USCIB Contributes to Discussion With OECD on China

USCIB participated in a Seminar with the OECD Informal Reflection Group on China as part of the Business at OECD (BIAC) delegation of the China Expert Group on November 27. The BIAC China Expert Group was created for the purpose of contributing expert guidance to China–OECD cooperation in areas that improve the investment climate and overall business environment in China. According to USCIB’s China lead Eva Hampl, who participated in this meeting, the group promotes adherence to OECD instruments and the sharing of knowledge on policy practices, contributing to a more level playing field for all businesses operating both inside and outside of China. It consults annually with the OECD Informal Reflection Group on China, which includes OECD Ambassadors from a wide range of countries. It also works with the OECD’s senior representative in Beijing to help scale–up the OECD presence in China. China is not a member of the OECD but participates in many of its meetings as an observer.

The focus of the discussion was “The OECD and China in the post-COVID scenario. Avoiding decoupling –strengthening resilience.” The business presentation provided an economic assessment, noted the global challenges, and included several so-called reflection topics on technological decoupling, artificial intelligence, state-owned enterprises (SOEs), and supply chain resilience.

Hampl, USCIB Senior Director for Investment, Trade and Financial Services, spoke on the issue of supply chain resilience, highlighting current business challenges globally in the context of the pandemic, as well as specifically related to China.

Hampl encouraged the OECD not to shy away from addressing the difficult issues, highlighting successful OECD workstreams on SOEs and subsidies.

“The relationship with China is complex, multifaceted and can be challenging for business,” stressed Hampl.

The OECD’s December 2020 Economic Outlook released yesterday highlights that China, where the recovery from the pandemic started earlier, is expected to grow strongly at 8% in 2021, accounting for over a third of global growth. Given China’s importance in the global economy, its practices and policies have a significant impact on its trading partners, providing strong incentives to work together to address common challenges and responsibilities.

Foreign Direct Investment More Important Than Ever During Health and Economic Crisis

USCIB Senior Advisor Shaun Donnelly was up early on Thanksgiving morning, participating virtually as a panelist in the annual International Investment Agreements (IIA) Experts conference organized in Geneva by the UN Conference on Trade and Development (UNCTAD). This year’s conference focused on the theme of IIA reform in the time of COVID-19. Donnelly participated in six of the last seven annual conferences organized by UNCTAD on international trade agreements.

In addition to his role as a panelist, Donnelly submitted a short written statement and a three-minute video message. 

“Our main message was simple,” said Donnelly. “In a time of health and economic crisis, private foreign direct investment (FDI) is more important than ever to restoring global economic growth, trade and jobs.” According to Donnelly, investment agreements, including strong dispute settlement provisions can be a critical factor to incentivizing FDI flows. 

Donnelly, a retired U.S. Ambassador and now a consultant to USCIB, also noted, “Unfortunately UNCTAD and many of the government and NGO speakers seem to share a view that FDI rules and IIAs need to be ‘reformed’ to reduce protections for investors and their access to independent arbitration to resolve investment disputes with host governments.  We have a different view; incentivizing and protecting FDI is more important than ever as we all strive for global economic recovery. So it is for business to speak up and get its views on the table in these international investment policy session. I was pleased to be joined this year on my panel by Winand Quaedvlieg from VNO, our Dutch counterpart national association and Chair of the Investment Policy Committee at Business at OECD.”     

UNCTAD’s link to the conference program presentations (including Donnelly’s) and documents.   

USCIB Banking Committee Welcomes New Chair: Bank of America’s Geoff Brady

Geoff Brady
Photo credit: Bank of America

USCIB is pleased to announce the appointment of USCIB member Geoff Brady of Bank of America as new chair of the USCIB Banking Committee. Brady, who is head of global trade and supply chain finance at Bank of America, succeeds Michael Quinn of JPMorgan Chase.

According to USCIB Senior Director for Trade, Investment and Financial Services Eva Hampl, USCIB’s Banking Committee works to increase efficiency and decrease the cost of international trade transactions by promoting the standardization of international banking procedures—primarily by providing input into the global work of the International Chamber of Commerce (ICC).

“We look forward to Bank of America’s active participation in this important area,” said USCIB President and CEO Peter Robinson. “We are confident in Geoff’s leadership in the ongoing work of the Committee, including ensuring strong U.S. representation in the ICC Banking Commission and ICC’s work to develop global rules and facilitate access to trade finance.”

