News Stories Archives

US Scuttles Trade Language at OECD Ministerial, Imposes Steel Tariffs

Published on June 6, 2018
Participants at the OECD ministerial in Paris

Last week, ministers gathered in Paris for the annual OECD Ministerial Council Meeting. For the second year in a row, the United States refused to join a consensus statement with the other OECD countries.

As happened last year, the U.S. objected to language supportive of globalization and the multilateral trading system. The action came as the Trump administration announced that it would end temporary exemptions from Section 232 tariffs on steel and aluminum granted to Mexico, Canada, and the European Union. The duties went into effect on June 1.

According to USCIB Senior Vice President Rob Mulligan, who attended the OECD ministerial as part of a delegation from Business at OECD, the administration has made clear that it attributes little significance to U.S. leadership in the global trade environment.

“In a misguided effort to re-balance perceived inequities, often based solely on the metric bilateral trade deficits without a view to the larger picture, the administration is effectively alienating the United States from the global order that it once championed and led,” he said following the meetings in Paris.

At the OECD ministerial, U.S. Commerce Secretary Wilbur Ross defended the U.S. action, saying problems arise “when people don’t follow the rules, when the enforcement mechanisms are inadequate and even more so when the rules become obsolete.”

Mulligan elaborated: “Protectionism, while tempting in the short term, has consistently proven to be damaging for the larger economy in the long term. Unilateral, protectionist actions such as these tariffs, enacted under the guise of national security, do not constitute an effective long-term strategy for economic growth. They will also erode the value of the national security exception. For the United States to continue its leadership in innovation, the trade and investment environment must remain open. These recent actions unfortunately do not reflect such a view.”

The business community remains very concerned about the trajectory of the administration’s policies on trade and investment, said Mulligan. While many U.S. actions appear targeted at China and its commercial practices, he said, “it is not clear how stepping away from the global table and alienating our allies is an effective strategy to address the many problems U.S. business encounters in China.”

Colombia Officially Joins OECD, Becomes 37th Member

Published on June 6, 2018

OECD countries have officially agreed, on May 25, to invite Colombia to become a member of the organization. An Accession Agreement was signed by Colombian President Juan Manuel Santos and OECD Secretary General Angel Gurria on May 30 during the OECD Ministerial meetings in Paris. Colombia is the 37th country and the third member country from the LAC (Latin America and the Caribbean) region to join the OECD.

“Through the OECD accession process Colombia has made impressive strides in, for example, reforming its justice system and reducing informality in the labor market,” said Gurria. “The accession process has been instrumental in the design and implementation of new national policies, such as on water and chemicals management. Colombia took important steps to improve its governance of state-owned enterprises, including removal of ministers from the boards. To comply with the OECD Anti-Bribery Convention Colombia significantly modified its corporate liability regime. The list of reforms goes on.” Gurria’s full remarks at the signing ceremony can be found here.

Colombia was invited to begin the accession process in 2013. Over the past five years, 23 OECD Committees conducted an in-depth review of Colombia’s legislation, politics and practices, to align them with OECD standards. The final two Committees where reforms were required were the Labor Committee and the Trade Committee. The Labor Committee concluded their process during their recent meeting in March. The Trade Committee concluded their April meeting with a draft formal opinion, which was finalized several weeks later, just ahead of the Ministerial. Rob Mulligan, USCIB senior vice President for policy and government affairs, was in Paris last week for the Ministerial.

“USCIB has been actively involved in providing input into Colombia’s accession process via Business at OECD (BIAC), the official business voice at the OECD,” said Mulligan. “The main affected sectors throughout that process were pharmaceuticals, distilled spirits, and trucking. Many issues were resolved before accession, and we look forward to continued progress and concrete actions being taken on outstanding issues.” View USCIB’s official statement here.

“Moving forward, USCIB will play an active role in providing U.S. business input to the OECD on any upcoming accession processes,” added Mulligan. The countries that have expressed interest are Argentina, Brazil, Peru, Romania, Croatia, and Bulgaria. At this time, no new process has commenced.

