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USCIB Submits Negotiation Objectives for US-EU Trade Deal

Published on December 11, 2018
USCIB submitted negotiation objectives for a U.S.-EU Trade Agreement to USTR.
The EU countries together make up the number one export market for the U.S., with goods exports to the EU in 2016 totaling $269.6 billion, constituting 18.6% of total U.S. goods exports.

 

USCIB submitted negotiation objectives for a U.S.-EU Trade Agreement to the United States Trade Representative (USTR) on December 11. The submission was filed in response to USTR’s request for comments and emphasized the importance of a comprehensive negotiation, covering not only market access for goods, but also critical services issues.

The USTR request for comments follows the Trump administration’s announcement to Congress on October 16 of its intention to initiate negotiations on a U.S.-EU Trade Agreement. USCIB supports negotiation of a comprehensive trade agreement with the EU as part of a broader strategy to open international markets for U.S. companies and remove barriers and unfair trade practices in support of U.S. jobs. USCIB priority issues for negotiation of a U.S.-EU agreement include investment, customs and trade facilitation, express delivery services, improved regulatory cohesion, digital trade, intellectual property, government procurement and SOEs, and financial services.

“The EU is an important trade partner for the United States,” said USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl. “USCIB members see the value of common approaches toward establishing a more integrated and barrier-free transatlantic marketplace. Regulatory discrimination and differentiation across the Atlantic is an increasingly frustrating obstacle to trade, investment and the ability to conduct business.”

USCIB supported the negotiations of a comprehensive, high-standard U.S.-EU trade agreement, the Transatlantic Trade and Investment Partnership (TTIP), which commenced in 2013 and aspired to eliminate tariff and no-tariff barriers on goods and services trade between the U.S. and the EU. These negotiations were halted by the current administration, but the range of issues that were on the table at the time, ranging from strong investment protections, to increased trade facilitation, and regulatory coherence, continue to be of great importance to our members.

The EU countries together make up the number one export market for the United States, with goods exports to the EU in 2016 totaling $269.6 billion, constituting 18.6% of total U.S. goods exports. U.S. goods and services trade with the EU totaled nearly $1.1 trillion in 2016, with exports totaling $501 billion. The United States also has a surplus in services trade with the EU, totaling $55 billion in 2016. According to Hampl, a successful trade agreement with the EU should cover not just market access for goods, but also address important services issues.

USCIB Contributes Comments to UN on Digital Cooperation

Published on December 11, 2018
USCIB filed comments to the office of the United Nations Secretary General to identify good examples and propose modalities for working cooperatively across sectors, disciplines and borders to address challenges in the digital age.
USCIB’s comments noted that stakeholder inclusion can lower the risk of unintended consequences and increase legitimacy and adoption of policies.

 

USCIB filed comments to the office of the United Nations Secretary General on November 28 in his request for public comments “to identify good examples and propose modalities for working cooperatively across sectors, disciplines and borders to address challenges in the digital age.” The comments will be presented to the High-Level Panel on Digital Cooperation, which was established by the UN Secretary General in July 2018. The Panel will seek to conduct a broad engagement and consultation process, resulting in a final report with actionable recommendations in 2019.

To inform the HLPDC deliberations, the Secretariat launched a wide-ranging consultation process to gather the views of governments, the private sector, civil society, international organizations, the technical and academic communities and other relevant stakeholders.

“USCIB believes that the multistakeholder model for Internet governance continues to be the best method to enable the whole-of-society/whole-of-government consideration of digital economy issues,” said Barbara Wanner, who leads USCIB work on ICT policy. “Given the rapid pace of technological change, governments need the perspectives provided by business, technical community, and civil society to better understand what policies are commercially viable, technically feasible, and offer adequate personal privacy protections. The inputs of all stakeholders produce a flexible policy environment critical to empowering the rapidly evolving digital economy.”

USCIB’s comments also noted that stakeholder inclusion can lower the risk of unintended consequences and increase legitimacy and adoption of policies. Top-down government-imposed policies and regulations often cannot keep pace with technological breakthroughs and can serve as a drag on development and innovation, and potentially infringe upon human rights.

