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IOE European Social Charter Must Support Job Creation

Published on October 23, 2014

Europe from spaceAdopted in 1961, the European Social Charter is an EU treaty that guarantees social and economic human rights, such as the rights to fair remuneration and safe working conditions.

Speaking at the High-Level Conference on the European Social Charter in Turin, Italy on October 17, the International Organization of Employers (IOE) Vice President for Europe, Renate Hornung-Draus said that the European Social Charter will only gain relevance if it supports reforms for job creation and sustainable social security systems. She warned that the way in which the supervisory bodies of the Council of Europe interpreted the principles of the European Social Charter was undermining its relevance for Member States.

Since 1990 many new member States have joined the Council of Europe. They have different economic and social challenges than the founding members. The interpretation of the European Social Charter by its Supervisory bodies has to be more responsive to their specific situation.

Hornung-Draus said: “The Social Charter will achieve its goal of promoting economic and social development only if its principles are implemented in a way that respect the variety of situations of Member States, and if they are conducive to the structural reforms and fiscal consolidation required by the changing economic and social context.”

Globalization, technological changes require open, dynamic and flexible labor markets and a commitment to life-long learning. In some European countries, where labor market regulation has not adapted to this changing context, very high unemployment, and especially youth unemployment, can only be properly addressed with profound structural labor market reforms.

In addition, social spending in some countries European countries has reached levels that overwhelm economic resources, leading to high public debt. Public debt crowds out investment, because social security systems in those countries become unsustainable in light of changing demographics. Fiscal consolidation in these countries is urgently required, not only to restore the credibility of financial markets and attract investment, but also as an act of social justice towards the young generation.

Staff contact: Ariel Meyerstein

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USCIB Talks Trade and Investment in the Americas at IDB Forum

Published on October 23, 2014

The global trade environment is changing rapidly, with the emergence of new global trade architecture, the uncertain fate of the WTO’s trade facilitation agreement, and increasing opposition to investment protections in trade agreements such as the Trans-Atlantic Trade and Investment Treaty (TTIP).

On October 20, the Integration and Trade Sector of the Inter-American Development Bank (IDB) hosted a forum on “The 21st Century Trade Architecture: Implications for Latin America and the Caribbean” for a discussion about the most pressing trade policy challenges, with an emphasis on Latin American economies.

Rob Mulligan, USCIB’s senior vice president for policy and government affairs, participated in a panel on “Trends in Trade and Integration: Trading against Headwinds,” in which he spoke about global value chains (GVCs), where companies move intermediate goods between countries in producing a final product, and of the benefits to be gained from the participation of Latin American economies in GVCs.

The panel was moderated by Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, and Mulligan was joined by John Melle, Assistant U.S. Trade Representative for the Western Hemisphere; Ken Ash, director of trade and agriculture at the Organization for Economic Cooperation and Development; Abdel-Hamid Mamdouh director of trade in services at the World Trade Organization and Sally Yearwood, executive director of the Caribbean-Central American Action.

In his remarks, Mulligan stressed the importance of using GVCs to remain competitive, innovate, and stay close to customers. He cited an OECD study that found that one-third of most countries’ imports is part of their exports, and noted that in order to remain competitive in GVCs companies require access to efficient imports of goods and services. Latin American economies have much to gain from participating in global value chains, and government policies can impact the extent of that participation.

Mulligan also discussed the factors that companies consider when they’re deciding whether to invest in a country along a global value chain. Such factors include infrastructure, workforce development, a fair and transparent tax system and effective rule of law. He noted that certain policies inhibit companies’ ability to operate through GVCs, such as forced localization, restrictions on cross-border data flows and restrictive customs rules and regulations.

Trade agreements are an effective way to pursue policies that facilitate that movement of goods and services within GVCs, and Mulligan explained that business prefers multilateral trade agreements and also supports regional agreements such as TTIP and the Trans-Pacific Partnership (TPP).

