Annual APEC Summit Fails to Reach Consensus

The Asia Pacific Economic Cooperation (APEC) Leadership Summit held its annual summit this year in Papua New Guinea (PNG) November 12-18, but for the first time in the Forum’s history, economies attending failed to reach consensus. The area of contention was around the Multilateral Trade System (MTS) section. This was also the first year that USCIB did not send a delegation to the APEC Summit, however USCIB contributed to earlier meetings this year, including the APEC meetings in Chile held September 11-12, which produced new principles in transit.

“This is clearly a disappointing outcome,” said USCIB Vice President for Product Policy and Innovation Mike Michener, who coordinates USCIB’s work on APEC. “APEC’s strength is the ability of member economies to find consensus on topics of mutual benefit, like trade. It is apparent that differing visions of trade policy blocked agreement for the first time in nearly 30 years.”

Following the summit, PNG released Statements to highlight what has been accomplished this year, including a reaffirmation of APEC’s commitment to achieve balanced, inclusive, sustainable, innovative and secure economic growth and prosperity in the APEC region, while pledging to combat protectionism and unfair trade practices. The Statements also emphasized the need to reform the World Trade Organization (WTO) in order to improve and strengthen the body to better address existing and emerging global trade challenges.

Furthermore, the Statement noted continuing support for the Work Program on E-commerce to advance initiatives on e-commerce, investment, small and medium enterprises, and trade and women’s economic empowerment.

For the 2018 APEC year, PNG chose the theme of “Harnessing Inclusive Opportunities, Embracing the Digital Future.” APEC will be led by Chile in 2019 and will focus on the digital economy, regional connectivity, and women’s role in economic growth. Chile previously hosted APEC in 2004.

Mixed Messages at Recent Meetings on Global ICT Policy

Barbara Wanner, was present at both events, alongside USCIB members, joining global business colleagues under the aegis of ICC-BASIS at the IGF and as part of the Business at OECD (BIAC) delegation to CDEP.
The two meetings could not have provided more different messages about the challenges and opportunities of digital transformation of the economy and how to address them.

 

The 13th Internet Governance Forum (IGF) and meetings of the OECD Committee on Digital Economy Policy (CDEP) and its Working Parties met in Paris, France the week of November 12. According to Barbara Wanner, who leads USCIB’s work on ICT policy, the two meetings could not have provided more different messages about the challenges and opportunities of digital transformation of the economy and how to address them.

French President Emmanuel Macron, who opened the three-day IGF on November 12 at UNESCO, depicted a digital economy fraught with danger from cyber-attacks, the proliferation of hate speech, and anti-democratic forces requiring development of a “better model” featuring regulation of the Internet and its actors. The OECD CDEP, in contrast, proceeded in a workman-like, measured manner to move its Going Digital Project toward completion as well as advance work on Artificial Intelligence (AI). Going Digital (GD) is an ambitious horizontal endeavor involving 14 OECD committees that takes a largely evidence-based and holistic approach to considering both the economic and societal benefits and the challenges of the evolving digital ecosystem.

Wanner, was present at both events, alongside USCIB members, joining global business colleagues under the aegis of ICC-BASIS at the IGF and as part of the Business at OECD (BIAC) delegation to CDEP.

“Our messages, as IGF workshop speakers and BIAC interveners, generally emphasized the commercial and developmental benefits that can be realized through the creation of a pro-innovation policy environment, the effectiveness of business-informed, risk-based approaches to privacy and security, and the importance of the multistakeholder model in considering the complexity of digital economy issues,” noted Wanner.

According to Wanner, by the week’s close, members agreed that the “watershed” moment at the IGF created by President Macron’s remarks will require further internal discussion about what business wants and needs from the IGF and strategies to tackle likely new challenges at the United Nation’s General Assembly and other multilateral organizations. Concerning CDEP’s leadership of the Going Digital Project, members generally were encouraged that the final product – to be issued at a special forum on March 11-12, 2019 – would reflect business inputs and provide a practical guide to tap the potential of digital transformation.

Unilever CEO Paul Polman to Be Honored by USCIB at Annual Gala

New York, N.Y., November 20, 2018Paul Polman, chief executive officer of Unilever, will be honored by the United States Council for International Business (USCIB), which represents America’s leading global companies, at the organization’s 2018 International Leadership Award Dinner. The gala event will be held on December 11 at the Delegates Dining Room at the United Nations HQ in New York City, under the theme “Business and Society: Creating Shared Value.”

