Trade and Investment Archives

USCIB Urges US and China to Avoid Trade War

Published on March 22, 2018

Washington, D.C., March 22, 2018 – The United States Council for International Business (USCIB), which represents America’s most successful global companies, responded to the Trump administration’s plans to impose tariffs on billions of dollars of Chinese exports along with restrictions on Chinese investment in the United States. USCIB expressed continued concern over Beijing’s trade abuses while also urging the administration to tread carefully to avoid a trade war.

“We support the goal of getting China to stop its unfair trade practices and treatment of U.S. intellectual property,” said USCIB President and CEO Peter M. Robinson. “We are encouraged to see that the administration is considering a range of tools in addressing these concerns, including WTO dispute settlement. However, we remain concerned that potential new U.S. measures and Chinese retaliation will hurt American companies, workers, farmers and consumers.“

President Trump today announced his intention to impose tariffs on some $50 billion of exports from China under Section 301 of the 1974 trade act, in response to intellectual property violations and other trade abuses. Specifically, he instructed the office of the U.S. Trade Representative to publish, within 15 days, a list of proposed Chinese goods that could be subject to tariffs, while the Treasury Department will have 60 days to recommend steps to restrict Chinese investment in the United States.

“It’s been said that nobody wins a trade war,” Robinson added. “That would be especially true of a trade conflict between the world’s two largest economies. Escalation of the current dispute would severely impact our members, who rely on sales in both markets and who maintain complex global supply chains encompassing both countries as well as many others. These overseas sales and supply chains support millions of jobs in the United States.”

Robinson concluded: “We therefore urge the Trump administration to carefully consider the actions it takes pursuant to this Section 301 report, and we encourage both governments to work together to resolve these unfair trade practices before taking steps that will damage both economies.”

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 several leading international business organizations, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More information is available at www.uscib.org.

Contact:
Jonathan Huneke, USCIB
jhuneke@uscib.org, +1 212.703.5043

Donnelly and Claman Play Key Roles at OECD and BIAC Investment Meetings

Published on March 20, 2018
Shaun Donnelly speaks at OECD, joined by (on the left) BIAC investment Committee Chair Winand Quaedvlieg of VNO (Netherlands)

Citi Director of International Government Affairs Kimberley Claman joined USCIB Vice President Shaun Donnelly at the recent March 12-13 meetings of the Organization for Economic Cooperation and Development (OECD) and Business at OECD (BIAC) Investment Committee meetings in Paris.

Claman, a last-minute addition to the wrap-up panel for the OECD’s day-long annual Investment Treaties conference, offered business perspectives on the day’s debates on investment treaties and investment chapters as tools to protect and promote much-needed Foreign Direct Investment (FDI) flows around the world.

After BIAC’s in-house Investment Committee discussions and strategizing on March 13, Donnelly and Claman joined the BIAC delegation, as well as invited labor and civil society “stakeholders,” to participate in the OECD Investment Committee’s discussion of “National Security” provisions and exceptions in Investment agreements.

“This was a very timely topic in light of the Trump Administration’s invocation of ‘national security’ justification for steel and aluminum tariffs,” said Donnelly. “Business took a strong position that national security provisions and especially their ‘self-judging’ nature could be serious threats to the quality of investment treaty disciplines.”

Donnelly joined the Dutch BIAC Investment Committee Chair at the table for formal stakeholder consultations with the OECD Committee, where they outlined BIAC policy priorities and positions, presenting BIAC’s “Proactive Investment Agenda for 2018.”  The day concluded with Claman, Donnelly and the rest of the BIAC Investment leadership hosting an informal working dinner for the OECD’s Investment Committee leadership, a useful off-the-record forum for explanations, probing questions, and candid debate.

“It was a long and challenging couple of days but with challenges growing to investment agreements and especially Investor-State Dispute Settlement (ISDS), it’s critical that USCIB be there standing up for strong investment protections, including effective enforcement/dispute settlement provisions,” noted Donnelly. “We offer special thanks to Kimberley for bringing her unique company and former USG negotiator expertise to the discussions.”