 

USCIB Champions Business Partnership in Migration Policy

Published on December 11, 2018
Well-managed, migration is a vehicle for fulfilling personal aspirations, for balancing labor supply and demand, for sparking innovation, and for transferring and spreading skills.
Unduly closing borders to migrants is detrimental to business needs at all skills levels. Thus, the overarching goal of the private sector is a regulatory environment in which labor migration policies support business development to create job opportunities and economic prosperity.

 

The Global Forum on Migration and Development (GFMD) and UN Global Compact on Migration (GCM) Summit were held back-to-back in Marrakech, Morocco December 5-11. USCIB Senior Counsel Ronnie Goldberg represented USCIB and the International Organization of Employers (IOE) as part of the Business Mechanism to the GFMD at both meetings.

The GFMD Business Mechanism was the primary vehicle through which the private sector contributed expertise and advised governments on aspects of labor migration policy pertaining to select provisions of the GCM, specifically those dealing with flexible pathways for regular migration, responsible recruitment and skills mobility and development.

IOE President Erol Kiresepi was also active during the Summit, presenting Business Mechanism views and commitments during the Opening Session of the Summit.

Goldberg participated in two side events: one as panelist on the Implementation of the GCM and another as moderator at a USCIB co-sponsored event Partnering with the Private Sector: The GCM and Business.

The Partnering with the Private Sector side-event took place on December 8, co-organized by IOE and PMI, and highlighted the crucial role the private sector plays in ensuring safe and orderly migration. As such, side-event participants advocated for a transparent legal framework to support business environments conducive to economic growth and development.

“Clear and well-implemented migration policies are an integral part of a regulatory framework conducive to economic growth and development,” said Goldberg. “Well-managed, migration is a vehicle for fulfilling personal aspirations, for balancing labor supply and demand, for sparking innovation, and for transferring and spreading skills. It also can provide  protection against unethical recruitment that could result in human trafficking and forced labor,” she added.  “Unduly closing borders to migrants is detrimental to business needs at all skills levels. Thus, the overarching goal of the private sector is a regulatory environment in which labor migration policies support business development to create job opportunities and economic prosperity.”

Update from the Field: Hunting for “Landing Zones” at Climate Change Conference in Poland

Published on December 11, 2018
Norine Kennedy at COP24
COP24 is to finalize a so-called Paris Rulebook, which will provide implementation guidance on how countries put the Paris Agreement into action.
Crucial to business will be outcomes on carbon markets.

 

The 24th UN Framework Convention on Climate Change Conference of the Parties (UNFCCC COP24) began on Sunday, December 2 and will run through December 14 under the Presidency of Poland, in Katowice, Poland.  On Saturday night, the negotiating groups delivered a first round of outcomes to be taken up by the Ministers arriving for the 2nd week.  Many key business issues remain incomplete or “in brackets” in the current draft “Paris Rulebook,” intended to guide putting the Paris Agreement into action.  For the week ahead, high level government representatives will be seeking “landing zones” to resolve remaining substantial divisions.

Over 30,000 are in attendance here, including USCIB members Arkema, Chevron, Mars, Novozymes and Salesforce, joining USCIB staff Norine Kennedy and Mia Lauter in tracking the complex discussions, meeting with U.S. and other government delegations and partnering with key business groups.  Here in Katowice, the International Chamber of Commerce (ICC) serves as focal point for business, convening daily meetings to share intelligence and organizing the UNFCCC Business Day on December 6.

Sticking topics have included provision of how to treat compensation for loss and damage, financial support to developing countries for greenhouse gas reductions and technology cooperation, the design of elements relating to carbon markets and different rules and practices that would apply to developing and developed countries. Delegates are talking about the IPCC1.5 Special Report, worrying increases in greenhouse gas emissions and tensions in France sparked by the proposed fuel tax, since rescinded by the Government of France.

COP24 is to finalize a so-called Paris Rulebook, which will provide implementation guidance on how countries put the Paris Agreement into action.

“So far, negotiations have proceeded predictably, albeit too slowly to conclude in time,” observed Kennedy, who leads USCIB policy work on the environment and climate change. “The complexity of technical and political issues obscures the real challenge: mobilizing private sector investment and innovation at a pace and scale that would advance the UNFCCC and Paris objectives.”

According to Kennedy, the general feeling among delegates is that a fair amount of political will, particularly among high-level representatives and Ministers of Environment, will be required in order to successfully conclude.

