Growth, Jobs and Open Markets Archives

USCIB Urging Congressional Support for Foreign Investment Bill

Published on September 16, 2013

4596_image001The U.S. Congress is considering legislation to bolster America’s competitiveness in attracting Foreign Direct Investment (FDI) from abroad, which can strengthen U.S. competitiveness and create good jobs.  USCIB is among the business voices leading the call for Congress to adopt the “Global Investment in American Jobs Act” (S. 1023/HR 2052). In a rare display of bipartisanship, the House of Representatives passed the bill by a vote of 370-32 on September 9. USCIB and our business coalition partners are now urging the U.S. Senate to move quickly to adopt the Bill (click here to view the coalition letter to the U.S. Senate).

The legislation would put the U.S. government clearly on record as welcoming international investment. The legislation would also task the secretary of commerce to lead a government-wide effort to focus on America’s investment competitiveness, and to develop and implement a plan to make the U.S. the unquestioned “gold standard” option for the best international companies to locate new facilities.

“Inward FDI is good for America,” said Shaun Donnelly, USCIB’s vice president for investment and financial services. “The competition among nations around the world to attract high quality investment projects increases daily, and the U.S. needs to up its game as a destination for FDI. This piece of legislation is a good place to start.”  USCIB commends the bill’s sponsors in the House (Lee Terry, R-NE; Jan Schakowsky, D-IL; Peter Roskam, R-IL; and John Barrow, D-GA) and the Senate (Bob Corker, R-TN; Amy Klobuchar, D- MN; Roy Blunt, R- MO; and Kay Hagan, D- NC) for their leadership in introducing this legislation.

USCIB has long been a leading business voice in Washington and internationally on the importance of both inward and outbound FDI to U.S. economic competitiveness, exports, economic growth and jobs. According to Donnelly, inward FDI brings not only needed capital but also technology, innovation and access to foreign markets. USCIB co-chairs the investment policy committees of the broad U.S. business coalitions working with the Obama administration on the two major ongoing trade negotiations, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership.

Staff contact: Shaun Donnelly

More on USCIB’s Trade and Investment Committee

Business Pushes for Trade Promotion Authority

Published on September 11, 2013

4597_image001The business community is urging Congress to act swiftly to pass legislation giving the president fast-track ability to negotiate free trade agreements. Such legislation would require Congress to make up-or-down votes on ratification of trade pacts without amendment.

In a letter to the leadership of the Senate Finance and House Ways and Means committees seeking passage of Trade Promotion Authority, USCIB and the other members of the Trade Benefits America coalition urged passage of legislation before the end of the year, saying that, without action, high-level trade talks would be jeopardized.

“Currently, the United States is pursuing an exceptionally ambitious and diverse range of trade negotiations, including the Trans-Pacific Partnership, the Transatlantic Trade and Investment Partnership, and the Trade in Services Agreement,” coalition members wrote. “These negotiations involve important 21st century trade issues – such as foreign restrictions on cross-border data flows, unfair competition from state-owned enterprises, intellectual property rights, forced localization barriers to trade and investment, and international regulatory cooperation – that have evolved or emerged since 2002. By updating and passing TPA, Congress can help shape the negotiating goals pursued by U.S. negotiators while also strengthening the hand of those negotiators in achieving solid outcomes favorable to the United States.”

The letter said passage of TPA would strengthen the partnership between Congress and the executive branch – which the coalition said “has long proven critical to negotiating U.S. trade agreements and getting them implemented by Congress” – thereby helping to ensure a meaningful role for legislators at all stages of trade negotiations.

Staff contact: Rob Mulligan

More on USCIB’s Trade and Investment Committee

US OKs Chinese Acquisition of Smithfield Affirming Open Investment Policy

Published on September 9, 2013

Smithfield Foods (of Smithfield, Virginia) announced on September 6 that the U.S. government’s Committee on Foreign Investment in the U.S. (CFIUS) has approved Smithfield’s acquisition by Shuanghui Holdings, a large Chinese/Hong Kong food company.  CFIUS, a nine-agency committee chaired by the Treasury Department, routinely reviews major acquisitions of U.S. firms by foreign firms for national security concerns.

USCIB welcomed the move. “CFIUS has never been a broad national screening mechanism for foreign direct investment into the U.S.,” noted Shaun Donnelly, USCIB’s vice president for investment and financial services.  “Nor in our view should CFIUS’s mandate be expanded beyond its present scope. We commend the Obama administration, and the CFIUS agencies in particular, for conducting the Smithfield/Shuanghui review rigorously and in compliance with long-established procedures and criteria laid out in relevant U.S. legislation and regulation.”

