ICC’s Danilovich Writes in FT on Importance of Services to American Economy

The Financial Times has published a letter to the editor from ICC Secretary General John Danilovich on the importance of services to the American economy. Danilovich, who has served as U.S. ambassador to Brazil and Costa Rica, writes that “tit-for-tat trade responses sparked by new border taxes could come at a considerable cost for the U.S. services sector– and the growing number of Americans whose livelihoods depend on it. When it comes to trade policy, nostalgia is no substitute for the realities of today’s global economy.”

To read Danilovich’s letter in the FT, please visit this link (subscriber log-in is required).

Priorities for the Trump Administration

USCIB President and CEO Peter M. Robinson
USCIB President and CEO Peter M. Robinson

By Peter M. Robinson
President and CEO, USCIB

As I write this, the administration of President Donald Trump is taking shape. Uncertainty remains as to how his campaign promises will be acted upon, and what his top priorities will be. But one thing is clear: our nation’s continued prosperity and security demand that the United States remain engaged internationally on key issues including trade, climate change, sustainability and support for a rules-based global economy.

American companies are heavily invested in creating the conditions for expanded U.S. influence internationally, and for renewed investment and growth at home. USCIB is well positioned to work with the new administration and Congress – and with the overseas business partners with whom we have established longstanding close ties – to support our member’s interests by focusing attention on the key issues and initiatives that will undergird America’s growth and success, and strengthen the global economy, in the 21st century.

Defining America’s role in the 21st century must be a top priority. USCIB is ready to work in concert with the Trump administration and Congress to develop the strategy for U.S. engagement with the wider world – one that both continues and augments the benefits that American businesses, workers and consumers draw from active participation in the global economy and international institutions. We need policies that anticipate, address and support the demands of a changing American workplace, while addressing the legitimate needs of those displaced or disadvantaged by the 21st-century global economy.

Building on strength

Such a strategy must recognize and build upon America’s strengths in innovation, entrepreneurship, world-class work force and know-how. It should further seek to leverage American business to reinforce U.S. global leadership, and effectively engage with multilateral institutions to foster international rules and a level playing field that support our competitiveness. The U.S. should also seek to make these institutions more accountable and representative of key global stakeholders, including the private sector, in pursuit of shared goals and values. As the recognized U.S. business interface — by virtue of our unique global network — with the UN, OECD, ILO and other multilateral bodies, USCIB is especially well-positioned to help bring this about.

Broadly speaking, we are looking to advance four themes with the new administration:

  1. Making globalization work for everyone – The benefits to the United States of increased trade and investment with the world are significant and broadly dispersed across the entire population. But the painful downside of job loss as the result of foreign competition is felt sharply by many individuals and localities. We need policies that effectively address the short-term losses while ensuring the broad gains remain intact, demonstrating the value of economic openness and dynamism for all Americans.
  2. Growing a dynamic, 21st-century economy – Keeping an open door to trade and investment is only part of the equation in building a robust, dynamic economy for the 21st century. Many of the biggest handicaps to U.S. competitiveness are self-inflicted: poor investment in infrastructure, lagging educational institutions, an antiquated and byzantine tax system and poorly constructed immigration policies. We need to build bipartisan support for sensible, long-term investments and policy reforms in each of these areas.
  3. American leadership in the wider world – Farsighted U.S. policies have helped foster global growth and stability ever since World War Two. This in turn has provided direct benefits to America in terms of national security, as well as our ability to grow and compete in the international economy. The world now confronts multiple challenges (such as climate change, terrorism, migration and slow growth in many economies) that demand continued American leadership and close international cooperation.
  4. Transparent and accountable international institutions – America, and American business, led the way in building the postwar international institutions and a rules-based system to foster global stability, growth and development. Unfortunately, some international organizations in the UN family are becoming hostile to the private sector, seeking to exclude business representatives from key meetings and to impose an anti-business agenda. We need to confront that discrimination, while actively supporting and growing the mutually beneficial relationships that do exist after over 70 years of consultative status by global business with various UN agencies. In this regard, we welcome the UN’s recognition of the positive role of business through the recent granting of Observer Status at the UN General Assembly to the International Chamber of Commerce.

We are ready to work with the Trump administration and Congress to strengthen U.S. competitiveness, reap the gains from participation in global markets and trade, and deliver benefits in the form of jobs and opportunities for U.S. workers. These objectives can and must be pursued together.

