Growth, Jobs and Open Markets Archives

USCIB Applauds President’s Trade Agenda in SOTU

Published on January 20, 2015

4935_image001New York, N.Y., January 20, 2015 – The United States Council for International Business (USCIB) welcomed President Obama’s commitment to a pro-trade agenda and specifically to Trade Promotion Authority (TPA) in his State of the Union address to Congress this evening. USCIB said its member companies look forward to working with the Administration and the Congress on a bipartisan effort to advance America’s national interests in this key area.

TPA will give the president the necessary authority to negotiate strong U.S. trade agreements, making it easier for the United States to close deals to benefit American workers and companies, and then move trade agreements to Congress for their review and approval.

“Trade is an important tax-free engine for U.S. economic growth and jobs,” said USCIB President and CEO Peter Robinson. “TPA will provide a boost to U.S.-led efforts to open international markets and eliminate trade barriers.”

Robinson continued: “Ambassador Michael Froman and his skilled team of negotiators should not have to negotiate with one hand tied behind their back. The business community is encouraged that the president has committed to move forward on an aggressive trade agenda that will enhance America’s competitiveness, economic growth, and jobs.”

Last week USCIB sent a letter to President Obama urging him to highlight his administration’s trade agenda and to call for passage of TPA. The letter emphasized that a strong, coordinated push from the administration, Congress and the business community is needed to get TPA over the finish line.

USCIB also praised the work being done by the United States Trade Representative Ambassador Froman, leading the charge on TPA and the trade negotiations under way including the Trans-Pacific Partnership with Pacific-Rim countries, the Trans-Atlantic Trade and Investment Partnership with the European Union and the Trade in Services Agreement.

A strong advocate for international trade and investment at home and around the world, USCIB is a member of the Trade Benefits America Coalition steering committee, an organization of American companies and business associations dedicated to getting the facts out about the benefits of TPA and U.S. trade agreements. International trade already supports over 38 million American jobs and TPA can help raise that number even higher.

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 leading international business organizations, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More at www.uscib.org.

Contact:

Jonathan Huneke, USCIB
+1 212.703.5043, jhuneke@uscib.org

USCIB on the TTIP Front Lines

Published on January 20, 2015
4936_image002
USCIB’s Shaun Donnelly addresses a panel with the Styrian regional parliament in Graz, Austria.

Passage of the Trans-Atlantic Trade and Investment Partnership (TTIP), a free trade agreement between the United States and the European Union, would stimulate economic growth and create jobs on both sides of the Atlantic. The agreement has been criticized over the past several months by anti-trade groups, especially over investor protections such as investor-state dispute settlement (ISDS).

To counter this negative messaging, Shaun Donnelly, USCIB’s vice president for investment and financial services, has been traveling around Europe as an American speaker for TTIP on behalf of U.S. embassies, spreading the word about the benefits of a strong, comprehensive, high-standard TTIP for both the United States and the European Union.

Last week, Donnelly visited Austria and Slovenia and participated in speaking engagements, meetings and interviews with government officials, business leaders, journalists and student groups. Anti-TTIP groups refused to speak with Donnelly.

“Austria and Slovenia are among the more ýTTIP-skeptical of EU member states and anti-ISDS fever runs high,” said Donnelly. “Our U.S. embassies in each capital are working hard to get our side of the story out and I was glad to lend a hand with some key audiences.”

USCIB is working with its member companies to mobilize support for TTIP in Europe and is seeking opportunities to promote and explain the business case for TTIP.

EU Publishes Consultation Report on Investment Protections in U.S.-EU Trade Agreement

Published on January 13, 2015

4931_image002New York, N.Y., January 13, 2015 – The United States Council for International Business (USCIB) looks forward to a resumption of negotiations on investor protections in the Transatlantic Trade and Investment Partnership (TTIP) following today’s publication of the EU’s final report on the online public consultation on investment protection and investor-state dispute settlement (ISDS) in the U.S.-EU trade agreement. TTIP negotiations were launched in July 2013, but negotiations on the agreement’s investment chapter have been stalled since early 2014.

As an active advocate for strong investment protections, USCIB hopes that with the publication of this report, productive negotiations on an investment chapter in TTIP can resume.

Following a preliminary report providing a statistical overview of responses, this final report provides the opportunity for the EU to resume negotiation of an ambitious investment chapter in TTIP, armed with a wide variety of stakeholder input as guidance. Nearly 150,000 replies to the consultation included specific views on the thirteen questions posed, as well as statements indicating opposition or concern to investment protection, ISDS and TTIP in general. Without providing specific guidance on the contents of an investment chapter in TTIP, the Commission responded to the various views by outlining four areas in which to explore further improvements.

