Donnelly Talks Trade and Diplomacy (and Soybeans) in Podcast Interview

Shaun Donnelly
The “American Diplomat” series seeks to give listeners greater appreciation of the work done by American diplomats and public servants.
Host Peter Romero leads Donnelly through an informal discussion of the nuts and bolts of trade negotiations.

 

USCIB Vice President Shaun Donnelly is featured in a recent interview on the podcast “American Diplomat” demystifying trade policy and negotiations for listeners outside the beltway. The “American Diplomat” series is supported by the American Academy of Diplomacy, which counts among its members both Donnelly and USCIB Vice Chair Thomas Niles, longtime U.S. diplomats who each achieved the ranks of ambassador and assistant secretary. It seeks to give listeners around the country greater appreciation of the work done by American diplomats and public servants – in this case trade negotiators – to advance America’s, and Americans’, interests.

In the podcast interview, host Peter Romero (a retired U.S. ambassador and assistant secretary of state for the Western Hemisphere) leads Shaun through an informal discussion of the nuts and bolts of trade negotiations, with soybeans arising often as an example how any specific products factor into broad trade policy.

Donnelly claims to have enjoyed the discussion. “Over the years, I’ve done a fair number of speeches, panels and interviews trying to help build public understanding and support for an aggressive, pro-engagement, pro-growth trade policy, and have not always succeeded,” he noted with a self-deprecating chuckle. “I found this more informal, extended conversation format with Peter and his colleague Laura Bennett allowed more opportunity to get behind the sound bite, the bumper sticker and the talking point. Trade remains a complex, controversial and politicized topic these days. All of us who believe in open trade and investment policies need to keep reaching out to help build public understanding and support for common sense trade policies. I hope this sort of podcasts can make a modest contribution to the public discourse on trade.”

In BBC Interview, Mulligan Shares Thoughts on G20 Meeting

Rob Mulligan, USCIB

G20 Finance Ministers gathered in Argentina over the weekend to raise concerns over growing tensions between the United States and its major trading partners. Following the meetings, BBC’s Aaron Heslehurst spoke with USCIB Senior Vice President for Policy and Government Affairs Rob Mulligan as part of BBC’s Talking Business segment regarding international trade tensions that may undermine the global economy and stunt growth.

Mulligan expressed concern that continued escalation of tariffs may cause all kinds of problems for USCIB member companies. “Tariffs will lead to higher costs, drive higher prices for consumers and, we think, in the end, can start driving job losses,” warned Mulligan. “In fact, we’ve seen estimates for the existing tariffs related to steel and aluminum that can cause job losses in the United States of up to 140,000 jobs.”

Specifically, on U.S.-China tensions, Mulligan noted, “there are issues with China’s unfair trade practices that need to be addressed and we fully support an effort that would bring together all our allies to make that point with China, but we’re not sure that raising tariffs the way the President has threatened, even threating to impose tariffs on all 500 million of China’s exports to the United States, is going to be the way to solve that problem.”

To hear the entire interview, click here.

USCIB in the Media: Highlights of 2018 Coverage to Date

Trade and protectionism dominated the news during the first half of 2018, and USCIB was featured prominently in many stories on the escalating trade battles. Tax policy also received significant coverage, especially around USCIB’s annual tax conference with the OECD.

Click here to download the latest USCIB in the Media review. Some links may be available only for paid subscribers.

Please contact Jonathan Huneke, USCIB’s Vice President for Communications and Public Affairs, to discuss this review and future opportunities with the news media.

ICC’s Denton on Preserving the Rules-Based Trading System

ICC Secretary General John Denton published a letter in Financial Times last week titled, “The Rules-based Trading System is Worth Preserving.”

The letter comes in light of the Trump administration’s decision to impose steel and aluminum tariffs on its trading partners.

“As the prospect of a ‘trade war’ gradually escalates, we must all bear in mind what is currently at stake in broader systemic terms,” writes Denton. “The rules-based multilateral trading system has fuelled seven decades of unprecedented job creation and poverty alleviation. Communities connected by commerce have a common interest in maintaining peace. The World Trade Organization has proved itself the linchpin of what is — by any objective measure — a more prosperous world order. And with the right reforms it can do more to help families and workers the world over.”

The full letter can be viewed on FT’s website, subscription required.

