Business Pushes Back Against Mexico Tariff Plan

Following President Trump‘s announcement of his administration’s plan to impose tariffs on imports from Mexico, to compel the country to act more forcefully against unauthorized migration, USCIB joined a broad array of U.S. business groups in criticizing the plan.

The groups wrote in a June 7 joint statement that the plan – involving five-percent tariffs that would ratchet up to 25 percent over a period of months – would impose undue hardship on American companies and consumers, and would jeopardize passage of the U.S. Mexico Canada Agreement, the successor to NAFTA.

“We have committed to work with the administration and both sides of the aisle in Congress to support congressional passage of USMCA,” the business groups wrote. “We are supportive of the constructive discussions members of the administration have had with members of Congress. But imposing unilateral tariffs on Mexico jeopardizes a successful bipartisan vote on USMCA and approval of the agreement.

President Trump withdrew the threat of tariffs following a pledge by Mexico to increase its enforcement efforts.

USCIB Statement on WTO e-Commerce Negotiations

USCIB has issued Recommendations on the WTO e-Commerce negotiations, reflecting member priorities and goals for the negotiations, which had their first round in May. The recommendations are being shared with relevant government officials and stakeholders.

At the December 2017 WTO ministerial in Buenos Aires, 71 countries agreed to begin discussing new global rules to facilitate the expansion of the digital economy. Thanks to intensive work by those countries, last January 76 countries (notably including the U.S., EU, and China) announced the launch of formal negotiations.

In addition to this paper, USCIB is actively engaging in the negotiations in Geneva via various efforts, including the Digital Trade Network and the International Chamber of Commerce.

“The vast majority of the world’s economy is at the table,” wrote Nick Ashton-Hart, the Digital Trade Network’s Geneva representative, in the most recent issue of USCIB’s magazine, International Business. “Since it is estimated that the digital economy underpins approximately one-third of global GDP this is a negotiation that will impact industry everywhere.”

Tax Conference Provides First Look at OECD’s Digitalization Roadmap

L-R: Pascal Saint-Amans (OECD), Gaël Perraud (French Ministry of Economy & Finance), Brian Jenn (U.S. Treasury), Pam Olson (PwC), Louise Weingrod (Johnson & Johnson)

Global companies are facing potentially seismic shifts in the taxation of their operations, with national tax authorities seeking to keep pace with a rapidly digitalizing business environment. This was the backdrop when more than 250 global tax professionals, government officials and other tax experts gathered in Washington, D.C. June 3-4 for USCIB’s annual OECD International Tax Conference. This year’s event provided an especially timely window into the Organization for Economic Cooperation and Development’s work to develop tax policy recommendations to governments.

On May 31, the OECD released a work program to develop proposals for allocating a company’s profits among countries that re-balance source and residence taxation and also result in a global minimum amount tax paid on earnings. Drawing from the views of nearly 130 jurisdictions (far broader than the OECD’s membership of 36 countries), the OECD roadmap could result in fundamental changes to national tax laws and bilateral tax treaties, including a move to a much more multilateral approach to international corporate taxation.

USCIB President and CEO Peter Robinson asked conference-goers in his opening remarks: “How will a new consensus form around reallocation of taxing rights? Many interests will need to be balanced to achieve a solution that will be ‘globally fair, sustainable and modern,’ to quote the G20. The OECD also needs to keep global growth front and center.”

This sentiment was echoed by Bill Sample, tax policy advisory at Microsoft and chair of USCIB’s Tax Committee.

“Unlike the OECD’s earlier BEPS [base erosion and profit-shifting] exercise, this project will reallocate tax revenues among various countries,” he said. “It’s a political exercise, requiring compromise and the balancing of many competing interests among governments. One thing parties generally agree on is the need to keep these revenue shifts modest, and to have a predictable, sustainable model for global tax policy going forward.”

The conference was the 14th annual gathering on global tax policy developments convened by USCIB, in cooperation with the OECD and its official private-sector advisory body, Business at OECD (also known as BIAC).

The G20’s mandate

G20 leaders have tasked the OECD, with a long and distinguished history of work on international tax policies, to lead work a consensus-based solution to address the impacts of the digitalization of the economy, with a target of developing recommendations by next year.