USCIB Issues Recommendations to EU on a Carbon Border Adjustment Mechanism

The European Union concluded a public consultation last month on a proposed Carbon Border Adjustment Mechanism (CBAM), part of the EU’s ambitious Green Deal, focusing on deep cuts in greenhouse gas emissions. USCIB submitted its members’ response on October 28, drawing on the expertise of its Committees on Customs, Environment, Taxation as well as Trade and Investment.

“The EU CBAM proposal is complex, seeking to “level the playing field” by imposing extra costs on imports from countries with different climate change policies” said USCIB Vice President for Environment, Energy and Strategic International Engagement Norine Kennedy. “In our comments, we addressed climate change, trade and technical aspects of the proposal which we believe to be most relevant to American companies doing business with, and in, the EU.”

One critical recommendation was on timing; USCIB encouraged the EU to undertake thorough consultative and data-based economic and trade impact assessments, especially with regards to developing countries, to avoid unintended and counter-productive consequences on livelihoods. “As countries continue to experience the fall out and economic disruption of the COVID-19 pandemic, we believe governments should proceed cautiously before adding stresses to the global trading system,” warned Eva Hampl, USCIB senior director for trade, investment and financial services.

USCIB also stressed the importance of ensuring compatibility with World Trade Organization (WTO) rules, warning that some elements of the EU CBAM proposal are unclear, which may lead to time-consuming disputes and delay the positive potential for deployment of innovative technologies and materials vital to climate change action, as well as hinder economic growth and recovery.

Hampl added: “Any further development of this currently counter-productive proposal must avoid and head off climate disputes at the WTO that may lead to unpredictable or unintended negative outcomes in environment, climate and trade negotiations.”

On technical practicality and administrative burdens, USCIB’s recommendation included reducing those burdens and the associated costs of compliance, which would inevitably subtract from resources available for other areas of environmental improvement.

USCIB believes that synergies between trade and environment protection should be the focus of international cooperation, and unilateral measures should be discouraged.

“Open trade advances economic prosperity and the UN Sustainable Development Goals (SDGs), and it is an essential vehicle to achieve widespread and rapid deployment of climate-related investments and cleaner and more efficient technologies and forms of energy,” emphasized Kennedy. “To meet the commitments and objectives of the SDGs, the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement, it is clear that more trade will be needed.”

For more information:

Earlier this year, USCIB published a paper Seeking Synergies: Environment, Climate and Trade Policy.

US Nominates Liddell for OECD Secretary General

Chris Liddell

The United States government formally nominated Chris Liddell on October 20 to be the next Secretary General of the Organization for Economic Cooperation and Development (OECD), the influential Paris-based thirty-seven-member international economic policy group.  Current OECD Secretary General Angel Gurria’s third five-year term will expire mid-2021. The selection process is underway with multiple candidates nominated, headed toward a final selection in early 2021.

Liddell is currently serving as Assistant to the President and White House Deputy Chief of Staff for Policy Coordination. He is a dual national, American and his native New Zealand. According to USCIB Senior Advisor and Former U.S. Ambassador Shaun Donnelly, Liddell brings a very impressive private sector resume to his current White House senior position and to his OECD candidacy. Prior to joining the Trump Administration, Liddell served as Vice Chairman and Chief Financial Officer at General Motors, where he led global finance operations and managed the company’s $23 billion IPO in November 2010, which, at that time, was the largest public offering in history. Liddell has more than three decades of experience in corporate leadership, including Chief Financial Officer and Senior Vice President of Microsoft Corporation and Chief Financial Officer of International Paper.

USCIB President and CEO Peter Robinson welcomed Liddell’s nomination. “We at USCIB are pleased to see the U.S. government coming forward with a strong nominee for the important OECD Secretary General position, succeeding Angel Gurria with whom we have enjoyed working over the past fourteen years,” said Robinson. “We are particularly pleased to see a nominee with strong private sector background and hands-on policy experience at the top levels of the U.S. government. The competition for the post will be tough with other strong nominees but there has never been an OECD Secretary General from the U.S.”

The nomination process closed on November 1. The governments of Australia, Canada, Czech Republic, Denmark, Estonia, Geece, Poland, Switzerland and Sweden have also formally nominated candidates for the Secretary General position. The United Kingdom Ambassador, as Dean (i.e. longest serving) of the OECD’s Council of Ambassadors, is leading the selection process. According to Donnelly, the target is to have the next Secretary General elected by the Council by March 1, 2021 and in place for a five-year term beginning June 1, 2021, presumably shortly after the organization’s annual Ministerial meeting scheduled to take place in Paris.

