By Eva Hampl
The EU Commission finally released its report on the online public consultation on investment protection and investor-state dispute settlement in the Transatlantic Trade and Investment Partnership, but it is disappointing that negotiations on an investment chapter in TTIP have yet to resume, writes Eva Hampl in Investment Policy Central.
Read the full post: http://www.investmentpolicycentral.com/content/investment-protection-ttip-one-step-forward-two-steps-back
The OECD recently published the latest edition of its flagship report “Going for Growth,” which assesses countries’ progress in implementing structural policies since 2013, and also identifies new priorities to revive growth. The OECD’s Going for Growth analysis forms the basis of the OECD’s wider contribution to the G20 Framework for Strong, Sustainable and Balanced Growth and to G20 National Growth Strategies.
Highlights from this year’s report include:
The Business and Industry Advisory Committee to the OECD Economic Policy Survey 2014, released last May, was a major business contribution to the formulation of the OECD’s Going for Growth report.
The Financial Times has published a letter from the head of the International Chamber of Commerce forcefully rebutting some of the more widespread canards, circulating in Europe and elsewhere, concerning investor-state dispute settlement (ISDS). (See below for the full text of the letter.)
ISDS provisions provide for the referral of disputes between foreign investors and host governments to neutral tribunals, rather than local courts, in cases of expropriation or other government actions that impact a company’s investment. Strong ISDS rules have been developed over the years via numerous European, U.S. and other trade and investment agreements as a way to promote cross-border investment, by providing a measure of certainty in investment decisions that might otherwise be lacking.
ISDS has emerged as a major lightning rod for opponents of the Transatlantic Trade and Investment Partnership (TTIP), which seeks to remove many remaining barriers to cross-border commerce between the United States and the European Union.
In his letter, ICC Secretary General John Danilovich said that “too much of the recent European debate on investor-state dispute settlement (ISDS) has been driven by hearsay, superstition and myth,” and that anti-ISDS fervor has been largely motivated by misplaced anti-Americanism. Sixty percent of recent ISDS cases worldwide, he noted, were launched by European investors.
“A gold-standard agreement in TTIP,” Danilovich wrote, “could play a central role in fostering improved conditions for a much-needed expansion of global investment flows.”
Financial Times
February 9, 2015
Letters
Ditching investor-state dispute settlement may come at quite a cost
Sir, John Kay is no doubt correct to conclude that excluding investment protection standards from the Transatlantic Trade and Investment Partnership would make it “much easier” to sell the proposed deal to a sceptical European public (“Free trade should not put democracy in the dock”, February 4). But would this be the right thing to do?
While greater public engagement in trade policy making is welcome, too much of the recent European debate on investor-state dispute settlement (ISDS) has been driven by hearsay, superstition and myth. Professor Kay shows that even the most reasoned commentators can fall into this trap, casually depicting big — “predominantly American” — businesses as rapacious users of ISDS.
The facts tell a different story: ISDS cases remain relatively rare and almost 60 per cent of claims filed over the past five years have been made by European investors. The importance of fact-based policy making is emphasised by the global dimension to the TTIP talks. Estimates may vary about the economic value of a transatlantic investment pact, but it would be short-sighted to ignore the negative precedent that a weak or non-deal would set for future negotiations.
By contrast, a gold-standard agreement in TTIP could play a central role in fostering improved conditions for a much-needed expansion of global investment flows. Prof Kay would be well advised not to lose sight of this broader perspective: ditching ISDS from TTIP might be the easy thing to do, but it may come at quite a cost in the long run.
John Danilovich
Secretary General,
International Chamber of Commerce,
Paris, France
View this letter on the Financial Times website (paid login may be required)
In order to stimulate inward investment, investors must be treated fairly and protected against the arbitrary behavior of host states. Open, transparent and non-discriminatory investment policies and agreements are a must. In this context, Investor-State Dispute Settlement (ISDS) is an indispensable part of a fair, efficient investment protection system. It provides for a neutral and high-quality legal dispute resolution mechanism in cases of investment treaty breaches by host states.
In light of the current anti-trade sentiment criticizing the ISDS system, USCIB and its global network including the Business and Industry Advisory Council to the OECD believe that it is crucial that the discussion is put back in the right perspective and that common misrepresentations are effectively addressed. The OECD, as an internationally recognized forum for fact-based and objective analysis, and with a long track record of fostering open, transparent and non-discriminatory investment policies, should play an important role in providing objective analysis, thus helping to shape further understanding about the issues that are at stake. The BIAC paper on ISDS contains concrete proposals for future OECD analysis in this area.
USCIB has been a strong advocate for ISDS, and Shaun Donnelly, vice president for investment, trade and financial services, has been travelling around Europe making the case for a strong Trans-Atlantic Trade and Investment Partnership and explaining the importance of ISDS provisions in that and other international trade agreements.
OECD public consultation meetings on the Base Erosion and Profit Shifting (BEPS) Project took place in Paris from January 21-23, 2015, where a number of key issues for business including Permanent Establishment (PE) Status (BEPS Action 7), Treaty Abuse (BEPS Action 6), Low Value-Adding Services (BEPS Action 10), and Dispute Resolution (BEPS Action 14), were addressed among business governments and NGOs.
BEPS refers to the G20/OECD initiative designed to rewrite global tax rules to prevent incidences of perceived under- or non-taxation of international companies.
At the consultations, BIAC Tax Committee Chair Will Morris emphasized the absolute importance of effective dispute resolution to a successful outcome for the BEPS Project. He also underlined the need for clarity in guidance regarding all BEPS outcomes. February consultations will address Interest Deductions (Action 4) and VAT B2C Guidelines (Action 1).