In order to take advantage of GVCs, Mulligan concluded by noting that Latin American governments could take unilateral steps to improve infrastructure and education, and eliminate localization rules and date flow restrictions. These countries could also benefit from regional trade integration.

Staff contact: Rob Mulligan

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World Investment Forum Looks at Leveraging FDI to Support Sustainable Development

Published on October 16, 2014
L-R Peter Robinson (USCIB) and Mukhisa Kituyi (UNCTAD)
L-R Peter Robinson (USCIB) and Mukhisa Kituyi (UNCTAD)

USCIB and the International Chamber of Commerce brought a pro-business, pro-investment perspective to the three-day World Investment Forum, which took place this week in Geneva.

Organized by the UN Conference on Trade and Development (UNCTAD), the biennial forum gathers heads of state, global CEOs and civil society leaders for dialogues on the world’s emerging investment-related challenges. This year’s event had a special focus on leveraging investment to support the UN’s Sustainable Development Goals (SDGs).

On Tuesday, the forum’s first day, ICC leaders and Mukhisa Kituyi, the UNCTAD secretary general, co-chaired the 11th meeting of the Investment Advisory Council. During the open discussion, Shaun Donnelly, USCIB’s vice president for investment and financial services, made a strong pitch for bilateral investment treaties and free trade agreements, which was echoed by a range of business and government representatives. ICC and USCIB Chairman Terry McGraw and ICC Secretary General John Danilovich spoke at the forum’s opening plenary, where they were joined by senior government officials.

Also on Tuesday, McGraw, Danilovich and USCIB President and CEO Peter Robinson met with Roberto Azevedo, the director general of the World Trade Organization, to discuss ways to restart the stalled Trade Facilitation Agreement. At the meeting Robinson thanked Azevedo for his leadership and said he looked forward to honoring him at USCIB’s annual award dinner in Washington, DC on November 19.

Mobilizing the Private Sector

On the forum’s second day, Robinson delivered plenary remarks, in which he discussed the four key elements that would crystallize private-sector support for sustainable development: good governance, economic growth, innovation and infrastructure. He noted that governments and businesses must work together to facilitate initial investments in least developing countries that lack basic infrastructure. Initial infrastructure funding can then help leverage further investments, leading to a “virtuous cycle.”  He also made the case for investment protection.

“Let’s continue the dialogue and partnership to harness investment as a key driver of economic, sustainable and inclusive development,” Robinson concluded. “And work together to create the virtuous investment circle, particularly in those countries that need it the most.”

Given the forum’s focus on investment for the SDGs, Robinson also emphasized that “taken together, open international trade and investment are important inter-related fundamentals and key drivers for engaging the private sector in achieving global economic growth that is inclusive, and environmentally and socially sustainable.”

On Thursday Robinson and Donnelly took part in key panel discussions on the role of bilateral and multilateral investment agreements and on investor-state dispute settlement (ISDS), where they spent over four hours defending investment agreements and ISDS in a morning-long Investment Agreement session, the centerpiece session during the final day of UNCTAD’s World Investment Forum.

With over 50 speakers limited to three-minute interventions, government and NGO representatives were often critical of investment agreements and ISDS in particular, whereas business voices were scarce. Robinson explained the overall importance of international investment agreements, while Shaun tackled the sensitive ISDS issue, emphasizing the need for effective enforcement measures to truly incentivize and protect FDI flows that are vital for economic growth, development and job creation. Donnely also highlighted USCIB’s strong opposition to any sectoral carve-outs from ISDS protections.

Although too many government participants opposed ISDS, Michael Tracton, director of the investment office at the U.S. Department of State, voiced support for strong investment agreements and ISDS, citing the high standards and balance of the USG’s Bilateral Investment Treaty and free trade agreement investment chapters.

Unfortunately, opposition to ISDS from NGOs has shown no signs of letting up. “USCIB will continue to confront these pressures internationally at forums like UNCTAD and in free trade agreement negotiations, voicing our strong support for common-sense, pro-business investment policies,” Donnelly said. “We will continue to leverage our international networks BIAC and ICC to mobilize international business support for these policies.”

