USCIB Files Comments on US Government Trade Strategy to Combat Forced Labor

USCIB filed public comments with the United States Trade Representative (USTR) August 5 in response to a request for input on a U.S. trade strategy to combat forced labor. According to the submission, a successful U.S. forced labor trade policy must assume a whole-of government approach that is multi-faceted, multilateral and risk-based in nature, focused on addressing the root causes of forced labor, including promoting rule of law in nations struggling to adopt and enforce internationally recognized labor standards.

With respect to trade policy tools, USCIB argued that USTR should leverage positive and accelerated, market incentives and market access for countries striving to tackle forced labor; provide capacity building and technical assistance to help governments struggling with compliance; and increase interagency collaboration and engagement with industry, allies, and multilateral institutions on promoting solutions to common supply chain problems. USCIB’s comments, which were built on past positions, statements, and work related to the critical topic of forced labor in supply chains, focused on both policy and technical issues, and supported the need for increased engagement with the trade community writ large.

“USCIB members condemn all forms of forced labor, and are deeply committed to preventing the use of forced labor in their supply chains,” said USCIB Director for Investment, Trade and China Alice Slayton Clark. “In fact, when they trade and invest in the global marketplace, they deploy and export responsible business practices and promote social responsibility around the world.”

For the U.S. Government’s forced labor trade strategy to be effective it must be developed considering industry perspectives and inputs.

The government must engage the trade community in partnership to support trade, investment, supply chain due diligence and compliance. They must also provide clear guidance to companies, addressing any new rules implementing forced labor eradication strategies.

“USCIB and our member companies are ready, willing and able to provide general policy as well as technical customs and trade facilitation guidance to support the effort to develop a focused trade strategy to combat forced labor,” added Clark.

Through its membership affiliation with the International Organization of Employers (IOE), USCIB holds the formal role as the U.S. employer representative at the International Labor Organization (ILO), and has long served as a leading industry voice in promoting core labor standards, bolstering human rights, and eradicating child labor and forced labor in global supply chains.

USCIB Policy Experts Contribute to The Economist Impact’s Global Trade Week

The Economist Impact kickstarted its four-day, second annual Global Trade Week (GTW) in London on June 27. The summit commemorated the supply-chain resilience day on June 28, amid other thematic issues, and had a melee of high-profile speakers including European Commission Director-General for Trade Sabine Weyand, office of the United States Trade Representative Senior Advisor Beth Baltzan and Ministry of Foreign Affairs of Chile Director General of Multilateral Economic Affairs Marcela Otero Fuentes. USCIB policy experts – Senior VP, Innovation, Regulation and Trade Brian Lowry, Director, Investment, Trade, and China Alice Slayton Clark and Senior VP, Policy and Global Strategy Norine Kennedy moderated crucial panels during the week that focused on technology, data and supply-chain resilience.

The summit aimed to connect supply-chain, procurement, manufacturing and finance executives with high-level government representatives including ministers, policymakers and advisors. According to the organizers, the summit allows for the new reality of trade to be understood in its entirety, including geopolitical and climate-change risks.

Clark moderated the June 27 panel, “Changing tariffs and trade barriers – are you prepared?” under the theme geopolitical dynamics impacting supply chains and was chaired by Mayra Souza (TradeExperettes), Darya Galperina (Pernod Ricard), Fernanda Herrmann (Diageo) and Stewart Paterson (Hinrich Foundation).

On June 30, Lowry moderated the panel “How to eradicate forced labor in global supply chains” and participants included Romain Chambre (French Treasury), Gemma Brierley (Danone), Desirée LeClercq (Cornell University) and Evan Smith (Altana).

According to Lowry, key issues discussed was how countries, multilateral institutions and businesses can collaborate better to eradicate forced labor from global supply chains and the role of trade policy in facilitating and addressing these issues.

Kennedy moderated the panel “Delivering a greener, fairer global economy” with panelists: Aik Hoe Lim (World Trade Organization), Marion Jansen (OECD) and Elisabeth Tuerk (United Nations Economic Commission for Europe).

Key issues discussed included links between trade and the environment and how trade could offer solutions to enforcing international climate agreements.

Temperatures Soared in Geneva and So Did the WTO!

Washington D.C., June 17, 2022—Despite a shaky start, the WTO negotiators delivered a historic trade deal this morning. After hours of negotiations, the 164-country organization adopted the “Geneva Package” with commitments on some very difficult issues, including pandemic response, intellectual property, fisheries, food security, electronic commerce and institutional reform.

