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Business Letter to US Senate on Dire Situation in Xinjiang Uyghur Autonomous Region

Published on November 9, 2020

USCIB joined with several other associations, including the U.S.-China Business Council, the National Retail Federation and the U.S. Chamber of Commerce, among others, to express great concern regarding the dire situation in the Xinjiang Uyghur Autonomous Region (XUAR). The letter was sent to the Honorable Sherrod Brown and the Honorable Ron Wyden of the United States Senate on November 6 and is copied below.

Dear Senators Brown and Wyden:

Thank you for your October 27, 2020, letter regarding the Xinjiang Uyghur Autonomous Region (XUAR).

The situation in XUAR is of enormous concern to the undersigned associations and our member companies. We have been working together and with other stakeholders to respond to this issue for some time. Forced labor in any form is horrific and intolerable, wherever it takes place. What is even more concerning is that forced labor – as horrific as it is – is only one component of a much larger campaign of oppression in this region.

Our members have long implemented rigorous due diligence activities to support and advance ethical manufacturing globally. These efforts have uncovered forced, bonded, and prison labor in facilities around the world. When they find such practices, our members act to root out and redress unacceptable and unethical practices.

Our members have been on the frontlines of deploying a range of best practices to prevent, identify, and mitigate instances of forced labor as well as joining forces in a collective effort to address the situation. Our members have been mapping out their supply chains and engaging with their supplier base and other partners to ensure there is no forced labor in their supply chains. We continue to explore alternative sourcing strategies and more effective due diligence mechanisms and technologies. That work has been and will continue in earnest. However, the situation in this region is of a scale, scope, and complexity – coupled with a lack of transparency – that is unprecedented in modern supply chains and goes beyond the capability of our members to fight this alone.

We strongly believe that the U.S. government must take a leadership role in a global approach that mobilizes the Administration and Congress, in conjunction with foreign governments, and engaging and partnering with industry, labor, and other important stakeholders. Marshalling the collective might of all stakeholders will be the most effective and only way of achieving our shared goal – ending forced labor practices and the larger campaign of oppression in the region.

The undersigned associations strongly condemn human rights abuses, including forced labor and the persecution and detention of Uyghurs and other ethnic minorities in China. We stand ready to work with you and your staff, and with all stakeholders, to find meaningful measures that would effectively safeguard human rights. We would appreciate the opportunity to meet with you to discuss what our organizations and our members are doing and determine possible paths forward.

Thank you for your time and consideration in this matter.

 

Sincerely,

American Apparel & Footwear Association

Footwear Distributors and Retailers of America

National Retail Federation

Retail Industry Leaders Association

U.S. Chamber of Commerce

U.S.-China Business Council

U.S. Council for International Business

U.S. Fashion Industry Association

USCIB Issues Recommendations to EU on a Carbon Border Adjustment Mechanism

Published on November 4, 2020

The European Union concluded a public consultation last month on a proposed Carbon Border Adjustment Mechanism (CBAM), part of the EU’s ambitious Green Deal, focusing on deep cuts in greenhouse gas emissions. USCIB submitted its members’ response on October 28, drawing on the expertise of its Committees on Customs, Environment, Taxation as well as Trade and Investment.

“The EU CBAM proposal is complex, seeking to “level the playing field” by imposing extra costs on imports from countries with different climate change policies” said USCIB Vice President for Environment, Energy and Strategic International Engagement Norine Kennedy. “In our comments, we addressed climate change, trade and technical aspects of the proposal which we believe to be most relevant to American companies doing business with, and in, the EU.”

One critical recommendation was on timing; USCIB encouraged the EU to undertake thorough consultative and data-based economic and trade impact assessments, especially with regards to developing countries, to avoid unintended and counter-productive consequences on livelihoods. “As countries continue to experience the fall out and economic disruption of the COVID-19 pandemic, we believe governments should proceed cautiously before adding stresses to the global trading system,” warned Eva Hampl, USCIB senior director for trade, investment and financial services.

