USCIB Testifies on China WTO Compliance

In response to Federal Register notice 82 FR 36071, USCIB Director, Investment, Trade and Financial Services Eva Hampl, provided oral testimony on Wednesday, October 4 to the U.S. government interagency Trade Policy Staff Committee (TPSC) regarding China’s compliance with its WTO commitments on behalf of USCIB and its members.

“USCIB and its members understand and appreciate that U.S.-China economic relations are complex and multifaceted, and American business holds a direct and important stake in this relationship and in its success,” noted Hampl in her testomony.

The testimony amplified priority issues for USCIB members, in addition to the written submission made in September. The Q&A session following the oral statement included questions from the various agencies on issues of regularly transparency, technology transfer, trade secrets, discriminatory industrial policies, and agricultural biotech.

On IT security measures, Hampl emphasized, “The Cybersecurity Law, which went into effect in June of this year, establishes a number of burdensome restrictions on the cross-border flow of data and establishes intrusive security reviews of equipment and services used by network operators and operators of critical information infrastructure.” Hampl therefore urged the U.S. government to continue to press for full suspension of all existing and proposed measures involving trade-restrictive requirements in this area.

In addition to discussing these issues with the interagency committee, Hampl emphasized USCIB’s support of continuing negotiations of a US-China Bilateral Investment Treaty (BIT), expressing USCIB’s hope that efforts to conclude a high-standard BIT will soon resume on the remaining issues.

USCIB’s Statement on China Urges WTO Compliance

As China continues to grow in importance in the global economy, it is crucial for the Chinese and U.S. governments to continue to work together to address common challenges and responsibilities. In view of this, USCIB has recently submitted a statement to the United States Trade Representative (USTR) on China’s compliance with its World Trade Organization (WTO) commitments, which incorporated a wide array of input from USCIB members across various sectors.

In the statement, which is submitted annually, USCIB commended the U.S. and Chinese governments for important work in on-going bilateral dialogues, as well as in support of working relationships between U.S. and Chinese agencies which provide invaluable opportunities for exchanging information and addressing agency-specific issues. The statement addressed important issues to U.S. business including taxation, customs and trade facilitation, information technology and intellectual property rights. Furthermore, it advocated for continuing negotiations of a Bilateral Investment Treaty (BIT) between the U.S. and China.

“We also urge both countries to utilize the full range of multilateral forums in addition to the WTO, including the Asia-Pacific Economic Cooperation (APEC) Forum and the Organization for Economic Cooperation and Development (OECD), to work toward improved commercial relations,” said Eva Hampl, who leads USCIB’s work on China.

“While USCIB acknowledges the efforts China has made since joining the WTO in 2001 to meet its obligations under the terms of its accession agreement, there still remain significant WTO obligation compliance concerns,” added Hampl. These concerns include government procurement, trade restrictions in information technology and continued intellectual property violations in audiovisual, software, agriculture biotechnology and chemicals.

The full statement is available here.

Industry Appeals to China on Cybersecurity Law

With China’s broad cybersecurity law set to take effect next month, USCIB has joined with a range of industry groups from the United States and other countries in appealing for the country to delay its entry into force. Among other things, the new law would give law enforcement enhanced authority to access private data and require data to be stored servers located in China.

In a joint letter, the business groups said they are “deeply concerned that current and pending security-related rules will effectively erect trade barriers along national boundaries that effectively bar participation in your market and affect companies across industry sectors that rely on information technology goods and services to conduct business.”

The letter called on China to ensure that cybersecurity regulations comply with China’s World Trade Organization (WTO) commitments and encourage the adoption of international models that support China’s development as a global hub for technology and services.

USCIB Facilitates Dialogue on US-China Cybersecurity

USCIB’s Eva Hampl (center) and Barbara Wanner alongside Tad Ferris, Foley and Lardner (right)

USCIB facilitated an off-the-record dialogue with U.S. Government officials on the topic of U.S.-China cybersecurity last week in Washington DC. The meeting brought together officials from the White House, FBI, Department of Homeland Security, Department of Commerce, and USTR. After brief introductions by Tad Ferris, partner at Foley & Lardner LLP and chair of USCIB’s China Committee, Barbara Wanner, USCIB’s vice president of ICT policy and Eva Hampl, USCIB’s director, investment, trade and financial services, the group received a strategic overview of the U.S.-China cybersecurity relationship from Christopher DeRusha, senior cybersecurity advisor, Office of the Federal Chief Information Officer.