The OECD’s effort represents “a fundamental rethink of the basics of the international tax system,” USCIB Vice President and International Tax Counsel Carol Doran Klein told Bloomberg News. “The scope could not be broader.”

Economist Ngozi Okonjo-Iweala

G20 governments will review the OECD roadmap at a June meeting in Japan.

“Despite the fact that people have been listening to all the talk about this being the largest international tax project, it’s only when people read this and see how wide-ranging this is that they’ll be able to appreciate it,” Will Morris, chair of the BIAC Committee on Taxation and Fiscal Policy and deputy global tax policy leader at PwC, told Bloomberg. “It’s not just about changing technical rules. It’s about saying, essentially, the world has changed, and this system we’re looking at needs to change with it.”

Economist Ngozi Okonjo-Iweala’s keynote remarks focused on ways to improve the tax capacity of emerging markets, which are expected to receive a growing share of global private-sector investment in the years ahead.

Other panelists and speakers at this year’s conference included:
Pascal Saint-Amans, director of the OECD Center for Tax Policy & Administration
Martin Kreienbaum, director general for international taxation, German Ministry of Finance
Chip Harter, deputy assistant secretary for international tax affairs, U.S. Treasury
Dr. Ngozi Okonjo-Iweala, an economist and former finance minister of Nigeria
Doug O’Donnell, commissioner of the Large Business and International Division, IRS
Mike Williams, director of business and international tax, HM Treasury (UK).

It’s not too early to mark your calendars for next year’s OECD International Tax Conference, which will take place June 1-2 in Washington, D.C.

USCIB All In Initiative

USCIB All In

About

Faced with the urgent need to make faster and smarter progress towards achieving the ambitions of a range of international agreements including the Addis Ababa Action Agenda, the 2030 Agenda for Sustainable Development and the UN Framework on Climate Change and its Paris Agreement, inclusive multilateralism is essential. In this context, USCIB has developed a 2 year initiative: “Campaign All In.”

All In has launched a global conversation on how to strengthen dialogue, partnership and engagement with business to advance implementation of 2015 outcomes via the multilateral system. The Campaign brings together policymakers and global businesses in key UN cities to begin a conversation on opportunities for harnessing the power of all industry sectors to achieve the SDG goals and other sustainability initiatives.

UN High Commissioner for Human Rights Michelle Bachelet speaks at the All In Roundtable

Campaign All In was launched during a roundtable event on May 8, 2019 in which USCIB partnered with the International Chamber of Commerce (ICC) and the International Organization of Employers (IOE) to convene the first All In Roundtable on Inclusive Multilateralism, Sustainable Development Goals (SDGs) and Business. Further ‘All In’ roundtables are planned for Bangkok on June 11 and in New York in July. Together, the three roundtables will address six key themes:

  1. Enabling Public-Private Partnerships with the UN for the SDGs (Geneva)
  2. More than the sum of the parts: Leveraging public private cooperation in science and technology for the SDGs (Geneva)
  3. Using Value Chains to mobilize multi-sector engagement and synergy for the SDGs (Bangkok)
  4. Economic Empowerment and inclusion to catalyze SDG impact (Bangkok)
  5. Investing in Infrastructure in all its forms for the SDGs (NYC)
  6. Measuring and Mainstreaming Impact of Private Sector Engagement on SDGs (NYC)

Utilizing the outcomes from the 2019 discussions, All In will develop a 2020 Action Plan for Inclusive Multilateralism.

Events

Geneva Week roundtable

Upcoming:

Past:

*Events are based on invite only

 

Taxation

Trends and Challenges Facing U.S. Business:

  • Multiple sets of inconsistent rules that drive up costs and result in double taxation
  • The mounting political pressure to move towards changing the taxation of the digitalized economy
  • Efforts to unfairly increase the tax burden on companies

USCIB’s Response:

  • Engage with the OECD on the development of international taxation principles
  • Proactively shape the development of the OECD’s guidance on the taxation of the digitalized economy by demonstrating to policymakers that unilateral action can result in double taxation, decreased trade, and reduced global growth
  • Actively monitor and contribute to the work of the UN Committee of Tax Experts to ensure its alignment with the work of the OECD Tax Committee and inform policymakers of their actions’ impact on investment
  • Support enactment of foreign tax simplification provisions in the IRC that would significantly reduce the burden of complexity for U.S. companies and enhance their international competitiveness
  • Host an annual conference in Washington, DC that provides a unique opportunity for the U.S. business community to interact with key representatives from the OECD Centre for Tax Policy and Administration (“CTPA”).

