Competitiveness and Innovation Archives

Inclusive Growth in Asia-Pacific: USCIB Rolls Out 2015 APEC Agenda

Published on January 26, 2015

4942_image002The Asia-Pacific Economic Cooperation (APEC) forum is the most influential high-level dialogue in the region. APEC convenes heads of state, business leaders and economic experts from 21 Pacific-Rim economies to share their views on how to promote free trade, innovation, growth and integration in the region.

The Philippines is the 2015 host economy, and it has organized APEC’s three Senior Officials’ Meetings and the APEC CEO Summit around the theme of “Building Inclusive Economies, Building a Better World.”

USCIB will be representing American business interests at the APEC meetings throughout the year. With our global network that includes the International Chamber of Commerce (ICC), the International Organization of Employers (IOE), and our membership in the U.S.-APEC Business Coalition, USCIB is uniquely positioned to give its members access to the policy dialogues taking place in one of the most dynamic regions of the world.

USCIB issued its “2015 APEC Priority Issues and Recommendations” in November outlining our longstanding and overarching objectives of promoting open markets, competitiveness and innovation, sustainable development and corporate responsibility. Covering a wide range of issues from chemical regulations to trade facilitation to women in the economy, USCIB will work to advance our APEC priorities throughout the Philippines host year.

USCIB Participation in APEC

SOM1 – Clark, Philippines

USCIB members will travel to Clark to attend the APEC Chemical Dialogue (CD), a forum for regulatory officials and industry representatives seeking to advance regulatory dialogue on the chemicals trade and achieve environmental protection while minimizing costs to business. Helen Medina, USCIB’s senior director for product policy and innovation, was scheduled to attend the summit but was unable to due to inclement weather in New York. She will attend the CD during SOM3, and will continue to review APEC’s ongoing efforts to promote regulatory cooperation in the APEC economies.

SOM2 and Meeting of the Ministers Responsible for Trade – Boracay, Philippines

USCIB is advancing work on global value chains within the Asia-Pacific, working with Ed Brzytwa, director for APEC affairs at the office of the United States Trade Representative, in supporting the U.S. government’s efforts to address barriers to trade and investment.

USCIB is also coordinating with ICC to issue a statement on localization barriers to trade urging APEC economies to adopt alternative policies that will enhance their competitiveness and attract foreign direct investment.

SOM3 – Cebu, Philippines

Kristin Isabelli, USCIB’s director of customs and trade facilitation, will attend a the meeting of the APEC Sub-Committee on Customs Procedures to share the private sector’s vision on the benefits of implementing guidelines that would streamline cross-border trade among APEC economies. Isabelli is also the private sector chair of the APEC Virtual Customs Business Working Group.

CEO Summit – Manila, Philippines

This is the fifth year that USCIB President and CEO Peter Robinson will attend the APEC CEO Summit. USCIB will join business representatives from around the world to participate in bilateral meetings with senior officials from APEC economies to relay USCIB’s top priorities and coordinate across industries, sectors and borders.

Key 2015 APEC Events

  • SOM I – Jan  26-Feb 7 (Clark)
  • SOM II – May 10-21 (Boracay)
  • SOM III – Aug 24-Sept 8 (Cebu)
  • Women in the Economy Summit – Sept 16-18 (Manila)
  • Energy Ministerial and Private Sector Dialogue on Energy – Oct 12-14 (Cebu)
  • CEO Summit – Nov 15-17 (Manila)
  • APEC Leaders Meeting – Nov 17-18 (Manila)

Southeast Asia Tanker Hijacks Rose Despite Global Drop in Sea Piracy

Published on January 23, 2015

4944_image002Attacks against small tankers off Southeast Asia’s coasts caused a rise in global ship hijackings, up to 21 in 2014 from 12 in 2013, despite piracy at sea falling to its lowest level in eight years, the International Chamber of Commerce (ICC) International Maritime Bureau (IMB) has revealed. Pirates took 442 crewmembers hostage, compared with 304 in 2013.

IMB’s annual piracy report shows 245 incidents were recorded worldwide in 2014 – a 44% drop since Somali piracy peaked in 2011. Somali pirates were responsible for 11 attacks, all of which were thwarted. However, IMB warns shipmasters to follow the industry’s Best Management Practices, as the threat of Somali piracy has not been eliminated.

