Policy Positions and Statements Archives

Robinson Shares US Perspective During Virtual Briefing on Socio-Economic Impacts of COVID-19 With ILO Director General

Published on May 14, 2020

USCIB President and CEO Peter Robinson joined International Organization of Employers (IOE) members from around the world in a virtual dialogue meeting with ILO Director General Guy Ryder. The April 30th briefing allowed for employers to gain better understanding of how the ILO is responding to the socio-economic impacts of COVID-19.

According to the IOE, this briefing attracted 112 participants from across the world.

Robinson’s remarks included the state of the U.S. economic situation, which included somber statistics regarding U.S. GDP, which has contracted 4.8% in the first quarter of this year and U.S. unemployment claims as of April 30, which reached a total of over thirty million.

“The impacts in the U.S. are sadly not unique,” said Robinson. “Every IOE member on this call and every ILO member state has been similarly laid low – especially vulnerable economies already beset by existing challenges.”

“At USCIB we’re particularly concerned with the inadequacies of social protection systems worldwide, but especially in vulnerable economies, as well as lack of access for SMEs in those countries to capital to maintain their financial viability during this crisis,” added Robinson.

USCIB has raised this issue, and others, with the U.S. government.

“As we look to the future and recovery, let’s be bold,” urged Robinson. “We’re in the first year of the ILO’s second century and we are faced with an enormous challenge. Now, more than ever is the time to take clear and focused action together to harness the unique strength of the ILO and its tripartite constituency. Let’s find unity in purpose to support the ILO’s role in helping the world ‘build back better’ by focusing on core issues of shared priority – looking to the ILO Centenary Declaration as our guide. Count on USCIB, our members and the IOE as your committed partners for our recovery together.”

USCIB Congratulates Colombia on Formally Becoming OECD Member

Published on April 30, 2020
Pictured from left: Iván Duque Márquez, President of the Republic of Colombia and Angel Gurría, Secretary-General of the OECD (Photo: OECD/Victor Tonelli)

The Organization for Economic Cooperation and Development (OECD) announced that Colombia has formally become an OECD Member as of April 28, 2020. Colombia is the 37th country to do so in the Organization’s near 60-year history.

According to the OECD, Colombia has now completed its domestic procedures for ratification of the OECD Convention and deposited its instrument of accession. This brings to a successful conclusion an accession process that began in 2013.

“Colombia is an important market for many companies, and we commend Colombia on successfully concluding this lengthy process and committing to the high standards of the OECD,” said USCIB Senior Director for Trade, Investment and Financial Services Eva Hampl. As the official voice representing U.S. business in this process, USCIB was actively involved in providing input into Colombia’s accession process via Business at OECD (BIAC), the official business voice at the OECD.

OECD Member countries formally invited Colombia to join the Organization in May 2018, following a five-year accession process during which it underwent in-depth reviews by twenty-three OECD Committees and introduced major reforms to align its legislation, policies and practices to OECD standards. These spanned the breadth of policy fields including labor issues, reform of the justice system, corporate governance of state-owned enterprises, anti-bribery, trade, and the establishment of a national policy on industrial chemicals and waste management.

USCIB Comments on Negotiating Objectives for a US-Kenya Trade Agreement

Published on April 30, 2020

Following the Administration’s recent notice to Congress that it is going to enter into negotiations with the Republic of Kenya for a U.S.-Kenya trade agreement, USCIB submitted comments on April 28 to offer its input on negotiating objectives.

USCIB’s comments offered support for a negotiation of a comprehensive trade agreement with Kenya as part of a broader strategy to open international markets for U.S. companies and remove barriers and unfair trade practices in support of economic growth and job creation.

“We strongly believe that free trade with Kenya is overwhelmingly in the interests of both countries and their global trading partners, provided that the agreement is a high standard and comprehensive bilateral trade and investment agreement,” said USCIB Senior Director for Trade, Investment and Financial Services Eva Hampl.

According to USCIB, reaching an agreement with Kenya is important for the United States because this would be the first trade agreement with a Sub-Saharan African country.

“Beyond Kenya, the Administration should continue ambitions to initiate trade negotiations with other African partners,” added Hampl.

USCIB stressed that a successful trade agreement with Kenya should be negotiated as a single, comprehensive agreement which covers comprehensive market access and national treatment for goods, services, investment and government procurement, and also addresses key rules issues as well.