Colombia Gets Approval to Join the OECD

Published on May 29, 2018

Colombia will join the Organization for Economic Cooperation and Development following an agreement among the 35-nation forum’s member states ahead of this week’s OECD ministerial.

Colombian President Juan Manuel Santos and OECD Secretary General Angel Gurría are expected to sign an accession agreement at the annual ministerial-level council meeting, which is scheduled for May 30, according to the OECD.

USCIB – which serves as the U.S. affiliate of Business at OECD, the representative private-sector voice in the OECD – issued the following statement:

“USCIB welcomes the progress Colombia has made over the past several years in the context of the accession process to the OECD. As the official voice representing U.S. business in this process, we acknowledge the steps taken by Colombia to meet the high standards of the OECD in various sectors. We look forward to continued progress and concrete actions being taken on outstanding issues, including on pharmaceuticals and trucking, where the current status does not yet rise to the level of like-mindedness with other OECD countries on open trade and investment. As the OECD considers inviting additional countries to join, USCIB will continue to advocate on behalf of U.S. business to ensure that all OECD countries continue to meet high standards.”

Colombia Statements Picked Up by Inside US Trade and Politico

Published on May 29, 2018

USCIB has been actively involved in providing input into Colombia’s accession process to the Organization for Economic Cooperation and Development (OECD). Most recently, USCIB’s views on Colombia’s progress to meet certain standards have been published in Politico and Inside U.S. Trade.

In Politico, USCIB stated that it welcomed the progress Colombia has made over the past several years in the context of the accession process to the OECD. “As the official voice representing US business in this process, we acknowledge the steps taken by Colombia to meet the high standards of the OECD in various sectors,” the statement reads. “We look forward to continued progress and concrete actions being taken on outstanding issues, including on pharmaceuticals and trucking, where the current status does not yet rise to the level of like-mindedness with other OECD countries on open trade and investment. As the OECD considers inviting additional countries to join, USCIB will continue to advocate on behalf of US business to ensure that all OECD countries continue to meet high standards.”

Read the full news story in Politico here.

Additionally, Inside U.S. Trade also highlighted this statement, along with those of NAM and PhRMA.

USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl, who coordinates U.S. business input on OECD accession issues, noted, “USCIB has worked over the past several years to represent and address any issues U.S. industry faces in Colombia in the context of the OECD accession process. Colombia is an important market for U.S. business, and it is important to ensure that the high standards of the OECD are met. We look forward to continued progress, as Colombia officially joins the OECD this week.”

USCIB Senior Vice President for Policy and Government Affairs Rob Mulligan is currently in Paris attending the annual OECD Forum, where the Colombia accession process will be finalized. Colombia is expected to sign an Accession Agreement on May 30 during the upcoming meeting of the OECD Council at the ministerial level. Colombia will become the 37th member of the OECD upon signing.

Hampl Testifies Regarding Proposed China Tariffs

Published on May 18, 2018

 Following the Trump administration’s proposed Section 301 tariffs on Chinese goods, USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl testified before the Section 301 Committee, chaired by USTR on May 16 regarding the proposal. Hampl’s testimony reflected USCIB member concerns about potential consequences the proposed tariffs will have on sectors vital to the U.S. economy. Her testimony was drawn from comments USCIB sent earlier this month to the U.S. Trade Representative Robert Lighthizer. Hampl was joined by over 100 other business representatives to share specific concerns regarding the proposed tariffs.

“We believe that the imposition of tariffs will not achieve the important goal of changing China’s behavior in the space of emerging technologies and intellectual property rights,” said Hampl in her testimony. “China’s threat of retaliation further exacerbates uncertainties caused by this proposed action. Rather than create more opportunities for U.S. business, sweeping tariffs will stifle U.S. agriculture, goods, and services exports and raise costs for businesses and consumers.

Hampl emphasized the need for a “holistic structure” to address the aforementioned issues. Speaking on behalf of USCIB, Hampl applauded the Trump administration for looking at alternative approaches, such as initiating a WTO dispute by requesting consultations with China.

“It is important for the administration to address these issues with a broad view, working collectively with U.S. industry, Congress, and our trading partners, to adequately address China’s unfair trade practices and get China to be WTO compliant,” noted Hampl.

