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With Timely European Programs USCIB Advances Trade and Investment Agenda

Published on October 14, 2013
USCIB’s Shaun Donnelly (left) makes a point at a well-attended conference in Copenhagen on the Transatlantic Trade and Investment Partnership.
USCIB’s Shaun Donnelly (left) makes a point at a well-attended conference in Copenhagen on the Transatlantic Trade and Investment Partnership.

The U.S. government shutdown may have caused the cancellation of planned U.S.-EU trade talks (along with so much else) in the first half of October, but USCIB kept up a high level of activity on key trade and investment priorities, with a number of timely events and meetings in Europe.

Working with the National Foreign Trade Council and the International Chamber of Commerce (ICC), we organized a September 30 program in Geneva on “Localization Barriers to Trade.” The well-attended gathering focused on the importance of global value chains to corporate and national competitiveness (the subject of a recent USCIB-commissioned paper by Dartmouth’s Matthew Slaughter), and how forced localization requirements undercut the ability of global companies to effectively utilize their value chains to generate growth and jobs in those countries that impose them.

Speakers included Rob Mulligan, USCIB’s senior vice president for policy and government affairs, Hendrik Bourgeois (GE), Jeffrey Schott (Peterson Institute for International Economics) and Rob Atkinson (Information Technology & Innovation Foundation). Afterward, USCIB co-hosted a reception that provided additional opportunity for members to meet with representatives from the WTO delegations of several countries.

While in Geneva, USCIB’s Mulligan attended the WTO’s Public Policy Forum, and met with a number of officials at the WTO, the U.S. mission to the United Nations, and UNCTAD. He also took part in a meeting of the ICC Trade and Investment Commission. He later traveled to Brussels, where he joined other members of the Business Coalition for Transatlantic Trade for meetings with EU negotiators as well as EU business representatives to discuss U.S. business priorities and views for the Transatlantic Trade and Investment Partnership (TTIP).

According to Mulligan, key takeaways from the meeting included the EU’s emphasis on government procurement in the TTIP, and some concern about a slow response from the U.S. on regulatory cooperation issues, a key aspect of the talks. Mulligan and other business representatives highlighted a number of priorities for American business, including comprehensive coverage of investment issues and investor-state dispute settlement, forced localization, cross-border data flows and a comprehensive approach to services market access, including for financial services.

Not to be outdone, Shaun Donnelly, USCIB’s vice president for investment and financial services, journeyed to Copenhagen to take part in a well-attended conference on TTIP organized by the Confederation of Danish Industry (DI). Speaking on a panel with the heads of Business Europe and DI plus the CEO of A.P. Moller – Maersk, Donnelly emphasized that U.S. business is insisting that a TTIP agreement be ambitious, comprehensive and high-standard.

The Copenhagen program was just one of a planned series of briefings and events Donnelly was scheduled to take part in across Western Europe, organized in cooperation with the State Department. Unfortunately, the government shutdown forced him to cancel the rest of the trip.

Staff contacts: Rob Mulligan and Shaun Donnelly

More on USCIB’s Trade and Investment Committee

USCIB Urging Congressional Support for Foreign Investment Bill

Published on September 16, 2013

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

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

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

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

Staff contact: Shaun Donnelly

More on USCIB’s Trade and Investment Committee

New Study Global Value Chains Paired With Open Markets Offer Path to Sustainable Growth

Published on September 16, 2013
A new study on global value chains from the OECD, WTO and UNCTAD echoes conclusions of a report commissioned by USCIB and the Business Roundtable.
A new study on global value chains from the OECD, WTO and UNCTAD echoes conclusions of a report commissioned by USCIB and the Business Roundtable.

A report launched by the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO) and the UN Conference on Trade and Development (UNCTAD) finds that global value chains (GVCs) have become “a dominant feature of the world economy,” with between 30 and 60 percent of G20 countries’ exports comprised of imported inputs or used as inputs by others, and offer new prospects for sustainable growth, development and jobs.

The report, entitled Implications of Global Value Chains for Trade, Investment, Development and Jobs, concludes that both the cost of trade and investment protectionism and the benefits of multilateral opening are much higher than previously thought, and highlights the urgent necessity of comprehensive policy reforms that enhance trade and investment openness.

