Donnelly Co-Authors Op-Ed in The Hill on Commercial Diplomacy

USCIB Senior Advisor Shaun Donnelly and his longtime State Department colleague Ambassador (ret.) Tony Wayne recently co-wrote an op-ed in The Hill titled, “Biden’s Trade Policy Needs Effective Commercial Diplomacy.”

Wayne and Donnelly, both retired U.S. ambassadors, ran the State Department’s Economic and Business Bureau in the early 2000s; Wayne served as assistant secretary and Donnelly was his principal deputy assistant secretary.  Their recent op-ed recommends that the new Administration focus on strengthening a government-wide effort to support U.S. companies (and thereby, U.S. workers and localities) to win more business opportunities overseas in order to bolster American revenues, jobs, and global competitiveness across the United States.

According to both, the international competition is fierce, and getting increasingly more fierce every day. “Frankly other governments have upped their games in recent years, so we have some catching up to do,” they argue in the op-ed.

“High-level political support, interagency teamwork, strong Ambassadorial leadership in the field, and in-depth partnership with the U.S. private sector will be essential.”

“Both in our days together at the State Department and now as colleagues in the American Academy of Diplomacy, Ambassador Wayne and I have been working on these important issues of how the U.S. Government can best support U.S. companies and workers, to help them win more deals, contracts and partnerships around the world,” said Donnelly.  “We’ve worked with the Obama and Trump Administrations on these issues and we anticipate engaging actively with the incoming Biden team at key agencies, as well as key players at the White House, on the Hill and beyond.  The U.S. needs to up its game, play stronger offense on international commercial battlefields. I see this work as a natural extension of my earlier work at State and USTR on international economic and trade policy and also of the important work we at USCIB have been doing to support U.S. business.”

Op-Ed: Business Must Come Together to Respond to COVID-19 Now

Op-Ed by Scott C. Ratzan MD, Executive Director of Business Partners for Sustainable Development

Earlier this month, nearly 500 experts in public health, law and human rights wrote an open letter to U.S Vice President Mike Pence to act swiftly, fairly and effectively, warning that “the COVID-19 outbreak is unprecedented in recent American history, and there is no playbook for an epidemiological event of this scope and magnitude.”

Yet, just weeks later, we all are living with unprecedented turmoil from this novel coronavirus, COVID-19.

While the virus was named a Public Health Emergency of International Concern (PHEIC) by the World Health Organization (WHO), this is the seventh time we have had such a proclamation in the last two decades. H1N1 influenza, polio, ebola in West Africa and in the Democratic Republic of Congo and Zika, all abated and did not cause as much havoc. Financial markets are on a roller coaster, planes grounded and many of us sheltering in place or in a self-imposed or government-recommended quarantine.

The future of our public health and economy depend on how government officials, policymakers, leaders and our fellow citizens react.

This includes honest, coherent, transparent, and timely communication while providing adequate funding and support for the response. The health care system needs immediate resources for equitable and effective infection control and the means to effectively manage the disease.

As 24/7 news, interactive websites, social media and alerts fill our day, the virus continues to spread. Unfortunately, without a clear treatment or cure, fear and uncertainty results in a rich environment for misinformation and misguided actions.

COVID-19 is a test of our system’s ability to address a legitimate public health threat with an unknown trajectory. Multiple sectors must leverage knowledge, expertise, networks and resources to produce better public health outcomes. Being prepared with a plan and being proactive is the name of the game in prevention, mitigation and management of risk and the adverse consequences of any threat.

Business must play a critical role in planning, implementing and adapting to this crisis due to its wide reach, resources and impact on employees, partners and markets.

Communication from employers on coronavirus is the most credible source of information, according to a recent Edelman ten-country study (March 6-10). This is consistent with a 2020 Edelman Trust Barometer, which showed that “my employer” is the most trusted institution by 18 points over business in general and NGOs, and by 27 points over government and media.

Employers are central in communicating the response. The public needs the assurance that as more is learned, information will be shared accurately and clearly from sources they trust.

This emergent threat challenges our society to cooperate amongst all sectors, including government, media, technology platforms and the private sector.

We know that large scale communication campaigns that employ behavioral economics, health literacy and communication levers (mass and social media) can drive citizens toward healthier decisions. As COVID-19 continues to spread, the business sector’s historical hallmarks of innovation, efficiency and management can help address the challenge we face today.