Magnifying Your Voice with USCIB:

  • USCIB is the only U.S. business association formally affiliated with the world’s three largest business organizations where we work with business leaders across the globe to extend our reach to influence policymakers in key international markets to American business
  • Build consensus with like-minded industry peers and participate in off-the-record briefings with policymakers both home and abroad.

More Recent Accomplishments

News Stories

USCIB Washington Update: May – June, 2019 (7/10/2019) - During the months of May and June 2019, USCIB Staff met with Angela Ellard, House Ways & Means Minority Chief
Modest Progress at G20 Osaka Summit Welcomed (7/1/2019) - Leaders of the Group of 20 made incremental progress on a range of issues, while the U.S. and China avoided

Read More

Chair

Bill Sample
Tax Policy Advisor
Microsoft Corporation

Vice Chairs

Timothy M. McDonald
Vice President, Finance & Accounting, Global Taxes
The Procter & Gamble Company

Will Morris
Deputy Global Tax Policy Leader
PwC

Louise Weingrod
Vice President, Global Taxation
Johnson & Johnson

Staff

Carol Doran Klein
Vice President and International Tax Counsel
202-682-7376 or cdklein@uscib.org

Erin Breitenbucher
Senior Policy & Program Associate and Office Manager, Washington
202-682-7465 or ebreitenbucher@uscib.org

Subcommittees

BIAC/ICC Subcommittee

Inbound Investment Subcommittee

Legislative and Administrative Developments Subcommittee

Tax Treaties Subcommittee

Transfer Pricing Subcommittee

Working Groups

Working Group on Consumption Taxes

Working Group on the Digital Economy

Working Group on Environment and Energy Taxes

Working Group on Financial Services Issues

Working Group on Permanent Establishment Issues

 

ICC Celebrates 100 Years, Sets Out Vision for Next Century

L-R: Peter Robinson (USCIB), Norine Kennedy (USCIB), Thomas Pletscher (ICC Switzerland)

The International Chamber of Commerce, the oldest and largest component of USCIB’s global business network, celebrated its centennial at a gala event in Paris on May 28. USCIB President and CEO Peter Robinson and Vice President Norine Kennedy were among the hundreds of attendees.

The world business organization was founded in 1919, out of the ashes of World War One, under a commitment by international business to build bridges through cross-border trade and investment and to serve as “merchants of peace.”

On behalf of its 45 million companies worldwide, ICC issued a declaration setting out a vision to shape the future of global business for the next century.

Mirroring the call by ICC’s founders, the declaration sets out guiding principles for ICC as a purpose-driven international organization, working with renewed purpose to “make business work for everyone, every day, everywhere.”

Listing a number of potential upheavals facing the global community – including climate change, digital transformations and rising inequality – the ICC declaration states: “In the years ahead, these disruptions will become increasingly pronounced in the absence of concerted action by global leaders to mitigate negative outcomes and drive collective solutions.”

Click here to read more and get the full declaration.

Ahead of ICC’s Centennial Summit, ICC launched a new work program to fulfill commitments set out in the Centenary Declaration. Leveraging ICC’s global membership in over 100 countries, ICC will execute the work program through five newly created and versatile knowledge hubs deploying five pivotal campaigns to enable business worldwide to secure peace, prosperity and opportunity for all.

“Faced with pressing global challenges in the 21st century, ICC and the global business community can – and must – do more as a force for good in the world,” said ICC Secretary General John W.H. Denton. “We will respond to this imperative with brave and bold action to meet the ambition of our renewed purpose.”