Worldwide, 21 vessels were hijacked last year, 183 were boarded, and 13 fired upon. Pirates killed four crewmembers, injured 13 and kidnapped nine from their vessels.

“The global increase in hijackings is due to a rise in attacks against coastal tankers in Southeast Asia,” said Pottengal Mukundan, director of IMB whose Piracy Reporting Centre has monitored world piracy since 1991. “Gangs of armed thieves have attacked small tankers in the region for their cargoes, many looking specifically for marine diesel and gas oil to steal and then sell.”

Citing the death of one crewmember shot on his bitumen tanker in December, the IMB report highlights the possibility of the hijackings becoming increasingly violent. Most of the 124 attacks in the region were aimed at low-level theft from vessels using guns and long knives.

IMB offers the latest piracy reports free of charge. To request a PDF version of the report by email, please click here.

More on the ICC website.

 

USCIB Urges WHO to Take Full Advantage of Private-Sector Engagement

Published on January 22, 2015
World Health Organization Headquarters, Geneva.
World Health Organization Headquarters, Geneva.

The sheer scale of global health challenges, such as the recent Ebola crises and the growing incidences of non-communicable diseases which are responsible for 60 percent of the world’s premature deaths, require everyone to be on board to address world health.

The World Health Organization (WHO), the United Nations public health arm, recently issued a framework document on its engagement with non-state actors, the “NSA Framework”. USCIB and other associations are concerned that the framework is too stringent, as it would limit the WHO’s ability to fully benefit from the private sector’s practical expertise, resources and research.

Joining six other business associations whose memberships span every sector in every region of the world, USCIB signed a letter to U.S. Department of State officials highlighting the importance of strengthening private sector engagement with the WHO. The NSA Framework suggests that close engagement with the private sector would lead to conflicts of interest. Such concern is misplaced, as USCIB’s letter states:

“[T]he NSA Framework suggests that WHO engagement of private sector actors raises a unique potential for conflicts of interest, a premise that disregards the wide set of motives, including financial incentives, that drive NGO activity. In truth, engagement of for-profit entities and their representatives carries with it an inherent degree of transparency of interests that is not necessarily available regarding the motivations and interests of NGOs. Just as importantly, an examination of the motives of non-state actors is simply not necessary to an evidence-based review of the facts those actors may raise to the WHO’s attention.”

BusinessEurope, an association representing businesses in the European Union, sent a letter to EU representatives expressing similar concerns about the WHO’s NSA Framework.

Norine Kennedy, USCIB’s vice president for international engagement, energy and environment, added: “In an era where health crises become increasingly international, such as the recent Ebola outbreak, the WHO can only make full use of its leadership and resources by making global health responses a multi-stakeholder initiative in which the private sector has a vital role going forward.”

USCIB Looks Ahead to Int’l Conference on Chemicals Management

Published on January 10, 2015
Helen Medina (USCIB) speaks at the second meeting of the Open-Ended Working Group of ICCM in Geneva on December 16. (Credit: International Institute for Sustainable Development)
Helen Medina (USCIB) speaks at the second meeting of the Open-Ended Working Group of ICCM in Geneva on December 16. (Credit: International Institute for Sustainable Development)

Central to the modern economy, chemicals are traded widely across borders and are used in the production of thousands of different products, from pharmaceuticals to computer microchips.

The International Conference on Chemicals Management (ICCM) is an inter-governmental ministerial that convenes UN member delegates and stakeholders for discussions on chemicals management. Adopted by the International Conference on Chemicals Management (ICCM) in 2006, the Strategic Approach to International Chemicals Management (SAICM) is a policy framework aimed to foster the safe and sound management of chemicals.

In December, Helen Medina, USCIB’s senior director for product policy and innovation, attended the Second Open-Ended Working Group of ICCM in Geneva to represent American business interests in the lead-up to the next ICCM ministerial, scheduled to take place in late September 2015.

Approximately 335 delegates attended the working group, representing 105 governments, five UN agencies, 12 intergovernmental organizations, and 38 non-governmental and industry organizations. At the meeting USCIB shared its concerns about SAICM’s Chemicals in Products program (CiP), a voluntary initiative designed to give guidance on how to share relevant information on chemicals in products along the supply chain and throughout their life cycle. Industry representatives argued that elements of the CiP draft text were too prescriptive, and that efforts should be made to make the document more attractive to business.