USCIB in the News: Op-ed in The Hill on UN Funding

un_headquarters_lo-resUSCIB President and CEO Peter M. Robinson published a timely op-ed in The Hill addressing recent calls in Congress to withhold or withdraw U.S. funding for the United Nations. The op-ed, reprinted below, is also available on The Hill’s website.

This op-ed comes as President-elect Trump’s top appointees, including his proposed foreign policy team, are on Capitol Hill for Senate confirmation hearings. We encourage you to share the op-ed with your colleagues and others who may be interested.


The Hill

January 11, 2017

Walking away from the UN would harm US economic interests

By Peter M. Robinson, opinion contributor

With President-elect Trump’s key foreign policy nominees facing Senate confirmation hearings this week and next, some lawmakers on Capitol Hill are threatening to withhold or slash U.S. funding for the United Nations.

This would be a bad idea, both for American power and influence, and for our economic interests. It would be especially risky for U.S. companies and workers.

My organization — The United States Council for International Business — has represented American business views to the U.N. and other international organizations for decades.

We know the U.N. sometimes fails to measure up to our expectations, particularly when it and its specialized agencies have provided a platform for anti-business views. Why do we put up with this? Why shouldn’t we just take our chips and go home?

Quite simply, because we know that no country, including the United States, can go it alone. A strong U.S. presence in the U.N. enhances our influence and our overall security.

More than ever, at a time when terrorism, cybersecurity threats, disease pandemics and refugee crises can disrupt our lives, we need the kind of platform for close international cooperation and collective action that the U.N. can provide.

This is especially true for American companies with customers, employees and operations around the world. While we may not agree with everything the U.N. does, it is simply not in our interest to withdraw support.

We in the private sector see an urgent need for the United States to stick up for its economic interests in the U.N.

For instance, in the negotiations that culminated in the 2015 Paris Climate Agreement, the U.S. had to push back hard against proposals to undermine protection for innovation and intellectual property rights, to assign historical liability for loss and damage from natural disasters, and to ban certain technologies or energy options important to U.S. energy security and climate risk reduction.

Without strong U.S. leadership, these initiatives would have carried the day, hampering American jobs and competitiveness.

At their best, the U.N. and similar bodies set global standards and develop rules that allow U.S. businesses to plan and invest.

Recent U.N. initiatives that have helped American business and our economy include agreements that support a fundamentally “hands-off” approach to the global Internet and guidelines laying out the roles and responsibilities of the private sector and governments in upholding human rights.

Moreover, the U.N. has recently developed the 2030 Sustainable Development Goals (SDGs), addressing an array of challenges, from ending global poverty and hunger to ensuring access to energy, for the next decade and beyond.

The SDGs were developed in close partnership with the private sector, which will be responsible for “delivering the goods” in many, if not most, measures of success.

So, is the U.N. perfect? Far from it, but withholding funding or walking away from the U.N. won’t change that.

Like it or not, it is part of the fundamental infrastructure for global economic activity. Like other infrastructure, the U.N. is desperately in need of repair to meet the needs of the 21st century.

If we play our cards right, this can be a century of American-led innovation and entrepreneurship. President-elect Trump’s administration should insist that the U.N. live up to its potential, defending and advancing U.S. interests in the influential world body.

Business will be there to help. Just last month, the U.N. afforded highly-selective Observer Status in the U.N. General Assembly to the International Chamber of Commerce (ICC), the business organization that represents enterprises across the globe in numerous U.N. deliberations.

This is an important sign of progress, indicating that the U.N. recognizes the need to work more effectively with business.

(Full disclosure: My organization serves as ICC’s American chapter and we pushed hard in support of ICC’s application.)

Congress should meet U.S. funding obligations and work with the Trump administration to hold the U.N. accountable to the U.S. and other member governments, as well as to economic stakeholders in the business community.

Strong engagement and leadership in the global body by the United States is an opportunity too important to lose. American security, jobs and economic opportunities are at stake if the U.S. were to indeed walk away.

Peter M. Robinson is president and CEO of the United States Council for International Business. He is an appointee to the President’s Committee on the International Labor Organization and the Secretary of State’s Advisory Committee on Public-Private Partnerships. Robinson holds a master’s degree in international affairs from Columbia University.