There are some promising examples:

  • A COVID-19 Therapeutics Accelerator supported by Mastercard will join with the WHO, government and private sector funders and organizations to speed the response to the COVID-19 epidemic by identifying, assessing, developing and scaling-up treatments.
  • The USCIB is leveraging existing networks to catalyze partnerships to address challenges, such as COVID-19. This includes working with the International Organization of Employers (IOE) and the International Labor Organization (ILO) to distribute WHO guidance on simple and low-cost measures for creating a healthier and more productive workplace.
  • The International Chamber of Commerce (ICC) and Business at OECD (BIAC) are also working on the design of an action plan to reach millions of businesses with recommendations to help governments deal with the threat to the global economy.
  • The Global NGO Business Fights Poverty is collaborating with Business Partners for Sustainable Development (BPSD) to develop an online “challenge” discussion on how business should tackle the coronavirus challenge.
  • NBCUniversal, Viacom/CBS, iHeartMedia, The Atlantic, Disney/ABC Television and the Ad Council will donate advertising inventory for campaigns that will advise consumers about social distancing, steps that can be taken to protect the public and more.

While the WHO was established to advance “informed opinion and active cooperation on the part of the public” we have now learned that health issues are not confined to one organization or sector.

Only by working together, with the public and private sectors, we can advance a society where our livelihoods are not threatened by similar future outbreaks and create a resilient society capable of responding to any future threat we may face.

Scott C. Ratzan MD is Executive Director of Business Partners for Sustainable Development. He is Former Senior Fellow at Harvard Kennedy School Mossavar-Rahmani Center for Business and Government.

Hampl Gives Testimony on US-UK Trade Agreement

Eva Hampl provided testimony before the Trade Policy Staff Committee, chaired by USTR, on January 29.
USCIB supports negotiation of a comprehensive trade agreement with the UK as part of a broader strategy to open international markets for U.S. companies and remove barriers and unfair trade practices in support of U.S. jobs.

 

Following USCIB’s submission on January 16 to USTR regarding negotiating objectives for a U.S.-UK Trade Agreement, USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl provided testimony before the Trade Policy Staff Committee, chaired by USTR, on January 29.

“USCIB supports negotiation of a comprehensive trade agreement with the UK as part of a broader strategy to open international markets for U.S. companies and remove barriers and unfair trade practices in support of U.S. jobs,” said Hampl in her testimony. “We strongly believe that continued U.S.-UK free trade 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. A successful trade agreement with the UK should cover not just market access for goods, but also address important services issues.”

Hampl’s testimony also emphasized the importance of regulatory cohesion across the United States, the UK and the European market as a key component in further liberalizing trade. Regulatory discrimination and differentiation between trade partners can be an obstacle to trade, investment and the ability to conduct business. Affected sectors include pharmaceuticals, chemicals and fintech.

Hampl also raised the issue of digital trade. “U.S. companies rely on cross-border data flows as part of their day-to-day operations,” said Hampl. “A U.S.-UK agreement should include requirements that data can flow unimpeded across borders except for limited and well-defined public policy exceptions, ensuring that they are not used as disguised barriers to trade.”

Regarding intellectual property (IP) protection, Hampl noted that at a minimum, a U.S.-UK agreement should enshrine existing protections and enforcement mechanisms. It should also address sectoral IP issues, such as in the pharmaceutical space.

To read Hampl’s testimony, please click here.

USCIB in the News: Taxes, Trade and Tariffs

USCIB’s voice and views were reflected in many of the top stories of the past several months, which saw a heavy focus on taxes, trade and tariffs. USCIB and its global network were featured prominently in numerous stories covering NAFTA modernization, China tariffs and the OECD’s work on global tax policy.

In October, USCIB CEO and President Peter Robinson contributed a letter to the Financial Times in response to an editorial urging action on the digital divide. In his letter, Robinson noted that “public-private partnerships are indeed needed to broaden access to the internet, and companies are already moving ahead in this regard, in addition to taking action on their own.”

In discussing G20 trade tensions, USCIB Senior Vice President Rob Mulligan sat down with BBC World News to do a live television interview. Mulligan said that Trump is right to address the balance of trade between the U.S. and China, but that tariffs aren’t the answer and will ultimately cause higher prices and job losses.

To read more of USCIB activity in the media, please visit this link.

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

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.

