Business Presses for Action on State-Owned Enterprises in Trans-Pacific Trade Talks

Published on September 7, 2011

USCIB has joined with three other business groups in urging the U.S. government to propose strong disciplines on state-owned enterprises in the context of the Trans-Pacific Partnership (TPP) negotiations.

In a letter to Michael Froman, the deputy national security advisor for international economic affairs, and Demetrios Marantis, deputy U.S. trade representative, the groups wrote:

“On the eve of the Chicago Round, the stakes in the TPP could not be higher. A successfully concluded TPP that sets the benchmark for 21st century bilateral, regional and multilateral trade and investment disciplines will go a long way towards establishing new rules of the road that would help U.S. companies and workers overcome the serious disadvantages that they face in competition with SOEs as commercial actors.

“We are concerned, however, that the final text tabled by the United States in the negotiations may fall short of the robust and detailed disciplines that are needed to ensure that U.S. exporters, investors, and American workers are able to compete on a level playing field against SOEs and the government support which they receive through myriad preferential policies. For our organizations, the TPP does not represent an incremental opportunity; it is an opportunity for an ambitious and game-changing approach worthy of the 21st century model it is intended to represent.

“As a result, we strongly encourage a final text be tabled that prescribes a detailed and comprehensive code of conduct to TPP negotiating partners. This code of conduct should include disciplines and obligations that can effectively deter governments from employing policy mechanisms that advantage SOEs in the marketplace when in competition with private actors.”

Other groups signing the letter were the National Foreign Trade Council, Coalition of Service Industries and U.S. Chamber of Commerce.

Staff contact: Shaun Donnelly, sdonnelly@uscib.org

Business letter on Trans-Pacific Partnership

From the President: Dealing With State-Owned Enterprises (Winter 2010-2011)

More on USCIB’s Trade and Investment Committee

ICC Warns of Harmful Regulatory Proposals for Internet Backbone

Published on September 6, 2011

Market-based incentives are fostering investment in local network capabilities that reduce the need for higher-cost international traffic

The International Chamber of Commerce (ICC), USCIB’s affiliate, today released a Discussion Paper highlighting how a commercially-driven framework has allowed Internet Backbone Interconnection Agreements to fuel the massive growth of the Internet across the globe.

The paper, written by the ICC Task Force on Internet and Telecoms Infrastructure and Services (ITIS), highlights data from various sources. This includes a 2011 Analysis Mason study that shows how commercial interconnection agreements negotiated in a market-based regulatory environment have resulted in more efficient global network usage, improved network performance, international expansion and investment growth.

One important example analyzed in the paper, is the evolution of Internet Exchange Points (IXPs) locations. From international Internet traffic originally being routed through IXPs located primarily in the US 15 years ago, the deployment of large numbers of IXPs quickly spread to OECD countries. Today, IXPs are increasingly being established and expanded in emerging markets.

Despite the huge success of the private-sector driven commercial model for Internet Backbone Interconnection Agreements, there have been proposals to regulate these agreements. Proposals appear to be based on the assumption that regulation would promote further investment within particular countries. The ICC paper explains that this view ignores the pertinent facts and policy options. In turn, the paper demonstrates that the desired new investments are actually being enabled and stimulated by the existing commercially-driven framework. In particular, although current proposals to regulate Internet infrastructure agreements would aim to shift costs between countries, the commercial model already is adapting to, and even enabling, the more fundamental shift in the underlying traffic flows that result in those costs. That is, market-based incentives are fostering investment in local network capabilities that reduce the need for higher-cost international traffic.

More on USCIB’s Information, Communications & Technology (ICT) Committee

ICC website

From the President Supply Chain Challenges

Published on September 1, 2011

Efficient and well managed supply chains are essential to corporate profitability and the health of the global economy. Companies are doing a lot – and being asked to do a lot more– to ensure the integrity of their operations and those of their suppliers around the world. Because of this, much of USCIB’s work in recent years has revolved around supply-chain concerns – customs practices, transport security, counterfeiting and piracy, labor and environmental concerns.

Most global companies have programs in place that set standards for suppliers and hold them accountable. More and more companies are adopting supplier codes of conduct to fill the gap created by the failure of local governments to implement or enforce their own laws, including labor and human rights laws.

But pressure is growing for companies to push supply chain management efforts even farther beyond their present scope.

New initiatives would make producers responsible for addressing broad social ills that may exist at some point in their extensive global supply chains, including child labor, forced labor, human trafficking, and armed conflict.