After the acquisition was first announced, there were calls from some in Congress and the media to expand the CFIUS mandate beyond clear national security criteria. “Had we succumbed to these siren calls to turn CFIUS into some sort of protectionist tool to deflect foreign acquisitions, especially from China or other ‘controversial’ partners, it could have jeopardized America’s traditional welcome mat for FDI,” Donnelly said. “The U.S. needs to be, and to be seen to be, a strong and consistent voice for open and transparent investment policies and regulations at home and abroad. Both inward and outward FDI are good for the U.S. economy, competitiveness and jobs. “

Staff contact: Shaun Donnelly

More on USCIB’s Trade and Investment Committee

BIAC Consultation on the BEPS Action Plan

Published on September 9, 2013

On October 1, the Business and Industry Advisory Committee to the OECD (BIAC) will hold an international business consultation on the Base Erosion and Profit Sharing (BEPS) Action Plan together with governments and the OECD Secretariat at the OECD in Paris. The meeting agenda will cover the full BEPS Action Plan, with the aim to provide business input early in the BEPS process. BIAC has launched a BEPS web resource to provide full background information for this important project.

The OECD BEPS Action Plan was endorsed by G20 Finance Ministers on July 19, 2013 in Moscow and subsequently by the G20 governments in Saint Petersburg in September. The Action Plan sets out 15 areas of work to be undertaken across a range of tax issues, including the digital economy, transfer pricing, coherence of corporate income taxation, as well as transparency, certainty and predictability of taxation. The timeline for BEPS is ambitious, aiming for completion by December 2015, and will integrate a number of related on-going OECD projects on fundamental tax issues, among them the definition of permanent establishment, and the transfer pricing of intangibles.

This fall, the BIAC Tax Committee will continue to provide input to the OECD on the entire range of BEPS related issues. BIAC also continues its dialogue on tax with emerging economies, including China, India and Brazil. On October 7-8, BIAC, together with its Brazilian Observer CNI, the National Confederation of Industry of Brazil, will hold a conference on Brazilian and International Tax Issues with the participation of business, the OECD and the Brazilian tax authorities.

Staff contact: Carol Doran Klein

More on USCIB’s Tax Committee

CEOs Meet With G20 Leaders to Urge Progress on Trade and Investment

Published on September 6, 2013
CNBC interview with ICC Chairman Terry McGraw
CNBC interview with ICC Chairman Terry McGraw

G20 heads of state met with CEOs representing the Business-20 or “B20” during a special session of the G20 Leaders’ Summit at Strelna Palace, near Saint Petersburg, Russia today.

The CEOs, including members of the International Chamber of Commerce (ICC) G20 Advisory Group, presented policy recommendations to the heads of state, urging world leaders to drive economic growth and job creation by liberalizing trade and improving conditions for global investment, particularly in infrastructure.

These recommendations, which covered topics including trade, investment and infrastructure, financial systems, innovation and development, job creation, and transparency and anti-corruption, were the product of intensive collaboration among companies serving on B20 task forces since December 2012. The process was chaired by Alexander Shokhin, president of the Russian Union of Industrialists and Entrepreneurs (RSPP), who had been designated by President Vladimir Putin to organize B20 efforts during the Russian G20 presidency.

ICC Chairman Terry McGraw, who is also chairman of USCIB and CEO of McGraw Hill Financial, took part in the meeting. He underscored that the impasse among members of the World Trade Organization (WTO) and an increasingly sluggish global trading system risk reversing significant progress made in global living standards over the past 60 years.

“Collective leadership by the G20 would inject new life into trade agreements that are vital for job creation, particularly the successful conclusion of an agreement on trade facilitation at the WTO Bali Ministerial in December,” said McGraw, citing research commissioned by ICC, which concludes that completion of a WTO trade facilitation agreement would translate into more than $1 trillion in world export gains, increase global GDP by $960 billion and support more than 21 million jobs, most of them in G20 countries.

“The most important thing for growth is trade and investment,” McGraw told CNBC. To view the full interview click here.

For more information on the ICC website, click here.

IOE, BIAC Voice Business Views on Jobs and Taxation

A strong business presence, through the B20 group, delivered recommendations to governments at the G20 Leaders’ Summit in St. Petersburg, pushing for the realization of concrete policy measures that will make a difference.