The views expressed by contributors are their own and not the views of The Hill.

TTIP: Now More Than Ever, We Need a Common Vision for the Future

USCIB President and CEO Peter M. Robinson
USCIB President and CEO Peter M. Robinson

By Peter M. Robinson, President and CEO, United States Council for International Business (USCIB)

This column was originally published in Echanges Internationaux, the magazine of ICC France, the French national committee of the International Chamber of Commerce.

The past year has been a disappointing one for transatlantic trade policy. More than ever, we must stand up for trade and investment, two keys for economic growth and job creation. Peter M. Robinson, President and CEO of the United States Council for International Business (ICC USA), puts forward some ideas for a common transatlantic business agenda.

Efforts by the United States and the European Union to negotiate a comprehensive, high-standard Transatlantic Trade and Investment Partnership have progressed at a disappointingly slow pace. As we near the end of the Obama administration (and look ahead to a Trump administration that promises a decidedly different approach to trade policy), TTIP has gotten mired in squabbling over a range of challenging issues and is now effectively sidelined.

These are challenging times for global companies and for major business organizations, including the International Chamber of Commerce and its national committees – such as ICC France and USCIB.

Strong, credible voices from business are more important than ever. The U.S., France and Europe more broadly all need more economic growth, more prosperity, more and better jobs. And as we in the ICC family know, one of the best ways to drive that growth is through increased international trade and investment. With that said, I would put forward the following as a common transatlantic business agenda that we can all agree on.

Keep pushing on trade liberalization

The U.S. and EU must keep pressing ahead on the important and challenging issues in TTIP. We cannot let the change of administration in the U.S., internal divisions within the EU, or other distractions deter us or our political leaders from achieving a comprehensive, ambitious, and balanced Transatlantic economic framework. TTIP was, and remains, our preferred option but that pathway seems blocked at least for the time being. It won’t be easy, and it won’t get done as fast as we’d like. But whether TTIP or some other comparable U.S.-EU agreement, it is more important to get a great agreement than to get a quick or easy agreement.

At the same time as we work to cement transatlantic ties, the U.S. and EU also need to keep providing strong leadership for the multilateral trading system, principally through support for and leadership of the World Trade Organization, which desperately needs a strong shot in the arm. The U.S. and Europe must work together to push forward an ambitious multilateral trade agenda for as we approach the WTO ministerial in Argentina in late 2017.

Work together on development

One key element of any WTO agenda needs to be a strong development pillar, designing and implementing creative ways the WTO trade regime can more effectively promote economic growth in the least developed countries, especially in Africa.

Through our “Business for 2030” initiative, USCIB had spearheaded efforts within the ICC network to provide proactive, constructive business participation in the UN Sustainable Development Goals and the 2030 Agenda. We would love to work more closely with ICC France and other leading ICC national committees in Europe on this effort, as we did successfully on the Paris Agreement on Climate Change. Our website www.businessfor2030.org provides additional information on this important effort.

Join forces on global taxation

Business needs clear, predictable, and fair tax regimes in order to plan and execute its operations. Both European and American business need to be more active, and more closely coordinated, in our participation in the G-20 and OECD efforts to reform global taxation. ICC France and USCIB actively engaged in the OECD’s Base Erosion and Profit Shifting (BEPS). We cannot allow the BEPS effort to get hijacked by those with an anti-business agenda.

Keep global organizations “open for business”

Unfortunately, some international organizations in the UN family are becoming hostile to the private sector, seeking to exclude business representatives from key meetings and to impose an anti-business agenda. Leading U.S. and European business groups, and the global ICC network, need to confront that discrimination, while actively supporting and growing the mutually beneficial relationships that do exist after over 70 years of consultative status with various UN agencies.

I have laid out a long and challenging agenda. I very much look forward to working with François Georges and his dynamic team at ICC France in all of these important areas. We have a lot to do, and a lot more that we can do together. Let’s get to work.

USCIB Statement on the U.S. Election Results

Trump announces security policy in Philadelphia, PennsylvaniaNew York, N.Y., November 9, 2016Terry McGraw, chairman of the United States Council for International Business (USCIB) and Peter Robinson, USCIB’s president and CEO, released the following statement on the results of the U.S. election:

“We congratulate Donald J. Trump on his election as our next President. It has been an intensely hard-fought campaign, and we look forward to Americans coming together behind shared values and a common purpose. We also congratulate the members from both parties elected to both houses of the 115th Congress.

