Global Industry Letter to China Urges for ITA Expansion

Published on July 23, 2013

USCIB, along with numerous business associations and companies from around the world, signed a letter to Chinese Vice Premier Wang Yang urging for expanded product coverage of the Information Technology Agreement (ITA).

What would have been the final round of ITA expansion talks were suspended in Geneva the week before due to China’s “disproportionately large product sensitivities list” that was “more than twice as long as any other country’s sensitivities list and included a request for the removal of roughly 100 product lines from the negotiating table,” the letter remarked. This has become the main obstacle in obtaining an ambitious ITA expansion outcome this year, which would, by one estimate, add $190 billion to global GDP annually.

The letter states that “China stands to be one of the largest beneficiaries of an expanded ITA” because of its considerable presence in the global tech industry, boosting its economy and innovation capacity. The letter thus urges China to significantly reduce the size of its sensitivities list so that ITA talks can reach a conclusion and further increase economic growth, competitiveness, and innovation around the world.

Click here to read the global industry statement supporting ITA expansion, signed by 81 associations from 31 economies and regions around the world.

Staff contacts: Rob Mulligan and Justine Badimon

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Uncertainty Hampering Trade Finance ICC Survey Shows

Published on July 9, 2013

The International Chamber of Commerce’s 2013 survey on trade and finance, released in June, has found that a continued shortage of trade finance for international trade remains a major challenge for economic recovery and development, with many traders depending on overdraft and other corporate loans to finance exports and imports.

The proliferation of new regulations in recent years has increased cost pressure on financial institutions and depressed markets. Some 65% of surveyed experts said implementation of Basel III regulations is affecting the cost of funds and liquidity for trade finance. While many changes have already been implemented or proposed, the regulatory future remains unclear due to lack of harmonization, which remains a major problem for trade financiers and their clients.

The ICC survey positively indicates that despite uneven performance around the world in 2012, the market for trade finance does show signs of slow and steady growth, with temporary trade measures imposed during the financial crisis – including the rise in fees for trade –slowly being removed.

“This shows that financial intermediaries are continuing to satisfy the demand for financing and that investing in trade assets is part of a more sustainable model of banking, said Pascal Lamy, director general of the World Trade Organization, in the survey’s foreword.

Click here to read more on ICC’s website.

Staff contact: Eva Hampl

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ICC Recognized for Trade Services

The ICC Banking Commission has won the Trade and Forfaiting Review
2013 Excellence Award for Best Non-Bank Trade Services Provider.

With 80 years of experience and more than 600 members in over 100 countries, the commission is ICC’s largest commission and has gained a reputation as the most authoritative voice in the field of trade finance.

The ICC Banking Commission rules and related services include rules and guidelines on documentary credits, UCP 600 – the most successful privately drafted rules for trade ever developed – and Bank Payment Obligation rules on supply chain finance.

The award follows the commission’s recent launch of new standards in the field of trade finance, including Uniform Rules for Forfaiting and Bank Payment Obligation and International Standard Banking Practice. Both publications are available for purchase in the USCIB International Bookstore.

Click here to read more on ICC’s website.

New Report Says Trade Finance Not to Be Feared

Published on April 16, 2013

The International Chamber of Commerce (ICC) today issued Global Risks – Trade Finance 2013 providing a timely, accurate and comprehensive outlook on the risks in trade finance from the global trade finance industry’s perspective.

Based on data from ICC’s Trade Register, a comprehensive online database of over 15 million transactions provided by 21 banks, the new report shows that trade finance is a relatively low-risk asset class that should not be feared by financial institutions, nor over-regulated by governments.

In relation to comparable corporate default rates, the trade register data recorded a lower level of defaulted transactions adding weight to the hypothesis that trade finance transactions enjoy a lower than average likelihood of default. For medium- and long-term Export Credit Agency (ECA)-backed transactions, a similarly relative low risk is observed.

The ICC Trade Register contains data reflecting no less than 60-65% of traditional global trade finance activity, worth approximately US$2-2.5 trillion. Data reveals fewer than 1,800 defaults were made across close to 8.1 million short-term trade finance transactions. This equates to an approximate 0.02% default rate on a transaction basis. Consolidating the volume of trade and export finance and the likelihood of default for trade and export finance products, the ICC Trade Register is vital to crafting fair regulations necessary for a well-functioning global trading and banking system.