These conclusions, which were presented to the G20 Summit in St. Petersburg in response to the G20 leaders’ request at the 2012 Summit to analyze the functioning of GVCs and their relationship with international trade and development, parallel those of a study by Dartmouth’s Matthew Slaughter,  American Companies and Global Supply Networks, published earlier this year by USCIB and the Business Roundtable, which found that the operations of globally engaged U.S. companies benefit American economic growth and job creation.

In our highly interconnected world, participation in GVCs can produce considerable gains: developing economies with the fastest growing GVC participation have per-capita GDP growth rates two percent above the average, according to the report. Likewise, countries that attract more foreign direct investment tend to have higher GVC participation levels and to generate more value added from trade. Thus, the report states that practical trade facilitation reforms are crucial in reducing trade costs and increasing GVC participation, and that policies conducive to open markets will help ensure that development and growth potential is realized and widely inclusive. Sustainable GVC growth also relies on multilateral cooperation so that policies are coordinated between exporters and importers, and host countries and home countries.

“Trade facilitation is about easing access to the global marketplace and doing away with the complicated border crossing procedures and excess red tape that raise costs, which ultimately fall on businesses, consumers and our economies,” said OECD Secretary General Angel Gurría. “Reducing global trade costs by just one percent would increase worldwide income by more than $40 billion, 65 percent of which would accrue to developing countries.”

One of the key challenges remaining is to understand and address the obstacles to such access that developing economies experience – access that would help build productive capacity where local firms can capture a significant share of the value added. Significant investment, though, would be required to aid technology dissemination, skill building, education and infrastructure upgrading.

Staff contacts: Rob Mulligan and Shaun Donnelly

More on USCIB’s Trade and Investment Committee

US OKs Chinese Acquisition of Smithfield Affirming Open Investment Policy

Published on September 9, 2013

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

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

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

Staff contact: Shaun Donnelly

More on USCIB’s Trade and Investment Committee

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

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

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

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

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

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

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

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

For more information on the ICC website, click here.

IOE, BIAC Voice Business Views on Jobs and Taxation

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

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

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

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

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

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

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

Click here for more information.

Uncertainty Hampering Trade Finance ICC Survey Shows

Published on July 9, 2013

4547_image002The International Chamber of Commerce’s 2013 survey on trade and finance, released in June, has found that a continued shortage of trade finance for international trade remains a major challenge for economic recovery and development, with many traders depending on overdraft and other corporate loans to finance exports and imports.

The proliferation of new regulations in recent years has increased cost pressure on financial institutions and depressed markets. Some 65% of surveyed experts said implementation of Basel III regulations is affecting the cost of funds and liquidity for trade finance. While many changes have already been implemented or proposed, the regulatory future remains unclear due to lack of harmonization, which remains a major problem for trade financiers and their clients.

The ICC survey positively indicates that despite uneven performance around the world in 2012, the market for trade finance does show signs of slow and steady growth, with temporary trade measures imposed during the financial crisis – including the rise in fees for trade –slowly being removed.

“This shows that financial intermediaries are continuing to satisfy the demand for financing and that investing in trade assets is part of a more sustainable model of banking, said Pascal Lamy, director general of the World Trade Organization, in the survey’s foreword.

Click here to read more on ICC’s website.

Staff contact: Eva Hampl

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ICC Recognized for Trade Services

The ICC Banking Commission has won the Trade and Forfaiting Review
2013 Excellence Award for Best Non-Bank Trade Services Provider.

With 80 years of experience and more than 600 members in over 100 countries, the commission is ICC’s largest commission and has gained a reputation as the most authoritative voice in the field of trade finance.

The ICC Banking Commission rules and related services include rules and guidelines on documentary credits, UCP 600 – the most successful privately drafted rules for trade ever developed – and Bank Payment Obligation rules on supply chain finance.

The award follows the commission’s recent launch of new standards in the field of trade finance, including Uniform Rules for Forfaiting and Bank Payment Obligation and International Standard Banking Practice.  Both publications are available for purchase in the USCIB International Bookstore.

Click here to read more on ICC’s website.

Business Groups Express Concerns on Senate Effort to Address IP Theft

Published on June 21, 2013

USCIB joined leading U.S. technology and business organizations in urging key senators from both sides of the aisle to take a fresh look at a proposed law on cyber-theft, to avoid any unintended consequences of harming U.S. economic security and competitiveness or hindering trade and commerce.