“Illicit Trade” Work Heating up at OECD

Published on March 20, 2018

The Organization for Economic Cooperation and Development (OECD) Governance Committee’s Task Force on Illicit Trade is raising its profile and tempo of work and increasing its effort to include the private sector in that workstream.

USCIB Vice President Shaun Donnelly led Business at OECD’s (BIAC) participation in the first of two days of Task Force meetings in Paris on March 15-16 with strong participation from USCIB member companies and other private sector representatives.  Deputy Assistant Secretary at the U.S. Department of Homeland Security Christa Brzozowski is one of the two new co-chairs for this OECD Task Force, driving this important OECD work and providing strong senior-level U.S. government leadership.

“Illicit trade is a broad and elastic concept, including but not limited to pirated, counterfeit, “gray market”, and smuggled goods but also illicit movement of arms, drugs, antiquities and endangered species as well as and human trafficking,” commented Donnelly.  “As the OECD steps up its policy and coordination efforts to combat illicit trade, strong, broad and proactive private sector involvement will be essential.  BIAC and its national committees, including USCIB, will play the key role in making this process work.”

Colombians in Washington Lobby on OECD Accession

Published on March 12, 2018

Last week, USCIB was actively involved in various meetings with the Colombian government, business community and civil society on the issue of Colombia’s accession process to the Organization for Economic Cooperation and Development (OECD). USCIB Director for Investment, Trade and Financial Services Eva Hampl, who coordinates U.S. business input on OECD accession issues attended a number of these meetings, along with USCIB Senior Vice President for Policy and Government Affairs Rob Mulligan.

“With only two outstanding OECD Committees left to approve the accession, Colombia has ramped up lobbying efforts to the U.S. business community and government,” said Hampl. The outstanding committees are the Committee for Employment, Labor and Social Affairs (ELSA) and the Trade Committee. These committees are scheduled to deliberate in March and April, respectively.

In anticipation of the upcoming meeting of the Trade Committee, Colombia’s Minister of Trade Maria Lorena Gutierrez met with USCIB to discuss outstanding issues on pharmaceuticals, distilled spirits and truck scrapping, as outlined in the Business at OECD (BIAC) Pre-Accession Recommendations. Also part of the delegation was Colombia’s Minister of Finance and Public Credit Mauricio Cardenas Santamaria, who advocated strongly for Colombia to accede prior to the end of Colombia’s President Juan Manuel Santos term this summer.

USCIB also had a meeting with ANDI, the National Business Association of Colombia, to discuss outstanding issues for business. Bruce Mac Master, president of ANDI led a delegation of Colombian CEOs in this meeting with the U.S. business community, in an effort to make progress on issues like trucking and pharmaceuticals.

Hampl also addressed these critical issues to U.S. business with Colombian civil society in an interview on Colombian radio last week. The main concerns raised during that conversation were on the timing of the accession process given the expiring term of President Santos, and substantive issues on pharmaceuticals, including patents.

“The U.S. business community remains firm on the outstanding issues,” said Hampl. “The OECD is a group of like-minded countries when it comes to believing in open trade and investment and innovation. It is important for any new members to share those views. The Colombian market is important to U.S. industry and we value the U.S. relationship with Colombia, so we look forward to Colombia making the necessary regulatory changes to allow the accession process move forward.”

Post-Brexit Trade: An Opportunity to Set New Standards

Published on March 12, 2018

By Chris Southworth

As the United Kingdom prepares to leave the European Union, the country is at a crossroads. To deliver success means delivering trade deals fast, and the only way to do that is to be more innovative, explains Chris Southworth, the secretary general of ICC UK, USCIB’s partner in the global International Chamber of Commerce network. This was also the topic of a recent ICC UK podcast featuring USCIB’s Rob Mulligan. The views presented here are the author’s own and do not necessarily reflect USCIB policy positions.

ICC UK Secretary General Chris Southworth

The UK government has committed itself to renegotiate its entire stock of trade relationships and bring home the largest number of trade deals ever delivered in a short space of time – the task has no precedent.

The first round of post Brexit deals will be with 88 countries and nine trade blocs, covering non-EU countries with EU deals – almost half the world. The scale and pace at which this task must be delivered presents a unique opportunity to be innovative – it’s the only way the government will deliver on its promises of a “free trade model that works for everyone.”

