Policy Areas Archives

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

Business Dialogue Engages Private Sector in UN Climate Talks

Published on December 11, 2014
USCIB President and CEO Peter Robinson at a press conference in Lima, Peru on December 8. “If a global agreement on climate change doesn’t work for and with businesses, it just won’t work,” he said.
USCIB President and CEO Peter Robinson at a press conference in Lima, Peru on December 8. “If a global agreement on climate change doesn’t work for and with businesses, it just won’t work,” he said.

The United Nations climate change conference wrapped up in the wee hours of Sunday in Lima, Peru ending two weeks of climate talks and 36 straight hours of negotiations over the weekend. Member states agreed to a common structure for reducing greenhouse gas emissions – known in the UN as “Intended Nationally Determined Pledges” – and to move ahead on a broader international climate agreement that would enter into force in 2020.

The UN Framework Convention on Climate Change’s (UNFCCC) 20th
Conference of the Parties (COP20), which took place in Lima from December 1 to 12, set the foundation for an intense year of negotiations leading to a long term, comprehensive climate agreement in Paris 2015.

Signaling the political challenges of the task at hand, the 194 governments struggled for consensus on a five page decision that would allow the process to continue. Conflicts between rich and developing nations bogged down efforts to build a draft of the final Paris 2015 climate agreement, in sharp contrast to strong interest by businesses and other stakeholders to be more substantively involved in action and consultation towards the 2015 Paris outcome.

“Lima’s outcomes show the scale of the task before governments and society in limiting greenhouse gases, planning for energy transitions, and linking resilience and development,” said Norine Kennedy, USCIB’s vice president for strategic international engagement, energy and the environment. “Business innovation and investment are indispensable, and USCIB is ready to continue to inform and support these vital economic and environmental deliberations going forward.”

USCIB and the Major Economies Business Forum

L-R: Norine Kennedy (USCIB), Honorable James Bacchus (Chair, ICC Trade and Investment Commission) and Diego de la Torre (CONFIEP) at the BizMEF Lima Business Dialogue.
L-R: Norine Kennedy (USCIB), Honorable James Bacchus (Chair, ICC Trade and Investment Commission) and Diego de la Torre (CONFIEP) at the BizMEF Lima Business Dialogue.

Committed to forging a recognized consultative role for business in the United Nations climate agreement to be finalized next year in Paris, the Major Economies Business Forum (BizMEF), of which USCIB is a member, co-hosted the “Lima Business Dialogue” during COP20 in Lima. The Dialogue was organized in partnership with, and hosted by, the Lima Chamber of Commerce on December 7.

Over 70 attendees participated in the dialogue, including high-level government officials and climate negotiators from the United States, Peru, New Zealand, the Netherlands, Japan and Poland; global business leaders; representatives of major national business organizations; and officials from the UNFCCC Secretariat. Playing a leading role for USCIB were President and CEO Peter Robinson and Norine Kennedy, vice president for strategic international engagement, energy and the environment.

BizMEF comprises national and regional business organizations representing millions of companies all over the world, and members have participated in and shared views at meetings of the UNFCCC since COP15 in Copenhagen in 2009. This partnership’s broad representation allows BizMEF to provide robust and balanced views on a range of issues in discussions concerning climate change, energy and development. USCIB contributed to five BizMEF papers on key priorities, issues and perspectives around the UN climate negotiations.

The Lima Business Dialogue tackled climate change policy and market opportunities and challenges faced by the Latin American business community, reviewed the role the private sector plays in the UN’s technology mechanism and the UNFCCC’s Green Climate Fund, and discussed the value of engagement by the private sector in the UN’s Post-2020 Climate Agreement. Panel discussions focused on critical areas for business such as nationally determined contributions, markets, and carbon markets and pricing.

View photos from the COP20 Lima Business Dialogue
(Flickr)

“Our goal is to encourage the creation of more effective engagement options for the business community in the United Nations Framework Convention on Climate Change,” said Robinson. “Both by considering ways to do so and by demonstrating the value of enhanced, recognized participation.”