Beyond Kenya, a high standard U.S.-Kenya FTA could serve as a benchmark for the further negotiation and implementation of the broader African Continental Free Trade Area Agreement (AfCFTA), parts of which entered into force in May 2019, and is viewed as a great step forward for African trade modernization.

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

Published on February 3, 2020
USCIB Vice President Shaun Donnelly (left) and Chevron Supervising Counsel Andres Romero-Delmastro (right) testifying as panelists before the US Government’s GSP Subcommittee

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

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

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

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

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

To read Donnelly’s full testimony, click here.

USCIB Commends Phase 1 China Deal, Urges Further Negotiations

Published on January 15, 2020

Washington, D.C., January 15, 2020 – The United States Council for International Business (USCIB), which represents many of America’s leading global companies, welcomes the signing of a Phase One deal with China today in Washington.

China continues to be an important market for U.S. business, and we recognize the progress on food and agricultural export opportunities in this agreement. It also addresses issues related to resolving intellectual property theft and forced technology transfer, which negatively affect the global competitiveness of our companies, but more remains to be done to ensure American companies are afforded a level playing field in China.

USCIB continues to support a comprehensive, high-standard deal that that holds China accountable for complying with their international obligations, vigorously pursuing a level playing field overseas, while avoiding policies that undermine U.S. industry competitiveness. We look forward to studying the details of this initial Phase One deal, and to a next phase of negotiations to address remaining issues, including removing the harmful tariffs that have been imposed on both sides.

In addition to working directly with China, we also continue to urge the Administration to work closely with allies to address many of these concerns on fundamental Chinese policies and practices. We are therefore pleased that the United States is continuing to work with the European Union and Japan toward that goal, exemplified by the cabinet-level meetings this week in Washington.

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

Op-Ed Dispels Myths of Business “Conflict of Interest” at UN

Published on September 25, 2018

As the annual United Nations General Assembly is underway in New York this week and next, USCIB President and CEO Peter Robinson contributed a timely op-ed in The Hill, titled “UN’s private-sector phobia prevents if from hitting its lofty goals.”

“It is increasingly evident that the international community is not on track to deliver the expected results under the Paris Agreement (as well as the broader U.N. Framework Convention on Climate Change) or the U.N.’s Sustainable Development Goals,” writes Robinson. “So why, at a moment when governments and international organizations should be actively seeking ways to encourage business to step up, is the private sector being accused of having a ‘conflict of interest’ or of actively seeking to upend global consensus?”

Robinson points out that accusations of conflict of interest are rampant across UN agencies, including the World Health Organization and in the context of the UN climate talks. He then outlines six “myths” about business influence in international policy-making and dispels them one by one.

To read the full op-ed, please visit The Hill.

 

Business Asks for Realistic Approach on OECD Corporate Governance Principles

Published on February 24, 2004

During February’s meeting of a key steering group of the 30-nation Organization for Economic Cooperation and Development, negotiations on the newly revised OECD Principles on Corporate Governance reached a crucial stage.  The principles are to be finalized for adoption at May’s OECD ministerial meeting in Paris.

Commenting on the negotiations of the government experts, members of the OECD’s Business and Industry Advisory Committee(BIAC) asked their governments to sustain the notion that “one size does not fit all” in corporate governance standards.

Every national regulatory system has to find its own balance between regulation by governments and self-regulation, BIAC members said.  A level of diversity is necessary for the maintenance of an internationally competitive environment, and companies welcome the new emphasis given to the effective enforcement of existing corporate governance rules.  Business believes, however, that having clear, concise and understandable OECD principles is necessary for their effective enforcement.

The 38 business federations from all the OECD countries belonging to BIAC – and the companies they represent – will continue to take the discussions on corporate governance seriously and participate actively in the elaboration and revision of corporate governance laws and codes in their countries.

Staff contact: Ariel Meyerstein 

BIAC website

More on USCIB’s Corporate Responsibility Committee

More on USCIB’s Trade and Investment Committee

ICC statement on Tobin tax

Published on December 14, 2001

ICCWBO logo

Department of Policy and Business Practices

Commentary by the ICC Presidency

The “Tobin tax” – a business viewpoint

Introduction

Since originally raised in 1974 by Professor James Tobin, Nobel Memorial Pricze winner in economics, the question of taxing international transactions in different currencies has over the years been proposed in various versions and for a number of different reasons.  While ICC considers that greater stability of financial markets is desirable, it also believes that a “Tobin tax” would be harmful to international trade, economic growth and welfare, and businesses throughout the world. The smallest nations would be most hurt. The tax would not prove feasible in practice since it would require uniform implementation throughout the world, and would need to encompass not only spot transactions but also substitutes and supplements such as currency swaps, forwards and futures in order to limit evasion.