“There is no one issue that is dominating conversations,” added Kennedy. “Rather, the sheer number of issues to be negotiated and the level of technicality those issues present is daunting for Parties to manage (or business representatives to track).”

The smaller than usual U.S. delegation here is led by Trigg Talley, and includes other State Department, Energy and EPA representatives.  Next week, Assistant Secretary of State Judy Garber and Wells Griffith (White House) arrive for the high-level portion of the negotiations.

Crucial to business will be outcomes on carbon markets. Countries seem to be falling into one of two camps:

  • The view of the U.S. is that any exchange – known as an ITMO (internationally transferred mitigation outcome) – should remain between the countries undertaking the transaction, and that both countries would agree their accounting and other arrangements accordingly.
  • Other parties take the view that ITMO approval should come through a centralized UNFCCC body, and that some share of the transactions (“a share of the proceeds”) should be allocated to a central fund or other UNFCCC-determined purpose.

Also crucial to business will be the potential adoption of the Silesian Declaration on Just Transition proposed by the Polish Presidency. Many parties support the Declaration, but others feel that they haven’t had enough time to examine the proposal.

“We are flagging the number of climate topics that are spilling into other forums and key issues, such as human rights and trade,” said Kennedy. “Following discussions with the U.S. Delegation here, USCIB has asked the State Department to stand firm against any intention to use participation in the Paris Agreement as a litmus test for trade policies among nations.”

Kennedy also observed that protesters and some social media accounts continue to complain about the presence of business at COP24, asserting that their involvement here constitutes a “conflict of interest” and interferes with the ability of governments to reach an ambitious agreement.  In the week ahead, USCIB members and staff will continue to express U.S. business priorities, working closely with the Administration to promote energy innovation and advance substantive business engagement.

Annual APEC Summit Fails to Reach Consensus

Published on December 5, 2018

The Asia Pacific Economic Cooperation (APEC) Leadership Summit held its annual summit this year in Papua New Guinea (PNG) November 12-18, but for the first time in the Forum’s history, economies attending failed to reach consensus. The area of contention was around the Multilateral Trade System (MTS) section. This was also the first year that USCIB did not send a delegation to the APEC Summit, however USCIB contributed to earlier meetings this year, including the APEC meetings in Chile held September 11-12, which produced new principles in transit.

“This is clearly a disappointing outcome,” said USCIB Vice President for Product Policy and Innovation Mike Michener, who coordinates USCIB’s work on APEC. “APEC’s strength is the ability of member economies to find consensus on topics of mutual benefit, like trade. It is apparent that differing visions of trade policy blocked agreement for the first time in nearly 30 years.”

Following the summit, PNG released Statements to highlight what has been accomplished this year, including a reaffirmation of APEC’s commitment to achieve balanced, inclusive, sustainable, innovative and secure economic growth and prosperity in the APEC region, while pledging to combat protectionism and unfair trade practices. The Statements also emphasized the need to reform the World Trade Organization (WTO) in order to improve and strengthen the body to better address existing and emerging global trade challenges.

Furthermore, the Statement noted continuing support for the Work Program on E-commerce to advance initiatives on e-commerce, investment, small and medium enterprises, and trade and women’s economic empowerment.

For the 2018 APEC year, PNG chose the theme of “Harnessing Inclusive Opportunities, Embracing the Digital Future.” APEC will be led by Chile in 2019 and will focus on the digital economy, regional connectivity, and women’s role in economic growth. Chile previously hosted APEC in 2004.

G20 Highlights 2019 Priority Issues in Leaders Declaration

Published on December 5, 2018

As Japan prepares to assume the role of host of the G20/B20 in 2019, G20 leaders issued a Declaration on December 1, outlining items needed to build consensus for fair and sustainable development.

According to USCIB Vice President for ICT Policy Barbara Wanner, there is noteworthy focus in the Declaration on the digital economy. “Of the 31 points, at least three of the top ten focus on the opportunities and challenges of digital transformation,” noted Wanner. “Points 6-7 focus primarily on potential job displacement and the need for reskilling and vocational training while point 9 draws upon the work of the G20 Digital Task Force. This underscores the importance of bridging the gender digital divide, securing the use of ICTs, and ensuring the free flow of information, ideas, and knowledge ‘while respecting applicable legal frameworks and working to build consumer trust, privacy, data protection, and intellectual property rights protections.’” Point 9 of the Declaration also calls for the establishment of a G20 Repository of Digital Policies to share and promote adoption of innovative digital economy business models.

