USCIB Talks OECD Accession With New US Ambassador to Brazil   

Todd C. Chapman

USCIB trade and investment policy staffers Shaun Donnelly and Eva Hampl had an introductory conference call on March 19 with the recently-confirmed new U.S. Ambassador to Brazil Todd Chapman and State Department Brazil Desk Economist Ben Kalt.  Ambassador Chapman, with whom USCIB worked in the past during Chapman’s earlier appointment as U.S. Ambassador to Ecuador, had hoped to meet in person with USCIB staff and member companies but settled for an introductory call in light of COVID-19 precautions.

According to Donnelly, the Ambassador assured USCIB that the Brazil’s Organization for Economic Cooperation and Development (OECD) accession process will be at the top of his policy agenda throughout his assignment in Brazil.

Donnelly and Hampl outlined USCIB’s role in the OECD accession process, serving as the official voice of U.S. business in all OECD matters, directly and as the U.S. affiliate of the Business at OECD (known as BIAC) business coalition on the ground at the OECD.

“We shared our experiences with the OECD, BIAC, the U.S. Government, the government of Colombia and business leaders on Colombia’s recent OECD accession,” said Donnelly. “We discussed possible modalities for embassy-USCIB cooperation throughout the OECD accession process as well as ways both USCIB and the embassy might work most effectively with CNI, which is Brazil’s largest and most influential business organization.”

USCIB has also worked extensively with CNI–as national committee partners in Business at OECD, as well as in the International Chamber of Commerce (ICC), the International Organization of Employers (IOE) and the Major Economies Business Forum (BizMEF) for climate change.

Ambassador Chapman enthusiastically signed up for a meeting with USCIB member companies on one of his early return visits to Washington after he gets settled in Brasilia.

The OECD accession process is a comprehensive, rigorous, and lengthy process, often running three to five years or more, with more than a dozen OECD committees and other bodies each carefully reviewing the candidate country’s laws, regulations, and practices to confirm they are in line with OECD standards.  When all relevant OECD committees and subsidiary bodies are satisfied by the applicant’s “like-mindedness” and commitment to OECD standards, the OECD “Council” of thirty-six ambassadors can formally approve the accession and invite the candidate country to file its binding acceptance of membership.

According to Donnelly, given Brazil’s prominent role in the global economy and, frankly, its history of barriers to foreign goods, services and investments, Brazil’s candidacy will likely attract great interest from OECD member governments and the Business at OECD coalition.  USCIB will be at the head of the line in that business effort.  The Brazil accession case has some important unique aspects, probably most important the strong early endorsement from President Trump personally.

If you have questions, concerns, or recommendations concerning Brazil OECD accession process, please contact Eva Hampl (ehampl@uscib.org) or Shaun Donnelly (sdonnelly@uscib.org).

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Hampl Facilitates Discussion on WTO Digital Trade Negotiations

World Trade Organization (WTO) members met earlier this month in Geneva for their seventh round of negotiations of a plurilateral agreement on electronic commerce. Negotiations started last year on this critical issue, and there will be two further rounds in Geneva to work toward an outcome by the WTO Ministerial, which will take place in June in Kazakhstan. Following the first round of negotiations this year, USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl moderated a session February 25, in Washington DC around expectations and priorities for the talks leading up to the Ministerial. The panel included representatives from Siemens, IBM, and the office of the U.S. Trade Representative.

“USCIB supports these negotiations to update the WTO’s digital trade framework, including support for a permanent ban on customs duties’ application and other customs processes on electronic transmissions for all WTO members.,” said Hampl. “We are encouraged by progress that was made last year and look forward to a high-standard outcome that includes important issues like data flows and data localization.”

This event was organized by the Association of Women in International Trade (WIIT).

USCIB Urges US Participation in WTO’s Procurement Agreement

USCIB joined over twenty industry associations in signing a letter to high-level government officials emphasizing the critical importance of continued U.S. participation in the World Trade Organization (WTO) Government Procurement Agreement (GPA). The letter was sent to United States Trade Representative Robert E. Lighthizer, Secretary of the Treasurer Steven T. Mnuchin, Secretary of Commerce Wilbur Ross, and National Economic Council Director Lawrence Kudlow.

The letter argues that the GPA provides benefits to the U.S. economy, businesses and workforce by empowering the United States to negotiate reciprocal terms under which GPA signatory countries open their government procurement markets to U.S. companies and commit to transparency and procedural protections that support the rule of law.

“The GPA is the only part of the WTO system that provides binding guarantees of the right to sell to foreign governments (which are not covered by other WTO disciplines). The GPA is also unique among WTO plurilateral agreements in that only the forty-seven current country signatories to the agreement benefit from and can enforce its binding commitments,” the letter stated.

