter M. Robinson is president of the United States Council for International Business. He can be reached at (212) 354-4480 or probinson@uscib.org.

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