Examples of this trend abound:

the California Transparency in Supply Chains Act, focused on slavery and human trafficking;
efforts to address forced child labor in cotton production in Uzbekistan;
similar efforts to address forced labor in Brazil
in cattle ranching, sugar and charcoal production; and
the Dodd-Frank law, specifically Section 1502, which requires companies to disclose whether or not conflict minerals are used in their products.

The common element of all these challenges is that they are the result of systemic failures of governance or reflect pervasive social problems. Our view is that a prescriptive approach does not address the underlying cause of the problem and therefore is doomed to failure.

USCIB has engaged companies and policy makers on the importance of maintaining high standards and improving performance throughout the supply chain. We have:

organized a series of workshops hosted by The Coca-Cola Company on how companies address forced labor, child labor and human rights;
promoted awareness and support for the Better Work Campaign, an ILO/World Bank program to improve factory conditions in developing countries;
engaged with the OECD on its recent revisions to the OECD Guidelines for Multinational Enterprises;
contributed to OECD’s best practices for conflict minerals in the Congo region; and
spearheaded efforts to address the Uzbek cotton issue via the International Labor Organization’s disciplinary process.

Perhaps our deepest involvement has been in helping craft the 2011 UN Guiding Principles on Business and Human Rights. The UN principles ask companies to respect human rights, starting with legal compliance, and institute a due diligence process to “know and show” that they do. But the guidelines are also very clear in stating that companies cannot – and should not – assume the responsibilities of governments, and that suppliers are themselves responsible for complying with national law and respecting human rights.

USCIB played a strong and vocal role in developing the UN principles, which are a sensible and responsible alternative to the overreach of the Dodd-Frank law. Policy makers should use the UN principles as a model for ensuring appropriate action by companies to keep their supply chains clean, while also maintaining pressure on local governments to live up to their fundamental responsibilities.

Mr. Robinson’s bio and contact information

Other recent postings from Mr. Robinson:

Opening the World for Business (Summer 2011)

The OECD at 50 (Spring 2011)

Dealing With State-Owned Enterprises (Winter 2010-2011)

Leadership’s Legacy, and Its Promise (Fall 2010)

USCIB Gears Up for APEC Senior Officials Meeting in San Francisco

Published on August 9, 2011

A wide-ranging agenda in San Francisco will help set the stage for this November’s APEC summit in Honolulu.

USCIB members and staff will be front and center as the Asia-Pacific Economic Cooperation (APEC) economies convene September 12-26 in San Francisco for their third senior officials’ meeting of 2011. Founded in 1989, APEC encompasses 21 economies of the Asia-Pacific region, with a focus on facilitating economic growth, cooperation, trade and investment.

As the host to APEC this year, the United States held the first two senior officials’ meetings in Washington, D.C. in February and in Big Sky, Montana in May. The meetings in San Francisco will set the stage for the APEC Leaders Meeting and CEO Summit, November 9-14 in Honolulu.

The San Francisco gathering will include important high-level meetings on women and the economy, energy and transportation, information and communications technology, and life sciences innovation. Also on the agenda are important sessions on customs and trade facilitation, electronic commerce and data privacy, and chemicals.

By participating in the APEC process, companies and business groups have the opportunity to lay out their priorities on various trade and investment issues directly to the economies of greatest interest, and participate in dialogues with the officials who ultimately make the policy decisions affecting their industry. Business input into APEC is facilitated at the regional level through the APEC Business Advisory Council, and at the U.S. level via the National Center for APEC.

USCIB members and staff will be busy informing discussions and attending a number of high-priority meetings, including the following.

Women and the economy: Ronnie Goldberg, USCIB’s executive vice president and senior policy officer, has been invited by the Department of State to attend the Women and the Economy Summit, which takes place September 13-16. The WES is set to bring together senior private- and public-sector representatives for a dialogue on fostering women’s economic empowerment among the APEC economies. Secretary of State Hillary Clinton is scheduled to deliver the keynote address.
Chemicals: Helen Medina, USCIB’s director of life sciences and product policy, will have an active role at the APEC Chemical Dialogue, scheduled for September 12-13, leading industry input and continuing discussion on the chemical in articles project from February’s meeting in Washington, D.C.
Customs: Nasim Deylami, USCIB’s manager of customs and transport policy, will participate in the APEC Customs-Business Dialogue on September 17, joined by members of USCIB’s Customs Committee to address issues ranging from mutual recognition of authorized economic operators to supply-chain connectivity and security.
Privacy: USCIB is coordinating a seminar on “APEC Cross-Border Privacy Rules: The Company Perspective:” At the earlier senior officials meeting in Washington, Heather Shaw, USCIB’s vice president of ICT policy, spoke on a panel about the costs and benefits to corporate participation in the program. In San Francisco, a working group will consider the potential interoperability between the APEC rules and other existing regulatory systems dealing with cross-border privacy issues, such as the EU’s binding corporate rules.