“The ICC Trade Register has been instrumental in fostering dialogue with regulators on a global scale. The integrity of the data is proven and is a strong incentive for other banks to participate,” said Pascal Lamy, director general of the World Trade Organization.

Kah Chye Tan, chair of the ICC Banking Commission and global head of trade and working capital at Barclays said: “I hope that by focusing on the critical connections between default levels in trade finance and the shaping of new regulatory recommendations, decision-makers will be able to engage collectively in efforts to improve the global financial system’s overall resilience.”

Read more, and download a copy of Global Risks – Trade Finance 2013, on the ICC website.

Staff contact: Eva Hampl

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USCIB Releases 2012 Report on Chinas Compliance With its WTO Commitments

Published on October 22, 2012

On October 16, USCIB submitted its 2012 statement to USTR on China’s compliance with its WTO commitments following an earlier Federal Register Notice. USCIB’s Justine Badimon, manager of the China Committee, worked with members from across industry sectors to compile the latest issues and update areas of last year’s report to reflect the current state of affairs.

As in previous reports, USCIB commended the work over the last year of both the U.S. and Chinese governments at maintaining the momentum of important bilateral dialogues such as the U.S.-China Joint Commission on Commerce and Trade (JCCT) and the Strategic & Economic Dialogue (S&ED) as well as several working relationships between U.S. and Chinese agencies, such as the Environmental Protection Agency (EPA) and China’s Ministry of Environmental Protection (MEP). Engagement and exchange of best practices with the Chinese government and business community is a productive approach to addressing our current challenges.

While the positive influence of these dialogues and resulting commitments and outcomes is clearly noted, throughout the report USCIB members detail the on-going concerns with China’s compliance with its WTO commitments in horizontal areas (anti-dumping, certification, licensing, IPR, government procurement, market access, regulatory environment, standards, SOEs and taxation) sector specific concerns (ag bio, audiovisual, chemicals, customs, electronic payments, express delivery, pharma, software, telecommunications) and finally in a third section which gives examples of certification licensing and testing requirements. Across all sectors, members call for more transparency and better efforts at consistency with regard to China’s regulatory agencies as well as increased efforts at meeting their WTO obligations. If you would like to receive a copy of the 2012 report, please contact USCIB’s Alexandra Garcia at agarcia@uscib.org

Following the submission of the Report to USTR on October 18 in Washington, DC the USCIB China Committee and Trade & Investment Committee met for a briefing with Audrey Winter, deputy assistant USTR for China Affairs. The meeting was held at the offices of Holland & Knight and chaired by Tad Ferris, partner of Holland & Knight and current co-chair of the USCIB China Committee. This was a timely meeting considering the political climate in both economies, the U.S. presidential election and China’s 18th Party Congress where Xi Jinpeng will be officially announced as new party leader replacing President Hu. Winter briefed the group on the current environment of bi-lateral economic relations between the U.S. and China and gave a snapshot of what is currently on the agenda for USTR with regard to China. Winter reported that at this time there is no public date for the next JCCT meetings but there is hope that there may be a meeting before the end of the year.

The China Committee looks forward to meeting with Winter again for future meetings to follow-up on concerns listed in the WTO report as well as other issues. The meeting also included a reporting out on recent U.S. Government restrictions on Chinese investment by Ron Oleynik, partner of Holland & Knight, and concluded with next steps for the Committee. A summary of the discussion will be circulated to Committee members.

We thank all USCIB members who took the time to participate in the drafting of our 2012 WTO report and thank those who attended the October 18 meeting.

2012 Report on China’s Compliance with its WTO Commitments

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Developing Countries Continue to Lead Trade Growth

Published on May 17, 2012

229 banks in 100 countries took part in the survey.

Developing nations were the key drivers of growth in international trade for 2011, in spite of the volatility caused by the international financial crisis, according to a report published today by the International Chamber of Commerce, the world business organization for which USCIB serves as the American national committee.

This year’s ICC Global Survey on Trade and Finance – titled “Rethinking Trade and Finance” – notes that after a year of upheavals, annual trade volume grew 6.6 percent in 2011, slightly above forecasts by the World Trade Organization. After positive growth prospects at the beginning of the year, a series of global shocks including the Arab Spring, the tsunami in Japan and the continuation of the global debt crises, resulted in an uneven performance for the year.