Beyond the digital economy, G20 leaders pointed out other critical areas of work, such as international trade and investment, which serve as engines of growth, productivity, innovation, job creation and development. However, the group added that the multilateral trading system has fallen short on some objectives and voiced continued support for the necessary reform of the World Trade Organization (WTO) to improve its functioning. The Group also reaffirmed its commitment towards preventing and fighting corruption.

On sustainable development, leaders emphasized commitment to leading the transformation towards sustainable development and support for the United Nations 2030 Development Agenda as the framework for advancing the G20 Action Plan. Regarding the role of energy, the G20 leaders recognize the opportunities for innovation, growth, and job creation, while acknowledging the role of all energy sources and technologies in the energy mix and different national paths to achieve cleaner energy systems.

The G20 focused this year on infrastructure for development, the future of work, and a sustainable food future and a gender mainstreaming strategy across the G20 agenda.

OECD Emphasizes Adverse Impact of US-China Trade Tensions on Economy

Published on November 26, 2018

The OECD’s semi-annual Economic Outlook, issued on November 21, warns that U.S.-China trade tensions are adversely affecting the global economic outlook and that the majority of the burden will be felt by U.S. consumers.  And if the U.S.-China trade disputes continue to escalate, world trade could reduce significantly by 2021.  In his remarks presenting the latest Economic Outlook, OECD Secretary General Angel Gurria highlighted downward adjustments in OECD’s forecasts for GDP growth rates from their May Outlook: dropping from 3.7% to 3.5% growth globally for 2019, with an additional 3.5% drop in 2020.

For the U.S. specifically, the OECD forecast for 2019 growth drops from 2.9% in May to 2.7% in this report and a further drop to 2.1% in 2020. For Europe’s “Euro Area”, the OECD now estimates 1.6% (down from 1.8% in the May Outlook) and 1.6% growth again in 2020. For China, the OECD is now forecasting 6.32% annual growth in 2019 (down from 6.6% in the May forecast) and 6.3% growth again in 2020.  The slides from the OECD presentation demonstrate in more detail key trends the OECD identifies over the coming years.

Gurria highlighted one major reason for this decline in global growth prospects is a breakdown in international cooperation. The imposition of new tariffs and uncertainty about further restrictive trade actions are contributing to a marked slowdown in trade growth, dampening global investment and threatening jobs and living standards. The international rules-based system that has governed trade since the end of the Second World War has been undermined. Gurria’s perspective is blunt – “Protectionism is not the answer.” While Gurria does not explicitly call out U.S. trade policies, it seems clear that the U.S.-China trades disputes and U.S. more aggressive unilateral trade policy are significant factors helping drive down global economic forecasts.

USCIB President and CEO Peter Robinson took note of the OECD’s semi-annual Economic Outlook. “The OECD has earned international respect for its detailed and apolitical economic outlooks,” said Robinson.  “All of us – governments, businesses and citizens – need to take heed to this OECD alarm bell.  Economic growth is the force that drives investment, trade, jobs and better lives for citizens around the world.  It seems clear that one key concerns causing the OECD and other experts to adjust their economic forecasts downward is increased protectionism.  I agree with Secretary General Gurria that protectionism is not a solution; protectionism begets protectionism and downward pressures.  We call upon the U.S. government, as well as other leading trade powers, to reject protectionism and provide global leadership to open trade and investment opportunities around the world.”

The OECD’s press release provides an excellent summary of their key analysis, findings and recommendations.

WATAC Raises Awareness About Carnets Among Indian Exports and Customs

Published on November 20, 2018
USCIB Senior Vice President and CFO Declan Daly, who oversees USCIB’s ATA Carnet department, attended the meetings.
WATAC discussed and reviewed the operation and administration of the ATA Carnet System in member countries with the aim of spreading awareness about ATA Carnet among Indian exports and Indian customs.

 

Meetings of the World ATA Carnet Council (WATAC), were held in Jaipur, India on November 15-16 at Hotel Jai Mahal Palace and SMS Convention Centre respectively. USCIB Senior Vice President and CFO Declan Daly, who oversees USCIB’s ATA Carnet department, attended the meetings. WATAC discussed and reviewed the operation and administration of the ATA Carnet System in member countries with the aim of spreading awareness about ATA Carnet among Indian exports and Indian customs.