The proposed tariffs pose a unique challenge to industrial inputs, which represent over 80 percent of the proposed list. Tariffs on industrial goods are especially problematic because they represent not just a tax on U.S. consumers but a tax on U.S. manufacturers and workers, and on the products they export. Tariffs on aerospace, machinery and IT parts and other advanced technologies can undermine the most competitive sectors of American manufacturing, driving up production costs in the U.S., impacting U.S. manufacturing employment, and making U.S. manufacturers less competitive against global rivals.

“Tariffs on industrial parts imported into the U.S. could have the unintended consequence of prompting manufacturers to move final production outside of the U.S.,” warned Hampl. “To see how U.S. companies will be affected by the tariffs, it is important to look to how the supply chain functions. China is the second largest economy and the largest manufacturing economy in the world. We cannot ignore that China may have some unique capabilities, at the product level, that U.S. businesses need to tap into in order to remain globally competitive. For many products or inputs, there is no feasible alternative to procuring from China. We urge the Administration to use this process to ensure that its actions do not inadvertently harm some of the most competitive sectors of the U.S. economy, and the hundreds of thousands of American jobs that depend on them.”

In addition to the testimony, USCIB also co-sponsored a reception last week for Hill staff centered around the China 301 hearing, as well as NAFTA, celebrating Great American Jobs Supported by Trade. Representatives from U.S. government, companies, and associations, spent the evening discussing various important developments in the trade space.

USCIB Warns of Potential Harms to the US Following China Tariffs

Published on May 14, 2018

In light of the Trump administration’s proposed Section 301 tariffs on Chinese goods, USCIB sent comments last week to the U.S. Trade Representative Robert Lighthizer expressing concern about the potential unintended negative consequences the proposed tariffs will have on sectors vital to the U.S. economy and jobs. With $587.6 billion in total goods trade in 2016, China has become the United States’ largest goods trading partner. China was also the third-largest export goods market in 2016 for the U.S., while U.S. foreign direct investment in China was $13.8 billion in 2016, with the ICT sector alone encompassing $4.34 billion.

“China can be a challenging market for U.S. companies to navigate. The ongoing intellectual property rights violations, forced technology transfer requirements, and state interventions harm U.S. companies, workers, consumers, and competitiveness,” stated Eva Hampl, who leads USCIB work on China-related issues.

Made in China 2025 is considered by many an indication that China plans on further advancing in developing their high-tech industries, such as robotics, advanced information technology, aviation, and new energy vehicles, with the eventual goal of global dominance in those industries through uncompetitive means such as subsidies.

“While this unfair advantage to Chinese companies in the high-tech industry space is a legitimate threat to U.S. leadership in innovation, continued engagement in the Chinese market is also very important for U.S. companies in terms of their ability to be globally competitive,” emphasized Hampl. “USCIB members are very concerned that these proposed tariffs will stifle the U.S. economy, and not achieve the important goal of changing China’s behavior in the space of emerging technologies and intellectual property rights. China’s threat of retaliation further exacerbates uncertainties caused by this proposed action. Rather than create more opportunities for U.S. business, sweeping tariffs will stifle U.S. agriculture, goods, and services exports and raise costs for businesses and consumers.”

The comments urge the administration to use this public comment period to listen to USCIB members and other U.S. stakeholders who explain how they will be directly affected by the proposed tariffs.

“It is critical that the administration exclude from its tariffs particularly those products that cannot feasibly be replaced by non-Chinese sources, where the harm of potential tariffs would fall more on U.S. businesses, workers, and exporters than on Chinese entities,” said Hampl. “Hurting American exporters cannot be the outcome of a process designed to level the playing field in China.”

USCIB has also signed on to a broader coalition of trade associations to echo these and other business concerns. Additionally, USCIB is co-sponsoring a reception later this week for Hill staff centered around the China 301 hearing, as well as NAFTA, celebrating Great American Jobs Supported by Trade. Finally, USCIB will also testify this week as part of the China 301 hearing.

Russian Sanctions: How Do They Affect US Business?