Additionally, the letter warns that if the U.S. withdrew from the GPA, it could no longer negotiate the terms under which China could join the GPA. As a result, other GPA signatory countries would be less likely to demand comprehensive access to Chinese government procurement markets.

USCIB Supports US–Singapore Joint Statement on Financial Services Connectivity

Washington DC – February 6, 2020 – The U.S. Council for International Business (USCIB) today voiced its support for the recent U.S. – Singapore Joint Statement on Financial Services Data Connectivity. We applaud this holistic approach to cooperation on the critical issue of Data Policy.

USCIB further recognizes the importance of ensuring seamless transfer of data across borders in conjunction with the business of a financial service provider. We support fostering greater understanding of this important public policy issue and acknowledge the importance of unfettered data connectivity and its role in global trade, innovation and economic growth.

Link to the Joint Statement by U.S. – Singapore on Data Connectivity:

https://home.treasury.gov/news/press-releases/sm899

USCIB Supports Respect for Arbitration Awards in U.S. GSP Program

USCIB Vice President Shaun Donnelly (left) and Chevron Supervising Counsel Andres Romero-Delmastro (right) testifying as panelists before the US Government’s GSP Subcommittee

USCIB went on the record at the January 30 Public Hearing of the USTR-led interagency Generalized System of Preferences (GSP) Subcommittee, supporting respect for the GSP eligibility criteria, specifically the need for “respecting and enforcing international arbitral awards.”  USCIB Vice President for Investment Policy Shaun Donnelly joined member company Chevron as the two business experts testifying on the specific issue of Ecuador’s continuing eligibility for GSP in light of the country’s very troubling record in a long-running major investment arbitration case filed by Chevron.

USCIB joined Chevron in recommending that, in light of Ecuador’s continuing refusal to enforce final arbitral awards by the panel, Ecuador’s access to GSP unilateral trade preferences should be suspended until they come into full compliance with those panel orders. According to Donnelly, after a senior official from the Ecuadorian Attorney General’s office presented the government’s case, a senior Chevron attorney detailed the long saga of Ecuadorian non-compliance. Donnelly then offered broader comments to the sub-committee on the important policy implications of Ecuador’s non-compliance and the importance of maintaining and enforcing the clear eligibility criteria laid out in the GSP statute. The Ecuador investment arbitration case was one of nine “country eligibility cases” on the agenda for public comments before the GSP subcommittee in its two-day meeting January 30-31.

“We at USCIB are strong supporters of the GSP program but it is not an entitlement for Ecuador or any other beneficiary developing countries” Donnelly explained.  “When a country refuses over many years to respect legitimate arbitral awards, in this case from an investment arbitral panel under the U.S.-Ecuador Bilateral Investment Treaty (BIT), the U.S. government’s patience must have a limit. Ecuador has clearly fallen short of the standards under the GSP statute. I think the detailed case presented by Chevron was compelling.”

Chevron and USCIB have been filing formal comments and testifying to the GSP sub-committee along these same lines regularly since 2012. USCIB has long been a leading voice in the U.S. and international business communities on the importance of foreign direct investment (FDI)  to economic growth and development in both the capital exporting and destination countries.  A vital key to incentivizing FDI flows in all direction is strong, transparent and enforceable investment protection, most often in the form of international investment agreements such as BIT treaties or investment chapters in Free Trade Agreements (FTAs.)  When investment disputes arise, access to and respect by all parties for the Investor-State Dispute Settlement (ISDS) arbitration system under those legally-binding investment agreements is essential.

USCIB has led international business advocacy on investment and ISDS issues, including respect for arbitral panel decisions, for many years including at meetings of the OECD, UNCTAD, and UN Commission on International Trade Law (UNCITRAL.)

To read Donnelly’s full testimony, click here.

USCIB Statement on Signing of USMCA

Washington, D.C., January 29, 2020 – The U.S. Council for International Business (USCIB), which represents many of America’s leading global companies, welcomes today’s signing of the United States-Mexico-Canada Agreement (USMCA) trade agreement, updating the North American Free Trade Agreement (NAFTA). Over 12 million American jobs depend on trade with Canada and Mexico, so USMCA is an important agreement for U.S. industry for future economic growth.

“The agreement contains several provisions modernizing the original NAFTA, creating new opportunities for American companies and consumers,” said USCIB President and CEO Peter Robinson. “However, USMCA also leaves room for improvement for future negotiations, so we look forward to continued dialogue with the Administration on ensuring critical protections will be upheld in future agreements.”