The groups explained their concerns in a joint letter to Senators Carl Levin (D-Mich.), Jay Rockefeller (D-W.Va.), John McCain, (R-Ariz.) and Tom Coburn (R-Okla.) — the bipartisan sponsors of S. 884, the Deter Cyber Theft Act. They wrote in part:

Theft of America’s valuable intellectual property and trade secrets through cyber espionage, or other means, is a serious economic security problem for U.S. companies and our country.  In today’s dynamic marketplace, a company’s success is highly dependent on its innovations and competitive advantage, both of which are closely tied to the development and protection of intellectual property. Collectively, the U.S. tech sector spent $80 billion in 2011 protecting and securing their networks against threats, including cyber espionage, and we commend the cosponsors for their demonstrated interest in protecting intellectual property (IP) from theft.

However, we have significant concerns with S. 884, the “Deter Cyber Theft Act,” as introduced, particularly the impact the legislation may have on international commerce and trade at a time when cyber policies are of heightened importance for the global technology ecosystem, as well as the long-term impact on U.S. economic security. For that reason, we urge the cosponsors to engage in a thorough review of this and similar legislation through hearings and markup in the Senate Finance Committee, where S. 884 is currently pending.

We applaud the bipartisan interest in protecting our economically vital intellectual property. However, we believe that we can advance intellectual property protection in a way that does not have a negative impact on our nation’s economic security and competitiveness.  For that reason, we look forward to working collaboratively with the cosponsors to ensure that S. 884 and similar legislation will effectively achieve these important shared goals.

Among the concerns expressed in the letter are S. 884’s potential impediment to international relations, its impact on U.S. exports, and its broad importation ban authority. Click here to read the complete letter. Signatories in addition to USCIB were BSA – The Software Alliance, the Information Technology Industry Council, the National Foreign Trade Council, TechAmerica and the U.S. Chamber of Commerce.

Staff contact: Rob Mulligan

More on USCIB’s Intellectual Property Committee

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World Bank President Upholds Doing Business Report

Published on June 13, 2013

As we reported last month, governments and interest groups that are highly critical of the World Bank’s annual “Doing Business” report and ranking launched a broad attack on the program under the guise of a review. In response, USCIB joined with the International Chamber of Commerce (ICC) and International Organization of Employers
(IOE) to urge the Bank to maintain the integrity and rigor of the report. These efforts appear to have paid off.

Last week, World Bank President Jim Yong Kim issued a statement in response to an independent review panel’s assessment of the Doing Business report, essentially upholding the report’s methodology and ranking while committing the Bank to work toward its improvement going forward.

Kim’s statement read in part:

“The World Bank Group’s work on business climate development, including the Doing Business report, is core to our mission of ending poverty, and in fact we expect it to grow. Our client countries are demanding it, because there is broad consensus about the need for jobs to eliminate poverty and boost growth. We are committed to this work.

“It is indisputable that Doing Business has been an important catalyst in driving reforms around the world. The Panel has made valuable suggestions for how to enhance the report, which merit consideration. Going forward, I will be pushing World Bank Group staff to focus their efforts on improving all aspects of Doing Business, including its data, methodology, and rankings. I am committed to the Doing Business report, and rankings have been part of its success.”

USCIB will continue to monitor the evolution of the Doing Business report, which we regard as a uniquely valuable catalyst for market-oriented reform, private investment, economic growth and job creation around the world.

Staff contacts: Shaun Donnelly and Adam Greene

New York Times: How the World Bank Makes Doing Business Easier

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New York Roundtable Looks at Stakes for Business in Transatlantic Trade Talks

Published on June 12, 2013

On June 6, at Pfizer’s headquarters in New York City, USCIB joined with the American Chambers of Commerce in Europe, a confederation of all the AmChams in the region, and the American Business Forum on Europe to hold a roundtable on the Transatlantic Trade and Investment Partnership (TTIP) and what is at stake for business.

On May 10, USCIB submitted a report on TTIP to the U.S. Trade Representative’s office detailing recommended negotiating objectives in a variety of areas. Click here to download a copy.