At a roundtable discussion on September 5, the G20 Task Force on Employment called tackling unemployment and job creation a top priority for the G20 countries. The co-chair of the B20’s own employment task force, Brent Wilton– secretary-general of the International Organization of Employers  – expressed concern over the lack of action taken by governments with regard to the needs of small and medium-sized enterprises (SMEs).

Wilton referred to evidence from the World Bank’s Doing Business Report of 2013 in calling on “G20 states to effectively assess the impact of regulation on business and job creation. Complicated and rigid labor law is a major stumbling block for SMEs, especially when it comes to hiring.” Key to getting more people into work, he added, were education and training programs that provide individuals with skills that match the needs of the labor market, and foster entrepreneurship. Click here to read more.

For its part, BIAC, the Business and Industry Advisory Committee
to the OECD, issued two important statements on global taxation.

In response to growing public concern about international corporate taxation in both the developed and developing world, as well as the current focus on Base Erosion and Profit Shifting (BEPS) outlined in the OECD Action Plan on BEPS endorsed by the G20, BIAC has produced two sets of voluntary guidance for business: a Statement of Tax Principles for International Business intended to promote and affirm responsible business tax management generally, and a Statement of Best Practices for Engaging with Tax Authorities in Developing Countries.

Will Morris (GE), chair of the BIAC Committee on Taxation and Fiscal Affairs, stated that: “Business makes a significant contribution to the global economy in terms of taxes paid and collected. However, public confidence in the international tax system has been shaken. In order to help restore that confidence, BIAC is working closely with the OECD to update international tax rules. But businesses also need to tell their own story.”

Morris said in developing countries, “it is in the interests of both taxpayers and governments that the tax authorities are given the information and cooperation they need to act in an efficient and transparent manner.”

Click here for more information.

USCIB Urging Congression Action to Promote Inward Foreign Investment

Published on July 30, 2013

USCIB joined with nine other leading business groups in a July 30 letter to the leadership of the House of Representatives strongly supporting quick floor approval for early adoption of HR 2052, the Global Investment in American Jobs Act.

USCIB has long been a leader in supporting both outward and inward foreign direct invest (FDI) as critical for American competitiveness, growth, and jobs in today’s globalized economy. The bill, which earned rare unanimous support of the House Energy and Commerce Committee on July 17, highlights the contributions which inward FDI makes to American prosperity and jobs, tasks the Secretary of Commerce to lead the first-ever comprehensive review of the competitiveness of the U.S. as a destination for international FDI, and to develop recommendations to enhance our national investment competitiveness in this key area.

While the United States remains the world’s leading recipient of FDI, our global share of such investment has dropped significantly since the turn of the 21st century, from 41 percent in 1999 to just over 17 percent in 2011. So we as a nation certainly have some work to do to keep ahead in this increasingly competitive global environment. This important piece of investment legislation can be a first step.

Staff contact: Shaun Donnelly

More on USCIB’s Trade and Investment Committee

Business Pushes for Maximum Liberalization in TPP Talks

Published on July 23, 2013

On July 23, concurrent with the 18th Round of Trans-Pacific Partnership (TPP) negotiations in Malaysia, USCIB co-signed a letter with 47 other business associations to U.S. Trade Representative Michael Froman on U.S. priorities in the talks. The letter emphasizes the need for “further trade liberalization – at home as well as abroad” across all sectors, including the few sectors of the U.S. economy that receive significantly more protection from import competition than most other sectors. The business associations have advocated for no exclusion of specific sectors in minimizing government protections or preferences that distort the market in order to increase competition and facilitate a more adaptable economy in the face of challenging market dynamics. They wrote that maximum liberalization of protected sectors will benefit our economy, our workers and our consumers in the long-term by advancing U.S. competitiveness in the globalized economy of the 21st century.

Staff contact: Rob Mulligan

More on USCIB’s Trade and Investment Committee

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

More on USCIB’s Trade and Investment Committee

More on USCIB’s China Committee

US and China Agree to Action on Climate Change

Published on July 22, 2013

smogAt this month’s U.S.-China Strategic & Economic Dialogue (S&ED) in Washington, D.C., the two countries agreed to undertake a number of steps to address climate change. This followed an announcement that the two nations will begin formal talks on a high-standard bilateral investment treaty (click here for our earlier report).

In May, the USCIB China Environment Task Force met with the EPA’s Steve Wolfson to discuss coordination and capacity-building between China and the U.S. on climate change, including Secretary of State Kerry’s newly created U.S.-China Climate Change Working Group.