USCIB will continue to monitor work on SAICM and provide regular updates to members. Medina will attend the fourth International Conference on Chemicals Management in September 2015.

Full House ICC Conference Elucidates New EU Rules on Genetic Resources

Published on January 8, 2015

4926_image002The International Chamber of Commerce (ICC) hosted a conference in Paris on November 24 and 25 which shed light on the new European Union (EU) regulation regarding Access and Benefit-sharing (ABS). ABS refers to the way in which genetic resources such as plant and animal products may be legally accessed, and how users and providers reach agreement on the fair sharing of the benefits that arise from the use of these products.

The United Nations Convention on Biological Diversity concluded the Nagoya Protocol in 2010, which provides an international framework for establishing national regimes on ABS.

Featuring a panel of high-level speakers representing government agencies and the private sector, ICC’s sold-out event brought together executives and policymakers to discuss how the new regulation affects their daily operations. The two-day conference convened over 120 participants from 16 countries representing a wide variety of sectors including cosmetics, pharmaceuticals, biotechnology, plant and animal breeding, collections and museums, as well as government representatives.

“It is very important to get to know better the new EU regulation as it may affect any professional involved in the manufacturing, development and distribution of genetic resources,” said Alicja Kozlowska, ABS policy officer of the European Commission.“The conference was a unique opportunity to throw some light on the scope of the obligations flowing from the regulation.”

The first day of the event featured an overview of the new EU ABS regulation covering topics such as scope and due diligence requirements under national and international regimes.The second day featured a program of technical workshops on tools to facilitate compliance, as well as commercialization and transactions with customers and licensees inside and outside the EU. Afternoon sessions highlighted industry best practices with panelists who shared their best practices.

ICC played an active role coordinating business participation in the Nagoya Protocol negotiations and continues to coordinate business input in the process of national implementation of the protocol.

 

USCIB Assails UKs Catch-22 Move to Tax Non-Resident Companies

Published on December 15, 2014

competitiveness2New York, N.Y., December 15, 2014 – The United States Council for International Business (USCIB) condemned proposed UK rules to impose a new tax on so-called “diverted profits,” saying the measure would, if implemented, have a major impact on U.S.-based multinational companies.

The rules, contained in UK Chancellor of the Exchequer George Osborne’s Autumn Statement, propose a new tax on diverted profits. Among other things, the proposed rules would impose a new tax on non-resident companies selling goods and services to UK customers by penalizing non-resident companies for avoiding a UK permanent establishment (“PE”).

“The UK’s proposal jumps the gun on ongoing discussions concerning the scope of taxation rights on non-resident companies,” said USCIB Vice President and International Tax Counsel Carol Doran Klein. “USCIB believes that the UK’s unilateral assertion of the right to tax so-called diverted profits is an undisguised attempt to bring more tax revenue into the UK, whether consistent with international norms or not.”

Klein said the UK move would undercut discussions in the 34-nation Organization for Economic Cooperation and Development (OECD) to develop rules on base erosion and profit shifting (BEPS). The BEPS project, which seeks to address growing concerns over non-taxation of certain cross-border operations and transactions by multinational firms, is examining a wide range of international tax rules, including those on permanent establishment.

“The goal of the multilateral discussions on BEPS is to reach consensus solutions to identified international tax issues,” Klein stated. “Unilateral assertions of taxing jurisdiction by any countryincrease the risk that other countries will simply abandon the process and act unilaterally. Such actions increase the likelihood of double taxation on companies, which will have a negative effect on cross-border trade and investment.”

The diverted profits tax PE rule would apply if a non-UK resident is: carrying on activity in the UK in connection with supplies of goods or services made by the non-resident company to customers in the UK without becoming subject to the UK corporate income tax;the UK tax authorities believe the non-resident is deliberately trying to avoid PE status; the non-resident’s total tax is reduced; and the company is large (sales of more than 10 million pounds in the UK).

This proposal would greatly expand UK taxing rights of non-resident companies that currently do not have sufficient presence in the UK to be subject to the regular corporate income tax, according to Klein. “Because the diverted profits tax applies when a UK nonresident does not have a PE and is imposed at a higher rate, companies will be encouraged to increase their UK presence to become subject to the regular corporate income tax,” she said. “That is, they would increase investment within the UK to pay more tax at the regular rate or pay the diverted profits tax at the higher rate on profits that will be subjectively determined by HMRC. That’s the Catch-22. “

Klein said the proposal would clearly override existing tax treaties and cause harmful double taxation. “It is intended to apply when there is no PE under the relevant rules,” she said. “Companies should be free to structure their affairs taking into account the rules as they are. If they do not have a PE under those rules, then they should not be subject to tax on their business profits. Countries should not be able to disregard agreed-upon rules simply because they do not like the outcome.

