Growth, Jobs and Open Markets Archives

USCIB Voices China Tariffs Concerns in Coalition Letter

Published on January 14, 2019

USCIB, as member of the Americans for Free Trade Coalition, signed a letter to Capitol Hill welcoming the 116th Congress and urging congressional members to consider the costs of the trade war on their home districts and states and to exercise their oversight role in trade policy matters. The Coalition is comprised of approximately 150 organizations representing U.S. manufacturers, farmers, retailers and consumers.

“The 116th Congress is beginning during a period of unprecedented economic growth and job creation, yet continued prosperity is not a foregone conclusion. We share the broadly-held concern about the impact to the U.S. economy of the Section 301 tariffs on imports from China, Section 232 tariffs on steel and aluminum imports and corresponding retaliation against U.S. exports,” the Coalition stated in the letter.

The letter emphasized that Americans have built global supply chains that reflect the U.S. economy’s strengths and those of its trading partners. These supply chains have made the U.S. economy even more dependent upon relationships with key economic and strategic allies than ever before.

“The strength of the U.S. is economy relies on these very complex supply chains, which cannot simply be shifted overnight,” said Eva Hampl, who leads USCIB’s work on China. “These sweeping tariffs are purposefully causing a disruption, negatively impacting the U.S. economy.”

 

US Tax Reform One Year Later

Published on January 14, 2019

Carol Doran Klein, USCIB vice president and international tax counsel, was featured in a new report by Freshfields Bruckhaus Deringer LLP “Four Big Questions on U.S. Tax Reforms,” which assesses the implications of the Tax Cuts and Jobs Act.

Doran Klein weighed in by providing her perspective on the future of BEAT (Base-Erosion and Anti-Abuse Tax), an anti-avoidance measure that targets multinational groups with a significant U.S. presence, effectively applying a 10 percent minimum tax for taxable income adjusted for certain types of payments made by U.S. corporations to related non-U.S. corporations.

In her interview for the report, Doran Klein noted that the BEAT does not respect the arm’s length standard for transfer pricing, which is the internationally accepted principle in the OECD Model Tax Convention (the guidance underpinning the bilateral tax treaties of OECD members), or advance pricing agreements (APAs).

“One might argue that BEAT would violate existing principles because it doesn’t matter whether you have an APA or whether the payment is otherwise considered to be arm’s length, BEAT would effectively disallow a share of the deduction,” said Doran Klein. “However, the U.S. government could argue that it’s no longer clear whether the international accepted standard should take into account the arm’s length nature of the payments because Action 4 of the BEPS Action Plan concerning limitations on the deductibility of interest payments doesn’t actually rely on the arm’s length principle.”

 

USCIB Issues Recommendations for WTO Modernization

Published on January 14, 2019

As World Trade Organization (WTO) member governments move forward this year with efforts to reform the WTO, USCIB issued recommendations on how business can support the WTO and its efforts to improve the organization.  USCIB’s recommendations also noted the importance of the WTO as a cornerstone of the global rules-based trading system that has helped spread growth and development for decades.

USCIB recommendations focused on addressing subsidies and other market-distorting support provided to state-owned enterprises (SOEs), the establishment of new rules for current issues such as digital trade and customs processes on electronic transmissions, and ensuring a properly functioning appellate body, among others.

“Our recommendations for modernizing the WTO should not in any way be read as questioning the business support for WTO,” said USCIB Senior Vice President Rob Mulligan. “Instead, they are intended to highlight areas for action that would strengthen the ability of the organization to more effectively meet the demands of a changing world as it deals with the rapid evolution of technology that can quickly reshape the way companies do business and operate globally. USCIB believes that effective WTO dispute settlement is a critical part of the global rules-based trading system.”

USCIB’s recommendations also urged Member States, as they continue to discuss modernization and improvements of the WTO and its underlying agreements, to be mindful that among the WTO Member States, private entities conduct the transactions that constitute trade and investment.

“The private sector has a direct stake in the rules that will be the outcome of the government-to-government discussions and, accordingly, private sector comments and recommendations should be actively solicited and given careful consideration by the Member States,” added Mulligan.

Donnelly Stresses Need for US Commercial Diplomacy

Published on January 9, 2019

The January-February edition of The Foreign Service Journal, which examines economic diplomacy from many angles—and from all over the world, included a piece from USCIB Vice President Shaun Donnelly, who is a former U.S. Ambassador. Donnelly’s piece “Secretary of State Mike Pompeo has made commercial diplomacy a foreign policy priority. Here’s how to get it right,” was co-authored with Daniel Crocker, a foreign commercial service vice president on the governing board of the American Foreign Service Association.

Donnelly and Crocker outline six critical elements in an effective U.S. economic/commercial diplomacy program, including that top leaders must be personally involved and that American business has a broad agenda in today’s and tomorrow’s global economy.

“As American companies compete to grow, prosper and win, they will need support from the government across a much wider agenda: services, regulatory coherence, license arrangements, international joint ventures, supply chain relationships, inward investment to the United States and outward investment by U.S companies to foreign markets,” Donnelly and Crocker note in the article. “A truly supportive, comprehensive “Team USG” approach to support our companies will have to be able to address that full range of issues.”