This session built on previous successful BizMEF Dialogues in Doha and Warsaw Dialogues in 2012 and 2013. While the UN refers to businesses as “observer organizations” at the UNFCCC’s deliberations, implementation of government commitments, and the financial and technological means to do so, rely in large part on the private sector. Yet business has limited opportunities to offer its technical expertise and policy advice to the deliberations.

“The UNFCCC now has a once in a decade opportunity to anchor business in the Paris 2015 outcome,” Kennedy said at the dialogue. “And by doing so, to tap into the business’s unique understanding of policy and markets, and its operational, technological, investment, and management expertise to help design and implement the new international cooperative climate framework. We are not seeking to sit at the table with negotiators. We aim to be a resource to negotiators and the process.”

The day after the Lima Business Dialogue, Robinson attended a press conference with International Chamber of Commerce (ICC) leaders in which he made a strong case for business engagement in UN climate talks.

“If a global agreement on climate change doesn’t work for and with businesses, it just won’t work,” he said. Robinson was also quoted in a Financial Times article, “Business calls for greater say in climate talks.”

For more information on USCIB’s, ICC’s, and BizMEF’s engagement in UN climate negotiations, visit our COP20 web page, and follow us on Twitter at #BizCOP20.

Key USCIB issues for Lima:

  • Ensuring the role of business is anchored in the Paris 2015 outcomes.
  • Reviewing the form and scope of the Intended Nationally Determined Pledges: USCIB tracked the degree to which business would be consulted in INDC preparation at the national level and in reviewing INDCs at international levels.
  • Supporting innovation and strong intellectual property rights protections, including in the ongoing work of the Technology Mechanism. While the Lima Decision does not mention IP, the most recent version of the “elements” of a negotiating text contains references to intellectual property.
  • Ensuring that conditions for private sector investment are strengthened. The Green Climate Fund did reach its $10 billion threshold, yet discussions of markets and market mechanisms were contentious.

Staff contact: Norine Kennedy

More on USCIB’s Environment 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

In FT USCIB Urges Stronger Business Participation in UN Climate Talks

Published on December 10, 2014
USCIB President and CEO Peter Robinson at a press conference in Lima, Peru on December 8. “If a global agreement on climate change doesn’t work for and with businesses, it just won’t work,” he said.
USCIB President and CEO Peter Robinson at a press conference in Lima, Peru on December 8. “If a global agreement on climate change doesn’t work for and with businesses, it just won’t work,” he said.

USCIB President and CEO Peter Robinson and USCIB Vice President Norine Kennedy are in Lima, Peru this week for the UN climate talks (COP20). Robinson took part in a press briefing yesterday alongside other members of the International Chamber of Commerce (ICC), including James Bacchus of Greenberg Traurig, chair of the ICC Commission on Trade and Investment.

Both Robinson and Bacchus are quoted at length in an article in today’s Financial Times, “Business calls for greater say in climate talks,” calling for a much bigger role for business in the UN climate negotiations. Here are some key quotes from the article, which is available in its entirety on the FT’s website
(subscriber login may be required):

Robinson: “If a global agreement on climate change doesn’t work for and with businesses, it just won’t work.”

Bacchus: “This issue is important for governments to address but it is far too important to leave to governments alone.”

Robinson: “We want to find an opportunity where we are more inside the tent than on the sidelines. We are concerned that we are not as fully engaged now as the world needs us to be.”

Bacchus (on the need for an agreement to guarantee open markets for trade and investment): “What kind of access will developing countries have to the new green technologies they need if they restrict trade and restrict investment?”

You can access recent statements and other materials from the Lima conference on USCIB’s webpage dedicated to COP20. We are also tweeting from Lima using the hashtag #BizCOP20.

Staff contact: Norine Kennedy

More on USCIB’s Environment Committee

UN Secretary General Private Sector Critical for Sustainable Development

Published on December 9, 2014

green buildingsOn December 4, the United Nations secretary general submitted an advance version of the synthesis report to the UN general assembly outlining his views on the UN’s Post-2015 Development Agenda outcomes.