Staff contact: Shaun Donnelly and Eva Hampl

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Leveraging Partnerships to Combat Malnutrition

Published on October 15, 2014

4861_image002As part of a series of public discussions leading up to the Second International Conference on Nutrition (ICN2), the United Nations Food and Agriculture Organization hosted a dialogue on October 14 in Rome about the critical role public-private partnerships in fighting malnutrition. The well-attended event convened representatives from member states, the private sector and civil society to raise awareness of global nutrition issues and catalyze support for partnerships. Dr. Nancy Stetson, special representative for global food security at the U.S. Department of State, noted that partnerships are necessary to reduce global hunger and malnutrition.

Louise Kantrow, ICC’s permanent representative to the UN, made a strong case for engaging the private sector as a full partner in deciding strategies for addressing malnutrition, since business is involved throughout the entire agriculture supply chain, from seeds to food processing to all the products farmers need to grow and distribute food.

“The UN has recognized that the problems confronting the global community now know no boundaries and all actors in society must come to the table and provide inputs,” said Kantrow, who also stressed the importance of trade and investment in the agriculture industry as it relates to economic development, empowering women, and innovation as areas where the private sector can contribute to the fight against malnutrition.

USCIB will attend ICN2 in November at the FAO’s headquarters in Rome.

Read the event summary on the FAO’s website.

Staff contacts: Louise Kantrow and Helen Medina

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USCIB Observes Nutrition Conference Negotiations

Published on October 13, 2014
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L-R: Katy Lee (Private Sector Mechanism), Ann Steensland (Global Harvest Initiative), Nico Belzen (International Dairy Federation), and Helen Medina (USCIB)

The United Nations and World Health Organization will convene the Second International Conference on Nutrition (ICN2) next month to address the persistently high twin threats of hunger and malnutrition around the world.

In the lead-up to ICN2, member states met in Rome at the UN Food and Agriculture Organization (FAO) from October 10 to 12 to negotiate the final outcome documents for ICN2 – the political declaration and the framework for action. The meeting was a continuation of negotiations in Geneva last September where member states made progress finalizing the political declaration.

The ICN2 outcome documents will provide key priorities and technical assistance to governments and other stakeholders for improving people’s nutrition.

During the Rome meeting, USCIB partnered with the Global Harvest Initiative to represent U.S. business interests at the negotiations. USCIB’s Helen Medina, senior director for product policy and innovation, attended the meeting. Watch her summarize the meeting’s key takeaways for business.

Prior to the negotiations, private sector representatives were concerned with outstanding issues in the political declaration for ICN2. The document contained some language on “culturally acceptable food” that might have produced negative trade implications. Business believes that the document should focus on nutrition and leave discussions about trade policy to the World Trade Organization. Private sector representatives sought to eliminate language that could create potential trade barriers.

Business also paid attention to other areas of concern in the Framework for Action, including policies that deal with food pricing incentives, marketing and labeling regulations, language the puts a pejorative spin on processed food, and policies that are not inclusive of the entire agriculture industry.

“There are some good winds for the private sector,” Medina said at the end of the meeting. Negotiators deleted language in the political declaration that would have had a negative impact on trade. However issues remain with the Framework for Action, which recommends policies in international trade and investment that would be problematic for business. The U.S. government has reserved its position on the framework’s paragraphs about recommended trade and investment action, and USCIB is planning a follow-up meeting with USG to learn about any remaining issues with the framework before ICN2.

ICN2 will take place in Rome from November 19 to 21.

Staff contact: Helen Medina

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USCIB Meets with G20 and B20 Sherpas to Discuss Business Priorities

Published on October 13, 2014

4856_image001Ahead of next month’s Group of 20 (G20) Summit in Brisbane, USCIB met with representatives of the Business 20 (B20) and G20 on October 9 in Washington, DC to discuss the 2014 B20 recommendations and give USCIB members an opportunity to voice their priorities for achieving economic growth and job creation.