“It is important for the United States to remain engaged globally and provide leadership on a range of issues affecting our national prosperity, including international trade, climate change, sustainability and support for a rules-based global economy.

“American companies are heavily invested in creating the conditions for expanded U.S. influence internationally and renewed investment and growth at home. USCIB is eager to work with the new Administration and Congress – and with the overseas business partners with whom we have established longstanding close ties – to focus attention on the key issues and initiatives that will undergird America’s growth and success, and strengthen the global economy, in the 21st century.

“The next Administration faces numerous challenges as it takes office. A top priority should be to develop and implement, in concert with the Congress, a strategy for U.S. engagement with the wider world – one that both continues and augments the benefits that American businesses, workers and consumers draw from active participation in the global economy and international institutions. We need policies that anticipate, address and support the demands of a changing American workplace, while addressing the legitimate needs of those displaced or disadvantaged by the 21st-century global economy.

“Such a strategy must recognize and build upon America’s strengths in innovation, entrepreneurship, world-class work force and know-how. It should further seek to leverage American business to reinforce U.S. global leadership, and effectively engage with multilateral institutions to foster international rules and a level playing field that support our competitiveness. It should also seek to make these institutions more accountable and representative of key global stakeholders, including the private sector, in pursuit of shared goals and values.

“We are ready to work with the new Administration and Congress to strengthen U.S. competitiveness, reap the gains from participation in global markets and trade, and deliver benefits in the form of jobs and opportunities for U.S. workers. These objectives can and must be pursued together.”

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, the International Organization of Employers, and Business at OECD, 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, VP communications, USCIB
+1 212.703.5043 or jhuneke@uscib.org

The U.S. and Mexico Must Work Together as Neighbors

Flag Badges of America and Mexico in PileUSCIB Chairman Terry McGraw has joined with ICC Mexico Chair Maria Fernanda Garza in a joint appeal for the United States and Mexico to work together to address common challenges of trade, immigration and security.

In a joint op-ed in the Mexican newspaper El Financiero, the two business leaders urged their compatriots to reject the antagonism emanating from the U.S. campaign trail, reminding readers of the direct and measurable benefits the North American Free Trade Agreement has brought to both Mexicans and Americans alike.

McGraw and Fernanda Garza finished by reiterating that the business communities of both the United States and Mexico are united in their support for the Trans-Pacific Partnership, which they urged their respective legislatures to ratify without delay.

Please see below for the English translation of the op-ed. To read it in Spanish on El Financiero’s website, click here.

USCIB and ICC Mexico each serve as their country’s national committees of the International Chamber of Commerce.

 

The U.S. and Mexico Must Work Together as Neighbors

By Harold McGraw III and María Fernanda Garza

If the U.S. presidential campaign has reminded us of anything, it is the importance of neighborliness. Just as your own neighborhood deteriorates if you and your neighbors don’t communicate or work together well, so it is in business and international affairs.

Right now, on both sides of the U.S.-Mexico border, we face a stark choice: build walls, foster mistrust and disengage our economies – or work together to continue building shared prosperity. As representatives of the business communities from both nations, we strongly urge our fellow countrymen and our leaders to choose the latter course.

Since the North American Free Trade Agreement was negotiated more than 20 years ago, Mexico and the United States have enjoyed an increasingly close and mutually beneficial relationship that builds on our respective strengths and abilities, our vibrant economies and vast resources, our unique position as neighbors and, most importantly, our peoples. Mexico, the U.S. and Canada have turned North America into one of the most important and most dynamic free trade areas in the world. It has taken foresight and resolve.

Bilateral trade between Mexico and the U.S. has multiplied by six since NAFTA’s entry into force, reaching nearly $500 billion in 2015. Mexico is now the second-largest export market for U.S. goods and its second-largest supplier. It is estimated that U.S. trade with Mexico supports some six million American jobs.

With a growing, $1 trillion economy and a developing middle class that eagerly consumes U.S. and other foreign products, Mexico is the world’s 9th-largest world importer, and it buys 16 percent of everything the U.S. sells to the world. It is the largest export market for California, Arizona, New Mexico and Texas, and one of the three most important export markets for 29 other U.S. states.