Carol Doran Klein, USCIB’s vice president for international tax counsel, participated in the OECD Public Consultation, representing U.S. business interests in BIAC’s work.
In support of its strategy to deepen developing countries’ engagement in the BEPS Project, OECD will also be organizing regional consultations during February and March in Peru, Korea, Turkey, Gabon and South Africa. BIAC is submitting written responses to all BEPS Discussion Drafts.
Keynote Speaker Confirmed:
R. Gil Kerlikowske
We are pleased to announce that Gil Kerlikowske, Commissioner of U.S. Customs and Border Protection, will be a keynote speaker at the ICC and USCIB Customs and Trade Facilitation Symposium from February 22 to 24 in Miami, Florida. As commissioner, Kerlikowske oversees the dual U.S. Customs and Border Protection mission of protecting national security objectives while promoting economic prosperity and security. His insights into international customs operations will be invaluable at the event.
R. Gil Kerlikowske was nominated by President Obama and sworn in on March 7, 2014 as Commissioner of U.S. Customs and Border Protection taking the helm of the 60,000-employee agency with a budget of $12.4 billion. As Commissioner, he runs the largest federal law enforcement agency and second largest revenue collecting source in the federal government. Most recently, he served as Director of the White House Office of National Drug Control Policy.
Mr. Kerlikowske brings four decades of law enforcement and drug policy experience to the position, including as Chief of Police for Seattle, Washington; as Deputy Director for the U.S. Department of Justice, Office of Community Oriented Policing Services; Police Commissioner of Buffalo, New York; and in the police department in St. Petersburg, Florida.
ICC and USCIB Customs & Trade Facilitation Symposium:
Finding Solutions to Cross-Border Challenges
February 22-24, 2015
The Four Seasons Hotel | Miami, Florida, USA
Limiting cross-border friction is increasingly vital to smooth the flow of trade and boost competitiveness for all business, especially for small and medium sized companies and emerging industry sectors. This conference brings business, government, international organizations and operational customs and trade experts together from the world over for an important dialogue on the most effective means to ease the movement of goods and services between countries along supply chains.
Topics Will Include:
If you wish to register via fax or email, please click here for the registration form.
For questions please contact Diana Jack at djack@uscib.org or (202) 617-3156.
For information on how you can become a sponsor contact Abby Shapiro at ashapiro@uscib.org or (617) 515-8492.
The 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 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.
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.
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.
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.
By Jerry Cook, HanesBrands, Chair of USCIB’s Customs & Trade Facilitation Committee
“A new year means new opportunities, especially in the trade world. With the recently resurrected World Trade Organization Trade Facilitation Agreement seemingly back on track, and Trans-Pacific Partnership close to completion, 2015 should be the year of trade.”
Read the full column at American Shipper.
USCIB and member representatives met with officials from the Organization of Economic Cooperation and Development (OECD) on January 22 at USCIB’s New York office to give feedback on the OECD’s New Approach to Economic Challenges (NAEC), aimed at updating the organization’s instruments and policy analyses.
USCIB President and CEO Peter Robinson met with the main authors of the NAEC report, Mathilde Mesnard and William Hynes, along with member representatives from Citigroup, Wells Fargo and JPMorgan Chase.
The informal meeting gave USCIB an opportunity to provide member feedback and concerns at this stage of the NAEC project.
USCIB is the American affiliate of the Business and Industry Advisory Committee to the OECD (BIAC), which acts as the voice of business in the OECD and has provided structured input to the NAEC project.
The OECD’s final synthesis report on its NAEC work will be delivered to OECD ministers in June 2015.
On Tuesday, January 13, the EU Commission released its final report on the online public consultation on investment protection and investor-state dispute settlement (ISDS) in the Trans-Atlantic Trade and Investment Partnership (TTIP). In response, USCIB issued a press release noting the importance of a strong investment chapter including ISDS in the agreement. USCIB also played a leading role in pulling together a group of 15 major business groups on both sides of the Atlantic to issue a joint statement that same day.
The commission launched the consultation in response to public concerns about whether the EU’s proposed approach for TTIP would achieve the right balance between protecting investors and safeguarding the EU’s ability to regulate in the public interest.
The commission – which issued a consultation questionnaire about 12 issues concerning investment protection and ISDS in TTIP – had received a total of nearly 150,000 replies by the July 13 deadline, with the vast majority (around 145,000, or 97%) submitted through various online platforms with pre-defined answers. Most replies were skeptical of investor protections and ISDS. In addition to these mass-produced responses, there were also submissions from more than 3,000 individual citizens, and about 450 organizations, including USCIB.
According to the report, the commission received responses in three broad categories: statements indicating opposition or concerns to TTIP in general, concerns or opposition with regard to investment protection and ISDS in TTIP, and specific views in relation to the various aspects presented under each question, often accompanied by concrete suggestions for the way forward.
“The commission has not made a clear recommendation on how to move ahead with the negotiations,” said Eva Hampl, USCIB’s Director for Investment, Trade and Financial Services. “That suggests the volume of responses opposing investor protections in TTIP has not gone unnoticed.”
Instead of prescribing a concrete way forward, the commission merely noted four areas where they urge further improvements to be explored:
“Though not unexpected, the Commission report confirms that TTIP, particularly for investment and ISDS, will continue to be an uphill battle,” said Hampl.
USCIB submitted comments in support of an ambitious investment chapter including strong investor protection and ISDS representing the views of the U.S. business community. USCIB also signed a joint statement with other U.S. and EU business associations upon the release of the report.
A high standard investment chapter including ISDS is crucial to a successful TTIP, and both the EU and the U.S. stand to gain significantly from a concluded agreement.