Titled “The Road to Dignity by 2030: Ending Poverty, Transforming All Lives and Protecting the Planet,” the report will inform member states’ negotiations of the Post-2015 Development Agenda, including the Sustainable Development Goals (SDGs) to be agreed upon in September 2015. The UN SDGs, which lie at the core of the UN’s ambitious Post-2015 Development Agenda, aim to address sustainable development through international commitments by governments and other sectors, finance and partnerships.

The secretary general envisions a strong role for business in his report, noting that “[a]n enabled properly regulated, responsible and profitable private sector is critical for employment, living wages, growth, and revenues for public programs.” The report adds: “Transforming business models for creating shared value is vital for growing inclusive and sustainable economies.”

An Open Working Group process in 2014 consisting of inputs from a wide variety of stakeholders and member states led to 17 draft SDGs. In his report, the secretary general has sought to inspire action and make these draft SDGs more easily absorbed by member states and other stakeholders by proposing a six pillar framework around – People, Dignity, Prosperity, Planet, Justice and Partnership. Promoting “decent work” is embedded as a core element in promoting prosperity “to grow a strong, inclusive and transformative economy.”

The private sector’s contribution is acknowledged in several paragraphs: “We know that forward-looking companies are taking the lead by transforming their business models for sustainable development, and that we have only scratched the surface of the potential for ethics-driven investment by the private sector.”

Key points of interest to business from the synthesis report:

  • The priorities identified by business for the sustainable development agenda are shared by many other stakeholders and are seen as essential elements to achieving the SDGs.
  • Acknowledgment that business is already innovating for sustainable development and stands ready to contribute more, given appropriate enabling environments.
  • A new framing of the goals and targets that will inspire public-private partnerships and mobilize essential actors.
  • Emphasis on the need to stimulate private money flows to pay for the Post-2015 agenda goals.

Staff contacts: Norine Kennedy and Ariel Meyerstein

More on USCIB’s Environment Committee

More on USCIB’s Corporate Responsibility Committee

USCIB Member Wins State Departments Corporate Excellence Award

Published on December 9, 2014
L-R: Charles Rivkin (U.S. State Dept.), Cathy Novelli (U.S. State Dept.) and Ahmet Bozer (Coca-Cola). Photo Credit: U.S. State Department.
L-R: Charles Rivkin (U.S. State Dept.), Cathy Novelli (U.S. State Dept.) and Ahmet Bozer (Coca-Cola).
Photo Credit: U.S. State Department.

For the fourth time in five years, a USCIB member has won the U.S. State Department’s Award for Corporate Excellence, an honor bestowed on U.S. companies that undertake responsible business activities to improve lives and advance the needs of local communities around the world.

The Coca-Cola Company received the 2014 Corporate Excellence Award for providing disaster relief services to areas in the Philippines devastated by Typhoon Haiyan. Coca-Cola improved water quality through its efforts to support watersheds, increase access to safe water, and educate communities on water conservation.

The company also partnered with the Philippines Department of Education to increase access to primary education for more than 60,000 disadvantaged children.

This year’s other awardees included Wagner Asia Equipment for its commitment to public-private partnerships in Mongolia to protect the environment, and EcoPlanet Bamboo Group for its sustainable development work regenerating degraded pasturelands in Nicaragua. Wagner is one of the largest Caterpillar dealers in the western United States, and Caterpillar is a longtime USCIB member.

Ariel Meyerstein, USCIB vice president for labor affairs, corporate responsibility and corporate governance, reflected that the awardees’ efforts were “perfect examples of the way the private sector can minimize its impacts on the environment and society and also proactively partner with the public sector to respect and promote basic human rights where they operate, which is key to securing and preserving their social license to operate.”

Shaun Donnelly, USCIB’s vice president for investment and financial services, and Eva Hampl, director for investment trade and financial services, attended the Corporate Excellence Award ceremony at the State Department, officiated Cathy Novelli, undersecretary of state for economic growth, energy and the environment, and Ambassador Charles Rivkin, assistant secretary in the bureau of economic and business affairs at the State Department. Novelli presented the Corporate Excellence Award to Ahmet Bozer, Coca-Cola’s executive vice president and president of Coca-Cola International.