This burgeoning trade relationship is built upon regional economic integration, cooperation and capitalizing on both nations’ competitiveness. Bilateral trade often occurs in the context of shared production, where manufacturers on each side of the border work together to produce goods. The development of robust supply chains as a result of NAFTA has translated into highly integrated trade in such key industries as automobiles, aerospace and electronics.

For instance, Mexican exports to the U.S. contain 40 percent of U.S. value-added, which is much higher than those from South Korea or China which are at five percent and four percent, respectively.

The U.S. and Mexico have a shared interest in fostering economic integration in North America, which is becoming, once again, the most competitive region in the world. Among other things, both countries need to ensure an efficient and secure border, the development of human capital for innovation and the growth of the services sector.

Businesses on both sides of the border firmly believe that the Trans-Pacific Partnership (TPP) will further strengthen Mexico-U.S. relations, North American competitiveness and our shared prosperity by encouraging competition and setting new and modern disciplines in the Asia-Pacific Region. With TPP, North America will become an even more important export platform to the world, with the consequent creation of jobs. We therefore are urging our respective legislatures to quickly ratify the TPP.

Especially in the face of growing protectionist and isolationist sentiment, we cannot stress strongly enough the critical importance of closer cooperation between our two governments in fostering a strong U.S.-Mexico relationship – one that contributes to shared economic growth, competitiveness and prosperity throughout North America. As neighbors, we have a shared responsibility to keep the neighborhood safe and prosperous.

Harold McGraw III is chairman of the United States Council for International Business. Maria Fernanda Garza chairs the Mexican chapter of the International Chamber of Commerce.

Talking Responsibly About Trade and Investment

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The recently launched OECD interim Economic Outlook reveals global GDP growth is projected to slow marginally to 2.9 percent in 2016, and acknowledges trade as an important driver of productivity growth — enhancing competitiveness, enabling greater specialization and facilitating knowledge transfer. Against this background, Bernhard Welschke, secretary general of Business at OECD, called on the OECD and member governments to communicate the benefits of trade more responsibly.

Read Welschke’s posting in the OECD Insights blog.

Transatlantic Trade Talks Lack European Leadership

Originally published in the Wall Street Journal on September 20

Many details of TTIP still need to be negotiated. But what’s missing is a sign of seriousness from the EU.

By PETER ROBINSON and THOMAS NILES
Sept. 20, 2016 3:05 p.m. ET

us_eu_flags_3Readers following the progress of negotiations over the Transatlantic Trade and Investment Partnership would be forgiven for thinking that a deal is now impossible. Between the Brexit vote, antitrade rhetoric on the U.S. presidential campaign trail and stern opposition by assorted European political leaders, TTIP appears to lack the kind of serious support needed to succeed.

The commercial and diplomatic logic behind TTIP remain as compelling as ever. An agreement would further open each side’s market to mutual trade, which currently amounts to more than $1 trillion annually. It would strengthen rules-based investment in what is already the world’s largest relationship for foreign direct investment. And it would improve market access for trade in services while tackling costly nontariff barriers, including regulatory obstacles.

Done right, the effort to roll back the impediments to trade and investment between the U.S. and the European Union could be a huge boost to both economies. Business leaders on both sides of the Atlantic are united in support of an ambitious agreement.

But progress in the 4-year-old talks has come more slowly than the governments or the business communities had hoped. TTIP certainly faces headwinds in the U.S., where the two major candidates in this presidential election have turned their backs on a half century of bipartisan trade policy and American global engagement. Instead, they pander to antitrade, isolationist, protectionist forces.

But the greatest challenge to TTIP right now comes from Europe, in the form of naked antitrade and anti-American prejudices from some European leaders.

Over the past couple of years, the European Parliament has consistently belittled American policies and positions, issuing unhelpful “red-line” declarations, for example, that no single EU policy or regulation could possibly be modified under a TTIP agreement, or that the U.S. would have to adopt wholesale the EU’s regulatory regime.

Particularly disappointing have been a series of high-level political statements in recent weeks from senior Austrian, French and German officials calling for a stop to TTIP negotiations because of American intransigence. These complaints are unfounded. In fact, the U.S. has been quite forthcoming about eliminating tariffs on industrial goods and agriculture, as well as removing barriers to trade in services and in government procurement. The EU has declared far more areas of negotiation to be off limits.