For many, this Ministerial was about the continued viability of the WTO. Recent struggles caused by increased protectionism and previous Ministerial Conferences that created few – if any – outcomes, raised serious questions about the rules-based trading system that grew out of the GATT in 1995. Concerns have ranged from relevance to functionality to value.

The WTO adoption of a ministerial decision to waive intellectual property rights on COVID-19 vaccines raises serious questions and presents a number of risks. This waiver under the WTO TRIPs Agreement will not solve vaccine access issues but, rather, it brings dangerous implications on incentives for innovation for future health challenges and future pandemic preparedness and response.  As disappointing and counter-productive as this decision is, business continues to work to advance vaccine literacy and fight COVID-19.

The Ministerial Statement on WTO Reform has charted a path forward for the trade body that is expected to address longstanding concerns and set a process for discussions on how the WTO can be reformed to be fit for purpose.

The “Geneva Package” covers a range of topics. A group of Ministerial Declarations was adopted on WTO response to emergencies covering food insecurity; export prohibitions on World Food Programme food purchases; and WTO pandemic response and preparedness.

A partial deal to curb fishing subsidies was reached; however, it fell short of a fuller agreement that has been under negotiation for more than 20 years. The agreement addresses rules to prohibit subsidies for illegal, unreported and unregulated fishing, while action on subsidies for fuel, ship construction and other areas was left unresolved.

Negotiators wrestled to address divergent views on the continuation of a moratorium on customs duties on electronic transmissions that has been in place since 1998 but was set to expire at the end of the ministerial. A handful of countries challenged the benefits of the digital economy for the developing world, seeking to end the moratorium, gain policy space to address the digital divide and collect needed customs revenues. Ultimately, delegates agreed to an extension of the moratorium with a commitment to study development impacts and revisit the issue at the next Ministerial Conference.

“USCIB congratulates WTO Director General Ngozi and all participants in MC12 for proving that multilateralism is alive and still functional in Geneva,” said Brian Lowry, USCIB Senior Vice President, who is reporting from Geneva at the ministerial meeting as an NGO delegate.

Several concerns about agriculture went without resolution. “The lack of a declaration on these concerns was a disappointment to some but the overall success of MC12 is noteworthy,” said Lowry.

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. USCIB is the U.S. affiliate of the International Chamber of Commerce (ICC), the International Organization of Employers (IOE) and Business at OECD. More at www.uscib.org.

Olsen Attends UN Environment Programme (UNEP) Meetings in Senegal on Plastic Pollution

Left to right: Raelene Martin (ICC) and Chris Olsen (USCIB)

In an effort to address global plastic pollution, the United Nations Environment Assembly (UNEA) is seeking to develop an internationally legally binding instrument on plastic pollution, including in the marine environment, based on a comprehensive approach that addresses the full life cycle of plastic. To develop such an instrument, UNEP hosted a series of meetings to set the rules of procedure, leadership and schedule, in Dakar, Senegal from May 30 to June 1.

The meeting in Dakar, officially titled the “Ad hoc open‑ended working group (OEWG) to prepare for the intergovernmental negotiating committee (INC) on plastic pollution” allowed the private sector an opportunity to help inform the UN process. USCIB Policy Manager for Regulation and Trade Chris Olsen represented USCIB at this meeting as a part of the Business and Industry Major Group.

According to Olsen, UNEP Executive Director Inger Anderson made opening remarks which outlined issues for countries to consider when negotiating. Calling for the agreement to be broad and cover the full lifecycle of plastic, be informed by science, have close engagement and involvement with stakeholders, spur solutions for a new economy, and learn from previous multi-lateral environmental agreements (MEAs) while being willing to embrace new and bold innovations in the multilateral space.

USCIB also joined meetings, along with International Chamber of Commerce (ICC) Head of Sustainability Raelene Martin, regarding the role ICC can play in the negotiating process. ICC brings not only a global voice of business, but also a combination of large multinationals and SMEs across its global affiliates.

“It was encouraging to hear consistent support for stakeholder engagement throughout the week both in informal side meetings and in the official negotiations themselves,” said Olsen, reporting from the field. “However, much work remains to be done to educate governments and convene business perspectives between now and the first negotiations (INC1) this fall and then sustain that engagement throughout the INC process. USCIB will continue to develop member engagement in the coming weeks and months, but we encourage members to come to us with any questions, concerns, or ideas of their own for how to get involved. The negotiation of this treaty, and its outcome, will have an impact across industries. It will be important to bring a broad view of private sector voices into the process.”