 

USCIB Statement on Announcement of U.S.-Mexico Trade Deal

Washington, D.C., August 27, 2018 – The United States Council for International Business (USCIB), which represents America’s most successful global companies, released the following statement on the U.S.-Mexico trade deal announced today:

“USCIB is encouraged that the Trump Administration and Mexico have reached an agreement in principle to modernize NAFTA. Updating the 25-year-old agreement has been a priority for the U.S. business community. We look forward to seeing the details of the agreement and if they effectively address our members’ key issues and concerns. In this regard, we are troubled by indications that certain investor protections have been removed or reserved only for specific sectors.

“More broadly, we hope that an agreement on NAFTA signals a redirection of U.S. trade policy – away from confrontation and toward cooperative efforts to open markets abroad. Our members, and the American economy, prosper when we are tearing down barriers to cross-border trade and investment, not erecting new ones.

“We and our members are also very committed to the fundamental structure of NAFTA as a single trilateral agreement. We are looking forward to a completed, comprehensive, trilateral NAFTA modernization that addresses all of our issues and includes Canada.

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, 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
+1 212.703.5043 or jhuneke@uscib.org

Hampl Testifies Regarding Proposed China Tariffs

 Following the Trump administration’s proposed Section 301 tariffs on Chinese goods, USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl testified before the Section 301 Committee, chaired by USTR on May 16 regarding the proposal. Hampl’s testimony reflected USCIB member concerns about potential consequences the proposed tariffs will have on sectors vital to the U.S. economy. Her testimony was drawn from comments USCIB sent earlier this month to the U.S. Trade Representative Robert Lighthizer. Hampl was joined by over 100 other business representatives to share specific concerns regarding the proposed tariffs.

“We believe that the imposition of tariffs will not achieve the important goal of changing China’s behavior in the space of emerging technologies and intellectual property rights,” said Hampl in her testimony. “China’s threat of retaliation further exacerbates uncertainties caused by this proposed action. Rather than create more opportunities for U.S. business, sweeping tariffs will stifle U.S. agriculture, goods, and services exports and raise costs for businesses and consumers.

Hampl emphasized the need for a “holistic structure” to address the aforementioned issues. Speaking on behalf of USCIB, Hampl applauded the Trump administration for looking at alternative approaches, such as initiating a WTO dispute by requesting consultations with China.

“It is important for the administration to address these issues with a broad view, working collectively with U.S. industry, Congress, and our trading partners, to adequately address China’s unfair trade practices and get China to be WTO compliant,” noted Hampl.

The proposed tariffs pose a unique challenge to industrial inputs, which represent over 80 percent of the proposed list. Tariffs on industrial goods are especially problematic because they represent not just a tax on U.S. consumers but a tax on U.S. manufacturers and workers, and on the products they export. Tariffs on aerospace, machinery and IT parts and other advanced technologies can undermine the most competitive sectors of American manufacturing, driving up production costs in the U.S., impacting U.S. manufacturing employment, and making U.S. manufacturers less competitive against global rivals.

“Tariffs on industrial parts imported into the U.S. could have the unintended consequence of prompting manufacturers to move final production outside of the U.S.,” warned Hampl. “To see how U.S. companies will be affected by the tariffs, it is important to look to how the supply chain functions. China is the second largest economy and the largest manufacturing economy in the world. We cannot ignore that China may have some unique capabilities, at the product level, that U.S. businesses need to tap into in order to remain globally competitive. For many products or inputs, there is no feasible alternative to procuring from China. We urge the Administration to use this process to ensure that its actions do not inadvertently harm some of the most competitive sectors of the U.S. economy, and the hundreds of thousands of American jobs that depend on them.”

In addition to the testimony, USCIB also co-sponsored a reception last week for Hill staff centered around the China 301 hearing, as well as NAFTA, celebrating Great American Jobs Supported by Trade. Representatives from U.S. government, companies, and associations, spent the evening discussing various important developments in the trade space.

The Hill: Trump Aiming to Make NAFTA Like a Football Game Without Referees

Op-Ed by USCIB President and CEO Peter Robinson as appeared on TheHill.com

The business community is broadly supportive of efforts to update and strengthen the North American Free Trade Agreement (NAFTA). NAFTA has been a major success for the United States, as well as our Canadian and Mexican partners.

But it’s now a quarter-century old and lacks rules in important new areas like digital trade, data flows and treatment of state-owned enterprises. A modernization that will bring NAFTA into the 21st century would be a welcome development, provided that it keeps what is already working in the agreement.