At OECD Ministerial, Business Engages on Digital Transformation

L-R: Peter Robinson (USCIB), OECD Secretary General Angel Gurria, Andrew Wyckoff (OECD), Charles Johnston (Citi)

On May 22-23, a strong delegation of global business leaders participated in the 2019 OECD Ministerial Council Meeting, stressing the need for integrated policies that will enable business to fully deliver on the potential from the digital transformation for economies and societies.

This pivotal exchange platform allowed global members and corporate leaders affiliated with Business at OECD (known by the acronym BIAC), part of USCIB’s global network, to convey what business needs from international collaboration to promote both economic growth and inclusion. The high-level dialogue featured multiple interactions with ministers of economy, trade, foreign affairs, and finance from 36 OECD countries and key non-member economies. Senior business leaders – including Peter Robinson, USCIB’s president and CEO, Alexandre Ricard, CEO of Pernod Ricard, BIAC Vice Chair Charles Johnston, managing director of global government affairs with Citi and a USCIB board member, and Saori Dubourg, board member from BASF – formally addressed ministers during the program.

The OECD Ministerial outcomes and adopted instruments reflected critical policy recommendations from the 2019 Business at OECD Statement to Ministers, notably the need to appropriately involve stakeholders as future policy recommendations are developed, guidance that will enable data governance based on trust, and continued support for OECD evidence and facts on tax, competition and trade, including on tracking market distorting support measures and barriers. BIAC commended the adoption of the OECD Artificial Intelligence principles and the creation of an OECD Observatory on AI – business involvement in this area will be critical to achieve innovation in a number of fields including health, environment, and anti-corruption.

While in Paris, USCIB’s Robinson BIAC Secretary General Russel Mills and Senior Director Nicole Primmer attended a reception for ministers at the U.S. Mission to the OECD hosted by U.S. Charge d’Affaires Andrew Havilland. Robinson added that the week’s activities “gave me an opportunity to connect with the OECD leadership, including Jeffrey Schlagenhauf, the newly appointed OECD deputy secretary general from the United States.”

BIAC members also convened for the 5th occasion the current G20 and B20 (Business 20) presidencies to share business recommendations to G20 leaders ahead of the Osaka Summit. The event featured the participation of the Japanese Foreign Minister Taro Kono, Shinya Katanozaka, president and CEO of ANA Holdings, and the OECD’s leadership. Business speakers from BIAC’s French and German national members MEDEF and BDI, its Argentinian observer UIA, and from Accenture also debated views with five G20 sherpas and senior government officials. In this meeting, Business at OECD Chair Phil O’Reilly affirmed the importance of ensuring continuity and frank exchanges across presidencies to achieve tangible outcomes in G20 declarations and implementation actions.

Earlier, the Business at OECD Annual General Assembly brought together BIAC’s executive board, leadership from national organizations from 30 OECD and non-OECD countries, and associate expert groups to discuss our strategic priorities for global governance and national challenges. The meeting also benefited from a conversation with leadership from 12 major BIAC policy groups to present the OECD agenda across critical issues, our business perspectives, and the role the OECD can play in these fields.

Ulrik Vestergaard Knudsen, deputy secretary general of the OECD, gave a keynote address to participants on major OECD initiatives affecting businesses, and Alvaro Pereira, director of the Country Studies Branch of the OECD Economics Department, responded to insights from BIAC’s 2019 Economic Survey, and also shared main themes from the 2019 OECD Economic Outlook.

USCIB Applauds Approval of OECD Principles on Artificial Intelligence

Washington, D.C., May 22, 2019 – The United States Council for International Business (USCIB), applauds the Organization for Economic Cooperation and Development’s (OECD) approval on May 22 of the OECD Principles on Artificial Intelligence (AI). Working through Business at OECD (BIAC), a core group of USCIB members participated in a special, 50+ member experts group that was convened to scope these principles. They contributed directly to the development of five complementary, values-based principles for the responsible development and stewardship of trustworthy AI and five recommendations for public policy and international cooperation.