The meeting was opened by Richard Blackburn, Pfizer’s vice president of international public affairs, USCIB President and CEO Peter Robinson and Jake Slegers, chair of AmChams in Europe.

The event featured two panel discussions providing perspectives on the upcoming negotiations from both sides of the Atlantic. The first featured Susan Danger, managing director of the AmCham EU in Brussels, and Rob Mulligan, USCIB’s senior vice president for policy and government affairs. Danger described how European business is organizing itself to advocate for the TTIP, and stressed the importance of complementary activity on the U.S. and European sides throughout the negotiations.

Mulligan provided a snapshot of how USCIB is working alongside fellow business groups in Washington to set up the Business Coalition for Transatlantic Trade and cited examples of some common themes on regulatory cooperation issues the business community is already communicating to governments. Country-specific outlooks were provided by Marina Niforos, managing director of AmCham France, and Joanne Richardson, chief executive of AmCham Ireland.

The second panel delved into the details of what specific industries are looking for in the TTIP. Dontai Smalls, vice president of corporate public affairs with UPS, and Doug Goudie, director of international government relations at Pfizer spoke on behalf of their companies. Both agreed that while the TTIP will be a challenge to navigate in several key areas, including regulatory matters and intellectual property protected, the benefits derived from the deal will create jobs and opportunities on  both sides of the Atlantic. The business community should therefore keep up outreach to governments, to build momentum and ensure a successful conclusion.

The roundtable also saw the launch of the 2013 Case for Investing in Europe, by Joseph Quinlan, economist at Bank of America. Quinlan spoke about the  current climate for investing in the European market and stressed that it is as strong as ever. The launch of the report was complemented by a case study presentation on investing in Europe by Salvatore Gabola, director for European public affairs with The Coca-Cola Company.

The event was attended by more than 70 members of the business, diplomatic and policy communities.  USCIB looks forward to working with the AmChams in Europe and AmCham EU in sharing information and coordinating business views during the TTIP negotiations.

Click here for photos from the event.

Staff contacts: Rob Mulligan and Justine Badimon

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Business Pressing for Ambitious Coverage of Financial Services in Transatlantic Trade Pact

Published on May 17, 2013

4509_image002USCIB and nine other leading U.S. business groups sent a forceful joint letter to the White House last week pressing for ambitious and comprehensive financial services commitments in the soon-to-be-launched U.S.-EU Transatlantic Trade and Investment Partnership negotiations.

“We strongly support financial services liberalization both in the EU and the U.S.,” according to Shaun Donnelly, USCIB’s vice president for investment and financial services. “Our immediate concern, quite honestly, is more on the American side. We have picked up worrying reports that some U.S. financial regulators appear hesitant to fully embrace the regulatory cooperation elements for financial services, despite the fact they will likely be extended to virtually every other sector of the economy.”

Donnelly said USCIB and other business groups understand the complexity and unique nature of the financial services sector, and appreciate that commitments in a TTIP agreement on regulatory cooperation will vary by sector.

The joint letter recommends that U.S. and European negotiators with the relevant statutory authority and expertise lead discussions in the TTIP talks about the processes, mechanisms and commitments relating to regulatory cooperation on financial services. The business groups also urge that cross-cutting disciplines on regulatory cooperation (e.g. early transatlantic consultations among regulators, transparency, use of rigorous impact assessment tools, periodic review of existing regulatory measures, and applications of broad “good regulatory practices”) be applied to the financial services sector.

“We are also urging a TTIP agreement coordinate, and strengthen, the various U.S.-EU bilateral regulatory dialogues already in place, or those that might be created in the future,” said Donnelly. In the financial services space, that would currently encompass the U.S.-EU Insurance Dialogue and the U.S.-EU Financial Markets Regulatory Dialogue. “These dialogues, and other US.-EU specialized forums, have been a good start, but it is important now that the TTIP provide strong additional impetus to U.S- European cooperation and integration in these key sectors,” he said.

The business groups’ bottom-line message to the Obama administration is that they strongly reject any suggestion that financial services sector might not be fully subject to important disciplines under the TTIP. Given the key role that financial services play in facilitating and driving broader economic integration, it is crucial that any TTIP agreement not carve out or give short shrift to these key sectors.

Staff contact: Shaun Donnelly

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