Tobin’s original idea

Tobin’s original idea was to introduce an internationally uniform tax on all spot conversions of one currency into another, proportional to the size of the transaction. The impact of such a tax would obviously punish short-term trading more seriously than longer-term trading. A major concern was to make currency exchange rates reflect to a larger degree long-run fundamentals relative to short-range expectations and risks, and thus reduce volatility. A second objective was to preserve and promote the autonomy of national macroeconomic and monetary policies. To raise revenues for international purposes was never a main motivation of Professor Tobin, but is a major purpose of many of the present supporters of such a tax.

Transactions are necessary to cover currency risks

An estimated 1,500 billion US dollars are traded each day on the world’s foreign exchange markets. Most transactions are for less than one week – most within a day – and the interbank share is approximately 70-80 per cent of the total. To a large extent, the high volume of the transactions reflects genuine needs to cover currency risks and spread the risks among different participants in the exchange market, in much the same ways that insurance risks are distributed on the international reinsurance market. Certainly, a single trade transaction may easily result in ten currency transactions because the currency risk is passed around among currency dealers like a hot potato. In most countries there are strict regulations regarding how much uncovered currency exposure banks may accept.

Harmful effects

A consequence of a Tobin tax would be to reduce short-term trading.  But there would be no guarantee that exchange rate volatility would diminish because liquidity would also diminish.  Indeed, minor currencies might become more volatile and vulnerable to manipulative speculative attacks. Reduced liquidity would also make stabilizing long-term arbitrage more risky. Thus, customers’ transaction costs would increase more than the tax levied. As with stock and security markets, some degree of short term trading – or speculation – is desirable on most currency markets to increase liquidity.

Transactions between minor currencies would be particularly hurt because there are no cross rates between many of them. Hence, it is necessary to use a major currency – for instance the US dollar (which is part of 80 to 90 per cent of all currency transactions) – as an intermediary currency. This implies two transactions or more (if an additional intermediary currency is required). Consequently, the tax might be doubled or tripled for conversions between many minor currencies. Because of the costs involved, pension funds and other portfolio managers would increase their home bias. Less capital would be available for international capital markets in general, and for investments in minor currencies in particular.

At a reasonable rate, say 0.05 per cent, the increased domestic autonomy the tax would provide in setting interest rates would be negligible.  And to the extent it did work, there might be a loss of discipline on economic policy stemming from abroad.

A Tobin tax would not prevent speculative attacks on a currency where the expected gain might be high — not unusually 10 per cent or more over a week. Furthermore, a tax could neither rectify nor repair unsustainable economic policy, which more often than not is the main reason why a currency comes under attack.

An impracticable tax

A Tobin tax would prove impracticable since it would require worldwide coverage, or at least coverage encompassing the G 10 countries, supplemented by a penalty on transactions to tax havens. Unilateral implementation would move currency trading offshore. Not only spot transactions, but also derivatives like currency swaps, forwards and futures would need to be taxed, since they are substitutes for and supplements to spot transactions.

ICC notes that Professor Tobin today is no longer a proponent of the tax that bears his name — inter alia, because the currency regime is now very different from the time when he originally proposed the tax and because he supports free trade as an instrument for raising welfare throughout the world.

Conclusion

In conclusion, ICC is firmly of the view that it would not be feasible to implement a Tobin tax.  And even if it were feasible, such a tax would neither significantly prevent speculative attacks on currencies nor increase national economic autonomy. The tax would throw sand in the wheels of international trade and investment and would harm the prospects for raising global economic growth and the welfare of all peoples.

About ICC

ICC is the world business organization, the only representative body that speaks with authority on behalf of enterprises from all sectors in every part of the world.  ICC promotes an open international trade and investment system and the market economy.  Business leaders and experts drawn from the ICC membership establish the business stance on broad issues of trade and investment policy as well as on vital technical and sectoral subjects.  ICC was founded in 1919 and today it groups thousands of member companies and associations from over 130 countries.