Business at OECD (BIAC) China Taskforce

The Business at OECD (BIAC) China Taskforce will meet on June 11-12, 2019 in Paris, France. The sessions will include:

  • Business at OECD Preparatory Meeting (June 11, 2019 | 3pm-6pm)
  • Seminar with OECD Informal Reflection Group on China (June 12, 2019 |10:30am-12:30pm)
  • Subscription lunch with chair of the OECD Informal Reflection Group on China (June 12, 2019 |following the seminar 12:30pm-3pm)

The Business at OECD China Task Force was created to provide a forum to discuss important issues surrounding China for business. China is not a member of the OECD, which provides the opportunity to develop rules with like-minded countries to address many of the concerns companies face doing business in China. The OECD Informal Reflection Group on China consists of Ambassadors from select countries interested in addressing these issues.

For more information, contact Chris Olsen (colsen@uscib.org).

Nobody Wins in Escalation of U.S.-China Trade Fight, Says USCIB

Washington, D.C., May 8, 2019 – The United States Council for International Business (USCIB), which represents America’s most successful global companies, appealed to the United States and China to ratchet down their trade fight in the wake of President Trump‘s decision to increase duties on some $200 billion of Chinese exports from 10 percent to 25 percent.

“When the U.S. and China fight, nobody wins, as the past year’s market gyrations, lost deals, and strained diplomatic ties have made abundantly clear,” said USCIB President and CEO Peter Robinson. “American business continues to have major problems with China’s commercial policies, but we simply must find a way to tackle these that doesn’t turn our most competitive companies into collateral damage.”

Robinson continued: “The earlier rounds of tariffs, coupled with China’s retaliatory measures, are already a significant strain on U.S. consumers, and on the economy as a whole. This latest U.S. escalation, and the inevitable Chinese response will impose considerable additional strains on our exporters and on companies, workers and communities that rely on international trade to succeed.”

Robinson urged the Trump administration to work more closely with key U.S. trading partners and with the business community to address serious Chinese trade abuses, including referring U.S. complaints to the World Trade Organization.

“The U.S. has won some important victories, including against discriminatory Chinese practices and policies, in the WTO lately,” he noted. “We should use the multilateral platform as it was intended to be used, to defuse escalating trade tensions, and to end the uncertainty that is rattling markets and fraying the nerves of both business owners and consumers.”

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 several leading international business organizations, 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, USCIB
jhuneke@uscib.org, +1 212.703.5043

Business Not Bullish on Prospect of New China Tariffs

USCIB joined other members of the American for Free Trade coalition to issue a statement to President Trump in response to his announcement on May 3 to increase the China tariffs from 10 to 25 percent, representing a tariff total of $200 billion.

The statement highlighted key figures that indicated the enormous consequences the tariffs would have on the U.S. economy and consumers. According to the statement, not only would this increase result in a loss of nearly one million jobs, but current tariffs already burden consumers with $69 billion in added costs.

“For ten months, Americans have been paying the full cost of the trade war, not China,” read the statement, which referred to the 10 percent of tariffs imposed earlier this year. “To be clear, tariffs are taxes that Americans pay, and this sudden increase with little notice will only punish U.S. farmers, businesses and consumers.”

Eva Hampl, who leads USCIB’s work on China also emphasized: “The tariffs currently imposed on Chinese imports are already a significant strain on the U.S. economy and consumers. An increase on such a broad cross section of industries will exacerbate the negative effects to a degree that will be a significant challenge for companies.”

New OECD Reports Outlines Business Investment Contribution to SDGs

The Organization for Economic Cooperation and Development (OECD) has recently published a report on “The Contribution of International Business Investment to the Sustainable Development Goals (SDGs).” The report surveys the main type of financing behind business investment in developing countries, recent trends, an evaluation of the contribution of these flows to the SDGs, and prospects going forward.

The report highlights that multinational enterprises (MNEs) have become one of the most important actors for channeling investment to the developing countries. A relatively new actor providing financing for development is the State-Owned Enterprise (SOE). Furthermore, mergers and acquisitions (M&A) is one of the primary vehicles that MNEs use to invest in foreign markets and a major component of foreign direct investment. M&A inflows in developing countries starting declining already in 2012.

An increasingly important source of international investment into developing countries is China; in 2017 China doubled its M&A in developing countries to $25 billion, making it their top resource of international M&A (ahead of Japan and the US). Meanwhile, private flows align naturally with the SDGs in the area of infrastructure: SDG 6, which focuses on clean water and sanitation), SDG 7 on affordable and clean energy, SDG 9 on industry, innovation and infrastructure, and SDG 10 which aims to reduce inequalities.