In addition to the above events, Justine Badimon, USCIB’s APEC affairs manager, will join members at public-private dialogues at the energy and transportation ministerial, a meeting of the APEC business mobility group, and the Secure Trade in APEC Region conference. She will also support a presentation of the Asia-Pacific Interactive Tariff Database to the business community and APEC customs officials.

USCIB is already looking ahead to the November leaders’ meeting and CEO summit in Honolulu, where a full agenda of public-private roundtables and events is being organized to facilitate discussion and cooperation between the public and private sectors of APEC member economies. USCIB President and CEO Peter Robinson plans to attend the CEO summit, joining many USCIB member companies in communicating industry’s priorities for the Asia-Pacific region.

For more information about registration for private-sector activities, please visit the National Host Committee’s website at www.apec2011usa.org.

Staff Contact: Justine Badimon

US Ramps Up Multilateral Attention on State-Owned Enterprises

Published on August 9, 2011

August 9, 2011

U.S. Ramps Up Multilateral Attention on State-Owned Enterprises

Senior U.S. officials are pressing governments in the Asia-Pacific region and elsewhere to develop multilateral rules to rein in state-owned enterprises, which are often favored by their home governments and increasingly compete against U.S. firms in third countries. Speaking in Hong Kong in July, Secretary of State Hillary Clinton urged Asia-Pacific governments to pursue multilateral agreements over bilateral economic pacts, develop rules in a fair and transparent manner, and avoid providing unfair advantages to state-owned enterprises.

Business Urges U.S. to Restart India Investment Talks: USCIB joined a number of industry groups in encouraging the U.S. government to re-engage India in discussions toward a bilateral investment treaty (BIT). In a letter to Secretary of State Hillary Clinton and U.S. Trade Representative Ron Kirk, the business groups stated: “Negotiating a strong and high-standard BIT with India will produce substantial increases in productive investments by U.S. companies, U.S. exports and other new market opportunities for the United States. BITs are a vital tool to protect important U.S. investments overseas that promote U.S. exports and economic growth.” A related association letter was submitted to India’s ministry of commerce in response to a discussion paper on India’s investment policy, in particular the use of equity caps. The business letter urged India to phase out these caps, which are expected to be an issue in any potential BIT with the United States.

“There is now a danger of creating a hodgepodge of inconsistent and partial bilateral agreements which may lower tariffs, but which also create new inefficiencies and dizzying complexities,” Secretary Clinton said. “A small electronics shop, for example, in the Philippines might import alarm clocks from China under one free trade agreement, calculators from Malaysia under another, and so on — each with its own obscure rules and mountains of paperwork — until it no longer even makes sense to take advantage of the trade agreements at all. Instead, we should aim for true regional integration.”

Secretary Clinton said the U.S. wants to focus attention on state-owned enterprises via Trans-Pacific Partnership talks. “We are working to ensure that the TPP is the first trade pact designed specifically to reduce barriers for small and medium-sized enterprises. After all, these are the companies that create most of the world’s jobs, but they often face significant challenges to engaging in international trade. So, the TPP aims to ensure fair competition, including competitive neutrality among the state-owned and private enterprises.”

These themes were echoed in remarks by Deputy U.S. Trade Representative Demetrios Marantis in Washington, also in July. Mr. Marantis told a conference convened by the Coalition of Services Industries that, as USTR develops a proposal for dealing with state-owned enterprises in the TPP talks, negotiations, it is using work already underway in the Organization for Economic Cooperation and Development as a guide.

He said that the U.S. approach on SOEs in the TPP talks would be based upon OECD work on fostering “competitive neutrality” between SOEs and private firms. “We are working right now on determining what our best negotiating proposal can be in the Trans-Pacific Partnership that covers this issue.”

Contact: Eva Hampl or Shaun Donnelly

From the President: Dealing With State-Owned Enterprises (Winter 2010-2011)

More on USCIB’s Trade and Investment Committee

Business Groups Seek More Aggressive Promotion of CleanEnergy Exports

Published on July 27, 2011

New York, N.Y., July 27, 2011 – The United States Council for International Business (USCIB), which represents America’s top global companies, has joined with an array of leading U.S. business groups in urging ramped-up efforts to promote U.S. clean energy exports. The groups unveiled their proposal at a briefing on Capitol Hill today.