Published on May 14, 2018

A roundtable discussion was held at HodgsonRuss LLP in New York on April 26, connecting participants from Washington DC, New York and Europe to discuss the recent sanctions imposed by the U.S. Government on Russia, enforcement trends and how they affect the way the U.S. companies conduct business around the globe. This event was organized by the Committee on Eastern Europe and Committee on International Trade of the International Section of the New York State Bar Association. Distinguished panelists included Charles R. Johnston (Citi), chair of USCIB’s Trade and Investment Committee, Michael Hendrix, OFAC, U.S. Department of Treasury, Hon. Volodymyr Yelchenko, permanent representative of Ukraine to the United Nations and Robert J. Leo, chair of the Committee on International Trade. The discussion was moderated by Serhiy Hoshovsky, chair of the Committee on Eastern Europe. Participation from overseas was moderated by Oleh Beketov, chapter chair in Kiev.

The event was opened by Paul M. Frank, a former chair of the International Section and renown international law attorney who hosted the event at his law firm. Yelchenko provided a comprehensive political context for the Russian sanctions and reminded of the events that led to their initial imposition in 2014. Michael Hendrix, an enforcement officer with OFAC, summarized legal framework for the sanctions and enforcement priorities as well as discussed some recent enforcement actions. Johnston provided a great overview of the sanction regime from the perspective of the U.S. business community, explaining in detail how the sanctions are becoming a new reality and how the U.S. businesses adapt to doing business. He also shared practical experiences of what U.S. companies do to stay compliant. Leo shared a very useful handbook on sanctions and practical tips on what to do when issues arise and how to stay compliant.

“The event provided a unique opportunity for the participants, especially those from the overseas, to ask questions and hear from people who are on the forefront of the sanction policy and enforcement at the US government, business community and legal profession,” said Nancy Thevenin, USCIB’s general counsel. “All panelists and participants agreed that the event was a major success and provided a great platform for sharing views and discussing major issues affecting business and legal community not only in the U.S. but also internationally.”

USCIB Sponsors National Governors Association North American Summit

Published on May 8, 2018
From left to right: CEO of Rassini Eugenio Madero; USCIB VP for Trade and Financial Services Shaun Donnelly; Woodrow Wilson Institute and former US Ambassador to Mexico Tony Wayne; National Restaurant Association Senior VP Steve Danon

USCIB was an organizational sponsor for the National Governor Association (NGA) North American Summit in Scottsdale, Arizona, which was held May 4-6. USCIB Vice President for Investment Policy and Financial Services Shaun Donnelly represented USCIB at the weekend event. The NGA welcomed Mexican Governors and Canadian provincial premiers to the North American Summit, which focused on strengthening North American economic integration and competitiveness in today’s and tomorrow’s global economy.

“The good news is that governors, across the three nations of North America, get it!” said Donnelly. “Open trade and investment gets broad bipartisan support across the political spectrum of governors and premiers. They welcome trade and investment and they welcome business comments and recommendations at these sessions. Obviously, NAFTA, and the on-going negotiations to update that key agreement, were key areas of discussion.”

Business speakers from the three countries were united in urging governors across all three countries, particularly in the U.S., to be strong advocates for a strong updated NAFTA with their national governments at this key moment in the negotiations.

USCIB member company representatives were also present and active at the NGA Summit with UPS, Walmart, and Squire Patton Boggs executives among the formal speakers/panelists to the Governors; CenturyLink was another active participant in the corridors. Former Canadian Foreign Minister Perrin Beatty, CEO of USCIB’s Canadian counterpart organization the Canadian Chamber was another clear pro-NAFTA, pro-business panelist in his presentation to the assembled governors.

Donnelly commented, “I come away from this NGA weekend with some key governors from across North America very encouraged that they really understand and support NAFTA and importance of an integrated, competitive North American economy/marketplace going forward. At this trilateral Summit, I saw none of the partisanship and anti-trade grand-standing we see so much of in Washington these days. The coming weeks will be critical for the fate of NAFTA and America’s governors, of wither party, can be important allies in convincing the Administration and, then down the road, the Congress to do the right thing…….and not to do the wrong thing on NAFTA.”