“Under Paul Polman’s leadership, Unilever has worked tirelessly to decouple its growth from its environmental footprint and to increase the company’s positive social impact,” said USCIB President and CEO Peter M. Robinson. “Paul has actively sought to drive transformative change across sectors to implement long-term, sustainable business models. As chair of the International Chamber of Commerce (ICC), one of USCIB’s key global business partners, he is demonstrating vigorous business leadership on the international stage, both on sustainability and on a host of other issues.”

Polman has served as Unilever’s CEO since 2009. In addition to his chairmanship of ICC, he is a member of the International Business Council of the World Economic Forum, chair of The B Team, vice chair of the UN Global Compact, and a board member of the Consumer Goods Forum. Polman also served until recently as chair of the World Business Council for Sustainable Development.

Established in 1980, USCIB’s International Leadership Award is presented annually to a leading CEO, international figure or institution, recognizing outstanding contributions to global trade, finance and investment, and to improving the global competitive framework in which American business operates. Recent recipients have included Ajay Banga of Mastercard and Randall Stephenson of AT&T. The annual USCIB award dinner attracts hundreds of top business executives, policy makers and members of the diplomatic community.  More information on the event is available at www.uscibgala.com.

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 at www.uscib.org.

Contact:
Jonathan Huneke, USCIB
+1 212.703.5043, jhuneke@uscib.org

 

Joint Conference Addresses Digital Taxation

The German business association BDI hosted the OECD, Business at OECD, USCIB and other business representatives at a joint conference in Berlin, Germany on November 6 to contribute to the current debate on digital taxation. The OECD is the leading organization in developing a consensus approach to this debate.

Leading global tax experts discussed current business models and value creation, profit allocation and nexus rules, and future challenges of profit taxation. Among them was USCIB Taxation Committee Chair Bill Sample (Microsoft Corporation) who gave a keynote on a panel, “Future Challenges of Profit Taxation.”

Sample spoke about a “borderless world,” with borderless businesses and borderless consumers, which increases the need for governments to work together to reduce the negative impact of hard borders on the digitalized economy.

The event, titled International Taxation in Light of Digitalization, also featured participation by OECD Deputy Secretary General Ludger Shucknecht and Director for the OECD Center for Tax Policy and Administration Pascal Saint-Amans, as well as Head of the International Tax Unit at the German Federal Ministry of Finance Christian Schleithoff.

USCIB Event Concludes With Action Plan to Promote Food Security and Nutrition Partnerships

USCIB President and CEO Peter Robinson (center) speaks at the Rome event. USCIB food and agriculture lead Mike Michener (left)
This year’s event concluded with some important outcomes to help deliver results: GAIN and The USCIB Foundation are planning to take the Principles to donors such as developmental agencies, foundations, and companies interested in public-private partnerships.
USCIB will ask its member companies, with existing public-private partnerships to pilot the Principles of Engagement by applying them retroactively to the ongoing PPP.
Michener emphasized the importance of engaging the Food and Agriculture Organization (FAO).

 

With the future of food continuing to be a pressing global challenge and malnutrition profoundly affecting every country, The USCIB Foundation once again teamed up with the Global Alliance for Improved Nutrition (GAIN) to organize a public-private partnerships dialogue to tackle malnutrition. The November 8-9 dialogue in Rome, Italy was a second in a series and was built on last year’s event in New York. USCIB CEO and President Peter Robinson participated in the event alongside Vice President for Product Policy and Innovation Mike Michener. Robinson spoke at the opening session and took part in a fireside chat conversation with GAIN Executive Director Lawrence Haddad, who is the winner of the 2018 World Food Prize.

This year’s event featured the theme of “Together for Nutrition: applying principles for public-private engagement.” The high-level dialogue explored practical and tangible ways to implement and scale coordinated initiatives to put the draft Principles, that were agreed upon last year, into practice. The program focused on both under-nutrition and the rise of overweight and obesity, as well as the associated diet related non-communicable diseases. Leaders of governments, development agencies, and the private sector from a wide range of countries, with a particular focus on developing countries with high burdens of malnutrition, participated in the dialogue.

This year’s event concluded with some important outcomes to help deliver results. GAIN and The USCIB Foundation are planning to take the Principles to donors such as developmental agencies, foundations, and companies interested in public-private partnerships. USCIB will also ask its member companies, with existing public-private partnerships to pilot the Principles of Engagement by applying them retroactively to the ongoing PPP. Michener, who leads USCIB’s work on food and healthcare, also emphasized the importance of engaging the Food and Agriculture Organization (FAO).