The survey, which provides some of the most important international data on trade finance, suggests the current environment is dampening prospects for 2012, with annual trade growth forecast at 5.2 percent this year, increasing to 7.2 percent in 2013, according to the report.

Developing countries continued to lead trade growth in spite of the slowdown towards the end of the year. South Asia exports, driven by soaring Indian trade with China, outperformed other developing regions in the first three quarters of 2011, but subsequently plummeted.

The report – in which representatives of 229 banks in 100 countries, a sharp increase on last year, took part – reveals that China’s trade experienced particularly volatile growth throughout the year, and exports from East Asia have fallen. Many major developing countries in the region are experiencing a slowdown in growth due to a tightening of domestic policy initiatives introduced between late 2010 and early 2011 to combat high inflation.

USCIB Shares its Trade Facilitation Priorities on US/Canada Beyond the Border Action Plan

Published on March 23, 2012

The USCIB Customs and Trade Facilitation Committee recently laid out its priorities on the trade facilitation aspects of the United States – Canada Beyond the Border Action Plan, released by President Obama and Prime Minister Stephen Harper on December 7, 2011. Click here for USCIB’s statement.

Work had been underway on the Action Plan since the February 4, 2011 announcement by President Obama and Prime Minister Harper on the United States-Canada joint declaration, Beyond the Border: A Shared Vision for Perimeter Security and Economic Competitiveness. The Action Plan lays out a shared approach to border security and economic competitiveness in which the United States and Canada work together to address the safety and security of our shared border, while expediting lawful trade and travel. The trade facilitation provisions establish steps, which upon implementation, will reduce costs and regulatory burdens, significantly enhance the flow of goods across the border, and facilitate trade and travel.

USCIB has shared its trade facilitation priorities with leaders of both the U.S. and Canadian teams leading the implementation efforts, and USCIB President and CEO Peter Robinson, met with Canadian Minister of International Trade, Ed Fast to convey USCIB’s support for the Action Plan and to emphasize interest, in particular, in Canada raising its de minimis level. USCIB applauds the effort to establish a long-term partnership between the United States and Canada, built upon a perimeter approach to security and economic competitiveness, and will continue to meet with officials on both sides of the border to engage in the implementation of the Action Plan.

U.S.-Canada Beyond the Border Action Plan

USCIB Trade Facilitation Priorities

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ICC Tackles Concerns About CrossBorder Access to Company Data

Published on March 20, 2012

Many companies are expected to meet conflicting requirements

The International Chamber of Commerce (ICC) has issued a policy statement pointing out conflicts that can arise between law enforcement requirements and privacy commitments when governments seek access to personal data held by companies across national borders.

Entitled “Cross-border law enforcement access to company data – current issues under data protection and privacy law”, the statement analyzes the issues that can arise in such situations, and makes recommendations that can help ensure respect for both law enforcement interests and those under data protection and privacy laws and commitments.

“Companies that process data in different countries are facing increasing government pressure to comply with law enforcement and regulatory requests that may conflict both with data protection and privacy laws in other countries in which they operate, and with consumer expectations and commitments to business partners,” said Christopher Kuner, Chair of the Task Force on Protection of Personal Data and Privacy, established by the ICC Commission on the Digital Economy.

“While some countries or regions have legal frameworks for reconciling law enforcement requirements with requirements under data protection and privacy law, many do not, and this can cause companies major problems,” Mr. Kuner added. “These sorts of problems are only increasing, given the growth in trans-border data flows.”

Click here to read more on ICC’s website.

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Business Trade Experts Work to Break Deadlock in Global Trade Talks

Published on March 16, 2012

L-R: WTO Director General Pascal Lamy, ICC Honorary Chairman Victor K. Fung, USCIB Chairman (and ICC Vice Chair) Harold McGraw III, and ICC Chairman Gerard Worms. — L-R: WTO Director General Pascal Lamy, ICC Honorary
Chairman Victor K. Fung, USCIB Chairman (and ICC Vice Chair) Harold McGraw
III, and ICC Chairman Gerard Worms.

Business leaders and trade experts met in Geneva earlier this week for the first conference on the ICC Business World Trade Agenda, an initiative of the International Chamber of Commerce (ICC), part of USCIB’s global network. The initiative aims to ensure that business works together with governments to
drive more effective trade talks.