“Foreign direct investment (FDI) is a cornerstone of economic growth and jobs, and an open investment climate requires policies and agreements that are transparent and non-discriminatory,” said USCIB Director for Investment, Trade and Financial Services Eva Hampl.  “ISDS is an essential component of a predictable and fair system that protects investors against the potentially arbitrary actions of host states. It de-politicizes potential disputes by providing a neutral mechanism of legal dispute resolution.”

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 right and ability to regulate in the public interest.  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.

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 leading international business organizations, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More at www.uscib.org.

 

ICC and WCO Secretaries General Meet to Talk Business and Customs

Published on January 13, 2015
L-R: John Danilovich (ICC), Kunio Mikuriya (WCO) and Norman Shenk (UPS).
L-R: John Danilovich (ICC), Kunio Mikuriya (WCO) and Norman Shenk (UPS).

International Chamber of Commerce (ICC) Secretary General John Danilovich met with World Customs Organization (WCO) Secretary General Kunio Mikuriya at WCO Headquarters in Brussels earlier this week to discuss ways to strengthen the relationship between the world business community and the WCO to facilitate cross-border trade.

Joined by Norman Shenk, chair of the ICC Commission on Customs and Trade Facilitation and UPS vice president of global customs policy and public affairs, Danilovich highlighted the role of the ICC World Chambers Federation in co-administering the ATA Carnet System and cooperating with the WCO in the area of Certificates of Origin.

ICC also supports the WCO with the Business Action to Stop Counterfeiting and Piracy (BASCAP) initiative to stop counterfeited goods at borders and prevent free trade zones from becoming hotspots for illicit trade and organized crime groups.

Discussions included specific challenges that small- and medium-sized enterprises (SMEs) encounter when trading across borders, customs valuation ceilings for goods known as de minimis, rules of origin and the increasing importance of e-commerce and global value chains.

Thanking Mikuriya for making the customs-business cooperation a priority, Danilovich also reaffirmed ICC’s ongoing support for the WCO’s work on trade facilitation and in particular for the implementation of the World Trade Organization (WTO) Trade Facilitation Agreement (TFA) that aims to enhance trade flows.

“Given that the agreement deals almost entirely with Customs-related topics, trade ministries, Customs and business must all be involved at country-level to ensure the TFA’s successful implementation,” Danilovich said.

Mikuriya has emphasized on many occasions that Customs and business are natural allies in trade facilitation. Both he and Danilovich will speak at the upcoming Customs and Trade Facilitation Symposium, hosted by ICC and USCIB in Miami from February 22 to 24.

USCIB Letter to President Obama on U.S. Trade Agenda

Published on January 13, 2015

Ahead of President Obama’s State of the Union address, USCIB sent a letter to the president urging him to highlight the U.S trade agenda and call for passage of Trade Promotion Authority. The letter emphasizes that a strong push from the Administration, Congress and the business community is needed to get TPA over the finish line.

“This year will present opportunities for the U.S. to conclude trade and investment agreements that will ensure that the United States grows its economy, creates jobs and opens markets to U.S. goods and services reaching customers around the world,” wrote USCIB President and CEO Peter Robinson in the letter to President Obama. “TPA would provide a critical boost to achieving these shared goals among U.S. workers, companies and citizens.”

In addition, the Trade Benefits America Coalition, of which USCIB is a member, also sent a letter to House and Senate leadership urging Congress to pass bipartisan legislation to modernize TPA early this year.

The Trade Benefits America Coalition includes a wide range of associations and companies that are dedicated to the pursuit of U.S. international trade agreements that benefit American businesses, farmers, workers, and consumers. The Coalition believes that passage of modernized TPA legislation is important to help ensure America continues to benefit from trade.

What Has Changed in the Climate Change Talks?

Published on January 10, 2015

If a global climate agreement doesn’t work for business, it won’t work.

USCIB President and CEO Peter Robinson
USCIB President and CEO Peter Robinson

Following another finish in “overtime,” the annual UN climate change conference wrapped up in Lima, Peru on December 13. This was the 20th Conference of the Parties to the UN Framework Convention on Climate Change, or UNFCCC, and one could be forgiven for a sense of déjà vu. After all, we have become accustomed to the inevitable cliff-hanger ending of these annual “COP” meetings, just as we have come to depend on a last-minute compromise.

The Lima meeting’s purpose was to set the stage for the home stretch of negotiations of a long term inclusive climate agreement to be finalized next December in Paris. Yet despite a modest agenda, it proved extremely difficult for member states to agree to even a brief five page outcome document. In my view, this means we should not be too complacent as we look ahead to 2015. Much has changed since the international community negotiated the Kyoto Protocol in 1997, and business has a lot on the line.

Negotiators did make progress in framing commitments to lower greenhouse gas emissions and fund developing countries’ climate efforts. I attended alongside USCIB’s Norine Kennedy and many dozens of USCIB member executives and representatives of our global business network. Our colleagues from the International Chamber of Commerce played an important coordinating role, facilitating private-sector engagement across the board in Lima.