While Cecilia Malmström, the EU’s trade commissioner, has, to her credit, defended TTIP, the overall response from the European political leadership has been disappointing. Many prominent EU leaders have remained silent. And while Germany’s Chancellor Angela Merkel has shown consistency and courage with a strong defense of TTIP, too many other European leaders haven’t matched her commitment or clarity.

Like all real-world negotiations, getting to agreement on TTIP will require tough decisions and compromise. American business groups are joining with other stakeholders in pushing their government to achieve an ambitious,
comprehensive, high-standard TTIP agreement. They have consistently opposed, for instance, the U.S. government’s insistence that the regulation of financial services be excluded from TTIP.

But the real question isn’t what detailed provisions will be included in a TTIP agreement. Rather, it’s whether the EU is serious about the negotiations at all. Will European leaders simply use TTIP to mollify their own critics at home? If the EU is serious about cementing its member economies more closely to each other, then European leaders need to stand up in support of a deal, and they need to do so now. Meanwhile, the European Commission should move quickly to schedule multiple negotiating rounds with the U.S. before the end of the year.

The two sides have agreed to continue talking, with the next round of TTIP negotiations set for early October. Hopefully this will result in actual progress and not additional excuses for delay. Both the U.S. and EU need to show the courage, vision and commitment to the transatlantic relationship and to push forward for the kind of balanced, ambitious, high-standard TTIP that both economies need.

Mr. Robinson is president and CEO of the United States Council for International Business. Mr. Niles, the council’s past president, is a retired U.S. diplomat who served as ambassador to the European Union.

Investment Facilitation – UNCTAD’s Useful Agenda For Pragmatism Over Politics

By Peter Robinson, President and CEO, United States Council for International Business

investment_buildingsWe in the international business community are, frankly, not in the habit of finding inspiration in policy papers on the sometimes politically-charged topic of international investment from the United Nations Conference on Trade and Development (UNCTAD), often seen as an organization more aligned with developing country governments. But a recent UNCTAD document, UNCTAD’s Global Action Menu for Investment Facilitation, discussed at last month’s UNCTAD’s Fourteenth Ministerial Conference and, in more detail, at its parallel World Investment Forum, is a valuable contribution to ongoing policy debates on international investment in developing countries, in the U.S., European Union and around the world.

Building off of the important model of the Trade Facilitation Agreement adopted at the World Trade Organization’s ministerial meeting in Bali in December 2013 and currently in the final stages of an extended ratification process among the WTO member countries, the UNCTAD proposal for an Investment Facilitation Action Agenda eschews broad and controversial policy issues related to international investment and, instead, focuses on concrete implementation and facilitation steps which governments, developed or developing, who chose to welcome Foreign Direct Investment (FDI) can take to improve their competitiveness as an FDI destination. Out with politicized policy debates on Investor-State Dispute Settlement (ISDS) and in with practical recommendations to help governments attract more and better foreign investments and to do it more quickly and efficiently.

Read the full column at Investment Policy Central.

USCIB Reflections on the New World of Work

Ronnie speaking IMG_0183
Ronnie Goldberg (center).

The following remarks were delivered by Ronnie Goldberg, USCIB senior counsel, at the first meeting of the working groups of the XIX Inter-American Conference of Ministers of Labor (IACML) in Washington, D.C. on June 28. 

First Meeting of the XIX IACML Working Groups

June 28, 2016

Washington DC

PANEL 1 REFLECTIONS ON THE NEW WORLD OF WORK

Remarks given by Ronnie L. Goldberg, Senior Counsel, USCIB and Deputy Vice-Chair, Business Technical Advisory Body on Labour Matters (CEATAL) to the IACML.

Many thanks to the authorities of Working Group 1 (Ministers of Labor of Brazil, Chile and Panama) for inviting me to participate on this Panel on the topic of the new world of work. I am honored to be included alongside representatives of the  ILO, OECD and IADB, as well as the representative of the Ministry of Chile and of course Marta Pujadas, President of COSATE.