“USCIB and our business colleagues in the OECD’s Business at OECD (”BIAC”) organization hope to be able to play a constructive, informal role in the selection process,” said Donnelly.

USCIB Delegation Makes Interventions at UN Meetings on Investment Reform

USCIB member Lauren Mandell from Wilmer Hale and USCIB Senior Director Eva Hampl represented the USCIB delegation at the meetings of the UN Commission on International Trade Law (UNCITRAL) Working Group III on Investor-State Dispute Settlement (ISDS) Reform that took place October 5-9. The meeting sought to address a variety of issues crucial to USCIB and its membership.

USCIB participated in the discussions as an observer and made interventions on alternative dispute resolution and mediation, shareholder claims and reflective loss, frivolous claims, as well as treaty interpretation.

“USCIB appreciated the opportunity to make interventions at UNICTRAL,” said Hampl. “As next steps, we are planning a briefing with the U.S. government negotiators in these discussions to take place in November.”

The next meeting of UNCITRAL Working Group III will take place April 12-16, 2021 in New York. UNICTRAL will also hold a Virtual Pre-intersessional Meeting of the working group on November 9.

Hampl Joins BIAC-OECD Discussion on Building Resilient Supply Chains

USCIB joined Business at OECD (BIAC) for a joint meeting on October 7 with the OECD to discuss building resilience in global supply chains to ensure that trade and investment can contribute to a robust, inclusive and sustainable recovery.

BIAC raised some key messages, such as the economic fallout from COVID-19 which has highlighted the need to strengthen supply chain resilience amid significant disruptions and containment measures that were especially stark during the early phase of the pandemic. BIAC added that because OECD work has demonstrated the gains from deepening and expanding international specialization in global value chains, the Organization should provide an important evidence-base on how countries can better prepare for future crises without disrupting global value chains and imposing restrictions at a time where global trade and investment are essential elements for innovation, job creation and getting our economies back on track.

Eva Hampl, who is leading USCIB’s work on trade and investment, participated in the conversation along with several USCIB members including from Apple, DHL, JPMorgan, Walmart and Pfizer.

In her remarks, Hampl noted the critical role of government cooperation as business is working to strengthening supply chains. “Consistency and predictability is critical for business,” said Hampl. “That’s why government cooperation and engagement with business is necessary to find effective solutions. This is where the OECD can provide crucial value by facilitating the conversation between business and governments.

Hampl Discusses Role of Open Markets, Inclusive Multilateralism in COVID-19 Recovery

USCIB Senior Director for Trade and Financial Services Eva Hampl provided a U.S. business perspective at the Joint Conference on Reviving the Global Economy by Opening Markets and Enhancing Cooperation. The event was co-organized by the China Council for the Promotion of International Trade (CCPIT) and the International Chamber of Commerce (ICC) on September 28.  During her panel, Hampl discussed what USCIB has been focusing on to advance open markets and an economic recovery from the COVID-19 pandemic.

“We have been active in all available forums to advocate that governments refrain from misusing the COVID-19 pandemic to adopt arbitrary, discriminatory or protectionist policies which only disrupt supply chains and put further strains on the economy – this also includes measures already in place that are now being justified by the pandemic,” said Hampl. “We consistently emphasize the crucial role of open trade and global value chains as fundamental drivers to recover from this global crisis.”

Hampl also discussed longer-term solutions, such as diversifying supply chains, so that global issues, such as a pandemic, do not endanger the reliable supply of necessary goods and services.

According to Hampl, the pandemic has highlighted the transformative power of digital technologies.

“Companies across all sectors stepped up to work closely with governments and other stakeholders to respond to urgent medical, economic and social needs by deploying and driving digital technology solutions,” said Hampl. “Looking ahead, digital technologies have the potential to shape the sustainable recovery from the pandemic. This also includes accelerating the digitization of government services such as licensing, permitting, tax collection and procurement.”

Hampl also emphasized the importance of global cooperation through multilateral institutions and discussed the role of inclusive multilateralism in the context of the COVID-19 outbreak.

“A COVID-19 response must be an ‘all hands on deck’ approach,” she noted. “When USCIB advocates for multilateralism, we mean multilateralism that promotes peace, cooperation and social justice, relies on effective and transparent multilateral bodies, advances collaborative approaches among states, encourages international dialogue and cooperation to design and implement effective policies and, finally, engages business across all sectors and other stakeholders in substantive dialogue and partnerships.

To view the video in English, please click here.