  • Digital Trade: USMCA contains a state of the art digital trade chapter, including prohibiting cross-border data flow restrictions and data localization requirements, prohibiting requirements for source code or algorithm disclosure or transfer as a condition for market access, prohibiting customs duties on electronic transmissions, provisions on consumer protection, privacy, cybersecurity and open government data. This new chapter allows companies to more effectively operate in the modern global economy.
  • Customs and Trade Facilitation: USMCA significantly updates the customs and trade facilitation provisions from the original NAFTA, ensuring that goods can efficiently flow in and out of the United States. The parties agreed on provisions related to trade facilitation, including the creation of a single-access window system and expedited customs procedures for express shipments. The agreement also includes commitments from Canada and Mexico to increase their de minimis levels, moving toward leveling the playing field for American companies.
  • Labor provisions: The original NAFTA was the first FTA to include labor provisions, though they were contained in side letters. USCMA brings the labor chapter into the agreement’s body, introduces strengthened labor provisions and makes them enforceable. The provisions require adherence to core labor standards of the International Labor Organization (ILO) and effective enforcement of national labor laws.
  • IP protections: USMCA contains important provisions protecting the intellectual property rights (IPR) of American companies, including protections on patents, copyright, trademarks and trade secrets, which are important for the ability of American companies to continue to innovate. One major omission, however, is the opportunity to fully protect biologics. The removal of increased market exclusivity of biologics in the final agreement is detrimental to American companies and consumers.
  • Investment: Protections for American companies when investing in Canada or Mexico are vital to ensure continued growth and development. USMCA contains such protections for many sectors, however does not fully protect all American companies across the board by significantly limiting access to the dispute settlement mechanism. In addition, even the limited dispute settlement mechanism is only available with Mexico, so for investment disputes with Canada, American investors have to rely on mechanisms outside of the newly negotiated agreement. Picking winners and losers for investment protection is not an appropriate precedent for U.S. FTAs going forward.

USCIB looks forward to entry into force and effective implementation of this important trade deal for U.S. business, and increased trade opportunities for our members.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world, generating $5 trillion in annual revenues and employing over 11 million people worldwide. As the U.S. affiliate of the International Chamber of Commerce (ICC), the International Organization of Employers, and Business at OECD (known as BIAC), USCIB helps to provide 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.

Contacts:

Kira Yevtukhova, USCIB
+1 202.617.3160,
kyevtukhova@uscib.org
Glen Brandow, USCIB
+1 212.703.5043,
gbrandow@uscib.org

USCIB Welcomes New Vice-Chair of Anti-Illicit Trade Committee

Fernando Peña

Director of Customs and Regulatory Affairs for DHL in the Americas Region Fernando Peña has been appointed vice-chair of USCIB’s Anti-Illicit Trade Committee (AITC).  Illicit trade is a major threat to the U.S. economy and profoundly harms American businesses and citizens.Today’s global illicit markets generate trillions of U.S. dollars every year for organized crime, corrupt facilitators and other bad actors.  Counterfeits, illegal goods and other contraband are sold on our main streets, social media, online marketplaces and the dark web. USCIB Is committed to fight illicit trade globally.

According to Megan Giblin, who leads USCIB’s work on customs, the AITC takes a comprehensive, multi-disciplinary approach to elevating the fight against illicit trade, particularly as it relates to the work of the OECD Task Force on Countering Illicit Trade, the Asia Pacific and Economic Cooperation (APEC), the World Customs Organization (WCO) and other international organizations.

Peña joins AITC chair, David M. Luna, president and CEO of Luna Global Networks & Convergence Strategies LLC, in providing leadership of the Committee and its critical work such as engagement of China and other Source Markets of Fakes, targeted Action on Illicit Trade including Counterfeit and Pirated Goods, AIT Enforcement at Free Trade Zones (FTZs), strengthening Information sharing across sectors and markets as well as addressing “small parcels” trade in contraband and illicit commodities.

“We are very excited that Fernando has accepted a role in leading USCIB’s efforts to elevate the fight against illicit trade” said USCIB Senior Vice President for Policy and Government Affairs Rob Mulligan. “Fernando will be a valuable asset to the AITC objectives and strategic planning.  His wealth of private and public sector experience, including working for U.S. Customs & Border Protection, knowledge of international organizations, focus on Americas region for DHL and his overall understanding of the small parcels environment will be an asset to the work of the Committee.”

“Business has a critical role in mobilizing collective action to counter illicit trade” said Luna. “DHL and other USCIB AITC members can partner with governments to effectively disrupt illicit economies and criminals’ exploitation of global supply chains and FTZs.”