UNEA and the negotiating governments are looking for new, innovative ways to engage the stakeholder community in the creation of a multistakeholder action agenda.

USCIB Promotes Foreign Direct Investment Qualities Initiative at OECD Ministerial

The OECD Ministerial Conference Meeting (MCM) took place in Paris June 9-10, focused on “The Future We Want: Better Policies for the Next Generation and a Sustainable Transition,” with a ministerial conference statement promoting sustainable economic recovery in the post-pandemic world, transition to sustainable and inclusive development, adoption of resilient health systems, among other important initiatives. Importantly, ministers at MCM adopted roadmaps for accession to the OECD for Brazil, Bulgaria, Croatia, Peru and Romania, opening up a key opportunity for USCIB to work through Business at OECD to advance member priorities in these countries.

At a side event, “Strengthening Sustainable Investment Policies,” Chair of the USCIB Trade and Investment Committee and Chair of Business at OECD Rick Johnston promoted the OECD FDI Qualities Initiative and the newly unveiled FDI Policy Toolkit for supporting sustainability goals. According to Johnston, the FDI Qualities Initiative is not only important to OECD members states but also to the developing markets they serve. “Sustainability indicators must be part of FDI regimes or the host country will not only suffer bad investments but also collateral problems.” He underscored that the private sector takes seriously sustainable FDI and urged countries to work closely in partnership with business in adopting policies that “make sense.”

On 10 June, the OECD Council Recommendation on FDI Qualities for Sustainable Development was adopted by OECD ministers. USCIB through Business at OECD (BIAC) strongly contributed to the FDI Qualities effort. Launched in 2018, the OECD FDI Qualities Initiative aims to better link FDI with sustainable development, focused on four Sustainable Development Goals (SDGs): productivity and innovation, job quality and skills, gender equality, and decarbonization. The Initiative includes:

  • The FDI Qualities Indicators provides data measuring the impacts of investments on SDGs in host countries; the FDI Qualities Indicators report for 2022, includes new sections on the green economy and resilience to the COVID-19 pandemic.
  • The FDI Qualities Policy Toolkit is a new product to help governments identify priorities to align investment policy and institutional reforms to sustainable development goals.
  • The FDI Qualities Policy Network is a platform for stakeholder consultation and exchange on sustainable investment policies.

Focus Turns to Global Food Security as Commodity Supplies Destabilize by War in Ukraine

According to USCIB Senior Vice President for Regulation, Innovation and Trade Brian Lowry, the focus in the United States last week shifted from sanctioning Russia toward urgently addressing global food insecurity caused by the war in Ukraine.

U.S. Secretary of State Antony Blinken convened a high-level UN Global Food Security Ministerial Meeting on May 18, bringing together approximately thirty-five countries to discuss ways to stave off global food shortages linked to the conflict in Ukraine, which is potentially impacting forty million people, according to the World Bank. The U.S. issued a fact sheet calling for Days of Action on Global Food Security and Blinken provided a statement outlining objectives for the ministerial meeting. Ministers ultimately produced a Roadmap for Global Food Security-Call to Action, a commitment to act urgently to address global food security and nutritional needs as well as strengthen resilient and “inclusive” food systems in line the objectives of the UN 2030 Agenda for Sustainable Development and its Sustainable Development Goals and the 2021 UN Food Systems Summit.

That same day, multiple International Financial Institutions (IFI) released the IFI Action Plan to Address Food Insecurity, a program of financing, policy engagement, technical assistance, and know-how developed by the by the Asian Development Bank (ADB), the African Development Bank (AfDB), the European Bank for Reconstruction and Development (EBRD), the International Fund for Agricultural Development (IFAD), the Inter-American Development Bank (IDB), the International Monetary Fund (IMF) and the World Bank Group to address food insecurity. Treasury Secretary Janet Yellen commended the release May 18 as the Action Plan was conceptualized at a meeting she convened with the international financial institutions in April.

The G7 joined the World Bank Group to announce on May 19 the launch of the Global Alliance for Food Security to support work on food security at the UN and other international institutions.  The Alliance will leverage existing institutions and programs to develop a short-term response to shortages in food, fertilizer, and fuel and work together to remove trade barriers and provide the support needed to alleviate the negative impacts of the war.