USCIB also stressed the importance of ensuring compatibility with World Trade Organization (WTO) rules, warning that some elements of the EU CBAM proposal are unclear, which may lead to time-consuming disputes and delay the positive potential for deployment of innovative technologies and materials vital to climate change action, as well as hinder economic growth and recovery.

Hampl added: “Any further development of this currently counter-productive proposal must avoid and head off climate disputes at the WTO that may lead to unpredictable or unintended negative outcomes in environment, climate and trade negotiations.”

On technical practicality and administrative burdens, USCIB’s recommendation included reducing those burdens and the associated costs of compliance, which would inevitably subtract from resources available for other areas of environmental improvement.

USCIB believes that synergies between trade and environment protection should be the focus of international cooperation, and unilateral measures should be discouraged.

“Open trade advances economic prosperity and the UN Sustainable Development Goals (SDGs), and it is an essential vehicle to achieve widespread and rapid deployment of climate-related investments and cleaner and more efficient technologies and forms of energy,” emphasized Kennedy. “To meet the commitments and objectives of the SDGs, the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement, it is clear that more trade will be needed.”

For more information:

Earlier this year, USCIB published a paper Seeking Synergies: Environment, Climate and Trade Policy.

USCIB Competition Committee Hosts DOJ Antitrust Division Deputy

Published on November 4, 2020

USCIB’s Competition Committee held its fall meeting on October 28 in a virtual format due to the ongoing COVID-19 pandemic. Following welcome and introductory remarks by Dina Kallay (Ericsson) and Jennifer Patterson (Arnold & Porter), Chair and Vice Chair of the Committee, respectively, the group received an update on the upcoming meetings of the OECD Competition Committee from John Taladay (Baker Botts), Chair of the Business at OECD (“BIAC”) Competition Committee, and on the current work of the ICC Competition Commission from USCIB Senior Director for Trade, Investment, and Financial Services Eva Hampl.

The meeting featured Alexander Okuliar, deputy assistant attorney general, Antitrust Division, U.S. Department of Justice (DOJ), as the main speaker. Okuliar recently returned to the DOJ following two decades at both federal antitrust agencies and the private sector, and is responsible for civil merger and conduct investigations and litigation. He delivered remarks to USCIB members that included the DOJ’s recent work regarding competition in digital markets; the recent DOJ Business Review Letter to IEEE; and China, including due process challenges in China’s antimonopoly agencies and the new China Standards 2035 policy. Following his remarks, DAAG Okuliar engaged in an open Q&A session with committee members.

The Committee, under the direction of Kallay also discussed various issues of concern, including on advocacy for international convergence re compliance. Finally, Lisa Kimmel (Crowell & Moring) provided the group an update of the recent report of the House Judiciary Committee, Subcommittee on Antitrust, Commercial and Administrative law, on the Investigation of Competition in Digital Markets.

 

US Nominates Liddell for OECD Secretary General

Published on November 4, 2020
Chris Liddell

The United States government formally nominated Chris Liddell on October 20 to be the next Secretary General of the Organization for Economic Cooperation and Development (OECD), the influential Paris-based thirty-seven-member international economic policy group.  Current OECD Secretary General Angel Gurria’s third five-year term will expire mid-2021. The selection process is underway with multiple candidates nominated, headed toward a final selection in early 2021.

Liddell is currently serving as Assistant to the President and White House Deputy Chief of Staff for Policy Coordination. He is a dual national, American and his native New Zealand. According to USCIB Senior Advisor and Former U.S. Ambassador Shaun Donnelly, Liddell brings a very impressive private sector resume to his current White House senior position and to his OECD candidacy. Prior to joining the Trump Administration, Liddell served as Vice Chairman and Chief Financial Officer at General Motors, where he led global finance operations and managed the company’s $23 billion IPO in November 2010, which, at that time, was the largest public offering in history. Liddell has more than three decades of experience in corporate leadership, including Chief Financial Officer and Senior Vice President of Microsoft Corporation and Chief Financial Officer of International Paper.

