EU Tax Commissioner Briefs Members on Planned Tobin Tax

Published on February 26, 2013

L-R: European Union Taxation Commissioner Algirdas Semeta, EU Ambassador to the United Nations Ioannis Vrailas, USCIB Executive Vice President Ronnie Goldberg

On February 22, USCIB members met with the European Union’s commissioner for taxation, customs union, audit and anti-fraud, Algirdas Semeta, at the EU Mission to the United Nations in New York. The meeting was chaired by EU Head of Delegation Ioannis Vrailas, and the commissioner was welcomed by USCIB Executive Vice President Ronnie Goldberg.

Commissioner Semeta spoke in detail about the debate regarding the EU’s proposed financial transactions tax (FTT) directive, for which a report was released on February 14, as well as the Commission’s views on a global approach to an FTT.

Saying the Commission believes that financial institutions should contribute to the cost of economic recovery, Commissioner Semeta stated that the FTT would also discourage speculative transactions that he said contributed to the financial crisis. He reviewed the more than 40-year policy debate over the FTT – nicknamed the “Tobin tax” after one of its early proponents, economist James Tobin – noting that a principle argument against the tax has been that it cannot be done if it cannot be implemented globally.

The Commission agrees that global implementation is best, he said, but that this is not possible at the present time, and that an FTT can be designed on a regional level. The place a financial transaction takes place is irrelevant; what is important is who trades with whom. The commissioner warned that neglecting the market of the 11 countries poised to adopt the FTT would not be a rewarding model, especially since they represent 90 percent of the eurozone and one-sixth of the global marketplace.

Commissioner Semeta also discussed corporate taxation and answered questions from participants on additional taxation topics as well as customs union.

Staff contacts: Justine Badimon, Carol Doran Klein

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UN Environment Program Begins Work Under New Mandate

Published on February 26, 2013

John Matuszak of the State Department and USCIB’s Norine Kennedy in Nairobi during a briefing on the Green Economies Dialogue project

The first “universal” meeting of the United Nations Environment Program (UNEP) Governing Council wrapped up last week in Nairobi, Kenya, having agreed on future directions and priorities for the newly strengthened UN body in guiding international policy on issues like the green economy, sustainable consumption and production, and chemicals.

In an important development, Norine Kennedy, USCIB’s vice president for environment and energy, was elected to serve as one of three key UNEP stakeholder group representatives. Representing the business community (with other stakeholder representatives from the indigenous peoples and environmental law communities), Kennedy will advise UNEP Executive Director Achim Steiner and other UNEP officials to support the strong involvement of business and other important non-governmental interests in the organization’s new governance structure.

Decisions taken in Nairobi are expected to have an impact far into the future as UNEP establishes itself as the preeminent platform for international environmental policy-making and action. UNEP was mandated by the last year’s Rio+20 summit and UN General Assembly session to lead UN work on environmental aspects of sustainability. The meeting was “universal” in the sense that all 193 UN members are now members of UNEP, which previously had a smaller number of governments involved directly in its decision-making.

In Nairobi, ministers and government representatives from 193 member states adopted numerous decisions regarding UNEP’s operations and work program. These included the transformation of the existing UNEP Governing Council into a UN Environment Assembly, and the creation of stronger links between UNEP’s science-based Global Environment Outlook process and its ministerial meetings – further implementing the call by UN member states at Rio+20 to strengthen the science/policy interface.

According to Kennedy, USCIB places particular importance on UNEP’s efforts to strengthen its scientific base. “We hope to explore additional options for business cooperation with UNEP on expert, science and research matters relating to its work program, such as the recent first meeting of the Intergovernmental Platform on Biodiversity and EcoSystems Services,” she said.

In the year ahead, UNEP will take up work on human rights and the environment, environmental law and new procedures for non-governmental and business participation in its work. UNEP will also host and coordinate the Climate Technology Center and Network, which will implement the technology-transfer mechanism of the UN Framework Convention on Climate Change.

USCIB’s Environment Committee has provided its recommendations on business priorities in UNEP’s broad work program, particularly relating to protecting and safeguarding information that is commercially important, such as IPR, CBI and trade secrets, in the context of increasing access to information.