This was my fourth COP, and a major difference I noticed from prior meetings was while governments still face gaps and differences in opinion, positions put forward by business groups are converging in three key areas that are – in USCIB’s view – deal-breakers for the future of the agreement.

Commitments and Transparency

The climate agreement to be signed in Paris must provide a clear framework for international cooperative action, committing all large emitting economies to the measurement, monitoring and reporting of nationally pledged activities to control and reduce greenhouse gas emissions, such as those announced recently by the United States and China.

UN negotiators needed to reach agreement on credible measuring, reporting and verification for all national commitments to ensure transparency and assess progress going forward. In Lima, China and a number of other, largely developing, countries resisted measurement and reporting tools to ensure that countries are living up to their commitments.

Financing and Investment

We need to leverage private investment if we are to have any hope of marshalling the $100 billion in annual financing that UNFCCC parties say is required to ensure adequate resources for climate mitigation and adaptation. Yet governments seem stuck in the same old “aid, not trade” mindset. The UN’s Green Climate Fund, designed to finance developing countries’ efforts to combat climate change, did reach its initial $10 billion capitalization target. But going from $10 billion to $100 billion depends on the mobilization of private investment and innovation.

Negotiators must now work toward a 2015 Paris agreement with measures that enable markets and foster business investment – as well as government aid – aimed at reducing greenhouse gas emissions and adjusting to climate impacts. The UNFCCC should promote innovation through financially efficient and well-targeted support mechanisms to scale up new technologies and strong, protection of intellectual property.

Private-Sector Engagement

If a global climate agreement doesn’t work for business, it won’t work. This was the message my colleagues and I delivered repeatedly in Lima. With so much riding on economy-wide transformational change that will rely on the private sector, the Paris outcomes must anchor the role of business in the UN climate agreement through actions to reduce emissions, pursue efficiency, transform energy systems and build more resilient infrastructure.

We made some progress on this front. Our well-attended BizMEF Lima Dialogue (see photo) won praise for engaging with key governments and other stakeholders in support of securing the private-sector commitment and expertise that can drive meaningful change. Given the wide impact that a UN agreement will have on markets, regulations and national competitiveness, an agreed and recognized structure is needed to provide business expertise and support.

UN negotiators should make space for a business consultative channel as a resource of technical and practical expertise for governments and the UNFCCC process.

So where does this leave us, with one year to go before the big Paris climate summit? The challenge of climate change is real on economic, environmental and social fronts, with opportunities for business in new markets and for the global community to enable climate friendly development and energy access.

Negotiators have a lot of work to do between now and next December. Have they bitten off more than they can chew? I think not, but getting this agreement past the finish line will clearly require pragmatic problem-solving and engagement with the private sector. Business innovates and invests in ways that the public sector can’t, and tapping into that innovation could well be the difference between success and the same old same old in Paris next year.

Peter Robinson’s bio and contact information

Other recent postings from Peter Robinson:

What’s the Rush on Global Tax Reform? (Summer 2014)

Setting the Rules of the Road in Cross-Border Commerce (Spring 2014)

It’s Time to Clap with Both Hands on FDI (Winter 2013-2014)

Making Sure the Business Voice Is Heard in International Agencies (Fall 2013)

China Commits to Stronger IPR Protection at US-China Trade Meeting

Published on December 22, 2014

The 25th US-China Joint Commission on Commerce and Trade (JCCT) concluded last week in Chicago after two days of talks and negotiations. The JCCT is the primary forum for addressing bilateral trade and investment issues and promoting commercial opportunities between the United States and China. At the forum, United States Trade Representative Michael Froman and Secretary of Commerce Penny Pritzker and the Chinese delegation met with Chinese Vice Premier Wang Yang to discuss economic relations between the United States and China.

Officials from both countries made progress on agriculture market access. China committed to import American soybeans and dairy products, and announced that it would pursue dialogue with the United States on biotechnology in agriculture.

China made commitments on Intellectual Property Rights protection, agreeing to protect American companies’ trade secrets and to work on new trade secrets law to enhance protection. China also agreed to streamline China’s regulatory processes and cut red tape for American imports of new, innovative pharmaceuticals and medical devices, which should lead to increases in U.S. exports and jobs in these sectors. And on China’s anti-monopoly law, China committed to treat both domestic and foreign companies equally, and to provide increased transparency for companies under investigation.

With regard to the U.S.-China Bilateral Investment Treaty, USCIB joined several other business organizations in signing a letter to Vice Premier Wang Yang in anticipation of his participation in the JCCT to signal to the Chinese government the U.S. business community’s strong support for a high-standard BIT.