Robinson Kicks Off 2020 With OECD, ICC France, ICC Germany 

ICC-Germany staff (Secretary-General Oliver Wieck, center) with USCIB President and CEO Peter Robinson (right) in Berlin

The Organization for Economic Cooperation and Development (OECD) held its annual consultation with Business at OECD on January 13 in Paris under the theme, Role of Business in Lifelong Opportunities: People First Policies to Bridge Divides. USCIB President and CEO Peter Robinson and AT&T Senior Vice President Karim Lesina provided a kick-off presentation on behalf of industry, followed by remarks by OECD Secretary-General Angel Gurria and Business at OECD’s Chairman Phil O’Reilly and Secretary-General Russell Mills.

Recommendations by Business at OECD focused on the value of relying on open markets on trade, investment, taxation and development initiatives; ensuring a people-first approach to developing new approaches to the Future of Work; and incentivizing and driving innovation in the health and environment areas in the 5G generation.

According to Robinson, it was the best-attended consultation to date, with a strong business delegation, senior OECD staff including all four Deputy Secretaries-General and OECD Ambassadors from nearly all OECD member countries. In helping to set the stage, Robinson emphasized the continued commitment of the American business community to open markets and multilateral approaches and institutions. “The necessity for inclusive multilateralism, whereby all stakeholders—including business—have a seat at the table to pursue societal challenges together is crucial,” said Robinson, who also praised the OECD in setting an appropriate example in this regard.

Lesina provided the perspective of a leading modern media company that is investing globally while driving innovation in life-long learning opportunities for its employees.  He highlighted that increased convergence and digitalization have helped create a truly global economy, providing consumers today with a unique opportunity to benefit from cross-border activity best cultivated by open market policies. Lesina emphasized the need for flexible policy and regulatory frameworks that foster innovation and drive creativity and underscored the vital role of the OECD in delivering the benefits of the digital economy to consumers everywhere through forward-looking and evidence-based policymaking.

“The Consultation provides an excellent opportunity for business to interact with OECD staff and country Ambassadors,” said Robinson. Robinson had several meetings with OECD management staff to discuss Business at OECD and USCIB priorities.

While in Paris, Robinson also visited USCIB’s International Chamber of Commerce (ICC) National Committee counterpart, ICC-France, and met with the new Secretary-General of ICC-France, Emmanuelle Butaud-Stubbs, to discuss mutual interests and priorities and cooperation in policy areas including trade and environment.

Robinson then traveled to Berlin to meet with several of USCIB’s global affiliate counterparts in Germany: ICC-Germany, the German Employers Federation (BDA) and the German Chamber of Industry and Commerce (DIHK). Secretary-General of ICC-Germany Oliver Wieck, Director of Communications Katrin Rupprecht and staff organized a discussion forum at which Robinson addressed U.S. Trade Policy in 2020. ICC-Germany members including Siemens, Thyssenkrupp and BDI attended as did Dr. Berend Diekmann, head of division for USA/Canada/Mexico from the Federal Ministry for Economic Affairs and Energy. Finally, Robinson met with BDA CEO Steffen Kampeter and DIHK Director of ATA Carnet Dr. Kornelia Ferati.

USCIB Welcomes Senate Approval of USMCA

Washington, D.C., January 16, 2020 – The U.S. Council for International Business (USCIB), which represents many of America’s leading global companies, issued the following statement on the announcement today of Congressional approval of the United States-Mexico-Canada Agreement (USMCA) trade agreement, updating the North American Free Trade Agreement (NAFTA):

“USCIB welcomes today’s announcement of Senate approval of USCMA following overwhelming bipartisan support of the agreement in the House of Representatives. USMCA is an important agreement for U.S. industry for future economic growth, containing several provisions important to our members modernizing the original NAFTA, like those on digital trade and customs.

While we continue to be concerned about certain provisions including the erosion of vital protections impacting the ability to innovate for our industry leaders, we applaud Congressional support of the agreement supporting over 12 million American jobs that depend on trade with Canada and Mexico. We look forward to entry into force of this important trade deal for U.S. business, and continued dialogue with the Administration on ensuring critical protections will be upheld in future agreements.”

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world, generating $5 trillion in annual revenues and employing over 11 million people worldwide. As the U.S. affiliate of the International Chamber of Commerce (ICC), the International Organization of Employers, and Business at OECD (known as BIAC), USCIB helps to provide 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.

Contacts:

Kira Yevtukhova, USCIB
+1 202.617.3160,
kyevtukhova@uscib.org
  Glen Brandow, USCIB
+1 212.703.5043,
gbrandow@uscib.org