About USCIB:

USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world. With a unique global network encompassing the International Chamber of Commerce, the International Organization of Employers and the Business and Industry Advisory Committee to the OECD, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More at www.uscib.org.

More on USCIB’s Taxation Committee

Business Fully Engaged at 2nd International Nutrition Conference

Published on November 21, 2014

ICN2_BannerThe Second International Conference on Nutrition (ICN2) wrapped up on Friday, ending an inter-governmental conference aimed at addressing the twin global threats of malnutrition and obesity as governments pledged to align national policies with nutrition objectives.

USCIB attended the conference, organized by the United Nations Food and Agriculture Organization and World Health Organization at the FAO headquarters in Rome from November 19 to 21, as part of a private sector delegation of over 90 people from more than 20 countries. USCIB and member companies were on the ground in Rome to make the case for the positive role the private sector plays in nutrition and agriculture.

USCIB, along with the International Agri-Food Network, developed a list of key private sector messages that were delivered during the ICN2 plenary:

Private Sector Key Messages

Nutrition & ICN2 meeting 19-21 November 2014

Addressing Nutrition Globally

  • Furthering nutritional goals depends on agricultural production and access, particularly to address the needs of women, children and the most vulnerable.
  • Good nutrition promotes broad-based, diverse diets and provides consumer choice.
  • Innovation, research, and education are essential to accelerating nutritional improvements.

Taking Action

  • The private sector is necessary to increase the scope of financial and human resources in order to tackle nutritional challenges on a large scale.
  • Expanding trade raises the standard of living in developing countries and improves the performance of national economies, which are necessary for combating global hunger.
  • Empowering women is crucial for improving nutrition, so governments should promote policies that help women become farmers, traders and entrepreneurs.

Private Sector Engagement is Essential

  • At ICN2, the private sector delegation included 90 private sector representatives from 24 countries.
  • The private sector appreciates the support of member-states in encouraging the participation of non-state actors in ICN2 and encourages future plans to engage them in action plans.
  • The private sector is committed to public-private partnerships that support public health strategies.
The Second International Conference on Nutrition took place at the FAO headquarters in Rome from November 19 to 21
The Second International Conference on Nutrition took place at the FAO headquarters in Rome from November 19 to 21

“The private sector is an important ally in fighting hunger and malnutrition, therefore the FAO is committed to strengthening its partnership with private sector,” said FAO Director General Jose Graziano da Silva. “There is a need for improved nutrition and coordination across sectors. This needs to be done in dialogue with non-state actors including the private sector.”

On November 18, Helen Medina, USCIB’s senior director for product policy and innovation, chaired a side-meeting with government officials – Kevin Concannon, undersecretary for food, nutrition and consumer services at the U.S. Department of Agriculture; Ambassador Peter McGovern, Canada’s ambassador to Italy; and Lois Brown, Canadian Parliamentary Secretary to the Minister of International Cooperation.

“The meeting was friendly,” Medina said. “The private sector shared its main messages while government officials reiterated how pleased they were to see a big private sector delegation at ICN2.”

Throughout the conference Medina and other private sector representatives engaged with delegates to promote business’s positive role in the nutrition space. Many governments supported business’s engagement in the dialogue.

During the plenary, discussion was intense over how the agriculture and food systems should address obesity. Speakers stressed the importance of reducing salt, sugar and fat in people’s diets, as well as reducing processed foods. Malnutrition received less attention.

The conference ended with participants agreeing that there is a clear need for a whole of government approach to nutrition. In particular, ICN2 has underscored that it is crucial to have policy coherence the health and agriculture agencies to deliver action on the nutritional challenges of each nation. Thus far, there has been a no coordinated approach on nutrition.

Looking ahead, there will be a push to include more nutritional targets in the UN’s Post-2015 Development Agenda and in the Sustainable Development Goals. USCIB will continue to work with the International Agri-Food Network to ensure that its members can engage with the FAO and relevant UN agencies as the ICN2 recommendations move forward.