Since we are living in an age where the benefits of global economic integration are not well understood or appreciated, it’s worth backing up a bit to ask: What is a free trade agreement (FTA) anyway? Also, why would countries want to enter into an FTA?

The United States currently has FTAs with 20 countries, but other countries around the world have entered into several hundred bilateral and regional FTAs since the end of World War II.

They have done so not to cede sovereignty or export jobs overseas — two of the widely held misconceptions about trade agreements. Rather, they enter into FTAs in order to grow their economies through mutually beneficial cross-border trade and investment.

FTAs historically have provided preferences to the negotiating parties primarily centered around tariff-free trade. More recent trade agreements, including NAFTA, also include provisions on customs and trade facilitation, investment protection, regulatory standards, environment and labor and many other issues.

The key to reaping the benefits of an FTA and ensuring that it benefits U.S. companies, workers and consumers is to enforce the rules of the agreement in the event of a breach. In short, a new NAFTA must be fully enforceable.

Unfortunately, it seems that the Trump administration may want to weaken NAFTA’s core enforcement provisions. Such a change would spell disaster, akin to playing football or any other sport without a referee.

NAFTA currently has three strong chapters that provide for enforcement and redress: Chapter 11, which covers disputes between investors and states; Chapter 19, which covers anti-dumping measures and countervailing duties; and Chapter 20, which covers state-to-state disputes.

The United States has put forth proposals on each of these chapters, ranging from weakening the provision to entirely eliminating the chapter. If all of these proposals were to be included in NAFTA 2.0, there would be no provision available to provide legal recourse to an injured party against the party in breach of any of the substantive provisions.

Simply put, an agreement without enforceability would be bad for business. The Trump administration’s proposal for an “opt-in” approach to NAFTA’s existing dispute resolution mechanisms is no substitute for real, recognized, agreed and enforceable rules in this area.

Without substantive provisions protecting investment, including investor-state dispute settlement (ISDS), it’s very unlikely that the United States would gain the very tangible benefits it gets from open investment among the three NAFTA partners.

ISDS depoliticizes the enforcement of important investment rules by putting the dispute in the realm of neutral and legal arbitration.

U.S. investors, including the many smaller and medium-sized companies that have expanded sales and operations north and south of the border under NAFTA, would be far less willing to do business in Canada or Mexico if those governments couldn’t be held responsible for poor treatment or abuse of power.

The same goes for Canadian or Mexican investors in the United States, who have created many thousands of jobs here at home since NAFTA came into effect.

More broadly, you have to ask yourself: What good is a free trade agreement without enforcement provisions? The law of the Wild West is not the sort of formula needed to govern international trade and investment in today’s complex globalized international economy.

To extend the sports metaphor, the Trump administration seems to be more focused on playing defense than offense, preoccupied with eliminating tried-and-true principles because they impinge on our unilateral ability to block imports, discriminate against foreign products or projects and simply ignore inconvenient rules and regulations.

Historically, under both Republican and Democratic administrations, the United States has played offense. Indeed, we have been the star quarterback of the pro-growth team, leading international efforts to open markets, fight protectionism, promote greater international competition and uphold the rule of law.

A key part of this has been our insistence on strong enforcement provisions, i.e., referees with real whistles and real authority. For the U.S. now to focus on defense while also throwing away the rulebook is truly troubling.

Peter M. Robinson is president and CEO of the United States Council for International Business a business advocacy group that was founded in 1945 to promote free trade and help represent U.S. business in the then-new United Nations.

Post-Brexit Trade: An Opportunity to Set New Standards

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

Fighting for American Business: USCIB in the News in 2017

Throughout 2017, USCIB President and CEO Peter M. Robinson, alongside other USCIB leaders and staff, garnered important coverage from the news media on issues critical to USCIB members. Policy issues ranged from NAFTA and the need to enshrine investor protections to the need for reform at the United Nations.

USCIB members and committee leaders, particularly Jerry Cook of Hanesbrands and Tam Nguyen of Bechtel, also made headlines on issues such as customs and trade facilitation and the evolution of corporate sustainability standards, respectively.

“USCIB won important news coverage in a wide variety of areas,” said Jonathan Huneke, USCIB’s vice president for communications and public affairs. “Thanks to outstanding thought leadership from USCIB President Robinson, as well as committee leaders and our staff experts, we were able to consistently punch above our weight, holding our own in a crowded media environment.”

Read the full 2017 media review here. To request an interview with a USCIB expert, contact USCIB Communications.