Green Economies Dialogue session

In conjunction with the Governing Council, the USCIB’s Green Economies Dialogue initiative held its first African event on February 21 at UNEP headquarters. The side event, entitled “Green Economies in Global Markets: Opportunities for Developing Countries to Innovate and Benefit,” highlighted opportunities and challenges in greening economic development and growth in developing countries, with a special focus on Africa.

The session featured a presentation by Micael Da Costa of CleanStar Mozambique, an integrated food, energy and forest protection business, as an example of an innovative business approach to greening economic activity that fits well with African needs and aspirations. The CleanStar business model offers economic, environmental and social benefits, providing connections between small and large companies and offering tangible improvements in health and development in Africa.

Other speakers included John Matuszak of the U.S. State Department, Robert Dixon of the Global Environment Facility, Asad Naqvi of UNEP’s Green Economy initiative and Green Economies Dialogue Chair Brian Flannery. The side event was attended by representations of governments, academia, business and NGOs, and highlighted priority areas in greener development and enabling frameworks for investment and public private partnership. It provided perspectives on where UNEP can work with business to advance and accelerate priorities for greener growth most relevant to developing countries.

The Green Economies Dialogue project was founded in 2011 by the United States Council Foundation and a host of sponsors and partners. It seeks to provides business perspectives into the international policy debate on ways to promote greener economic, social and environmental progress. It has done so through previous dialogue meetings with national governments and other stakeholders, including the OECD, in Washington, Paris, Beijing, Tokyo, Brasilia and Rio de Janeiro. It has also commissioned peer-reviewed papers by respected academic authors on green economy topics of interest to business, published last year in a special “Green Perspectives” volume of the journal Energy Economics.

For more information on the Green Economies Dialogue project, visit www.green-dialogue.org

Staff contact: Norine Kennedy

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Business More Must Be Done to Protect the Internet as a World Resource

Published on February 25, 2013

Jean-Guy Carrier, secretary general of the International Chamber of Commerce, addressed the gathering, which marke4d the 10th anniversary of the UN’s World Summit on the Information Society.

At the opening of the first World Summit on the Information Society +10 Review meeting at UNESCO headquarters in Paris today, business representatives appealed to all stakeholder groups within the Internet governance community to do more to protect and strengthen the Internet as it is today.

The International Chamber of Commerce and its BASIS (Business Action to Support the Information Society) initiative used the event to highlight the importance of formulating policy that supports the free flow of information online. This encourages freedom of expression and creates the right conditions for open trade as well as investment in the Internet and the applications and services that run on it, as a path to future global economic growth and social progress, especially through education and learning.

Addressing the multiple stakeholder groups present at the event, including ministers and high-level governmental officials, heads of intergovernmental organizations, senior business executives, Internet technical community leaders and civil society, industry representatives urged that more be done to ensure the permanence of a free, fair and open Internet characterized by the free flow of information.

USCIB Vice President Barbara Wanner attended the meeting and served as the ICC-BASIS rapporteur on multi-stakeholder principles. USCIB member companies made important contributions in a number of topical sessions at the review event, including eLearning (Microsoft), promoting freedom of expression and privacy on the Internet (Google), cultural and linguistic diversity (Disney), and avoiding e-waste (HP).

G20 Employment Task Force Hears Business Perspective on Job Creation

Published on February 22, 2013

Employers and trade unions recently held consultations in Moscow with the G20 Employment Task Force, according to the International Organization of Employers. The session was hosted by the Russian Union of Industrialists and Entrepreneurs, whose vice president, David Iakobachvili, presented the business perspective along with his fellow co-chair of the B20 Job Creation Task Force, Erol Kiresepi of the Turkish employer federation TISK.

In their comments to the task force, Iakobachvili and Kiresepi called on the G20 to recognize the key job-creating role of the private sector, and to commit to addressing within their respective economies the barriers to business creation and growth. Iakobachvili cited “complicated and rigid labor law” as a major stumbling block to hiring, especially for SMEs. He recommended improving education and training systems to match skill sets with the needs of business.

Kirespi called for countries to share experiences by mapping and measuring instruments that were successful, cost-effective and could be replicated.

USCIB Executive Vice President Ronnie Goldberg is a member of the B20 Job Creation Task Force, which is coordinated by the IOE and the Business and Industry Advisory Committee to the OECD. The task force will next meet in March in Geneva to advance plans for a private-sector apprenticeship network.