“Meeting the global demand for American clean energy technology will be critical for job creation and American technological leadership in the years ahead,” said Rob Mulligan, senior vice president and head of USCIB’s Washington, D.C. office. “To do this, we need a more coordinated and aggressive approach by the U.S. government in promoting exports of U.S. environmental goods and services.”

The business groups put forward a six-point plan to help guide action by the U.S. government in promoting green technologies. They recommend the following principles:

1. Ensure technological neutrality in efforts to encourage clean technology exports

2. Activate U.S. commercial diplomacy, including the International Trade Administration, in support of clean tech exports

3. Require robust monitoring and reporting on clean technology export programs

4. Further develop flexible clean technology funding mechanisms

5. Protect U.S. intellectual property rights globally

6. Reduce barriers to international trade in environmental goods and services.

“Taken together, these efforts would help clear away significant barriers at the domestic and international levels to American clean energy exports, thereby supporting robust job creation and innovation in this critical sector,” said Mr. Mulligan.

In addition to USCIB, signatories to the principles were the Business Council for Sustainable Energy, Business Roundtable, Coalition of Services Industries, Emergency Committee for American Trade, Information Technology Industry Council, National Foreign Trade Council, National Association of Manufacturers, National Electrical Manufacturers Association and the U.S. Chamber of Commerce.

The proposal was released at a briefing featuring Senator Ron Wyden (D-OR), chairman of the Senate Finance Subcommittee on International Trade, and Representative David Dreier (R-CA), chairman of the Committee on Rules in the House. Also at the briefing, a panel of senior representatives from the business and environmental communities and U.S. government discussed how promoting U.S. clean energy exports can help unlock foreign markets and grow businesses and jobs in the United States.

Panelists included: Jennifer Haverkamp, director of the international climate program at the Environmental Defense Fund; Mark Linscott, assistant U.S. trade representative for environment and natural resources; Ty Mitchell, vice president and general manager of LED lighting, Cree; Peter Perez, deputy assistant secretary of commerce for manufacturing; and Tim Richards, managing director for energy policy with GE Energy. The discussion was moderated by Bill Reinsch, president of the National Foreign Trade Council.

About USCIB

USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and prudent regulation. Its members include top 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 information is available at www.uscib.org.

Business statement: “Encouraging U.S. Clean Energy Exports: A Set of Private-Sector Principles”

Transatlantic Dialogue on Investment Urged

Published on July 19, 2011

USCIB has joined several business associations in urging the United States and the European Union to take up shared issues relating to foreign investment as a priority matter.

In a letter to EU Trade Commissioner Karel De Gucht and Michael Froman, the U.S. deputy national security advisor for international economic affairs, the business groups argues strongly in favor of reinvigorating the U.S.–EU Investment Dialogue with special attention to:

coordinating efforts including promoting strong investment protections in key third countries, especially countries such as China, Russia, Ukraine, India and key countries in Latin America;
highlighting that a major theme of “third-country” discussions should be how the EU and U.S. can use investment and other agreements to mitigate the anticompetitive effects of government supports for state-owned enterprises;
reiterating a long-standing position that any evaluation of inward investment should contain safeguards to ensure that it is limited to legitimate national security concerns; and
tracking investment negotiations and handling of BITS in the EU as the authority for negotiating BITS has shifted from the member states to the EU Commission.

USCIB is seeking input from members on the range of issues to be taken up when the investment dialogue is revived.

Business letter on U.S.-EU Investment Dialogue

From the President: Dealing With State-Owned Enterprises (Winter 2010-2011)

More on USCIB’s Trade and Investment Committee

More on USCIB’s European Union Committee

USCIB Urges Closer Cooperation on Air Cargo Security

Published on July 8, 2011

In June, USCIB urged the heads of U.S. Customs and Border Protection and the Transportation Security Administration to work more closely to improve air cargo security, including taking other countries’ rules and regulations into account when implementing new air cargo security rules.

In a letter to Customs chief Alan Bersin and TSA Administrator John Pistole, USCIB President and CEO Peter M. Robinson commended the two agencies for working with the private sector to implement protocols and rules of engagement for the air cargo security program, and expressed hope that heightened interagency cooperation would continue to ensure a streamlined program.

On the international aspect of new security rules, Mr. Robinson wrote: “Although CBP recently suggested increasing the number of countries in the pilot program from 28 to 42 countries, … we urge that any increase be done with significant private sector consultation to ensure the proper consideration of issues such as timing and availability of information, volume of shipments for each country, as well as data privacy rules and regulatory hurdles in each country. USCIB urges CBP and TSA to assess the regulatory environment in other countries before increasing the scope of this pilot program.”