USCIB Expresses Concern Over China 301 Tariffs

In light of last week’s release of two lists of China 301 tariffs by the Trump administration, USCIB Senior Director for Trade, Financial Services and Investment Eva Hampl expressed concern about the impact the China 301 tariffs will have on the U.S. economy and jobs. “In our submission to the U.S. government we highlighted a number of products of particular concern to our members, for which tariffs would have a significant effect on U.S. production and revenue. Unfortunately it appears that only a handful of consumer products were taken off the list. We are also reviewing the new list of products, and welcome the opportunity to provide input as appropriate. We are, however, troubled by the planned investment restrictions to be imposed on Chinese investments in technology later this month, where stakeholder input is not taken into account. Given the significant impact investment restrictions could have on U.S. companies and jobs, this move by the Administration is problematic.”

The first list of China 301 tariffs was a reduced version of the 1,300 tariff lines USCIB commented on in May. This list of tariffs on about $34 billion of Chinese products is set to go into effect on July 6. The second list, covering about $16 billion of Chinese goods, are products that were suggested to be added. That list will be up for a comment period, with a public hearing to be held in late July. The Federal Register Notice is not yet officially out.

“China is ready to retaliate,” warned Hampl. China has apparently reduced their initial $50 billion list to $34 billion to match what is currently the U.S. tariff list – the Ministry of Finance has apparently posted the list.

Hampl was also quoted earlier today in Politico. Full article is available here, subscription required.

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.

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.

USCIB Op-ed: It’s Time to Save NAFTA

USCIB President and CEO Peter M. Robinson has joined ICC Mexico Chair Maria Fernanda Garza and Canadian Chamber of Commerce CEO Perrin Beatty in publishing an op-ed, “A trade deal in distress: It’s time to save NAFTA,” in The Hill.

The op-ed has also been published in Spanish in the Mexican newspaper El Economista.

The op-ed comes as negotiators from the United States, Canada and Mexico take stock following the most recent round of talks, which exposed divisions between the U.S. and its two neighbors on a variety of issues.

The three business leaders express their support of efforts to improve and modernize NAFTA. They also state their concern over proposals that they believe are inconsistent with the principles of free trade and free enterprise, calling them “a dramatic reversal of long-held U.S. trade policy objectives” that “would greatly restrict, rather than enhance, cross-border commerce.”

Please click here to read the op-ed in its entirety on The Hill’s website.

Robinson: NAFTA Talks an Opportunity to Modernize Agreement

As negotiations between the United States, Canada and Mexico to update the North American Free Trade Agreement got underway last week in Washington, D.C., USCIB President and CEO Peter M. Robinson was quoted in Chief Executive magazine as saying that the talks provided a valuable opportunity to update an agreement that has been in place for more than two decades.

“Negotiators can do this especially by addressing such issues as digital trade, cross-border data flows, streamlined customs processes, treatment of state-owned enterprises and regulatory coherence,” said Robinson. “But negotiators should preserve those parts of NAFTA that have worked well for U.S. business. These include the investor protection provisions, including a strong investor-state dispute settlement framework. Access to strong ISDS arbitration procedures can be especially important for smaller companies, given their greater vulnerability to costly, protracted legal battles in foreign courts.”

In June, Robinson contributed an op-ed to The Hill outlining USCIB’s goals for NAFTA modernization.

Read the entire article on Chief Executive’s website here.

USCIB in the News: Bloomberg Covers USCIB Work on Labor

White HouseAs the White House continues to discuss appropriations, the union umbrella group AFL-CIO, in partnership with USCIB, is targeting the Senate in search of a bipartisan group of lawmakers to champion the Department of Labor’s (DOL) Bureau of International Labor Affairs, as reported by Bloomberg BNA. This comes during discussions between the White House and a House appropriations panel to eliminate a grant program designed to eradicate labor abuses overseas.

“I think that type of outreach can only help bring attention, with leading U.S. business speaking up and engaging directly, it can only help,” said Gabriella Rigg Herzog, USCIB’s vice president for corporate responsibility and labor affairs, as quoted by Bloomberg BNA. “USCIB will continue to speak out on this matter and seek ways to bring attention to this.”

USCIB CEO and President Peter Robinson also met with Labor Secretary Alexander Acosta earlier this year about the importance of a fully funded ILAB. Additionally, USCIB submitted a joint letter with AFL-CIO earlier this year to the House Committee on Appropriations to continue funding ILAB’s and the Department of State’s Bureau of Democracy, Human Rights and Labor’s grants and programs.

To read the full article on Bloomberg BNA, click here. Please note, Bloomberg BNA is available via subscription.