The government has begun the process of passing legislation to set up a new Trade Remedies Authority, share customs data and maintain an open procurement market, but there is currently no proposal for how the government will deliver so many deals in such a short space of time. The government says that the 60-plus countries with EU deals will roll over on the same trade terms, so no extra consultation is required, but that is highly unlikely according to the experts.

In a rare display of unity, business groups, NGOs, unions and consumer groups all agree that to move forward on trade, the UK needs a more transparent, inclusive and democratic framework to handle trade policy if there is any chance of ensuring trade benefits everyone.

The UK has become one of the most centralized G7 countries, with wide disparities across its regions, a stubborn trade deficit and a history of under-performance on productivity and competitiveness. London now dominates the UK economy, with every other region a long way behind. Brexit presents a golden opportunity for trade to play a central role in boosting regional economies as well as address the frustration and disparity that is all too clear to spot, but only if the mode of engagement changes.

If the government wants to deliver new trade deals at the pace and scale required, fresh thinking and reinvented processes are required – those who generate trade will need to be consulted on what works, not only because it is necessary, but because it is democratic. To deliver a trade model that works for everyone means giving stakeholders a say in the decisions.

The Trade Bill

The Trade Bill – currently under review in Parliament – sets out an initial framework for an independent trade policy: a Trade Remedies Authority, an open procurement market, rolling over terms with countries with third party EU agreements sharing customs data. Controversially, the bill also proposes “Henry VIII” powers giving the government the ability to overrule Parliament.

Being a member of the EU means that the UK has no formal structures or procedures for reviewing treaties, and Parliament does not have to debate, vote on or approve deals. Trade agreements are scrutinized via the usual Parliamentary means such as written questions and answers, internal debates and select committee inquiries.

If government negotiators have any chance of delivering trade deals on the scale and pace required, there needs to be a more structured approach that provides organised forums for the international community, business, unions, NGOs and civil society organisations to engage on the issues and make consensus based decisions.

There is a myth that consultation and transparency slows the decision-making process. But without dialogue there is scope for mistrust to grow, which if unchecked, has more than enough weight to derail trade negotiations – as we saw with the lack of public support for the Transatlantic Trade and Investment Partnership (TTIP). As hard is may be to hear, public services and food standards trumped trade and that is exactly how people expressed their views.

The TTIP negotiations collapsed, losing five to seven years of negotiation with no sign of an opportunity to restart discussions. It was a colossal waste of resources that could have been easily avoided if the engagement process had been better organised and more inclusive from the start.

The Canada-EU trade agreement (CETA) very nearly went the same way. The issues surrounding Wallonia’s role in Belgium that almost derailed CETA could very well apply in a host of UK regions. Good-quality engagement throughout the decision-making process would prevent such scenarios happening in the future and most importantly give people a stake in making trade a success.

Trade policy now influences all walks of life – it’s not possible to separate trade from public policy and it’s imperative to have the public on board if deals need to be done.

International Models

The US trade model is often cited as an option for the UK but it’s not the only country that has a better system of engagement. New Zealand has successfully integrated private sector groups, civil society and the Maori – its indigenous population – into its model for developing trade positions.

Beyond regular public meetings regarding trade policy, the government established a ministerial advisory group to oversee high-level consultations. The group consists of representatives from key export sectors, NGOs, business and minority groups to reflect the overall priorities of New Zealand’s trade agenda, and to provide feedback to the nation’s minister of trade. In short, it’s a more inclusive system.

The scale of the UK challenge provides an opportunity to set a new international benchmark – no country has it completely right. A deal with 27 EU countries, followed by 60-plus countries with EU agreements, and then the rest of the world is a lot of ground to cover in a short space of time – if the UK government is going to return the benefits of Brexit as promised.

In fact, the success or failure of Brexit will hinge on the government’s ability to deliver trade deals – this is central pillar of the Brexit strategy to offset costs incurred from leaving the EU, especially for SMEs. To do that, it means breaking from the past, opening up and building a model of engagement that is more transparent, consensual and democratic in approach – and doing it fast!