“The report calls to action for improving the global rules for trade and investment, pursuing domestic policy reform agenda to improve business climates, and addressing new areas of regulatory co-operation,” observed USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl.

The OECD will be organizing a round table on investment and sustainable development on October 23, 2019, as part of the next OECD Investment Week.

USCIB Joins Coalition in Urging Specific US Government Action on US-China Trade

USCIB joined Americans for Free Trade, a multi-industry coalition consisting of over 150 members, to send a letter to President Donald Trump on April 22 regarding upcoming U.S.-China trade talks.

The Coalition letter urged the U.S. government to fully and immediately remove all recently imposed tariffs, including U.S. tariffs and China’s retaliatory tariffs as part of a final deal, while also encouraging the U.S. to come up with a deal that levels the playing field for U.S. companies by achieving meaningful changes to address China’s unfair trade practices that put American technology, innovation and intellectual property at risk.

Regarding unfair trade practices, the letter stated: “For too long, China has engaged in unfair trading practices, including forced technology transfer, cyber theft, intellectual property violations and more. We hope any final deal will resolve the structural issues that are at the core of the trade dispute in order to fully protect American technology, innovation, and intellectual property.”

The letter also urged the government to avoid any enforcement mechanism that would trigger further tariffs and obtain clarity on how the tariff exemption process will be carried out in the event of a deal.

Finally, the group also urged an economic assessment by the Administration examining the costs of tariffs for American businesses and consumers.

Americans for Free Trade represents companies that employ tens of millions of American workers and provide goods and services to virtually every corner of the United States.

At B20, Robinson Stresses Need for International Cooperation

Peter Robinson at the B20 in Japan

USCIB President and CEO Peter Robinson was in Japan the week of March 11 for the B20 Summit, alongside other business leaders such as John Denton, secretary general and Paul Polman, chair of the International Chamber of CommercePhil O’Reilly, chair and Russell Mills, secretary general of Business at OECD, as well as Erol Kiresepi, chairman of the International Organization of Employers.

Robinson spoke on a panel titled, “Global Economy for All: International Cooperation for Global Governance.” In his remarks, Robinson proposed looking at international cooperation from two perspectives: strengthening global institutions and rules, while also encouraging bottom-up approaches and a general spirit of cooperation, rather than confrontation, in international economic relations.

“For the foreseeable future, we will need to accept that many electorates and governments view the world through a more nationalistic, mercantilist lens,” said Robinson. “We need to demonstrate the value in international cooperation, not just through new binding rules and official structures, but through voluntary, bottom-up initiatives. Efforts such as the Paris Climate Agreement, or the plurilateral agreements being pursued by WTO members on several issues including digital trade, should be welcomed and encouraged.”

Throughout the course of the panel, Robinson also touched upon trade conflicts with China, WTO modernization, and the need to radically reform education, job training and retraining approaches around the world.

Robinson also called out climate change as being a crucial long-term global challenge. “Climate impacts everything – economic growth, jobs, health care, where people live,” stressed Robinson. “We therefore need to view climate and energy policy in a more holistic manner.”

The Japan Times covered the B20 and quoted Robinson in their piece, “At B20 in Tokyo, World Business Leaders Urge Stronger Cooperation on Looming Challenges.” The Japan Times quoted Robinson emphasizing that “The American business community still believes in open trade, globalization and multilateralism.”

Robinson also applauded the B20’s prioritization of adoption and dissemination of artificial intelligence to ensure that AI development deployment remains “human-centric”. This issue will be a big focus of the digital economy conference that USCIB is organizing with Business at OECD (BIAC) and the OECD on March 25 in Washington, DC.

USCIB Co-Sponsors China-US Foreign Policy Association Panel

USCIB co-sponsored a recent Foreign Policy Association event titled, “U.S.-China Trade: Taking Stock and Looking Ahead” on February 28. The event, hosted by Citi in New York, featured a panel of experts who discussed the state of trade between the two countries, including the geopolitical and economic implications of the trade war, the 90-day truce, and the negotiations currently taking place.

USCIB member Citigroup’s Global Head of Subsidiaries Marc Merlino moderated the panel. Experts included Bloomberg’s Chief Economist Tom Orlik, Director of CSIS’ Project on Chinese Business and Political Economy Scott Kennedy and Global Head of Research for JP Morgan Joyce Chang.