USCIB President and CEO Peter Robinson welcomed Liddell’s nomination. “We at USCIB are pleased to see the U.S. government coming forward with a strong nominee for the important OECD Secretary General position, succeeding Angel Gurria with whom we have enjoyed working over the past fourteen years,” said Robinson. “We are particularly pleased to see a nominee with strong private sector background and hands-on policy experience at the top levels of the U.S. government. The competition for the post will be tough with other strong nominees but there has never been an OECD Secretary General from the U.S.”

The nomination process closed on November 1. The governments of Australia, Canada, Czech Republic, Denmark, Estonia, Geece, Poland, Switzerland and Sweden have also formally nominated candidates for the Secretary General position. The United Kingdom Ambassador, as Dean (i.e. longest serving) of the OECD’s Council of Ambassadors, is leading the selection process. According to Donnelly, the target is to have the next Secretary General elected by the Council by March 1, 2021 and in place for a five-year term beginning June 1, 2021, presumably shortly after the organization’s annual Ministerial meeting scheduled to take place in Paris.

“USCIB and our business colleagues in the OECD’s Business at OECD (”BIAC”) organization hope to be able to play a constructive, informal role in the selection process,” said Donnelly.

USCIB Provides Feedback on AI to the National Institute of Standards and Technology

Published on October 21, 2020

As the National Institute of Standards and Technology (NIST) works on its principles of explainable “Artificial Intelligence (AI),” USCIB welcomed an opportunity to submit comments on behalf of its members. The comments, sent to the NIST Director and Undersecretary of Commerce for Standards and Technology Dr. Walter Copan, draw from industry experience, as well as from USCIB’s direct input to the development of the OECD’s AI Principles through USCIB’s affiliation with Business at OECD (known as “BIAC”).

“NIST’s effort represents a positive first step in terms of grappling with the issue of AI explainability,” remarked USCIB Vice President for ICT Policy Barbara Wanner. “The draft, and NIST’s broader program to develop approaches to AI trustworthiness, should significantly contribute to the private and public sector’s understanding of the many considerations necessary to implement AI, while ultimately enabling broader, faster and more responsible use of AI. We believe that, to be most effective, humans and machines should collaborate, combining their respective strengths to provide sustainable value for consumers, businesses, governments and society.”

In its comments, USCIB also highlighted the work of USCIB members such as Facebook, Google, IBM and Microsoft within an Experts Group that developed the OECD’s AI Principles. The U.S. government also contributed actively to the development of the OECD principles, under the leadership of the State Department.  On May 22, 2019, the OECD’s 36 member countries, along with Argentina, Brazil, Colombia, Costa Rica, Peru, and Romania,  endorsed the OECD Council Recommendation on Artificial Intelligence. The principles contained in the recommendation were subsequently endorsed by the G20.

USCIB Joins Coalition to Oppose IRS Proposal to Declare Revenue Procedure Obsolete

Published on October 21, 2020

USCIB joined a coalition of over a dozen other trade associations to submit a letter to the IRS Large Business and International Division, opposing the proposal to declare Revenue Procedure 94-69 (“Rev. Proc. 94-69”) obsolete. According to the letter, under §6662, the general rule is a taxpayer has until the time the taxpayer is first contacted by the IRS and notified that a tax return is under examination to submit an amended tax return or make other adequate disclosures of errors on their originally filed tax return.

The letter states, “Rev. Proc. 94-69 allows taxpayers who are under continuous audit to avoid the imposition of certain penalties by submitting a written statement within 15-days after receipt of an information request from the IRS, describing all items that would result in adjustments if the taxpayer were to file a properly completed amended return. Pursuant to Rev. Proc. 94-69, such written statements are treated as qualified amended returns.”