The views that I will express are those of both CEATAL and the International Organization of Employers (IOE). CEATAL, business advisory body to the IACML, is composed of employer associations from each OAS member state. Through these organizations, CEATAL represents literally tens of thousands of small, medium and large private employers across the Americas.  The IOE, the world’s largest and most comprehensive business association with members in 142 countries, serves as the secretariat to CEATAL.

The new world of work is high on the agenda of CEATAL because business and employers’ organizations of the Americas are working to anticipate the realities that will confront their members and to provide well-constructed input to policy makers at the national, regional and international level. In common with most of the organizations and governments around this table, IOE has launched a discussion on the Future of Work, addressing many of the issues we are discussing today.

The impact of technology in the new world of work

During our own lifetimes, the context in which work is organized, distributed and performed has changed, irrevocably.  In his Report to the 2015 International Labor Conference, ILO DG Guy Ryder noted that change is taking place at such a speed and at such a scale as to constitute a real transformation of the world of work. A revolution.  We have had industrial and technological revolutions before.  They are disruptive, but they have historically resulted in the growth of economies and productivity, as well as the creation of new jobs. Despite short-term challenges resulting from the replacement of manual labor and the need to upscale skills and competencies, the pace of transformation has historically allowed enough time for education and training institutions to catch up, i.e. to appropriately prepare young people for careers and to equip low and mid-skilled workers with new skills and competencies to function productively. At the same time, population growth accelerated at a relatively consistent rate across the affected economies.

Today, things may be different.  Change is being fueled by technological advances taking place at unprecedented speed and undreamed of scope.  Many studies show that technology is replacing middle-level skills that were once considered uniquely human. With the new and affordable capabilities made possible by automation, a significant number of new job opportunities and new markets will be created. At the same time existing jobs will disappear or be re-designed. In short, widespread technological change are bringing about profound changes in the way we work.  Simultaneously, globalisation, and demographic trends, as well as new ways of organising the production of goods and delivery of services, are both providing a myriad of opportunities to society, and at the same time presenting considerable challenges.

To again quote Guy Ryder, “the debate about the (disruptive) effects of technological changes on jobs is some two centuries old, and the encouraging conclusion to be drawn from the historical record is that over the long term it has created more employment than it has destroyed, and has pushed overall living standards to new levels”. The question that none of us can answer is whether the current technological revolution that promises further applications in such areas as robotics, automation, 3D printing, is inherently different from what has been experienced in the past.

These are issues for all of us. Profound transformations have already taken place in the mature economies of North America.  Other regions of the continent are well placed to benefit from similar transformations.  They enjoy a young and numerous active population – more flexible and mobile, more technologically prepared, with greater participation by women, better educated, and more assertive – which is demanding infrastructure, health care, education, services, and opportunities for work and personal growth.

I can personally attest to this energy and potential in the region.  Last week I attended the OECD Digital Economy Ministerial in Cancun.  Among the collateral events was a Hackathon – a competition among more than 200 young people (nearly 40 percent young women) mostly from Mexico and elsewhere in Latin America, who divided themselves in teams and competed over a 24 hour period to develop innovative and useful apps. The winning apps were designed to facilitate the transfer of health information to emergency medical personnel, to improve security and independence for the visually impaired, and to make learning history a more immersive experience for teenagers. I took away several lessons from witnessing this phenomenon.  One was the vast potential of the digital economy to bring social benefits. A second is that these young people – the workforce of the future – have different expectations and aspirations for their careers than previous generations.  And a third is the importance of the major policy messages from the Ministerial: the need to preserve and extend the reach of an open Internet and the vital importance of training and education to meet the needs of the future and foster innovation and creativity.

What should we do about it?

History abounds with examples of attempts to resist innovation that should not so much be considered misguided or self-defeating, as simply impossible.

But progress can and must be shaped.  It is up to both developed and developing countries of the hemisphere not only to seize the opportunities but also to help those less willing or able to adapt to face the challenges:

One important element in shaping the future of work lies in labor market regulation. Regulations are essential for the proper functioning of labor markets. They can help correct market imperfections, support social cohesion and encourage economic efficiency. Labor market regulations cover a wide spectrum, from rules governing arrangements for individual contracts to mechanisms for collective bargaining. Evidence shows that labor market regulations can have an impact on a number of economic outcomes- including job creation, job flows, trends in productivity and the speed of adjustments to shocks. The negative effects of both under and over regulation are well documented. The challenge is to develop policies that avoid the extremes and effect a balance of flexibility with worker protection.

