USCIB’s Donnelly Talks Sri Lanka With Washington Times

Shaun Donnelly

USCIB Vice President for Investment and Financial Services Shaun Donnelly took a break from his usual USCIB policy portfolio that includes NAFTA/USMCA, the WTO and Investor State Dispute Settlement (ISDS) to be interviewed by The Washington Times Foreign Editor David Sands on November 8 on one chapter in his previous life as an American diplomat, serving as U.S. Ambassador to Sri Lanka twenty years ago.

With Sri Lanka back in the news (again) going through a period of political turmoil, the Times was seeking basic background on the current political situation.

Donnelly was happy to oblige, noting: “I don’t really work on Sri Lanka these days but have tried to stay in touch with major developments and some of the players. Like most countries around the world, Sri Lanka has a unique political situation which is sometimes hard to explain to Americans or others  – and sometimes even hard to explain to Sri Lankans! Situated literally “on the other side of the earth” twelve hours away from the East Coast, Sri Lanka’s impact on Americans will always be limited and fleeting. But the regional implications (India vs. China) and the precedent of what is arguably South Asia’s most enduring (if flawed) democracy may be worth a little attention.  In the five days since we did the interview, the situation in Sri Lanka has further intensified with the two dueling Prime Ministers remaining in a standoff  and the President has dissolved the parliament which would, in normal circumstances, resolve the political standoff.  The whole mess seems headed toward the Sri Lanka Supreme Court which could, I’m afraid, open up another can of works. I’m increasingly worried where this crisis might be headed.”

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

USCIB Applauds UN on Global Compact for Safe Migration

USCIB Senior Counsel Ronnie Goldberg delivered a statement on July 13 at the United Nations headquarters in NY in support of the final draft of the Global Compact for safe, orderly and regular Migration (GCM). Goldberg delivered the statement on behalf of the International Organization of Employers and the Global Forum on Migration and Development (GFMD) Business Mechanism.

The Global Compact for safe, orderly and regular migration was agreed upon by UN Member States following several negotiating rounds and aims to protect the interests of both migrants and citizens.

“Regular migration is critical to the success of our enterprises – as well as our economies,” said Goldberg. “That success requires a comprehensive and balanced approach – such as that sought in the GCM – that facilitates the economic contributions of migrants while protecting them from predatory practices.”

Herzog Leads US Employer Delegation to ILO Conference

2018 International Labor Conference. Photo Credit: ILO

USCIB Vice President for Corporate Responsibly and Labor Affairs Gabriella Rigg Herzog led a five-member U.S. Employer delegation to the 107th annual International Labor Conference (ILC) of the International Labor Organization (ILO) May 28 – June 8. The ILC is the ILO’s annual policy setting meeting at which global representatives of national governments, employers and workers gather to negotiate and adopt policy and governance on a range of priority issues.

This year’s ILC was attended by over 5,000 participants from across the world, of which 32.7% were women. “Important topics discussed by delegates this year included the role of the ILO in carrying out development cooperation programs in light of the new UN Sustainable Development Goals, and what constitutes social dialogue in the workplace and what value can it deliver to industrial relations and productive workplaces,” noted Herzog. The ILO’s Committee on the Application of Standards also met to review in detail 24 cases of governments alleged to not be effectively enforcing a range of ILO standards they had ratified and committed to implement. Without a doubt, however, the topic at the top of this year’s ILC agenda was the first round of a two-year standard-setting discussion on violence & harassment in the workplace.

“The challenge and the opportunity for the ILO and its tripartite constituents is how to develop an instrument that can protect the most people, with special focus on gender-based violence and harassment, in the most places in the world,” stressed Herzog. “This will be a challenge because while violence in the workplace is broadly understood and condemned, there is less universal understanding and consensus around the world on what constitutes harassment. Given this and the growing realization of the prevalence and negative impacts of these unacceptable behaviors, USCIB and global employers are and will continue to work to address these practices where they appear and also push for an effective instrument addressing this issue at the ILO.”

While there was consensus among the government, employer and worker representatives on the need for ILO action, there was unfortunately lack of consensus on core definitions that will determine the ultimate effectiveness of the instrument and its chances to interest governments in ratification. Unfortunately, vague and contested definitions for foundational issues like what constitutes violence and harassment, who is a worker, what are the boundaries of a workplace, and the behaviors from which workers should be protected were adopted. The problems with these overly broad definitions began to become clear to some of the participants when discussions turned to operationalizing the responsibilities of governments and employers.

“USCIB – together with our members and IOE’s global affiliates – will work hard over the coming year to meaningfully engage tripartite ILO partners with an eye towards a refresh in 2019 and a hopefully more balanced text that is both bold in its aspiration but practical in its direction to governments on the important task of working to eliminate both violence and harassment from the workplace,” said Herzog.

Herzog gave remarks at the closing ceremony in support of the IOE violence and harassment spokesperson. Her full speech can be found here, and below.