The B20 provides global business leaders with a forum for producing policy recommendations to be delivered at the annual G20 meeting, reflecting the key role the private sector plays as a driver of strong, sustainable growth.

Members of the USCIB Trade and Investment Committee and Customs and Trade Facilitation Committee met with Caroline Atkinson, the G20 Sherpa for the U.S. government, Sarp Kalkan, policy advisor at the Union of Chambers and Commodities Exchanges of Turkey and upcoming Turkey B20 Sherpa, and Robert Milliner, the Australia B20 Sherpa. Members broadly supported the B20 recommendations to the G20, which include focused proposals in the areas of trade, infrastructure, human capital, finance and transparency.

Milliner summarized the B20 recommendations and noted that they would play a big role in the G20 agenda coming out of the Brisbane Summit. Trade and infrastructure rank high on the B20’s priorities, and Milliner hoped that governments will agree to establish a proposed “infrastructure hub” that will share information among nations and increase transparency on infrastructure projects.

Atkinson appreciated how focused the B20 recommendations are and explained it is helpful for government leaders to see which reforms business feels would be useful to support growth and jobs. She suggested that U.S. business leaders communicate often with their counterparts in other countries to coordinate their priorities, and she noted that business must engage more often with labor. USCIB plays a part on both counts, through our affiliation with the International Chamber of Commerce (ICC) – the world business organization – and theInternational Organization of Employers.

Kalkan noted that during next year’s G20 Summit in Turkey, global infrastructure initiatives will remain at the core of the B20 agenda, as well as trade and investment policies that make it easier for emerging economies to attract foreign direct investment. On that note, the successful passage of the World Trade Organization’s trade facilitation agreement ranks high on the list of business priorities. The B20 also plans to do more work on small- and medium-sized businesses, helping to integrate them into global value chains and increasing their access to finance. Kalkan also noted that will be greater efforts to have the B20 and G20 interact more frequently over the course of the year.

At a similar event on October 8 in Washington, DC, ICC and the Center for Strategic and International Studies brought together Australian and U.S. government officials to discuss expectations for the Australian G20 summit in December.

“We intend to concentrate on advocating for the implementation of the existing stock of B20 recommendations,” Kalkan at the CSIS meeting. “We will do this through extensive consultations with G20 ministers, sherpas and business leaders.”

Staff contact: Robert Mulligan

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USCIB Participates in Greater China Business Forum

Published on October 13, 2014

4857_image001Last week, USCIB partnered with the U.S. Commercial Service for the Discover Global Markets: Greater China Business Forum, a two-day conference in New York City that gave entrepreneurs opportunities to gain insights and contacts for exporting to the Greater China region, which includes Singapore, Hong Kong, Mongolia and Taiwan, Province of China.

Elizabeth Cafaro, USCIB’s marketing assistant for Carnet and Trade Services, spoke at the conference on a panel about “Utilizing Trade Shows in China.”

At the event, U.S. Under Secretary of Commerce for International Trade Stefan M. Selig said that U.S.-China trade is right on track, and that China is an elite market for U.S. exports, according to CNC TV. Selig also noted that China is the third-largest market for U.S. exports, supporting over 800,000 American jobs, and that facilitating American business engagement with the Greater China market is a high priority.

The conference was part of the U.S. Commercial Service Business Forum Series, and attendees were able to meet one-on-one with U.S. Commercial Service diplomats and obtain the resources necessary to succeed in the Greater China market.

Growing American Exports, One Small Business at a Time (NYTimes)

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USCIB Remembers Richard M Hammer Longtime Steward of Tax Policy

Published on October 10, 2014
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Richard M. Hammer

It is with great sadness that we mark the passing of Richard M. Hammer, who served for 13 years as USCIB’s international tax counsel following a 40-year career at Price Waterhouse, one of the predecessor firms of PricewaterhouseCoopers. While at PW, he also chaired USCIB’s Taxation Committee for many years. Hammer passed away on October 7 at age 84.