Importantly, these principles are not prescriptive. They highlight human-centered values, fairness, transparency, robust security, and accountability as foundational elements for AI deployment that will ensure inclusive growth, sustainable development and well-being. The principles, which were developed through multistakeholder dialogue involving input from business, government, civil society, the technical community, and labor unions, also recognize the appropriate role of governments in creating an enabling environment for research and development to drive innovation in trustworthy AI. They call upon governments to develop mechanisms to share data and knowledge and programs to equip people with digital skills so they can transition to new employment that will harness AI for economic and societal good. The OECD’s 36 member countries, along with Argentina, Brazil, Colombia, Costa Rica, Peru and Romania, who signed up to the AI Principles at the organization’s annual Ministerial Council Meeting today in Paris, further agreed to cooperate across borders and sectors to share information, and develop international, interoperable standards to ensure safe, fair and trustworthy AI.

“USCIB is honored that its members played a direct role in shaping principles that will enable us to tap the extraordinary potential of Artificial Intelligence in a manner that will improve economic and societal well-being across diverse sectors such as energy and the environment, healthcare, and transportation, to name a few,” said USCIB President and CEO Peter Robinson. “Perhaps most important, these principles include important safeguards that keep human-centered values at the core of AI deployment and prevail upon all ‘AI actors’ to respect democratic values throughout the AI system lifecycle, commit to transparency, and to demonstrate accountability, among other responsibilities. We see a bright future ahead and look forward to the adoption of these principles by OECD members and non-members alike,” added Robinson.

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

ICC Warns Against Misuse of Incoterms 2020 Rules

The International Chamber of Commerce (ICC) is preparing for the publication of Incoterms® 2020, an update of the renowned regulations that define the responsibilities of buyers and sellers operating in the international trade system.

According to ICC, with the launch of Incoterms set for later this year, websites are already claiming to have information or training sessions about the update of its commercial trade terms. As the world business organization, ICC is the originator and sole official publisher of the Incoterms® rules. Any misuse of the terms can lead to costly mistakes. So how can users spot fake Incoterms® rules information? ICC provides three tips to ensure the right details, from the most credible source:

  1. Does it mention ICC? One of the easiest ways to spot a misleading Incoterms® 2020 rules website is to check and see if ICC mentioned at all. As the originator and official publisher of the Incoterms® rules, it is important for business to consult resources directly sourced by ICC.
  2. Words matter: In most cases, websites will make bold predictions about the Incoterms®2020 rules. Speculative sentences, such as “rumors point to changes,” or “it would be very important to change,” are commonplace on these deceptive websites and do not reflect the official position of ICC.
  3. Are they offering training sessions now? ICC urges those using or studying to consult only ICC-supported websites for information pertaining to the Incoterms® rules to ensure application of the right procedure. By registering for non-ICC affiliated training sessions, businesses and other users run the risk of spending money to receive false information.

For more detailed information, visit ICC.

USCIB has established a central information page on its website for all the latest developments surrounding the introduction of Incoterms® 2020. Go to uscib.org/about-incoterms-2020 for more information.

Hampl Discusses China and USMCA at Investor Conference

USCIB Senior Director, Investment, Trade and Financial Services Eva Hampl spoke on a panel entitled Trade & Tariffs – Today & Tomorrow at the annual MLP & Energy Infrastructure Conference (MEIC 2019) in Las Vegas last week. The panel, which also included Colin Bird from the Embassy of Canada and Karen Antebi from the Embassy of Mexico, provided a macro perspective on current trade issues. The discussion focused on various issues surrounding China, the importance of the U.S. trade relationship with Mexico and Canada, including the U.S. Mexico Canada Trade Agreement (USMCA),and other trade issues.

According to Hampl, the timing was fortuitous with a lot of activity in the trade policy space. “One of the positive developments included the U.S. administration’s announcement that they would be removing Section 232 steel and aluminum tariffs currently imposed on Mexico and Canada, removing one of the remaining obstacles to Congressional approval of USMCA,” said Hampl.

“Unfortunately, as one set of tariffs was removed, the tariffs under Section 301 against China were escalated,” she added.

After the Administration increased tariffs on the list of $200 billion worth of Chinese imports from 10% to 25% on May 10, China retaliated by increasing tariffs on $60 billion worth of U.S. goods, which will take effect on June 1.

Earlier this month, USCIB issued a statement urging the Administration to refrain from continuing to escalate the trade fight with China.