At Congressional Hearings, Calls for a “Stable, Secure and Free” Internet

Published on February 11, 2013

On February 5, USCIB members took part as the House Energy and Commerce Committee hosted a joint committee hearing on “Fighting for Internet Freedom: Dubai and Beyond.” The hearings focused on developments at last December’s World Conference on International Telecommunications (WCIT), which saw a split over a proposed treaty that some, including the United States and a number of other countries, saw as sanctioning greater government involvement in the management of the global Internet.

At the hearings, all House members present expressed support for the U.S. government’s decision not to sign the WCIT treaty because it included provisions that would subject the Internet to international regulation, according to Barbara Wanner, USCIB’s vice president for information, communications and technology (ICT) policy.

“There were bipartisan expressions of support for a draft bill that would affirm U.S. policy as supporting an Internet that is ‘stable, secure, and free of government control,’ and governed through a multi-stakeholder model involving dialogue on Internet policy among government, business, civil society, academia, and the technical community,” Wanner said. The bill has not yet been formally introduced, with Congressional staff seeking to secure as many principal sponsors and co-sponsors from both parties as possible.

All of the witnesses, which included Ambassador David Gross, chair of USCIB’s ICT Policy Committee and a partner at Wiley Rein LLP, said the proposed legislation would serve as a powerful statement of U.S. commitment to policies aimed at ensuring that the Internet does not come under the purview of international regulations. The witnesses, all of whom participated in the WCIT, said that last year’s bipartisan support in Congress for a non-binding resolution supporting an Internet unregulated by inter-governmental agencies had a substantial impact on treaty negotiations, according to Wanner. Countries understood the U.S. negotiating posture and ultimately why the U.S. could not sign the WCIT treaty, since it so clearly flew in the face of principles supported by the Congress.

Wanner said the witnesses underscored that those seeking to subject Internet governance to international regulations would use the upcoming World Telecommunications Policy Forum and World Summit on the Information Society forum, to be held this May in Geneva, to try to build momentum in favor of expanding the role of the International Telecommunications Union (ITU) in Internet governance at November’s ITU Plenipotentiary Conference in Busan, South Korea. The so-called ITU Plenipot, held every four years, is the top policy-making body of the ITU.

In his testimony, which he delivered in his personal capacity as the former top U.S. official on global Internet policy, Ambassador Gross outlined funding problems faced by the Internet Governance Forum (IGF), which for the past seven years has served as the principal venue for multi-stakeholder dialogue on Internet policy and governance. He proposed that if the U.S. government’s goal is to ensure continued multi-stakeholder governance of the Internet, then the United States needs to join business and other governments in providing financial support to the IGF.

Sally Shipman Wentworth, senior manager with the Internet Society, concurred that the IGF warrants greater support because it plays an invaluable role in helping to build not only technical capacity but also “human capacity” in developing countries. The IGF needs more plentiful and stable funding to enable outreach and engagement to developing countries who may prove invaluable allies as the debate on Internet governance ratchets up in the events leading up to the 2014 ITU Plentipot, Wentworth suggested.

In addition to Gross and Wentworth, witnesses included FCC Commissioner Robert McDowell, Harold Feld, senior vice president with Public Knowledge, and Bitange Ndemo, permanent secretary in the Kenyan information and communications ministry, who, befitting the occasion, participated via the Internet.

All formal testimony presented at the hearing is available by clicking here.

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APEC’s “Indonesia Year” Gets Underway at Chemical Dialogue

Published on February 11, 2013

USCIB continues to maintain a high profile in the APEC (Asia-Pacific Economic Cooperation) forum, which groups the United States and 20 other economies in the Asia-Pacific region. This is especially true in areas where we bring high functional expertise, such as customs, privacy and chemicals. The latter issue was among those addressed at this year’s first APEC senior officials meeting (SOM I) in Jakarta at the end of January and the beginning of February. (Indonesia has taken over from last year’s host, Russia; China is slated to serve as APEC host next year.)

Several USCIB members joined Helen Medina, director of life sciences and product policy, at the APEC Chemical Dialogue’s steering group meeting during SOM I. The Chemical Dialogue’s overall goals are to facilitate trade in the region through expanded cooperation and mutual recognition among chemical regulators, to enhance understanding of the chemical industry’s innovative role, and to encourage chemical product stewardship, safe use and sustainability.