Published March 12, 2018

Controversial Proposals Remain Following Recent NAFTA Round

Published on March 6, 2018

Eva Hampl, USCIB director for trade and financial services was in Mexico City last week for the 7th Round of negotiations of the North American Free Trade Agreement (NAFTA). The negotiations for this round started on February 25 and concluded with a Ministerial on March 5. U.S. Ambassador Robert E. Lighthizer, Canadian Minister of Foreign Affairs Chrystia Freeland, and Mexico’s Economy Minister Ildefonso Guajardo made statements at a press conference in Mexico on the final day relating to the relative progress of the negotiations, where three new chapters and two sectoral annexes were closed out.

In Mexico, Hampl participated in an event entitled NAFTA Negotiations Status – Current Situation & Impact Analysis hosted by the Canadian Chamber of Commerce in Mexico (CanCham) and organized by Galicia Abogados, a law firm in Mexico City with expertise in arbitration and ISDS issues. Hampl’s remarks at this event addressed the business perspective and priorities, covering the current status of the negotiations, highlighting the substantive and political difficulties, and outlining what these various developments mean for U.S. business. Hampl was joined by Salvador Behar, director for North America in the Secretariat of Economy, part of Mexico’s negotiating team and Jean-Dominique Ieraci, minister-counsellor for trade for the Embassy of Canada, and part of Canada’s negotiating team. The off-the-record remarks were followed by a discussion with the three speakers, joined by Jennifer Haworth McCandless, partner at Sidley Austin and international arbitration and trade expert. The discussion was moderated by Armando Ortega, president of the CanCham Mexico. Following the event, Galicia hosted a lunch for industry, which provided another opportunity to amplify the message about the importance of NAFTA negotiations, particularly investment protection / ISDS and the general enforceability of the agreement. The casual discussion included many questions on the U.S. political process, and the differences between the U.S. government position and business on several of the proposals.

The remainder of the week in Mexico City consisted of briefings from U.S., Mexico and Canada officials. Based on various briefings business had with negotiators from Mexico and Canada, as well as Congressional staff and others last week in Mexico, there continues to be very little progress in the poison pill or rebalancing proposals the United States has put on the table. There continues to be little progress on the sunset provision and automotive rules of origin, particularly as the U.S. negotiator on rules of origin was called back to Washington before negotiations could commence. On investment protection, Canada and Mexico have begun negotiating among themselves, and have similarly begun to do so on government procurement, which was a new development during this Mexico round.

“While valuable progress continues to be made on modernization chapters such as digital trade and customs, concerns remain that the progress on the controversial proposals is too incremental to bridge the dramatic divide between negotiating positions on a reasonable timeline,” said Hampl. “While Mexican officials emphasized prioritizing a good trade deal over a quick one, there are potential political complications on the horizon with the upcoming elections in Mexico. In addition, U.S. midterm elections are coming up later this year, something Ambassador Lighthizer raised in his press conference following the conclusion of the last round of negotiations.”

It does not appear likely that the negotiations will wrap up during the next round, which will take place in Washington DC, likely the week of April 9.

Additional challenges remain following last week’s announcement on steel and aluminum tariffs by the Trump administration. Trade proponents are hoping that, the more they learn about the possible impact of the new tariffs and likely retaliatory measures, the less voters will like them.  A new study from Trade Partnership Worldwide estimated the proposed tariffs would increase employment by some 33,000 jobs in the steel, aluminum and related industries, but cost some 179,000 jobs throughout the rest of the American economy.

Meanwhile, a new survey of likely voters in four key swing states by Firehouse Strategies and Optimus revealed that most voters underestimate the importance of trade on U.S. employment. Only 13.6 percent said their jobs depend on trade, while 69.3 percent said they do not. Most economists put the percentage at more than 20 percent when both exports and imports are factored in.