“We [GAIN and USCIB] will take the Principles to the Rome-based agencies, starting with a briefing for Permanent Representatives early in 2019, followed by the FAO Program Committee and the Executive Boards of WFP and IFAD,” he said. “We also plan to take the Principles to regional meetings, with the first meeting tentatively set for Africa in late 2019.”

Global food and agriculture constitute a US$7.8 trillion industry, employing up to 40 percent of the working population in many countries yet progress towards the ambitious 2030 Sustainable Development Goals (SDGs) is too slow and the scale and complexity of the problem underscores the need for deepened collaboration and renewed commitment to improving nutrition outcomes for all, especially the most vulnerable,” according to Michener.

“Countries cannot achieve their SDG goals without an aligned, motivated and incentivized private sector as a key partner,” said Michener. “In this context, improved dialogue and collaboration between government, business, civil society and international organizations is crucial for guiding engagement and focusing efforts where they can have the most sustainable impact and long-term success.”

USCIB Urges Free Data Flows to Achieve Economic Growth

USCIB filed comments on November 11 in response to a Federal Register notice from the U.S. Department of Commerce’s National Telecommunications and Information Administration (NTIA) regarding a proposed approach to consumer data privacy. NTIA’s proposal is designed to provide high levels of protection for individuals, while giving organizations legal clarity and the flexibility to innovate.

USCIB’s comments highlighted the view that the free flow of data and information is critical for economic development and growth, citing a recent study that the increase in GDP from data flows was an estimated $2.8 trillion.

“Business realizes that the benefits of technology innovation enabled by data flows will only be realized and embraced by consumers, businesses, and governments who trust the online environment and feel confident that the privacy of their personal data will be respected,” stated the letter. “USCIB members are committed to complying with applicable privacy regulations and recognize their responsibility to adopt recognized best practices to ensure that personal data and information is appropriately secured as technology and services evolve.”

However countries such as China, India, Malaysia, Panama and South Korea have proposed restrictive data protection laws that could significantly harm U.S. companies while also undermining efforts to enhance global interoperability.

“These countries’ approaches range from quite onerous data localization requirements to national privacy frameworks that are administratively burdensome and complex, all of which end up imposing economic costs on the country by undermining their attractiveness as destinations for jobs-creating investment and innovation,” warned Barbara Wanner, USCIB’s vice president for ICT policy. “They also create an increasingly fragmented regulatory landscape, which imposes added compliance costs on business that hampers continued innovation.”

The comments also highlighted an example of a proposal made by India that would establish an alarming global precedent and could significantly impede the growth of innovation, investment, entrepreneurship, and industrial growth through strict data localization requirements, restrictions on the cross-border data flows, and extraterritorial application.

“It is vital that the U.S. continue to exercise global leadership in pushing back against this type of protective approach to personal data protection,” said Wanner.

NTIA’s initiative runs parallel to the efforts of the National Institute of Standards and Technology (NIST) to develop a voluntary privacy framework and the efforts of the Commerce Department’s International Trade Administration to increase global regulatory harmony.

To read USCIB’s comments, please visit our website.

 

 

USCIB Supports Singapore Convention on Mediation 

International businesses now have a powerful tool that will greatly facilitate international trade and commerce. The new Singapore Convention will make enforceable settlement agreements resulting from international mediation.

USCIB joined the US Chamber of Commerce, NFTC, and NAM to co-sign a letter of support for the U.S. signing and ratifying the Singapore Convention on Mediation. The letter was sent to U.S. Secretary of State Michael Pompeo on November 1. The treaty negotiation was launched by the U.S. with the aim of developing a cost-effective international legal mechanism for resolving cross-border commercial disputes between private parties.

“By encouraging the use of mediation as a viable path to resolving commercial disputes, the Convention reduces cost and eliminates the need for duplicative litigation,” the letter stated.

The Convention also improves the enforcement process by obliging governments to recognize the legal status of any mediated settlement. As a result, the Singapore Convention helps mitigate risk when entering into a commercial relationship with businesses in foreign markets and raises the standards of fair trade globally.

Business Groups Fire Back Against Proposed Tax on Tech Firms

Following the United Kingdom’s plan to impose a new tax on sales by many technology companies, U.S. business groups, including USCIB, fired back warning that the proposal would violate tax agreements by targeting U.S. firms. The proposal includes a 2% tax on sales by large social media platforms, internet marketplaces and search engines from April 2020.

BBC reported on this development and highlighted comments by U.S. Treasury Secretary Steven Mnuchin, who according to BBC, voiced strong concern about different countries’ efforts to develop digital sales tax. “This tax is a proportionate and targeted interim response that reflects the changing global economy, and how digital businesses derive value from users – it’s not targeted at any country and seeks to ensure the tax system is fair,” said Mnuchin.