Improving nutrition is a collective business (FAO)

Staff contacts: Helen Medina

More on USCIB’s Food and Agriculture Working Group

More on USCIB’s Product Policy Working Group

ICC Warns Against Double Taxation in BEPS Action Plan

Published on November 4, 2014

4879_image002The International Chamber of Commerce (ICC) has expressed concern that the Organization for Economic Co-operation and Development (OECD) Action Plan on combating Base Erosion and Profit Shifting (“BEPS”), mandated by the G20, may inadvertently incur severe collateral damage on compliant taxpaying companies of all sizes as a result of well-meaning measures undertaken unilaterally by states to mitigate double-non-taxation.

While ICC fully supports the BEPS Action Plan and actively engages with the OECD and the UN on the issues at hand, concern was raised during back-to-back meetings with the United Nations (UN) Committee on International Cooperation in Tax Matters at UN Headquarters in Geneva last week.

Stressing that taxation systems should be sound and stable – to encourage transparency, efficiency and predictability and to incentivize long-term investment, job creation and economic growth – ICC advises governments and policymakers to take the following into consideration:

  1. ICC strongly believes that several of the 15 BEPS Action Points are interdependent and recommends an overall perspective and coordination of the various recommendations – including the 2014 deliverables of Phase 1 in Phase 2 of the project.
  2.  ICC calls for a coordinated implementation of the combined deliverables of the G20/BEPS project on a multilateral basis with a consensus approach in order for the solutions to be consistent and uniformly applied on an international level. ICC therefore cautions against implementation of domestic tax legislation through unilateral and divergent actions which risk leading to disparate rules, increased complexity and double taxation.
  3. ICC urges mitigating the increased unavoidable and foreseeable risk of double taxation via a solid dispute resolution mechanism, with mandatory agreements forcing competent authorities to agree on how to tax certain transactions, or simplified, how to split the ‘tax cake.’

ICC strongly opposes tax fraud and tax evasion but warns that it is crucial to distinguish these illegal activities from the use of lawful methods of tax planning and tax management, provided they are aligned with commercial and economic activities.

More on ICC’s website.

Staff contact: Carol Doran Klein

More on USCIB’s Taxation Committee

ICC Hails Progress on Automatic Exchange of Information Agreement

Published on October 30, 2014

The International Chamber of Commerce has welcomed an agreement reached this week by over 90 countries to automatically swap tax information, describing the step towards achieving transparency in this area as an important milestone for the international tax reform agenda. The new OECD/G20 standard on automatic exchange of information was endorsed in Berlin yesterday by all OECD and G20 countries as well as major financial centers participating in the annual meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes. More than 50 countries additionally agreed to put exchange systems in place by the year 2017.

More on the ICC’s website

Staff contact: Carol Doran Klein

More on USCIB’s Taxation Committee

BIAC Welcomes FTA Focus on Eliminating Double Taxation

Published on October 28, 2014

Participants to the OECD Forum on Tax Administration (FTA) meeting on October 23 and 24 in Dublin agreed that ever-greater cooperation is necessary to implement the results of the OECD’s project on Base Erosion and Profit Shifting (BEPS) and Automatic Exchange of Information.

The Business and Industry Advisory Committee (BIAC) to the OECD welcomed the opportunity to attend part of the FTA, which gathers tax commissioners from more than forty countries, enabling them to identify, discuss and influence relevant global trends and develop new ideas to enhance tax administration around the world. BIAC engaged with the FTA on the issue of improving tax control frameworks.

Will Morris, chair of the BIAC Tax Committee, noted: “We very much welcome the commitment of the tax authorities present to improve the Mutual Agreement Procedure for resolving tax disputes. This shows that the OECD and FTA remain focused on continuing to eliminate double taxation, as well as on preventing double non-taxation. We also welcome the continued emphasis on the cooperative compliance program. One of the best ways of preventing base erosion and profit shifting is by building trust between tax authorities and taxpayers, and that is exactly what cooperative compliance does. This was a positive and very useful meeting.”

USCIB, BIAC and the OECD organize an annual tax conference, the most recent of which took place in June, which reviews the OECD’s work on BEPS, under which governments are seeking to curtail what they perceive as growing under-taxation of international corporate income.

Staff contact: Carol Doran Klein

More on USCIB’s Taxation Committee