USCIB letter on air cargo security

More on USCIB’s Customs and Trade Facilitation Committee

Countries Decline to Ramp Up Disclosure of Product Information

Published on July 8, 2011

USCIB’s Helen Medina at the conference in Chisinau, Moldova

Timely work by USCIB and other business groups around an intergovernmental conference paid off when parties to the Aarhus Convention rebuffed efforts to widen possible public environmental disclosure rules to include proprietary product information.

The scene was the fourth meeting of parties to the convention, which took place June 27 to July 1 in the Moldovan capital Chisinau. Attending on behalf of business and industry were Helen Medina, USCIB’s director of life sciences and product policy, attended the meeting in Moldova and was joined by Alessandra Salamini (Monsanto), Michelle Orfei (Croplife International) and Robbie Schreiber (European Crop Protection Association).

Formally known as the UN Economic Commission for Europe Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters, and named after the Danish city where it was signed in 1998, the Aarhus Convention links environmental protection and human rights, laying our procedures for public access to information, participation and redress in local, national and cross-border environmental matters. Some 40 European and other countries are party to the convention.

“The Aarhus Convention is not just an environmental agreement,” noted Ms. Medina. “It is also about government accountability, transparency and responsiveness. It grants the rights to the public, and it imposes obligations on countries and public authorities regarding access to information, public participation and access to justice.”

Industry representatives were interested in how the convention work program for 2012-2014 would be implemented, especially the work plan for a task force aimed at widening the range of information – including privately held product information – made available to the public. In the end, parties to the convention opted to delete the reference to product information.

“This was a win for us, brought about largely because, prior to the conference, industry did a lot of work on educating the European Union about the slippery slope of giving the public have direct access to product information from the private sector,” Ms. Medina said. “In the end, it was the EU that changed the language.”

USCIB and other industry groups will continue to monitor future discussions to see how this language in the work program translates into practice.

Business also sought to learn how Aarhus Convention principles are being promoted at the global level and in other international environmental discussions. Stakeholders at the Chisinau meeting issued a declaration, “Rio Plus Aarhus – 20 Years On,” which highlights the importance of promoting Aarhus principles of openness, transparency, wide participation and accountability in international environmental decision-making in preparation for the Rio+ 20 Conference in 2012. In this context, the business delegation delivered an intervention which highlighted the need of wide stakeholder engagement in matters relating to sustainable development.

On the last day of the meeting, USCIB’s Ms. Medina delivered a business statement highlighting the positive role companies can play in providing practical solutions to complex global environmental challenges. She stressed the need for improved governance and policymaking, as well as a multi-stakeholder approach, in tackling such environmental challenges as climate change, energy security, waste management, water scarcity and population growth.

More on USCIB’s Product Policy Working Group

Global Business Seeks Coordinated Action to Curb Maritime Piracy

Published on July 8, 2011

Against the backdrop of ever-more aggressive forays by Somali pirates against shipping in the Indian Ocean, USCIB President and CEO Peter M. Robinson recently wrote to Secretary of State Hillary Clinton and other top administration officials involved in national security to draw attention to a global Call for Action on Piracy, issued by our affiliate the International Chamber of Commerce at the May 25-27 International Transport Forum in Leipzig, Germany.

ICC calls on governments to take immediate action to improve the rules of engagement given to the navies present in the Indian Ocean, to refocus the efforts of the United Nations and other international bodies to ensure that required institutions in south-central Somalia are established to maintain economic and social standards, and to hold pirates accountable for their conduct.

In the past year, there has been an escalation in both violence and the number of attacks on ships and crew in the area off the coast of Somalia. According to ICC’s International Maritime Bureau, there were 219 attacks off Somalia in 2010, in which 49 vessels were hijacked and 1,016 crew members taken hostage.

Despite measures taken by the UN Security Council and the presence of naval units in the area, pirates continue to strike with increasing violence. In addition to placing individuals and crews in danger, piracy is disrupting international trade and shipping. In 2010, the One Earth Foundation estimated the economic cost of piracy on the supply chain to be in the range of $7-12 billion.

In the call to action, ICC “urges governments to recognize that piracy, in addition to its effect on the safety of seafarers, has an important financial impact on global trade and shipping, and furthermore poses increased threat on the stability and security of energy supply lines not only for major industrial nations.”

The ICC Call for Action on Piracy has been endorsed by over 20 CEOs from key shipping and trading companies around the world.

ICC Call to Action on Piracy

More on USCIB’s Customs and Trade Facilitation Committee