Trade and investment have become more intertwined, reinforcing and interdependent, USCIB President and CEO Peter Robinson told the annual OECD Forum in Paris on Tuesday, stressing the importance of global value chains and the need for smarter policies to foster FDI – and the growth and jobs it creates.
Robinson took part in a panel discussion moderated by Shawn Donnan of the Financial Times on the new realities of cross-border trade, including the development of highly integrated global value chains where various stages of R&D, production and distribution are scattered across many different countries. The session encouraged debate among panelists and the audience about how to adapt policies to meet the new, interconnected trade and production landscape.
In his remarks, Robinson identified three important trends – the growth of global value chains, the interdependence of trade and investment, and the dangers of protectionist policies such as forced localization and data flow restrictions – as he had highlighted at the BIAC/TUAC pre-Ministerial consultations with the OECD and the Japanese last month in Tokyo. He called for policies that acknowledge that the world of trade has shifted towards global value chains, and noted that the role of foreign direct investment is crucial and should be central to the discussion along with trade.
Other speakers at the Future of Trade panel included Robert Carvalho de Azevêdo, director general of the WTO; James Bacchus of Greenberg Traurig, chair of the Commission on Trade and Investment Policy at the International Chamber of Commerce; Sharan Burrow, general secretary of the International Trade Union Confederation; Tim Groser, New Zealand’s minister of trade; and Tadayuki Nagashima, executive vice president of the Japan External Trade Organization.
Trade and investment are two sides of the same coin, Robinson explained, neither will occur alone. Cross-border trade requires investment as well as investment protection like the investor state dispute settlement to help balance legitimate government needs and dispute resolution.
Robinson also warned that trade barriers are going up behind the border, handicapping the development of integrated global value chains. He encouraged the OECD to continue research on the impact of policies that localize production and content and limit data flows on global value chains.
The business community ideally favors a global approach to trade and investment liberalization, Robinson said. But he noted its encouragement of regional and functional initiatives such as the Trans-Pacific Partnership (TTP), the Transatlantic Trade and Investment Partnership (TTIP), and the Trade in Services Agreement and leveraging where possible those plurilateral or bilateral coalitions of the willing into multilateral ones. Robinson also thanked the OECD for its high-quality work on trade analysis, such as Trade in Value Added.
The OECD Forum takes place each year around the OECD’s ministerial council meeting, which this year focused on “Resilient Economies and Inclusive Societies.” A high-level United States delegation participated in the OECD ministerial, advancing efforts to level the playing field for American businesses and promoting a more open and outward-oriented OECD. The delegation included U.S. Trade Representative Michael Froman, Council of Economic Advisors Chairman Jason Furman and the new U.S. ambassador to the OECD, Daniel Yohannes.
Staff contact: Rob Mulligan