 

USCIB Responds to Announcement of New US Steel, Aluminum Tariffs

Published on March 2, 2018

Washington, D.C., March 2, 2018 – The United States Council for International Business (USCIB), which represents America’s most successful global companies, issued the following statement on the Trump administration’s announced plans to impose new duties of 25 percent and 10 percent, respectively, on imports of foreign steel and aluminum:

“USCIB strongly supports a more competitive America, which enjoys economic growth and jobs by increasing exports, opening global markets and securing a level playing field for our goods and services. We are disappointed with the administration’s decision. History clearly teaches that fomenting trade wars with our commercial partners is likely to backfire on the United States, harming American businesses, workers, farmers and consumers in the process.

“The imposition of tariffs on steel and aluminum will lead to higher prices for U.S.-made products, reducing the competitiveness of our exports, and will probably eliminate more jobs than it saves. In addition, it is likely to create strong disincentives for foreign investment in the United States, and to spur higher inflation. 

“Most importantly, these protectionist tariffs are likely to cause a chain reaction of retaliatory measures by our trading partners, as many of them have already indicated. Other nations are likely to target our most competitive exports and otherwise disadvantage American companies.

“We hope that these measures will be short-lived. We urge the Trump administration and America’s trading partners to work cooperatively and swiftly to address the serious issues associated with steel and aluminum dumping, and to open up new markets for our exports and new opportunities for American workers, farmers and consumers to prosper in the wider world.”

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 several leading international business organizations, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More information is available at www.uscib.org.

Contact:
Jonathan Huneke, USCIB
jhuneke@uscib.org, +1 212.703.5043

USCIB Partners with Japanese Group Keidanren on NAFTA Letter

Published on February 26, 2018

With the National Governors Association meeting last week and this week and the next round of NAFTA negotiations starting this week, USCIB coordinated with the Japanese business group, Keidanren, on a joint letter to each governor expressing support for keeping and modernizing NAFTA.

“Having worked closely with Keidanren in promoting the importance of foreign direct investment to government leaders in international forums such as G20, OECD and the United Nations, we wanted to leverage our joint voices to highlight the importance of NAFTA in driving the growth of foreign direct investment into the United States,” said Rob Mulligan, USCIB senior vice president for policy. “The investment by Japanese companies into the U.S. serves as an example of this growth and each letter identifies the number of jobs in the particular state that are accounted for by Japanese-owned firms.”

The letters stress the position USCIB has urged from the beginning that the negotiations “do no harm” to the existing NAFTA framework and then reinforces key messages related to ISDS, rules of origin, government procurement, and any sunset provision.

“We hope this letter will encourage the governors to actively engage the Administration on achieving a modernized NAFTA that we can all support,” added Mulligan.

Hampl Leads Group for NAFTA Lobby Day to Voice Concerns

Published on February 20, 2018

With the next NAFTA negotiating round now set for Mexico City later this month, USCIB Director for Investment, Trade and Financial Services Eva Hampl joined more than 100 representatives from the business and agriculture community last Wednesday for a second NAFTA House Lobby Day. The Lobby Day gave business representatives the opportunity to talk about business concerns and perspectives regarding the ongoing negotiations to modernize NAFTA and to increase support on the leadup to the next round of negotiations, scheduled for February 26 to March 6.

Hampl led one of the groups on the Hill, which included representatives from other associations and companies from the business and agriculture community. “The diversity of sectors represented was extremely helpful in getting our message across,” said Hampl. “Our group alone met with 9 offices throughout the day, receiving generally positive feedback about supporting our issues and concerns, including potential interest in signing on to a House NAFTA letter.”

Hampl will be traveling to Mexico for part of the next round at the end of February.

Politico Highlights Business at OECD Work on Colombia Accession

Published on February 5, 2018

In light of Secretary Tillerson’s upcoming trip to South America, Politico published an article highlighting unresolved concerns surrounding Colombia’s accession to the Organization for Economic Cooperation and Development (OECD), including on intellectual property and transparency.

USCIB has long been advocating on these issues, particularly through Business at OECD and most recently through a document, which Politico references.

“This important advocacy document, which contains pre-accession recommendations for issues Colombia should address before acceding to the OECD, to be included in the OECD Trade Committee’s Formal Opinion, was developed by BIAC, with significant USCIB input on US industry priority issues,” noted Eva Hampl, USCIB director of investment, trade and financial services.