The International Chamber of Commerce (ICC) of which USCIB is unique affiliate, called on G7 governments on May 19 to spearhead efforts to provide logistical supports – humanitarian sea corridors, rail and road land routes – sanctions carve-outs, and risk guarantees to restore trade in Ukrainian grains and vegetable oils and Russian fertilizers. Ukraine and Russia had been major exporters of wheat, sunflower oil and fertilizers, creating a trade a gap today that cannot be readily filled. This is consistent with recent messaging from UN Secretary General António Guterres to reopen the Black Sea to agricultural shipments from Ukraine.

Similarly, the G7 Finance Ministers and Central Bank Governor’s released a communique May 20 expressing support for Ukraine and a commitment to help close short-term financing gaps and ensure its macro-economic stability. They pledged continued coordinated action to isolate Russia and Belarus from the global economy through economic and financial sanctions, to prevent sanctions evasion and backfilling and to support the ongoing work of the Russian Elites, Proxies and Oligarchs Task Force.

According to USCIB, there is no doubt that additional sanctions are in the offing, as the G7 Foreign Ministers released a statement May 14 affirming continued coordinated actions against Russia and in support of Ukraine. They pledged to continue working together to pressure Russia with future economic and financial restrictions on sectors that Russia depends on, and by imposing penalties on Russian elites, institutions and military. In fact, the United States has already resumed punitive actions this week.

USCIB Joins Global Trade and Industry in Statement to Urge WTO to Renew Moratorium on Customs Duties on Electronic Transmissions

May 17, 2022, New York, NY — The United States Council for International Business (USCIB) joined today nearly 100 other global trade and industry associations to urge WTO members to renew the Moratorium on Customs Duties on Electronic Transmissions at the 12th WTO Ministerial Conference in June.

According to the statement, allowing the Moratorium to expire would be a historic setback for the WTO, representing an unprecedented termination of a multilateral agreement in place nearly since the WTO’s inception – an agreement that has allowed the digital economy to take root and grow. All WTO members have a stake in the organization’s continued institutional credibility and resilience, as well as its relevance at a time of unprecedented digital transformation.

Continuation of the Moratorium is critical to the COVID-19 recovery. As detailed by the United Nations, the World Bank, the OECD, and many other organizations, the cross-border exchange of knowledge, technical know-how, and scientific and commercial information across transnational IT networks, as well as access to digital tools and global market opportunities have helped sustain economies, expand education, and raise global living standards.

Continuation of the Moratorium is also important to supply chain resilience for manufacturing and services industries in the COVID-19 era. Manufacturers – both large and small, and across a range of industrial sectors – rely on the constant flow of research, design, and process data and software to enable their production flows and supply chains for critical products.

The Moratorium is particularly beneficial to Micro, Small and Medium-Sized Enterprises (MSMEs), whose ability to access and leverage digital tools has allowed them to stay in business amidst physical restrictions and lockdowns.

Failure to renew the Moratorium will jeopardize these benefits, as customs restrictions that interrupt cross-border access to knowledge and digital tools will harm MSMEs, the global supply chain, and COVID-19 recovery – increasing digital fragmentation. As UNCTAD has explained, such fragmentation “reduces market opportunities for domestic MSMEs to reach worldwide markets, [and] … reduces opportunities for digital innovation, including various missed opportunities for inclusive development that can be facilitated by engaging in data-sharing through strong international cooperation…. [M]ost small, developing economies will lose opportunities for raising their digital competitiveness.”

The rest of the statement can be found here.

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. As the U.S. affiliate of the International Chamber of Commerce (ICC), the International Organization of Employers (IOE) and Business at OECD (BIAC), USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade and investment. More at www.uscib.org.

OECD Event Attempts to Help Governments Develop Agile Governance

Rick Johnston at the Agile Governance Symposium

The OECD, Business at OECD (BIAC) and the George Washington University Regulatory Studies Center co-hosted an event on April 26 on the need for agile and adaptable regulatory practices. The event, titled “Agile Governance for our Future: Reimagining Regulation to Support Innovation” was held in person in Washington, DC, at the REACH at the Kennedy Center and received programming support from both USCIB and USCIB member Google.

The program included a keynote by Cass Sunstein of Harvard Law School, a fireside chat with Google President of Global Affairs Kent Walker as well as remarks by BIAC Chair and USCIB Trade and Investment Committee Chair, Rick Johnston of Citi.