This year, the Chemical Dialogue will continue to promote the implementation of the UN’s Globally Harmonized System of Classification and Labeling of Chemicals – a set of guidelines aimed at simplifying regulations and labeling requirements, as well as improving safety and environmental protection – by APEC member economies. Chinese Taipei (Taiwan) and Australia are lending support to the effort by assembling a clearinghouse on labeling initiatives and case studies on how APEC economies are implementing the UN system.

Chemicals Dialogue members are also evaluating the implementation of the EU’s REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) initiative, which regulates use of chemicals throughout a product’s life cycle, and which has had a large impact on companies up and down the supply chain. USCIB’s Medina made the case that regional initiatives like REACH need to take account of the global impact such rules can have, given today’s highly integrated global production networks.

The treatment of confidential business information is an important issue in chemicals regulation and product policy. While regulators must collect product information in order to carry out their programs, companies also need to protect trade secrets. USCIB is leading an effort to survey APEC member economies on their treatment of confidential business information. “Companies must be committed to designing and selling products safe for the users and environment in all markets, and have the confidence that intellectual property will be protected,” commented Beth Hulse, global regulatory manager at GE.

A number of additional programs are underway in the APEC Chemical Dialogue to promote regulatory cooperation and analyze the potential hazards of specific products and substances. USCIB members came away impressed with the discussion in Jakarta. “The sessions provided in-depth insight into cooperation between economies to forge a fair regulatory framework that promotes trade and environmental awareness,” said Poh Cheng Oh, compliance program manager with Hewlett-Packard.

APEC’s 2nd senior officials meeting takes place April 6-19 in Surabaya, Indonesia and include a meeting of trade ministers. The next round of APEC Chemical Dialogue meetings will take place June 22-24, during SOM III, in Meden, Indonesia. The APEC Leaders Meeting takes place October 5-7 in Bali. You can read a 2-page backgrounder on USCIB’s activities and priorities for APEC in 2013 by clicking here.

Staff contact: Helen Medina and Justine Badimon

USCIB APEC 2013 Backgrounder

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Business Gearing Up for G20 Summit

Published on February 4, 2013

Preparations for this year’s Group of 20 Summit, which takes place September 5-6 in Saint Petersburg, Russia, are well underway, with last year’s Mexican hosts essentially handing off to Russia in December. USCIB is working with all three of our affiliated global business bodies to advance a positive private-sector agenda at the summit, which will again feature a high-level business component known as the B20.

The International Chamber of Commerce is a leading member of the B20 organizing group, which is working with Alexander Shokhin, president of the Russian Union of Industrialists and Entrepreneurs, to facilitate business input to the summit. ICC plans to hold a number of preparatory events through its 30-member G20 Advisory Group – whose members include USCIB Chairman Terry McGraw
of McGraw-Hill and USCIB Trustee Andrew Liveris of Dow – and has published an informative update on its G20 activities.

Focus on apprenticeships

Both the International Organization of Employers and the Business and Industry Advisory Committee to the OECD are also taking part in preparations for the B20, with a special remit to engage with governments on labor and employment policy. As part of this, the two organizations have forged a joint initiative on apprenticeships as a follow-up to the Mexico B20 business commitments on employment. In December, they released an initial overview of national initiatives to promote apprenticeships and internships.

Building on their findings, IOE and BIAC plan to create a global company network for apprenticeships, with the aim of facilitating exchange of information and joint action, increasing the visibility of companies’ engagement in vocational education and training, and fostering dialogue with policy makers and other actors at the national and international level.

IOE and BIAC will again spearhead business representation to the G20 Labor Ministerial, which takes place July 18 in Moscow.

In addition, USCIB members met in Washington on January 31 with Fabrizio Pagani, head of the OECD’s “Sherpa” office for G20 and G8 affairs, to discuss OECD contributions to the G20 Summit and related matters. OECD Secretary General Angel Gurria participates in the G20 Summit along with the heads of several other international agencies.