Discussions focused on the issue of cybersecurity from the perspective of different agencies. One of these perspectives was highlighted in a panel on trade-related aspects of the U.S.-China cybersecurity relationship, which was discussed by Jonathan McHale, deputy assistant USTR for Telecommunications and Electronic Commerce Policy, Office of the U.S. Trade Representative and Christopher Wong, international trade specialist, Office of China and Mongolia, Department of Commerce.

Another panel addressed progress on law enforcement cooperation and international cooperation against third party threats.  This was discussed by Amit Kacchia-Patel, unit chief, Federal Bureau of Investigation and Jordana Siegel, director, international affairs, Department of Homeland Security.

USCIB’s Eva Hampl moderates panel at U.S.-China Cybersecurity Meeting

“Cybersecurity is an issue of growing concern for USCIB members, which is reflected in our submission of Priority Issues for the U.S.-China Joint Commission on Commerce and Trade, as well as our annual Statement on China’s Compliance with its WTO Commitments” said Hampl.

USCIB also recently signed on to a multi-association letter on China’s draft Cybersecurity Law and related pending cybersecurity regulations and measures.

Click here to read USCIB’s submission of Priority Issues for the U.S.-China Joint Commission on Commerce and Trade (JCCT)

Click here to read USCIB’s Statement on China’s Compliance with its WTO Commitments

Business Hits Chinese Cybersecurity Rules as Protectionist

China - Flag on Button of Black Keyboard.Earlier this month, China adopted broad cybersecurity regulations giving law enforcement enhanced authority to access private data and requiring data to be stored servers located in China. In a letter to Chinese authorities, USCIB and some 40 other industry groups from around the world protested the measure, saying it would wall off China’s internet and unfairly hamper access to the Chinese market.

The letter said Chinese regulators used security as a pretext for enacting protectionist trade policies to benefit Chinese industry, and urged China to to respect its World Trade Organization commitments. “We are concerned that these commitments are undermined by public statements and other forms of high-level guidance that call for indigenous and controllable substitution plans for information technology products and services,” the industry letter stated.

USCIB is organizing a high-level government and business dialogue on US-China cybersecurity, to be held December 16 in Washington, D.C. White House and other government officials will be invited to brief members on the ongoing U.S.-China cyber dialogue and discuss specific member priorities. Please contact Eva Hampl for additional information.

Business Pushes for TFA Ratification at G20 Summit

International flagsPromoting robust trade and investment is a key focus of the B20 2016 policy recommendations to the G20 summit, which will take place in Hangzhou, China on September 3 and 4. Business recommendations include improving the global investment environment, strengthening the multilateral system and rolling back protectionist measures. USCIB and several of its members contributed to the recommendations. According to Rob Mulligan, USCIB’s senior vice president for policy and government affairs, G20 governments can take one easy step to boost growth.

“The upcoming summit is an important opportunity for the G20 to push for the ratification of the World Trade Organization’s Trade Facilitation Agreement by the end of this year,” Mulligan said. Once implemented, the TFA has the potential to increase global exports by up to $1 trillion per year, according to the WTO’s World Trade Report.

The International Chamber of Commerce (ICC) also published a set of business recommendations for sustained economic growth ahead of the G20 summit.

Additionally, President Obama will promote the Trans-Pacific Partnership (TPP) during his upcoming trip to China and Laos in early September, according to a White House statement released on August 18. As part of Obama’s Asia trip, he will attend the G20 summit and use use the visit as an opportunity to discuss a wide range of global and regional issues, including adoption of TPP.

“This visit also will support the President’s efforts to expand opportunities for American businesses and workers to sell their products in some of the world’s fastest-growing markets,” the White House said in a statement. “Central to this effort is the Trans-Pacific Partnership, the high-standards trade agreement that will unlock key markets to American exports and cement America’s economic leadership in the Asia-Pacific.”

Obama’s push for TPP comes at a time of growing skepticism that the trade agreement will be approved before election day in November. Both Republican and Democratic nominees for president oppose the agreement.

Business Urges China to Revise Cybersecurity Laws

Cyber security concept with lockUSCIB joined a group of 45 business organizations from around the world warning the Chinese government that it would harm business operations and restrict trade if it implements proposed cybersecurity and insurance rules.

A letter the group sent to Chinese Premier Li Keqiang on August 10 urges China to live up to its role as the host of this year’s G-20 leaders summit in September to promote the meeting’s goals of creating an “innovative, invigorated, interconnected and inclusive world economy.”