One aspect of the necessary flexibility in the new world of work has to do with flexible work arrangements. Self-employed and independent workers are growing in number and new forms of work are appearing (crowd working, teleworking, polling of workers, portfolio work, etc). The 2015 ILO Employment and Social Outlook estimates that fewer than 20 percent of the working population has a full-time open-ended contract. The variety of contractual arrangements continues to grow; employing workers on fixed term contracts to cover seasonal peaks in production, or for a one-off assignment, or to cover for maternity or long-term sick leave are all quite normal and accepted as the new “standard” everywhere.

Demonizing non-standard jobs, either overtly or by implication, ignores the ways in which they can benefit both workers and employers. Well-designed and regulated “non-standard forms of employment” can both protect workers and help enterprises by increasing their ability to respond and adapt to market demands. They can also be a mechanism for retaining and recruiting workers, for more quickly harnessing skills and expertise and most importantly – for Latin America and the Caribbean – for fighting informality. In addition, freely chosen employment in flexible arrangements permits better reconciliation of work, life and family responsibilities.  Looking to the future, we should respond to the new and changing demands of the labor market, by employing various complementary employment strategies and not simply by blocking the new, or trying to make the new fit into the old.

But as we all know, the future of work is not only about more flexible, short-term and transient forms of work but about completely new forms of work. There is every reason to believe that the platform approach begun in the taxi industry will spread to more and more sectors of the economy. At the moment, the platform economy represents a tiny part of even the U.S. economy.  But it will grow, and will inevitably have an impact on employment relationships, social security and tax systems, corporate regulations and generally on labor rights. Let me be clear: When employers speak about labor rights in this context we do not do so with the intention of undermining fundamental labor principles and rights at work, but rather with the intention of ensuring that these rights and standards are meaningful in new work environments that may be very different to the way work has been organized thus far.

The debate on the new world of work in the Americas is complex and diverse. Employers and workers alike are impacted by the rapid pace of change, and business, people, skills, career management and government policies, regulations and institutions will need to adapt to accommodate the new realities.

The challenges and opportunities are different from sub region to sub region and country to country, both for developing and developed countries of the Americas.

The debate will go on for years, in international and regional bodies, and in national governments.

To summarize:

We are facing the rise of more flexible, short-term and transient forms of work, as well as completely new forms of work and new models of business.

These transformations will impact an array of institutional and legal frameworks including social security, taxation systems, trade and investment. To be effective, institutional and legal frameworks should be coherent with an array of policies affecting labour markets. Policies on education, skills and training are essential elements of this package.

Such developments will also have a profound impact on the employment relationship. We will need to rethink this relationship and explore new ways to extend and administer social protection. Other aspects of regulation that will be affected concern health & safety, data protection, and hours of work.  We have a lot to do – and we have to do it together.

Employers are willing to provide credible input to policy makers and trade unions on how we can work together to prepare for the future. This is not only about companies and workers adapting to new technologies or accommodating the impact of social media. It is about transforming mindsets and attitudes towards work.

The Employers of the Americas are ready to bring their voice, experience and expertise to the table assisting the governments of the hemisphere.  Let me give four examples of areas in which we must collaborate:

  • Providing credible evidence based data. In Cancun, the OECD repeatedly made a plea for more and better information and statistics. This is essential for us  to better understand the trends and developments in the labor market and the drivers behind this change. Given the rise in not only flexible forms of work but also new forms of work, a first step is to define these arrangements.
  • Designing modern migration regulations and facilitating talent mobility and skills recognition.  One key feature of  the new world of work must be allowing workers to move across borders.
  • Adapting legal regulations and institutions to the new needs of business, the workforce and workplace. It is not for people to change to ensure that regulations work but regulations themselves need to change and adapt to the new context in order to support individuals. Regulations need also to facilitate the process, instead of being an obstacle to change.
  • Collaborating with schools and universities to develop a curricula and a shared practical knowledge of the market. The education system needs to change to allow a focus on new skills and lifelong learning.

There are many things we don’t know.  But of one thing we can be certain – we need to rethink and reform our education curricula and our training institutions to equip both children and the existing workforce for a future we can’t predict.  This must be a joint effort.

Thank you.