Technology issues, particularly as they relate to data and Artificial Intelligence (AI), were a common theme of discussion across all panelists. AI is a necessary investment for China due to their demographics and life expectancy. However, while China is focused on AI and data, they lag in the quality of their commercial aircraft and semiconducters, making economic partnerships with the United States a necessity, particularly as China’s debt continues to grow.

USCIB Participates in Business Coalition Fly-in on China Tariffs  

USCIB Senior Director Eva Hampl participated in the Fly-In organized by Tariffs Hurt the Heartland the nationwide campaign against tariffs, combining the efforts of Farmers for Free Trade and Americans for Free Trade, of which USCIB is a member. Groups of representatives from associations and companies covered over 150 meetings with Senate and House offices from both sides of the aisle over February 6-7.

“There is general concern about the tariff actions, with many members of Congress having signed on to letters either on the section 232 tariffs or on the section 301 exclusion process,” stated Hampl. “However, there is also still a lot of apprehension about publicly pushing back against the President’s actions on tariffs. To those who expressed a desire to wait and see what happens on March 1 – the deadline for reaching a deal with China, to prevent tariffs on $200 billion worth of Chinese imports increasing from 10% to 25% — we repeatedly made the point that the time to act is now, as the damage to US industry and consumers increases with every day these tariffs are in place.”

To underline these points, a new study launched showed that in the event that tariffs of 25% go into effect on March 2 on List 3, combined with various other tariffs and retaliation already in place, the net impact on U.S. jobs will be over 900,000 and the annual impact on a family of four over $750. For the complete study, please click here.

There are two pieces of legislation that were introduced in in the Senate the week of February 4, both of which have House companion bills: (1) the Bicameral Congressional Trade Authority Act and (2) the Trade Security Act. Both attempt to push back against the President’s authority on tariff actions.

United States Trade Representative Robert Lighthizer and U.S. Secretary of the Treasury Steven Mnuchin will travel to Beijing for principal-level meetings on February 14 and 15, and these meetings will be preceded by deputy-level negotiations beginning on Monday, February 11.

 

Tariffs Hurt the Heartland Group Warns of Impacts on Economy

USCIB Senior Director Eva Hampl will be taking part in a “Tariffs Hurt the Heartland” fly-in on Capitol Hill February 6-7. This fly-in is organized by a broad coalition of business groups that warned about the detrimental impacts of tariffs on Chinese imports on the U.S. economy in a recent press release. Tariffs Hurt the Heartland is the nationwide, non-partisan campaign opposing tariffs that is supported by over 150 trade associations from every industry, including USCIB.

The press release emphasized that new auto tariffs and tariffs on all Chinese imports would lead to 2.2 million job losses, cost the average family over $2,300 and reduce GDP by over 1%. Moreover American workers will lose nearly one million U.S. jobs if tariffs rise to 25 percent on March 1.

The report, which served as the basis for the press release, was prepared by Trade Partnership Worldwide LLC.

Application of ATA Carnet System Expands in China

New York, N.Y., January 23, 2019 – China has significantly expanded its use of ATA Carnets for the temporary, duty-free importation of various types of goods. As of January 9, the country is now accepting the widely used “merchandise passports” for professional equipment and product samples, according to the United States Council for International Business (USCIB), which administers the ATA system in the United States.

Previously the country honored ATA Carnets just for goods destined for trade shows and exhibitions. China also extended the period for which goods may be brought into the country under ATA Carnets to a full year, from six months as had previously been the case.

“We expect China’s decision to accept Carnets for the full range of uses to significantly expand American exports to the country,” said USCIB President and CEO Peter Robinson. “Carnet usage is often a leading indicator of future exports, and this move will make the process of getting goods to and from the country much smoother.”

ATA Carnets are internationally recognized customs documents that allow for the temporary importation of various types of goods, duty-free and tax-free, generally for up to one year. They are used by a wide variety of exporters and businesses as a simple, cost-effective means of moving goods temporarily to 78 countries and customs territories around the world. Additional information on developments related to the use of ATA Carnets in China is available on USCIB’s website here.

The worldwide ATA Carnet system is overseen by the World Customs Organization and the International Chamber of Commerce (ICC), for which USCIB serves as the American national committee. Find out more about the services offered by USCIB to facilitate cross-border trade and investment at www.uscib.org.

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

About USCIB:
The United States Council for International Business (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 several leading international business organizations, including ICC, USCIB provides business views to policy makers and regulatory authorities worldwide. USCIB also works to facilitate international trade and investment. It is the U.S. national guaranteeing association for ATA Carnets, which enable the temporary export of many types of goods, free of import duties or taxes, for up to one year.