Three fundamental realities underline the importance for our country of an effective economic/commercial diplomacy program. First, more than 80 percent of global purchasing power now lies outside the United States, including several large emerging markets with annual gross domestic product (GDP) growth rates that are double our own, or more. Second, it’s an ultra-competitive world; in all key sectors, American companies face broader, deeper and more aggressive foreign competitors, some of whom promote their standards, military platforms and state-subsidized or state-owned companies for both commercial and political gain.

US-China Trade: Hampl Speaks With BBC Radio

Published on January 8, 2019
USCIB’s Eva Hampl

As talks between the United States and China aimed at de-escalating their tariff war ended their first day, USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl spoke with BBC World News on what American business wants out of the negotiations.

Hampl said the business community wants to see progress on fundamental market-access concerns they face in China, and would be disappointed with more cosmetic takeaways from the talks. But she warned that the Trump administration’s strategy of applying tariff pressure across the entirety of U.S.-China trade could prove counter-productive.

“We see this as a very heavy-handed approach” said Hampl. “We would prefer a more targeted approach to address the underlying issues of IP and forced tech transfer.”

Click here to listen to the full report on the BBC website.

USCIB Outlines Priorities for Trade Agreement With Japan

Published on January 2, 2019
USCIB submitted comments to USTR outlining negotiating objectives for a U.S.-Japan Trade Agreement
Japan is currently the fourth largest goods trading partner of the U.S.

 

USCIB submitted comments in late 2018 to the United States Trade Representative (USTR) outlining negotiating objectives for a U.S.-Japan Trade Agreement. USCIB supports negotiation of a comprehensive trade agreement with Japan 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 outlined its priority issues, which include digital trade, intellectual property, media and entertainment services, investment, customs and trade facilitation, express delivery services, electronic payment services, regulatory coherence, government procurement and financial services.

Japan is currently the fourth largest goods trading partner of the U.S. and in 2017, Japan was the United States’ fourth largest export market as well. U.S. goods and services trade with Japan totaled an estimated $283.6 billion in 2017, with exports totaling $114 billion. The U.S. also has a surplus in services trade with Japan, totaling $13.4 billion.

“A successful trade agreement with Japan should cover not just market access for goods, but also address important services issues, as well as issues like digital trade and intellectual property,” said USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl. “We look forward to working with the Administration toward a favorable outcome for U.S. business in a U.S.-Japan FTA.”

USCIB welcomed the conclusion of the Trans-Pacific Partnership Agreement (TPP) back in October 2015, noting at the time that a comprehensive, market-opening agreement would provide a significant boost to the United States.  The Administration has released negotiating objectives for a U.S.-Japan FTA, negotiations for which may begin as soon as late January.

USCIB International Business Magazine: Winter 2018 Issue

Published on December 13, 2018

The Winter 2018 issue of USCIB’s quarterly International Business magazine is available here. The issue features a timely column by USCIB President and CEO Peter Robinson titled, “Upholding Human Rights Requires Strong Partnerships.” The issue also features news stories on USCIB’s leadership in promoting food security and nutrition partnerships, the U.S.-China trade conflict, and USCIB’s artificial intelligence priorities, plus news from our global network–Business at OECD, the International Organization of Employers and the International Chamber of Commerce.

“International Business,” USCIB’s quarterly journal, provides essential insight into major trade and investment topics, a high-level overview of USCIB policy advocacy and services, USCIB member news and updates from our global business network.

Subscribe to USCIB’s International Business Magazine

Subscriptions to “International Business” are available free upon request to representatives of USCIB member organizations. Contact us to subscribe.

Non-members may subscribe to “International Business” and other USCIB print publications at an annual rate of $50 (U.S.) for domestic delivery, or $75 for overseas delivery. Contact us to subscribe. USCIB’s annual report, studies from the United States Council Foundation and related publications are included with your paid subscription.

Our free electronic newsletter, “International Business Weekly,” provides regular updates on USCIB’s major activities and priorities. Click here to view a sample issue. Click here to subscribe.

We welcome outside submissions and inquiries regarding our publications – send them to news@uscib.org.

We welcome advertising in International Business magazine — special discounted rates for USCIB member organizations! Contact Kira Yevtukhova (kyevtukhova@uscib.org) for more information.

USCIB in the News: Taxes, Trade and Tariffs

Published on December 13, 2018

USCIB’s voice and views were reflected in many of the top stories of the past several months, which saw a heavy focus on taxes, trade and tariffs. USCIB and its global network were featured prominently in numerous stories covering NAFTA modernization, China tariffs and the OECD’s work on global tax policy.

In October, USCIB CEO and President Peter Robinson contributed a letter to the Financial Times in response to an editorial urging action on the digital divide. In his letter, Robinson noted that “public-private partnerships are indeed needed to broaden access to the internet, and companies are already moving ahead in this regard, in addition to taking action on their own.”

In discussing G20 trade tensions, USCIB Senior Vice President Rob Mulligan sat down with BBC World News to do a live television interview. Mulligan said that Trump is right to address the balance of trade between the U.S. and China, but that tariffs aren’t the answer and will ultimately cause higher prices and job losses.

To read more of USCIB activity in the media, please visit this link.

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.