Coca-Cola also won the Corporate Excellence Award in 2002 for its work in Egypt. Recent USCIB member winners have included Intel in 2012, Proctor and Gamble in 2011, and Cisco in 2010. Two other USCIB members, General Electric and Chevron were among the other finalists for this year’s award.

Read Ambassador Rivkin’s remarks at the 16th Annual Awards for Corporate Excellence.

For more information on State’s Corporate Excellence Award, please visit: http://www.state.gov/e/eb/ace

Staff contacts: Shaun Donnelly and Eva Hampl

USCIB Foundation Weighs Impact of Artificial Intelligence on Human Jobs

Published on December 4, 2014

world map on interfaceScience fiction is rife with farfetched stories about robots plotting to conquer the world – the physicist Steven Hawkings even recently suggested humans should colonize other planets in case robots surpass people – but fears of artificial intelligence displacing human labor in the workplace are much more realistic.

As part of the USCIB Foundation’s ongoing research of human capital requirements in the 21st century, the foundation published a report with the McGraw Hill Global Institute and the Center for Curriculum Redesign (CCR), titled “Hype vs. Reality: A Roundtable Discussion on the Impact of Technology and Artificial Intelligence on Employment,” which concludes that our educational system must change if we are to take advantage of the new jobs technology will create.

Published on October 21 and based on a roundtable held earlier this year in New York, the report is available for download on the USCIB Foundation website.

CCR Director Charles Fadal observed that the educational systems of the United States and many other advanced economies were designed with the needs of a 19th century, largely industrial workforce in mind. In order to address the needs of a more technologically advanced workplace, the older curriculums would need to give way to new systems that foster greater creativity, critical thinking and collaboration.

It is likely that as the pace of technological innovation increases, more jobs will be completed more quickly and efficiently by machines. But as the report notes, “it is just as likely that truly creative intelligence tasks, social intelligence tasks, and those mechanical tasks involving sophisticated perception and manipulation will still require – at the very least – human oversight, if not substantial human involvement.” The report adds, “just as it has in the past, technology will eliminate some jobs for human beings while creating the conditions for the emergence of others.”

But in order to equip the workforce with the knowledge and skills needed for a new labor landscape in which robots perform jobs traditionally done by humans, today’s education curriculum must undergo a major redesign. Above all, the report notes that the educational system must teach students to be adaptable, “precisely because we cannot predict what technologies will be ascendant in the future, we have to teach ourselves and our children to be versatile.”

Staff contact: Abby Shapiro

More on the USCIB Foundation

IOE Unveils First Policy Brief on Womens Economic Empowerment

Published on December 3, 2014

women workplaceGender equality is a key business priority. The International Organization of Employers (IOE) commits to tackling gender discrimination in the workplace; to promoting access to equal education, training and career opportunities; to encouraging women entrepreneurs and entrepreneurship; and to contributing to the global effort to increase the participation and integration of women in the workforce.

To this end, the IOE secretariat has worked with member organizations and partners to produce its first Policy Brief on Women’s Empowerment.

“Issues surrounding women’s economic empowerment affect countries at every level of development and every company,” said Ronnie Goldberg, USCIB’s senior counsel who was involved with IOE policy brief. “USCIB welcomes this IOE initiative, which promises additional platforms for advocacy, exchange of best practice and demonstration of the commitment of business to ensuring workplace equality.”

In further activity to intensify the IOE’s work in this area, representatives of the IOE secretariat and 29 member federations joined other specialists from the World Bank, Deloitte, the Centre for International Private Enterprises (CIPE) and the International Labor Organization at a conference organized by the ILO Training Center in Turin entitled Employers’ Organizations and Women Entrepreneurs: How to reach out. The event took stock of the achievements of employers’ organizations in supporting female entrepreneurs.

Staff contact: Ronnie Goldberg