Natural Gas Exports: Seeking Synergy Between Environment, Energy and Trade Policy

Published on January 22, 2013

A tanker transporting liquefied natural gas

In the context of current discussions about the export of liquefied natural gas from the United States, we believe that fundamental principles of environmental, energy and trade policy that USCIB has supported over the years remain relevant.

USCIB has long championed expanded trade and investment, and the elimination of barriers to global commerce, including in the energy sector, under a rules-based system, and we support established WTO rules limiting export and import bans. Erecting new barriers to LNG exports would run counter to our past positions and efforts by the American business community to discourage restrictions by other countries.

Throughout our work to promote international cooperation on climate change and energy security, USCIB has advocated keeping all energy options on the table in the transition to a greener economy. In that connection, we have underscored the critical importance of open trade as a means to disseminate cleaner technologies and energy options, and have signaled the adverse environmental impacts of export bans.

Increased domestic supplies of natural gas are already providing a competitive edge for many U.S.-based manufacturers, with positive impacts on jobs both in the energy sector and in the economy as a whole. Many observers, including the International Energy Agency, predict that the United States will become a net energy exporter, which would have major economic and geopolitical ramifications. Additionally, there is potential for natural gas, with its much lower climate footprint, to surpass coal as the world’s number-two energy source.

We appreciate the concerns voiced about LNG exports, including the potential for increased U.S. energy costs, and these concerns should not be taken lightly. As U.S. companies operate in global markets, they need access to affordable and sustainable energy in order to remain competitive. With wise policy choices, the domestic energy revolution has the potential to bring major economic and environmental advantages to the U.S. business community, and to U.S. citizens.

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New International Services Negotiations to Be Launched

Published on January 22, 2013

Last week, U.S. Trade Representative Ron Kirk informed Congress that the Obama administration plans to enter into negotiations for a new international agreement on trade in services. With negotiations encompassing the United States and 20 other countries soon to be launched in Geneva, the initiative is one of a number of “plurilateral” efforts expected to be undertaken in the wake of failure to make meaningful progress toward completing the Doha Round.

According to USTR, the negotiation partners account for nearly two-thirds of global trade in services. In his letter to lawmakers, Kirk cited a recent Peterson Institute for International Economics study estimating that tradable services are five times less likely to be exported than manufactured products. The U.S. is the world’s largest service provider.

“This is an important new initiative, and one we will be following closely at USCIB,” said Rob Mulligan, USCIB’s senior vice president for Washington. “Services are an enormous and growing part of our economy and our overall trade. The opportunities to drive U.S. economic growth and jobs through a services plurilateral are quite significant.”

Mulligan said advancing the new services talks would be an important objective in USCIB’s trade and investment policy agenda for 2013. Other top priorities include concluding the Trans-Pacific Partnership talks, starting negotiations on a U.S.-EU trade and investment agreement, addressing forced localization regulations and expanding product coverage under the WTO Information Technology Agreement.

Among the other parties expected to take part in the talks are Canada, the European Union, Japan, Korea and Mexico. One country that is not an initial party to the negotiations is China. In 2006, USCIB and the United States Council Foundation published a study on U.S.-China trade in services, which foresaw growing export opportunities for services. According to USTR, the U.S. had a services trade surplus with China of $13 billion in 2011.

“Obviously, the opportunities in China and other emerging markets are tremendous,” said Mulligan. “But we understand and appreciate the need to work with like-minded countries to achieve the most ambitious liberalization possible. Hopefully other countries would join a services agreement down the road.”

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EU Data Law Must Be Improved, ICC Says

Published on January 21, 2013

In conjunction with Data Protection Day/Data Privacy Day, which is observed on January 28, the International Chamber of Commerce has issued comments on the European Union’s proposed General Data Protection Regulation. ICC warned that its lack of clarity on certain requirements, together with the excessive burdens it would place on companies, would chill innovation and weaken the EU’s ability to attract investment. ICC said it was particularly concerned about the proposal’s effect on small- and medium-sized companies.

Christopher Kuner, co-chair of the ICC Commission on the Digital Economy’s task force on privacy and personal data protection said: “The protection of fundamental rights and the promotion of innovation and economic progress, which have been the defining goals of European Union data protection and privacy efforts for the last two decades, are also the goals of the proposed regulation. However, ICC believes that changes need to be made to the proposed regulation to better promote these two goals.”