Education and Re-skilling in the Age of AI

By Andreas Schleicher, Shea Gopaul and Peter Robinson

Faced with major economic and social disruption, business and policy leaders are joining together to devise strategies and models to adapt the skills of the existing and future workforce to the opportunities offered by AI, automation, robotics and digitalization. McKinsey reports that 42% in the United States, 24% in Europe, and 31% in the rest of the world admit they currently lack a “good understanding of how automation and/or digitization will affect […] future skill needs.”

To prepare for looming technological upheavals, we need to understand the current educational and training landscape, its limitations, examine the latest research on the future skills needed and highlight some of the most effective employment and human resources strategies and educational models that can better position all stakeholders for the imminent change. We argue that by working together, especially through public-private partnerships, business and policy leaders can develop effective work-readiness and skill matching solutions, lifelong learning and re-skilling approaches to prepare both employers and employees for the changing world of work.

Teaching People to Learn

For some, AI and globalization can be liberating and exciting; but for those who are insufficiently prepared, they can mean uncertainty in employment, and a life without prospects. Our economies are shifting towards regional hubs of production, linked together by global chains of information and goods, but concentrated where comparative advantage can be built and renewed. This makes the distribution of knowledge and wealth crucial, and that is intimately tied to the distribution of educational opportunities.

The dilemma for education is that the kinds of things that are easy to teach have now become easy to digitize and automate (e.g. memorization vs. critical thinking). The modern world does not reward us just for what we know – Google knows everything – but for what we can do with what we know. So, the focus must shift to enabling people to become lifelong learners, which encourages constant learning, unlearning and relearning when the contexts change, and integrates both the practical world of work, with the theoretical world of learning. The future is about pairing computers with the cognitive, social and emotional skills of human beings.

These days, AI algorithms sort us into groups of like-minded individuals. They create virtual bubbles that amplify our views and leave us insulated from divergent perspectives. Tomorrow’s educational institutions will need to help students to think for themselves and join others, with empathy, in work and citizenship, and build character qualities such as perseverance, empathy or perspective taking, mindfulness, ethics, courage and leadership.

But to transform schooling at scale, we need not just a radical, alternative vision of what’s possible, but also smart strategies and effective institutions. Our current educational institutions were invented in the industrial age, when the prevailing norms were standardization and compliance, and when it was both effective and efficient to educate students in batches and to train teachers once for their entire working lives. The curricula that spelled out what students should learn were designed at the top of the pyramid, then translated into instructional material, teacher education and learning environments, often through multiple layers of government, until they reached, and were implemented by, individual teachers in the classroom.

This structure, in a fast-moving world, reacts to current needs, far too slowly. Today, we need to embrace AI also in ways that elevate the role of educators from imparting received knowledge towards working as co-creators of knowledge, as coaches, as mentors and as evaluators. AI can support new ways of teaching that focus on learners as active participants (e.g. chat bot, gaming applications).

Public/Private Coming-Together Around Skills

With 40% of employers reporting that they lack the talent required, it is surprising that at the same time global youth unemployment as stated by the International Labor Organization (ILO) is at 66 million. There is clearly a mismatch and the private sector has a critical role to play in resolving this skills-education deficit. Employer-driven education (i.e. apprenticeships, traineeships, internships, learnerships) are key in equipping the workforce with the soft and technical skills that employers require.

In countries such as Switzerland and Germany with robust apprenticeship programs and strong employer engagement, the rate of youth unemployment is very low. So, why aren’t there more apprenticeships and employer driven education? In many countries, the policies, regulations, registration process for setting up work-based learning programs are cumbersome and time-consuming for employers. The return on investment (ROI) is often unknown, e.g. in the U.S. for every $1 spent there is a return of $1.47. Lastly, educational institutions are not always linking to employers on curriculum design to reflect the world of work’s latest needs.

We have learnt at the Global Apprenticeship Network (GAN), a public-private partnership (PPP), that the convening of key stakeholders at the local city and country level ensures that education and legislation is better attuned to the world of work. Although private and public stakeholders do not always speak the same language, bringing them together increases their mutual understanding of the needs and changes that will assist in getting skills for business and jobs for youth.

Employers are uniquely positioned to define the skills required in the world of AI, robotics and automation as they are developing these technologies. Sadly, their importance as not only job creators, but also curricula designers, are often overlooked and they are often left out of the conversation and decision-making process. Work-based learning and notably apprenticeships connect education to work and we are seeing more and more employers creating innovative apprenticeships – part-time apprenticeships, pre-apprenticeships and a vast range of online tools. e.g. e-apprenticeships. In the last five years since GAN’s inception, it has become increasingly apparent that these models must be leveraged to ensure that not only youth, but also middle-aged and senior population groups adapt their skills and competencies to the fast evolving economic and technological context. In short, with the need for re-skilling and lifelong learning on an unprecedented scale, innovative apprenticeships can help get skills for business and jobs for all.