The letter goes on to give additional reasons Rev. Proc. 94-69 should not be declared obsolete:

  • Without Rev. Proc. 94-69, large taxpayers would be put in the position of either filing an amended return every time they discovered an error on a previously filed return or bearing the risk that penalties may be imposed.
  • Declaring Rev. Proc. 94-69 obsolete ignores the administrative burden it would visit on taxpayers who otherwise are generally required to file amended state income tax returns every time they filed an amended federal return.

Additionally, now is not an appropriate time to abandon the revenue procedure that has been in place and has been working well for over 35 years. The Tax Cuts and Jobs Act (“Act”) caused a sea change in many elements of the Internal Revenue Code and the IRS and Treasury continue to release guidance on these changes almost three years later. Taxpayers continue to digest the myriad changes to the tax laws and, because of the lag between the passage of the Act and the release of published guidance, taxpayers may not have filed their original returns in line with current guidance. For this reason alone, Rev. Proc. 94-69 is not yet obsolete.

The letter closes by urging the IRS to both retain and expand the eligibility for use of Rev. Proc. 94-69.

The letter can be found in full here.

USCIB Delegation Makes Interventions at UN Meetings on Investment Reform

Published on October 14, 2020

USCIB member Lauren Mandell from Wilmer Hale and USCIB Senior Director Eva Hampl represented the USCIB delegation at the meetings of the UN Commission on International Trade Law (UNCITRAL) Working Group III on Investor-State Dispute Settlement (ISDS) Reform that took place October 5-9. The meeting sought to address a variety of issues crucial to USCIB and its membership.

USCIB participated in the discussions as an observer and made interventions on alternative dispute resolution and mediation, shareholder claims and reflective loss, frivolous claims, as well as treaty interpretation.

“USCIB appreciated the opportunity to make interventions at UNICTRAL,” said Hampl. “As next steps, we are planning a briefing with the U.S. government negotiators in these discussions to take place in November.”

The next meeting of UNCITRAL Working Group III will take place April 12-16, 2021 in New York. UNICTRAL will also hold a Virtual Pre-intersessional Meeting of the working group on November 9.

Diversity in the Workplace Amid Topics at Annual Engaging Business Forum

Published on October 14, 2020

USCIB co-organized the twelfth annual Engaging Business Forum on Human Rights on October 7, however due to COVID-19 precautions, the usual two-day forum was condensed into a virtual event. Hosted by The Coca-Cola Company every year since 2008, the Forum has gathered hundreds of practitioners to discuss leading issues at the intersection of business and human rights. Despite the virtual nature of the forum, this year was no different in terms of interest and engagement by over 500 leading practitioners.

With opening remarks from The Coca-Cola Company Chairman and CEO James Quincy and a keynote address from the United Nations High Commissioner for Human Rights Michelle Bachelet, as well as the International Labor Organization Director General Guy Ryder, participants were guided through a program that included discussion of the increasingly important role of business in respecting human rights as the world works towards a post-COVID-19 recovery that is sustainable for all. As in years past, USCIB led some of the discussions; USCIB Vice President for Corporate Responsibility and Labor Affairs Gabriella Rigg Herzog contributed her expertise on the panel “Diversity at the Workplace and Beyond – What Now Needs to Happen?”

“Diversity covers a range of factors, including age, gender, sexual orientation, race, ethnicity, religion, culture and disability,” said Herzog. “Our goal today is to explore the connection between diversity and business and human rights, as well as to bring heightened awareness of the critical role companies play in advancing progress.”

Herzog was joined on her panel by President and CEO of the Center for Civil and Human Rights Jill Savitt, Chair of the UN Working Group on Business & Human Rights Anita Ramasastry, Founder and Chair of Omnia Strategy Cherie Blair and Global Chief Diversity Officer, The Coca-Cola Company Lori George Billingsley.

The Forum was co-organized by the International Organization of Employers (IOE), the U.S. Chamber of Commerce and hosted by The Coca-Cola Company.