USCIB submitted a letter to EU Commissioner Pierre Moscovici in July in response to a proposed EU directive urging the directive not to be adopted.

“The directives reflect a lack of understanding of current and evolving business models and would distort the allocation of revenue or income to functions that do not accurately reflect value creation by the companies earning the revenue or income,” stated USCIB’s letter.

“USCIB supports a consensus-based comprehensive income-tax-based solution applied equally to agreed upon issues in segments of the digitalized economy,” added USCIB Vice President for Tax Policy Carol Doran Klein. “There is agreement that the global economy, businesses and the public sector are digitalizing. Therefore, any solution to agreed upon issues (if any) must apply to the economy broadly, not to narrow segments of the economy. Any solution must also be broadly agreed to by countries to minimize double taxation and controversy, therefore the G20-OECD Inclusive framework is the best forum for this discussion. The EU itself recognizes the importance of a multilateral approach.”

 

Robinson Furthers USCIB Ties with US Mission to Geneva

The Palais des Nations, which serves as the UN’s Geneva headquarters

USCIB President and CEO Peter Robinson was in Geneva the first week of November for high-level meetings of the International Organization of Employers (IOE), for which he serves as vice president for North America. While in the city, Robinson also met with senior officials at the U.S. Mission to the United Nations in Geneva, including Deputy Permanent Representative (and Charge d’Affaires in the absence of an Ambassador) Mark Cassayre. Tom Mackall, USCIB senior counsel and ILO Governing Body representative, accompanied Robinson.

Cassayre was only recently posted to Geneva, but already speaks with keen knowledge about areas of mutual interest, according to Robinson. Key senior staffers from the U.S. Mission also attended the meeting, including Howard Solomon, Bill Lehmberg and Phil Cummings.

“The meeting afforded us the opportunity to underline to the Mission USCIB’s unique positioning with regard to international institutions, and its role on behalf of U.S. business in global regulatory and standard-setting diplomacy, reflecting our parallel and mutually-supportive missions,” said Robinson.

A major issue of discussion was the emergence in recent years of allegations in some UN organizations of “conflict of interest” and “corporate capture” as an attempt to limit, if not exclude, business (industries, companies, and the organizations that represent their interest) from international discussions in areas ranging from health to climate change to labor protections. Robinson also noted The USCIB Foundation’s collaboration with a Geneva-based NGO, Global Alliance for Improved Nutrition (GAIN), to develop principles for nutrition-related public private partnerships.

“The U.S. Mission seemed very supportive of an all-inclusive approach to today’s economic challenges, and we will look forward to working with them to help ensure preservation of that principle in international institutions,” noted Robinson.

Specific areas of discussion included current ILO debates within the Governing Body, the worrisome Ecuador-led efforts to secure a treaty on business and human rights, and approaches to other Geneva-based institutions including UNCTAD.

“We also highlighted USCIB’s longtime collaboration with the U.S. Missions in New York and Geneva, and our hope for a second USCIB member company delegation to Geneva, as we had undertaken this past spring with the help of the Mission,” said Robinson. “We ended the meeting feeling confident that this was a solid next step in constructive engagement with the U.S. Mission. On a personal note, I was delighted to learn that Mr. Cassayre, like me, had been an AFS exchange student, he to Lausanne, Switzerland, and I to Graz, Austria, and that both of us had maintained solid connections with those respective countries.”

USCIB Leader Appointed to President’s Trade Advisory Group

Business & Climate Summit 2015, USCIB Chairman Terry McGraw.
USCIB Chairman Harold McGraw III has been reappointed by President Donald Trump as member of the ACTPN.
The ACTPN is the highest ranking of around 25 private-sector committees that advise the administration on trade.

 

USCIB Chairman Harold McGraw III who serves as chairman emeritus of S&P Global has been reappointed by President Donald Trump on October 30 as member of the Advisory Committee for Trade Policy and Negotiations (ACTPN). McGraw joins two others, including Fred Bergsten, chairman emeritus of the Peterson Institute for International Economics and James Hoffa, president of the Teamsters union,  in being reappointed to the ACTPN.

“We are delighted that Terry will continue to provide insightful and impassioned advocacy of fair and balanced policies to expand American trade as a member of the ACTPN,” said USCIB President and CEO Peter Robinson.

Trump also plans to appoint two new members Evan Greenberg, president and CEO of Chubb Limited, and Timothy Smucker, chairman emeritus of the J.M. Smucker Co.

The ACTPN is the highest ranking of around 25 private-sector committees that advise the administration on trade.