Below are two business-led initiatives that further illustrate the power of public-private partnership in skilling and reskilling. With the uncertainties linked to fast-paced technological change, these models show us how all actors – public and private- can join forces to ensure that skill development is continuously connected to present and future socioeconomic needs.

The first is IBM’s P-TECH school, a public-private partnership educational model that addresses postsecondary degree completion and career readiness by smoothing the transitions between high-school, college, and the professional world in science, technology, engineering, and mathematics (STEM). It recognizes that students need early and engaging experiences with the world of work, to make the academic work in high school and college meaningful and to fully prepare them with the workplace skills required by employers. The model pairs educational institutions with “employer partners” to act as mentors, develop curriculum, organize site visits, internships and other workplace learning opportunities.

The sustainability of the model depends on public authorities’ active involvement to develop appropriate frameworks, regulations, licensing, etc. Starting with one school in 2011 and engaging over 400 business partners, P-TECH expects to have 100 schools in 2018. IBM also ensures that its own workforce has continuous access to lifelong learning. Through the Think40 program IBM staff is asked to pursue at least 40 hours of personal and technical skills development through formal classes, self-paced learning, and online resources. The Think Academy platform allows IBM staff to access customized training which is constantly updated to IBM’s clients’ most current and pressing needs.

The second example is based on Randstad’s approach to “put humans first” in the age of digital transformation. Randstad supports clients to integrate versatility in their organizational culture, through a wide variety of re-skilling mechanisms, ranging from external & internal training, mentorship to job rotations and adult apprenticeships. Moreover, Randstad operating companies facilitate the integration and reintegration of vulnerable segments of society (e.g. youth, women, senior staff) with more than 100 social innovation programs mostly through public-private partnerships across the world. For example, in Spain, the Randstad Foundation works with more than 600 companies to ensure the reintegration of those at risk of exclusion from the labor market. In Italy and in the Netherlands, Randstad focuses on employees over 50 years of age, by organizing training in the latest technologies, advocacy, and networking opportunities (12 events to date) with employers.

This overview of initiatives, models and partnerships demonstrates that, through collaboration involving public and private entities, excellent strategies can be developed, not only to adapt to the upcoming technological change, but also to capitalize on the opportunities technology has to offer for the creation of better jobs and better lives.

Employers Are Optimistic in the Age of AI

We’re all being told that our jobs are doomed by robots and automation. But the OECD estimates that only nine percent of jobs across the 35 OECD nations are at high risk of being automated, although of course even nine percent can generate plenty of social difficulties. But there is an established track record throughout history of new technologies creating at least as many new jobs as they displace. Usually these new jobs demand higher skills and provide higher pay. The biggest threat is that our educational institutions won’t be able to keep pace with the new skills demands including the important skills that AI will not be able to replace.

For global employers, there is a steadily growing mismatch between what companies need in terms of skills and what the workforce is coming equipped to do. In an economy with a significant on-demand labor force, two main types of competencies will be needed: “technical” – or in other words, related to deep knowledge of a specific domain, whether welding or engineering, and “transversal,” which applies to all occupations. Those are described by the Center for Curriculum Redesign as creativity, critical thinking, communication and collaboration.

The Skills Employers Will Seek

So what skills will managers need as a result of likely structural changes, driven by AI and growth of the on-demand economy? A recent survey by Business at OECD (BIAC) surveyed 50 employers’ organizations worldwide. It showed that employers value not just the skills and character traits described above, but also character qualities as well, such as mindfulness, curiosity, courage, resilience, ethics, leadership and meta-learning (e.g. growth mindset and metacognition).

Furthermore, it is becoming increasingly clear that, in a constantly changing world, an individual’s versatility matters; so, the model developed by Jim Spohrer of IBM, of a “T-shaped” person, holds true: broad and deep individuals capable of adapting and going where the demand lies.

Employers’ organizations at the national and global levels are already developing innovative programs to help governments and educators anticipate the needs of the future workforce. Through robust action at the global level, including through the G-20 and the OECD, policy makers can also make sure that they are helping their populations succeed and thrive in a world of AI and other technological advances.

This overview highlights the strength of partnerships between the public and the private sector in preparing for the unpredictable. For such alliances to reach their full potential, on the one hand governments and policy makers must be open to the private sector’s input and on the other hand employers need to take a long term view of the ROI and accordingly commit resources in skilling and educating their current and future staff, notably through apprenticeship and work-readiness programs.

Andreas Schleicher heads the Directorate of Education and Skills at the Organization for Economic Cooperation and Development (OECD). Shea Gopaul is executive director and founder of the Global Apprenticeship Network (GAN). Peter Robinson is president and CEO of the United States Council for International Business (USCIB).

For more information, please contact:

OECD: news.contact@oecd.org
GAN: gueco@gan-global.org
USCIB: 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.