World Trade Week NYC Celebrates Gotham’s Export Champs

Published on May 8, 2018
Cheryl Moore of the New York Genome Center

USCIB is a longtime partner in the annual World Trade Week festivities in New York City. World Trade Week, a celebration of international commerce in cities across the United States, was launched by President Franklin Delano Roosevelt and brings together trade champions and companies of all sizes to mark the critical importance of cross-border commerce in promoting American competitiveness and global leadership.

World Trade Week NYC 2018 – despite the name, actually a full month of events and activities – kicked off this week with a high-level awards breakfast hosted by the Weissman Center for International Business at Baruch College, part of the City University of New York. Among the award honorees was the New York Genome Center, whose president and COO Cheryl Moore also served as the breakfast keynote speaker, providing an overview of New York’s efforts to foster growth in the life sciences industries.

Other businesses recognized for export success included Magnetic Analysis Corp., Innodata, Inc. and Classic Rug Collection, Inc. Empire State Development’s Global NY initiative was also honored, as was Irving A. Williamson, a member of the U.S. International Trade Commission, who was presented with a lifetime achievement award.

USCIB Vice President Jonathan Huneke served on the steering committee for World Trade Week NYC 2018. For a full list of World Trade Week events in and around New York City, click here.

Mulligan Joins BIAC to Push for Business Priorities at OECD

Published on May 4, 2018

USCIB Senior Vice President for Policy and Government Affairs Rob Mulligan was in Paris the last week of April attending Business at OECD (BIAC) and OECD Trade Committee meetings, which included dialogues with several OECD officials, including Director of the OECD Trade Directorate Ken Ash, OECD Deputy Secretary General Mari Kiviniemi, Head of the OECD Investment Division Ana Novik, and Head of the OECD Services Trade Division John Drummond, among others.

“BIAC’s meetings were integral in getting the business community on the same page regarding several issues, including possible accession to the OECD by Argentina, Brazil, Peru, Croatia, Romania and Bulgaria, BIAC’s upcoming work with B20 Argentina on joint meetings later this month in Paris, as well as the OECD release of a Trade Facilitation publication this summer,” noted Mulligan.

According to Mulligan, BIAC members also discussed BIAC talking points on the OECD’s draft Program of Work and Budget for 2019-20 (PWB), providing suggestions for inclusion of services trade, de-minimis, overcapacity, digital trade, cybersecurity, customs simplification for SMEs, trade distortions, international regulatory cooperation, and government procurement.  These were in addition to the points based on the BIAC Trade as a Priority for All paper approved by the Committee last year. At a subsequent OECD Trade Committee Meeting later that week, member countries provided feedback to the secretariat about the draft PWB and BIAC, represented by its Chair Cliff Sosnow, noting the areas it would like to see the committee focus on during this cycle, which aligned with many of the areas BIAC had suggested.  However, BIAC noted that the PWB did not seem to include further work on localization requirements and state-owned enterprises that continue to be key areas of concern for its members and encouraged the OECD to include this in their work plans going forward.

Mulligan also had the opportunity to attend the BIAC Roundtable on Data Localization, Digital Trade and Market Openness which enabled a dialogue among the 25 people around the table. Ash, who recently met with the Japanese business group Keidanren, emphasized his desire to understand the realities of business and digital trade issues and noted Keidanren’s plans to make digital trade a focus when they host G20/B20 in 2019.

Mulligan then joined Pat Ivory of the Irish Business Federation Ibec, in their capacities as vice chairs of the BIAC Trade Committee to provide overviews on the BIAC digital trade priorities.

“Members are increasingly voicing concerns about data localization requirements related to the impact on cybersecurity and the conflicts they can cause for highly regulated industries,” stressed Mulligan. “The impact of rapidly changing technology and the need for regulators to take approaches to digital trade that do not end up restricting trade, stifling innovation, and undercutting economic growth.”

BIAC members noted challenges they deal with when assessing where to do business and suggested that localization requirements that can increase security risks in some developing countries and can make it less likely for them to do business there.