US Government and USCIB Look Forward to OECD Virtual Ministerial  

Published on October 14, 2020

OECD member country high-level delegations will meet remotely October 28-29 for three-hour daily sessions of roundtable discussions following the postponement of its annual late-May Ministerial in Paris due to COVID-19. The abbreviated agenda for the Ministerial focuses on global and national recovery from the COVID-19 pandemic, including through trade and investment, sustainability and international cooperation. USCIB is preparing for the Ministerial, including active participation as part of the Business at OECD (BIAC) team in OECD preparatory high-level roundtables over the course of the fall.

Meanwhile, U.S. Government preparations for the Ministerial are being led by the Department of State—Under Secretary of State for Economic Growth, Environment and Energy Keith Krach will likely head U.S. Government participation. Spanish Prime Minister Pedro Sanchez will chair the Ministerial sessions, and OECD Secretary General Angel Gurria will also play a major role in the Ministerial deliberations.

USCIB Vice Presidents and Acting Policy Co-leads Norine Kennedy and Mike Michener consulted on the Ministerial agenda with senior staff at the Department of State and the U.S. Mission to the OECD in Paris on October 13.

“We were able to underline USCIB and international business priorities, emphasizing the role the private sector can play in restoring global economic growth and the contribution of U.S. business to COVID-19 response and recovery in that context,” said Kennedy. “Open, transparent trade and investment regimes advancing rule of law and substantive U.S. business engagement to develop, resource and deploy sustainability and COVID-19 solutions are key to enabling economic recovery.”

BIAC, with strong USCIB leadership, has been actively contributing to preparations for the OECD Virtual Ministerial. USCIB provided substantive input and expertise into the BIAC policy submission to the OECD and for the September 14 consultation for the Ministerial.  Rick Johnston from Citi (who also chairs the USCIB Trade and Investment Committee and serves as a vice chair of the BIAC Board), played a key role in BIAC’s October 7 Board meeting, which reviewed how best to represent the business agenda and priorities for the Ministerial.

“We at USCIB are encouraged that the OECD is persevering with its Ministerial this year, albeit in an abbreviated virtual format,” said USCIB President and CEO Peter Robinson.  “And we fully support the focus on national and international actions, measures and international cooperation that can drive economic recovery.  The private sector, led by USCIB member companies, can play a vital role in driving that growth and job creation. The BIAC Statement, Strengthening International Coordination to Overcome COVID-19: Business Recommendations for the Recovery, reflects USCIB priorities, highlighting the importance of technology-neutral, all-of-economy measures that balance economic, social and environment considerations as countries enact stimulus measures.”

Hampl Joins BIAC-OECD Discussion on Building Resilient Supply Chains

Published on October 7, 2020

USCIB joined Business at OECD (BIAC) for a joint meeting on October 7 with the OECD to discuss building resilience in global supply chains to ensure that trade and investment can contribute to a robust, inclusive and sustainable recovery.

BIAC raised some key messages, such as the economic fallout from COVID-19 which has highlighted the need to strengthen supply chain resilience amid significant disruptions and containment measures that were especially stark during the early phase of the pandemic. BIAC added that because OECD work has demonstrated the gains from deepening and expanding international specialization in global value chains, the Organization should provide an important evidence-base on how countries can better prepare for future crises without disrupting global value chains and imposing restrictions at a time where global trade and investment are essential elements for innovation, job creation and getting our economies back on track.

Eva Hampl, who is leading USCIB’s work on trade and investment, participated in the conversation along with several USCIB members including from Apple, DHL, JPMorgan, Walmart and Pfizer.

In her remarks, Hampl noted the critical role of government cooperation as business is working to strengthening supply chains. “Consistency and predictability is critical for business,” said Hampl. “That’s why government cooperation and engagement with business is necessary to find effective solutions. This is where the OECD can provide crucial value by facilitating the conversation between business and governments.