“Dick Hammer was a leading light in global tax policy,” said USCIB President and CEO Peter Robinson. “He brought a career’s worth of insight into the intricacies of multinational tax practice, the details of tax treaties and the importance of the multilateral structures that uphold them. What’s more, he was a true friend and mentor, especially to the USCIB staff members who worked with him and came to trust his wisdom and guidance.”

For 16 years, Hammer chaired the Taxation Committee of the OECD’s Business and Industry Advisory Committee (BIAC), through which the business community provides input to the OECD and its member governments on vital international tax issues. He advised the governments of Kazakhstan and the Russian Federation on the modernization of their tax systems, and he made major contributions to China’s tax law and regulation, serving as an advisor to the Chinese government from 1981 to 1993. He also acted as consultant to the Barbados ministry of international trade and has served as president of the International Fiscal Association, the premier global tax think-tank.

Memorial services were held for Hammer today in New York. He is survived by his wife Ellen, by his son Jeffrey and Jeffrey’s wife, Heidi, and by three grandchildren. Friends and colleagues of Dick Hammer are encouraged to sign an online guest book.

OECD Update on Corporate Governance Principles

Published on October 10, 2014
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Business and Industry Advisory Committee to the OECD

Good governance contributes to sustainable value creation and is in the interest of companies as it facilitates access to capital as well as increased investor and stakeholder confidence. The OECD Principles of Corporate Governance, which are currently being revised, are an international benchmark for policy makers, investors, corporations and other stakeholders worldwide. The Financial Stability Forum has designated them as one of the 12 key standards for sound financial systems.

The October 13 consultation with the OECD Corporate Governance Committee will be an important opportunity for a discussion on the first revised draft of the OECD Principles of Corporate Governance. As a follow up, a public consultation on the draft revised Principles is planned for the end of 2014. BIAC has been involved all along the process and will continue its active contribution to ensure that the final text to be presented to the 2015 Ministerial Council Meeting reflects business considerations. BIAC is also actively involved in the review of the Guidelines on Corporate Governance of State-Owned Enterprises, which are being revised in parallel, and will participate in the next consultation on October 22.

Staff contacts: Ariel Meyerstein

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USCIB Leads Charge for Strong TTIP Investment Chapter

Published on October 3, 2014
Shaun Donnelly
Shaun Donnelly

Investor State Dispute Settlement (ISDS) took center stage at stakeholder forum of the U.S.-EU Transatlantic Trade and Investment Partnership (TTIP) negotiations on October 1, with anti-business groups strongly opposing ISDS amid activist protests and political criticisms on both sides of the Atlantic.

Shaun Donnelly, USCIB’s vice president for investment policy, led the defense of investment provisions, including strong dispute settlement rules.

Representing transatlantic business, Donnelly spoke out for strong investment provisions, including ISDS, following a political diatribe on the perceived evils ISDS from a local NGO. He argued that investment is critical to growth, competitiveness and jobs in the U.S. and EU and that foreign direct investment is vital to overall investment flows.

Donnelly debunked urban myths on investment and ISDS, arguing that strong investor state dispute provisions in TTIP are essential because they give foreign companies a fair hearing by a panel of experts, without which they would otherwise face discrimination in domestic courts. Investment provisions are also crucial for setting a good model for other bilateral and regional trade initiatives. Press reports highlighted Donnelly’s role in standing up for common sense, pro-business investment policies.

Staff contact: Shaun Donnelly

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Obama Reappoints USCIB Chairman to Advisory Committee for Trade Policy

The White House issued a press release on October 1 listing presidential appointees to key administration posts. Among them, USCIB Chairman Terry McGraw has been appointed as a member of the Advisory Committee for Trade Policy and Negotiations. McGraw is also chairman of the International Chamber of Commerce and chairman of McGraw Hill Financial [now S&P Global].