Staff contacts: Justine Badimon and Eva Hampl

More on USCIB’s China Committee

More on USCIB’s Trade and Investment Committee

Turkey Gets Ball Rolling on 2015 B20 Summit

Published on December 16, 2014
L-R: Guler Sabanci, Rifat Hisarciklioglu (Chair of B20 Turkey), Ali Babacan (Turkisk Deputy Prime Minister) and Terry McGraw (ICC).
L-R: Guler Sabanci, Rifat Hisarciklioglu (Chair of B20 Turkey), Ali Babacan (Turkisk Deputy Prime Minister) and Terry McGraw (ICC).

USCIB’s global network, including the International Chamber of Commerce, (ICC) the International Organization of Employers (IOE) and the Business and Industry Advisory Committee (BIAC) to the OECD, joined over 500 Turkish and international business leaders, key international business groups and government officials in Istanbul on Monday to officially launch preparations for the 2015 G20 Business (B20) Summit scheduled to take place in Antalya, Turkey on November 14 and 15, 2015.

The B20 group provides global business leaders with a forum for producing policy recommendations to be delivered at the annual G20 meeting, reflecting the key role the private sector plays as a driver of strong, sustainable economic growth.

“2015 will be a year where G20 will focus its efforts on ensuring inclusive and robust growth through collective action,” said Turkish Deputy Prime Minister Ali Babacan. “This can be formulated as the three I’s of the Turkish Presidency: Inclusiveness, Implementation, and Investment for Growth.”

Regarding inclusivity, Babacan emphasized the role of small- and medium-sized enterprises (SMEs) to economic growth and job creation, and noted that his G20 colleagues believed that the voice of SMEs must be integrated into the work of the G20. Babacan also underscored the essential role the B20 would play in integrating SMEs and announced a partnership with ICC to launch the Global SME Forum.

Warmly accepting Babacan’s joint initiative, ICC Chairman Terry McGraw said: “ICC welcomes the opportunity to partner with Turkey to ensure that the SME initiative is a success this year and becomes an anchor of the B20’s work for years to come.”

Also at the inaugural G20 meeting, IOE President Daniel Funes de Rioja spoke about employment, job creation and human capital development in the context of the G20 agenda. He noted that the G20 had not yet lived up to its commitments to lower global unemployment rates, and he called on G20 leaders to put the spotlight on job creation, SMEs, labor migration and greater inclusion of women in the workplace as key areas for action.

BIAC Secretary General Bernhard Welschke delivered remarks on a high-level panel concerning steps to further improve B20 interactions with the G20. The B20 summit in 2015 will be held in November back-to-back with the G20 summit, providing an opportunity for maximum business impact into the policymaking process at G20 level.

Demonstrating an understanding of the valuable role the business community plays in the G20 process, Babacan said: “The ideas you [B20] develop are valuable to us. Economic growth can only be achieved by private sector investment. No matter what decisions we take, if you don’t have the confidence to undertake investment we are not going to meet our growth objective. This is why the B20 is so important.”

Staff contact: Rob Mulligan

More on USCIB’s Trade and Investment Committee

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

USCIB Takes Trade Agenda to Europe

Published on December 11, 2014
Shaun Donnelly talks TTIP at the INSIGNIS business school in Bordeaux, France.
Shaun Donnelly talks TTIP at the INSIGNIS business school in Bordeaux, France.

USCIB Vice President for Investment and Financial Services Shaun Donnelly, a retired U.S. Ambassador and USTR trade negotiator, was invited by the U.S. Embassy in France and IFRI, the leading French think tank on international relations issues, to present a U.S. business perspective on the U.S.-EU Transatlantic Trade and Investment Partnership (TTIP) under negotiations for the past 18 months.

At IFRI’s annual Transatlantic conference in Paris last Friday and in sessions in Bordeaux earlier in the week with university students, city leaders and wine exporters, Donnelly laid out USCIB’s strong support for a “comprehensive, ambitions, and high standard” TTIP with the potential to help drive economic growth, jobs and competitiveness in Europe and the United States.

As in many TTIP events at home in the United States, Donnelly spent much of him time debunking myths fomented by activist opponents of TTIP on both sides of the Atlantic.

“Investment protections including Investor-State Dispute Settlement (ISDS) provisions, food safety and environmental regulations and intellectual property protections remain some of the most controversial, and most misunderstood, issues among the public in Europe,” Donnelly said. “But we at USCIB want to do our part to help get the perspectives, priorities, and concerns of U.S. business exposed to European audiences.”

Proving we’re willing to go beyond the bright lights of France, Donnelly has accepted a follow-on invitation from the State Department to brave the winter weather and take the U.S. views on TTIP to Bulgaria, Romania, Slovenia, and Austria in early January.

Staff contact: Shaun Donnelly

More on USCIB’s Trade and Investment Committee