“[T]he current drafts, if implemented, would weaken security and separate China from the global digital economy,” USCIB and others stated in the letter. “To that end, we urge both The Law and The Provisions be revised to encourage international policy models that will support China’s development as a global hub for technology and services. This will assure a legacy of an innovative, invigorated, interconnected and inclusive world economy from China’s G20 presidency.”

Read the letter.

US Business Concerned with China’s Cybersecurity Regulations

china_flag_large-600x300Ahead of the U.S.-China Strategic Economic Dialogue which took place in Beijing on June 6-7 convening high-level officials to discuss trade, finance, security and the environment, USCIB and other business organizations sent a letter to the China Insurance Regulatory Commission citing concerns with China’s proposed technology regulations (“Provisions”).

“If adopted as currently drafted, however, the Provisions would create unnecessary obstacles to international trade and likely to constitute a means of arbitrary or unjustifiable discrimination against producers and service providers in countries where the same conditions prevail,” USCIB and others stated in the letter. “As a consequence, we have concerns that the Provisions could constitute an unnecessary obstacle to international trade.”

The business community asked China to postpone the adoption of the Provisions to allow for further stakeholder input, and to ensure that China’s cybersecurity regulations avoid unnecessary commercial disruptions.

Additionally, on June 13 the United States and other World Trade Organization members expressed concerns about proposed Chinese insurance regulations that they claim favor home-grown technologies over those of foreign producers.

Read the full letter.


New Study Details the Impact of an Environmental Goods Agreement on China

Solar-workers_3The Coalition for Green Trade, of which USCIB is a founding member, issued the following press release today about a new study onthe impact of an Environmental Goods Agreement on China:

New Study Details the Impact of an Environmental Goods Agreement on China

The Coalition for Green Trade today released the results of a new study detailing the effects that a World Trade Organization (WTO) Environmental Goods Agreement (EGA) would have on the economy of China and the country’s ability to meet its environmental goals.

Overall, the study, “Value of an Environmental Goods Agreement: Helping China Meet Its Environmental Goals,” finds that full implementation of an EGA accord to eliminate tariffs on green technologies by China – the largest producer of these technologies participating in the EGA negotiations – would have a positive impact on the Chinese economy and environment.

The study was principally prepared by Dr. Joseph F. Francois and Laura M. Baughman of the Trade Partnership Worldwide, LLC.  They find that full implementation by China of an ambitious EGA:

  • Increases China’s GDP and national income by billions of dollars;
  • Increases exports by nearly $27 billion, up by 9.8 percent;
  • Increases real spending of roughly $22 billion annually on environmental goods; and
  • Results in gains of approximately $659 billion annually in economic benefits linked to improved environmental quality, based on the literature assessing cost-benefit ratios for investment in improved environmental conditions.

In July 2014, the United States and a group of other countries launched EGA negotiations at the World Trade Organization (WTO) in an effort to improve access to important green and energy efficient technologies, among other objectives. The United States and the 16 other WTO members participating in the EGA talks account for at least 86 percent of global environmental goods trade.

The Coalition for Green Trade is composed of a broad range of associations – including the U.S. China Business Council, which provided advice and outreach in support of this report – and companies doing business in the United States who seek to remove barriers to global trade in environmental technologies.

Boao Forum Focuses on G20 Policy Agenda

jdboao_sourceWith less than six months to go to the 2016 G20 Summit, a special session of the Boao Forum for Asia brought together leaders from both business and government to discuss policy priorities to support growth and job creation.

International Chamber of Commerce (ICC) Secretary General John Danilovich moderated the high-level roundtable, which featured keynote addresses from Wang Shouwen, China’s vice minister of commerce and Thomas Lembong, Indonesia’s minister for trade. A major theme of the discussions was the importance of public-private partnership and dialogue to address key global challenges ranging from weak global growth to climate change.

Commenting at the roundtable on the strategic importance of this year’s G20 process, Danilovich said: “It’s vital that this year’s G20 process develops a comprehensive and credible strategy to reinvigorate trade and global growth… As business, we also look to the G20 to drive forward implementation of the landmark UN agreements which were forged last year on sustainable development and climate change.”

The roundtable explored recommendations being developed by the five B20 task forces on trade and investment, infrastructure, employment, financing and small business (SME) development. The issue of SME growth remains a particular priority for ICC’s global outreach, building on engagement throughout last year’s B20 process which lead to the creation of the World SME Forum.