“Being that this was my first WATAC meeting, it was a great opportunity to meet member colleagues from all around the world,” said Daly.

The meeting was jointly organized by WATAC, which is part of the International Chamber of Commerce, and the Federation of Indian Chambers of Commerce and Industry under the aegis of the Central Board of Indirect Taxes and Customs (CBIC), which is part of India’s ministry of finance.

The ATA Carnet is the global gold standard for temporary admissions under the auspices of the World Customs Organization. ATA Carnets are international tools of trade facilitation, which serve as a temporary export-import documentation. The ATA System is in place in 87 countries and territories, and provides duty-free and tax-free imports on goods that will be re-exported within 12 months.

Mixed Messages at Recent Meetings on Global ICT Policy

Published on November 19, 2018
Barbara Wanner, was present at both events, alongside USCIB members, joining global business colleagues under the aegis of ICC-BASIS at the IGF and as part of the Business at OECD (BIAC) delegation to CDEP.
The two meetings could not have provided more different messages about the challenges and opportunities of digital transformation of the economy and how to address them.

 

The 13th Internet Governance Forum (IGF) and meetings of the OECD Committee on Digital Economy Policy (CDEP) and its Working Parties met in Paris, France the week of November 12. According to Barbara Wanner, who leads USCIB’s work on ICT policy, the two meetings could not have provided more different messages about the challenges and opportunities of digital transformation of the economy and how to address them.

French President Emmanuel Macron, who opened the three-day IGF on November 12 at UNESCO, depicted a digital economy fraught with danger from cyber-attacks, the proliferation of hate speech, and anti-democratic forces requiring development of a “better model” featuring regulation of the Internet and its actors. The OECD CDEP, in contrast, proceeded in a workman-like, measured manner to move its Going Digital Project toward completion as well as advance work on Artificial Intelligence (AI). Going Digital (GD) is an ambitious horizontal endeavor involving 14 OECD committees that takes a largely evidence-based and holistic approach to considering both the economic and societal benefits and the challenges of the evolving digital ecosystem.

Wanner, was present at both events, alongside USCIB members, joining global business colleagues under the aegis of ICC-BASIS at the IGF and as part of the Business at OECD (BIAC) delegation to CDEP.

“Our messages, as IGF workshop speakers and BIAC interveners, generally emphasized the commercial and developmental benefits that can be realized through the creation of a pro-innovation policy environment, the effectiveness of business-informed, risk-based approaches to privacy and security, and the importance of the multistakeholder model in considering the complexity of digital economy issues,” noted Wanner.

According to Wanner, by the week’s close, members agreed that the “watershed” moment at the IGF created by President Macron’s remarks will require further internal discussion about what business wants and needs from the IGF and strategies to tackle likely new challenges at the United Nation’s General Assembly and other multilateral organizations. Concerning CDEP’s leadership of the Going Digital Project, members generally were encouraged that the final product – to be issued at a special forum on March 11-12, 2019 – would reflect business inputs and provide a practical guide to tap the potential of digital transformation.

Joint Conference Addresses Digital Taxation

Published on November 13, 2018

The German business association BDI hosted the OECD, Business at OECD, USCIB and other business representatives at a joint conference in Berlin, Germany on November 6 to contribute to the current debate on digital taxation. The OECD is the leading organization in developing a consensus approach to this debate.

Leading global tax experts discussed current business models and value creation, profit allocation and nexus rules, and future challenges of profit taxation. Among them was USCIB Taxation Committee Chair Bill Sample (Microsoft Corporation) who gave a keynote on a panel, “Future Challenges of Profit Taxation.”

Sample spoke about a “borderless world,” with borderless businesses and borderless consumers, which increases the need for governments to work together to reduce the negative impact of hard borders on the digitalized economy.

The event, titled International Taxation in Light of Digitalization, also featured participation by OECD Deputy Secretary General Ludger Shucknecht and Director for the OECD Center for Tax Policy and Administration Pascal Saint-Amans, as well as Head of the International Tax Unit at the German Federal Ministry of Finance Christian Schleithoff.