More than 70 business experts, including CEOs, senior corporate executives and representatives of business organizations, together with World Trade Organization (WTO) Director General Pascal Lamy, took part in the event. USCIB was represented by Chairman Harold McGraw III and Senior Vice President Rob Mulligan as well as a number of member executives.

Global business leaders involved in this initiative aimed to define multilateral trade negotiation priorities for business, and to help governments set a trade policy agenda for the 21st century that contributes to economic growth and job creation.

“It is crucial that governments work directly with the global business community to find answers to the current economic crisis,” said ICC Chairman Gerard Worms. “Opening trade and investment offers a stimulus to the global economy and would give business the clear sign that governments will not resort to protectionism.”

For the first time in 60 years, the multilateral trade negotiation process is at a standstill, and after 10 years, the Doha Development Agenda has reached a stalemate. Yet global trade remains a mainstay of the world economy and it is therefore crucial that global trade rules address the needs of the global marketplace.

“Business is especially troubled by the threat of increased protectionism from the world’s major economies. During this economic crisis, governments should be opening markets to stimulate their economies rather than putting up barriers to trade,” Victor K. Fung, chairman of the ICC Business World Trade Agenda initiative and honorary chairman of ICC said.

ICC launched in December 2011 the Business World Trade Agenda at the WTO Ministerial Conference in Geneva, answering the call from G20 leaders at the recent Summit in Cannes for new approaches to trade negotiations. ICC is bolstered by the support it has received from the WTO in engaging business to provide recommendations to advance global trade negotiations.

Business Presses for Action on State-Owned Enterprises in Trans-Pacific Trade Talks

Published on September 7, 2011

USCIB has joined with three other business groups in urging the U.S. government to propose strong disciplines on state-owned enterprises in the context of the Trans-Pacific Partnership (TPP) negotiations.

In a letter to Michael Froman, the deputy national security advisor for international economic affairs, and Demetrios Marantis, deputy U.S. trade representative, the groups wrote:

“On the eve of the Chicago Round, the stakes in the TPP could not be higher. A successfully concluded TPP that sets the benchmark for 21st century bilateral, regional and multilateral trade and investment disciplines will go a long way towards establishing new rules of the road that would help U.S. companies and workers overcome the serious disadvantages that they face in competition with SOEs as commercial actors.

“We are concerned, however, that the final text tabled by the United States in the negotiations may fall short of the robust and detailed disciplines that are needed to ensure that U.S. exporters, investors, and American workers are able to compete on a level playing field against SOEs and the government support which they receive through myriad preferential policies. For our organizations, the TPP does not represent an incremental opportunity; it is an opportunity for an ambitious and game-changing approach worthy of the 21st century model it is intended to represent.

“As a result, we strongly encourage a final text be tabled that prescribes a detailed and comprehensive code of conduct to TPP negotiating partners. This code of conduct should include disciplines and obligations that can effectively deter governments from employing policy mechanisms that advantage SOEs in the marketplace when in competition with private actors.”

Other groups signing the letter were the National Foreign Trade Council, Coalition of Service Industries and U.S. Chamber of Commerce.

Staff contact: Shaun Donnelly, sdonnelly@uscib.org

Business letter on Trans-Pacific Partnership

From the President: Dealing With State-Owned Enterprises (Winter 2010-2011)

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USCIB Urges Closer Cooperation on Air Cargo Security

Published on July 8, 2011

In June, USCIB urged the heads of U.S. Customs and Border Protection and the Transportation Security Administration to work more closely to improve air cargo security, including taking other countries’ rules and regulations into account when implementing new air cargo security rules.

In a letter to Customs chief Alan Bersin and TSA Administrator John Pistole, USCIB President and CEO Peter M. Robinson commended the two agencies for working with the private sector to implement protocols and rules of engagement for the air cargo security program, and expressed hope that heightened interagency cooperation would continue to ensure a streamlined program.

On the international aspect of new security rules, Mr. Robinson wrote: “Although CBP recently suggested increasing the number of countries in the pilot program from 28 to 42 countries, … we urge that any increase be done with significant private sector consultation to ensure the proper consideration of issues such as timing and availability of information, volume of shipments for each country, as well as data privacy rules and regulatory hurdles in each country. USCIB urges CBP and TSA to assess the regulatory environment in other countries before increasing the scope of this pilot program.”

USCIB letter on air cargo security

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