Additional panels featured the perspectives of policymakers, regulators and civil society, including Director General of the Danish Business Authority Katrine Winding, Assistant Secretary, Regulatory Affairs Sector of the Treasury Board of Canada Secretariat Tina Green and Susana Cordeiro Guerra, manager for institutions for development at the Inter-American Development Bank.

According to USCIB Policy Manager for Regulation and Trade Chris Olsen, who attended the Symposium, this event builds on the Fall 2021 release of the OECD’s Agile Governance Recommendation, which aims to help governments develop and implement agile and resilient regulatory approaches, and facilitate institutional co-operation both in response to, and to further stimulate, international innovation. This Recommendation received input and support from the Business at OECD (BIAC) Governance and Regulatory Policy Committee.

A full recording of the symposium will soon be available on both the OECD website and through George Washington University’s program page.

USCIB Welcomes Korean Business Colleagues for Discussion on ILO, Labor and Trade issues

Chairman of CJ Group Kyung Shik Sohn (left) and Peter Robinson (right) at USCIB’s NYC office.

Kyung Shik Sohn, chairman of CJ Group and of the Korea Enterprises Federation-FEK (and also Honorary Chairman of the Korean Chamber of Commerce and Industry-KCCI), visited USCIB President and CEO Peter Robinson on April 12.  Sohn was accompanied by CJ America CEO Hyunsoo (Hans) Shin. USCIB Senior Counsel Ronnie Goldberg and Vice President for Corporate Responsibility and Labor Affairs Gabriella Rigg Herzog, joined Robinson for USCIB.

FEK is USCIB’s Korean sister member organization in the International Organization of Employers (IOE). Discussion thus included an exchange of information and perspectives on ILO work in such areas as human rights, supply chains, forced labor and discrimination. KCCI, for which Sohn had served as longtime Chairman, is USCIB’s Korean sister national committee in the International Chamber of Commerce (ICC) and also counterpart as National Guaranteeing and Issuing Association for the ATA Carnet export service.

According to Robinson, discussion also included respective perspectives on Korean and U.S. political environments and the recent Korean elections, U.S.-Korea trade relations and the importance to business of engagement with multilateral institutions. Sohn and Shin also provided an overview of the CJ Group and its American operations, a multinational corporation with operations ranging from Food/Food Services to Bio/Life Sciences, to Media/Entertainment, to Retail/Logistics.

USCIB looks forward to ongoing collaboration with KEF, KCCI and CJ Group.

USCIB Makes a Case for FDI and Investor Rights at OECD

USCIB members and staff made a compelling case for foreign direct investment FDI) and investor rights last week as part of a roundtable discussion with leadership at the Organization for Economic Cooperation and Development (OECD).

Senior Vice President of International Government Affairs at USCIB member Chubb Yancy Molnar described the contradiction between high demand for FDI today accompanied by a deteriorating environment for investment due to growing anti-business bias around the globe.

“Chubb has never seen such uncertainty,” proclaimed Molnar, which is particularly troubling for insurance, telecommunications and financial services companies, which often have to establish operations in country for prudential reasons. These industries are “heavily regulated and need more protections,” he argued.

Many trends today raise concerns. There is growing pressure to elevate the interests of civil society and sovereign authority in investment agreements and investor state dispute settlement proceedings. There are efforts to reshore supply chains which can translate into an anti-FDI bias.

Moreover, as geo-political frictions rise, nations around the globe are more closely scrutinizing and restricting both inbound and outbound investments through a national security lens. Some USCIB companies face potential expropriation of assets for complying with sanctions regimes in response to Russia’s invasion of Ukraine.

“All are creating a chill on FDI flows,” noted USCIB Senior Advisor Shaun Donnelly.

USCIB Director for Investment, Trade and China Alice Slayton Clark intervened, arguing “governments and international organizations have a critical role, today more than ever, in providing the necessary welcoming environment to encourage foreign direct investment in an uncertain world.” She urged the OECD and nation states to engage more closely with industry to learn about growing barriers to investment and defend a rules-based trade and investment system, particularly the investor state dispute settlement system which safeguards investor rights particularly when investing in riskier markets.

The April 5 roundtable was organized by Business at OECD (BIAC) to connect BIAC members directly with the OECD Investment Committee leadership. OECD Investment Division Head Ana Novik and the OECD Investment Committee Chair Manfred Schekulin attended, as well as leading business representatives from Europe and Japan. USCIB is grateful to Business at OECD for organizing the important engagement.