On July 10, the working group presented its report on bilateral cooperation between the two countries. This non-binding climate plan lays out five new action initiatives with the goal of reducing greenhouse gas emissions and air pollution by tackling the largest sources of emissions in both countries, focusing on: vehicle emissions; smart grids; carbon capture, utilization and storage; greenhouse gas data collection and management; and building and industry energy efficiency.

In a fact sheet, the U.S. Department of State released the following details of specific projects and commitments.

  1. Reducing emissions from heavy-duty and other vehicles: Heavy-duty vehicles are the fastest growing source of greenhouse gas emissions from transportation in the U.S. and account for more than half of transportation fuel consumed in China. Light-duty vehicles also contribute significantly to greenhouse gas emissions, fuel use and air pollution. Efforts under this initiative will include advancing comprehensive policies to reduce CO2 and black carbon emissions.
  2. Increasing carbon capture, utilization, and storage (CCUS):
    The U.S. and China account for more than 40 percent of global coal consumption. Emissions from coal combustion in the electric power and industrial sectors can be significantly reduced through CCUS. China and the U.S. will cooperate to overcome barriers by implementing several large-scale, integrated CCUS projects in both countries, which will engage companies in both countries and allow for enhanced trade and commerce.
  3. Increasing energy efficiency in buildings, industry and transport:
    The U.S. and China recognize that there is significant scope for reducing emissions and costs through comprehensive efforts to improve energy efficiency. Both sides commit to intensify their efforts, initially focusing on promoting the energy efficiency of buildings, which account for over 30 percent of energy use in both countries.
  4. Improving greenhouse gas data collection and management:
    Both countries place a high priority on comprehensive, accurate reporting of economy-wide greenhouse gas emissions data to track progress in reducing emissions and to develop and implement mitigation policies. The U.S. will work with China to build capacity for collection and management of greenhouse gas emissions data.
  5. Promoting smart grids: The power sector accounts for over one third of U.S. and Chinese carbon emissions. To reduce greenhouse gas emissions from the power sector and put in place a resilient, low-carbon power grid, both countries will collaborate on developing modern, “smart” grid systems, deploying renewable and clean energy, and improving demand management.

In their joint report, the two parties made clear that this just the beginning of a new phase in U.S.-China cooperation on climate change issues, where the Climate Change Working Group is designed to serve as the new leader in this critical bilateral relationship. Working closely with private sector and non-governmental stakeholders, the working group will develop implementation plans for the following initiatives by October 2013, with the goal of continuing to find new ways to expand cooperation on climate and clean energy issues.

Staff contacts: Norine Kennedy and Justine Badimon

More on USCIB’s Environment Committee

More on USCIB’s China Committee

SMEs Face Significant Financing Gap

Published on July 22, 2013

Speaking at the World Trade Organization’s annual “aid-for-trade” review earlier this month, a representative of the International Chamber of Commerce (ICC) made a plea for added financing for cross-border trade.

ICC Senior Policy Manager Thierry Senechal said that trade finance intermediation is crucial today as it provides real-time risk mitigation, while improving liquidity and cash flow of the trading parties. It also gives localized small- and medium-sized enterprises much-needed access to credit and working capital to finance exports and imports.

Between 80 and 90 percent of global trade depends on some sort of trade finance, yet structural access issues, related to factors such as poorly-developed banking sectors or perceived country credit risk, continue to act as bottlenecks.

In remarks at the event, WTO Director General Pascal Lamy said: “Overcoming existing skills gaps in developing countries can help them draw enhanced benefits from their participation in the multilateral trading system. These discussions have brought some key areas into focus, including access to finance — and trade finance in particular.”

Click here to read more on ICC’s website.

Staff contact: Eva Hampl

More on USCIB’s Banking Committee

ICC names Donald Smith New Banking Commission Technical Advisor

ICC announced earlier this month the appointment of three new technical advisors for its Commission on Banking – a leading global policy and rule-making body for the banking industry known worldwide for its trade finance products and services including Uniform Customs and Practice for Documentary Credits, the most successful privately drafted rules for trade ever developed.

These  include Donald Smith, president of Global Trade Advisory Ltd.

Smith has over 40 years’ experience in international banking operations and trade product management. He has been responsible for international operations for 4 banks. He served as senior project manager for the ICC’s 2011 Basel III Default Registry project which documented the level of risk in trade transactions; chaired the US Delegation to the ICC Banking Commission from 1998 to 2009 and co-chaired the drafting group which produced the ICC’s first International Standard Banking Practices (ISBP) publication. He presently serves on several ICC Task Forces. Read more on ICC’s website.