USCIB Submits Comments to USTR on China’s Compliance With WTO

USCIB submitted comments on China’s compliance with WTO commitments on September 17. The comments were in response to the U.S. Trade Representative’s (USTR) request for input. In its comments, USCIB welcomed the “Phase One” trade agreement between the United States and China, as well as China’s actions to date to implement its commitments under that agreement. According to USCIB, if fully implemented, the agreement will help address a host of policies and practices maintained by China that undermine the ability of U.S. businesses to operate, including unfair and discriminatory governmental practices.

USCIB also noted that U.S. tariffs and Chinese retaliatory tariffs imposed as a result of the U.S. Section 301 investigation into China’s forced technology transfer, intellectual property, and innovation policies have been disruptive to U.S. business.

“While the Phase One deal partially addresses some of these tariffs, more must be done to restore the ability of U.S. business to compete effectively in the global marketplace,” said Eva Hampl, who leads USCIB’s policy work on China. “As described in this submission, many issues affecting business remain a concern in China. Accordingly, high-level bilateral dialogue between the United States and China continues to be of the utmost importance.”

USCIB urges both countries to utilize, in addition to the World Trade Organization (WTO), the full range of formal multilateral fora, including Asia-Pacific Economic Cooperation (APEC) Forum and the Organization for Economic Cooperation and Development (OECD), to work toward improved commercial relations. Plurilateral dialogues that include U.S.-friendly jurisdictions such as the European Union, Canada or Australia should also be considered.

“USCIB and its members understand and appreciate that U.S.-China economic relations are complex and multifaceted, and that American business holds a direct and important stake in this relationship and in its success,” added Hampl. “As the world’s largest economy, China’s practices and policies have a significant impact on its trading partners, and engagement with China can be challenging.”

Due to the COVID-19 pandemic, there will not be a public hearing this year. USCIB’s submission is public and can also be found on www.regulations.gov under Docket Number USTR-2020-0033.

 

USCIB Welcomes a Changing of the Guard at US Mission to OECD

Andrew Havilland
Photo source: U.S. Mission to the OECD

Late summer is traditionally turnover season at U.S. diplomatic missions overseas, according to U.S. Ambassador (ret.) Shaun Donnelly, who serves as senior adviser at USCIB. Pandemic notwithstanding, 2020 is no exception. For USCIB, a key move is at the U.S. Mission to the OECD in Paris. Andrew Havilland is wrapping up three years as chargé d’affaires (i.e. acting Ambassador) at the U.S. Mission to the Organization for Economic Cooperation and Development (OECD).  Three years ago, Havilland arrived in Paris as deputy chief of mission (DCM) at the OECD but for three years, no U.S. Ambassador has been confirmed.

“Havilland has done a fantastic job leading the U.S. Mission through a very challenging period,” said Donnelly. “He is liked, respected and listened to across the OECD and beyond.”

Throughout his time in Paris, Havilland worked closely with USCIB President and CEO Peter Robinson and other USCIB staff on a wide range of major policy issues.

Whitney Baird Photo source: US Mission to the EU

“We are, of course, sad to see Andrew depart Paris but are delighted that he’s being replaced as DCM/Chargé by Whitney Baird, another one of the State Department’s very best senior economic experts,” noted Robinson. Baird has a background in EU issues and trade policy and is coming from a tour as deputy assistant secretary of state for African affairs, in charge of West African and regional issues. She will be arriving in Paris next week to take over leadership of the Mission.

Robinson led a September 2 virtual session with Baird and Havilland for USCIB policy managers to brief Baird on key policy issues ahead at the OECD for USCIB member companies; tax policy, including digital services tax, and Internet and digital economy issues were at the top of the agenda, but other important policy areas were also discussed – from trade and investment, environment, labor and social affairs, anti-corruption and responsible business conduct to health and anti-illicit trade.

Additionally, Robinson and USCIB policy experts thanked Havilland and his team for their access and close cooperation on a range of issues over the past few years and agreed to continue the close, mutually beneficial cooperation on key OECD issues, organizational as well as policy-related, with Baird and her U.S. Mission team going forward. For the foreseeable future, that cooperation, like all USCIB engagement with the OECD and Business at OECD (BIAC) will be by email, conference call and Zoom sessions.

After a three and-a-half year gap in the post of U.S. Ambassador, President Donald Trump nominated current State Department Assistant Secretary for Economic and Business Affairs Manisha Singh as the next U.S. Ambassador to the OECD on May 5. If confirmed, Singh would assume charge of the U.S. Mission to the OECD and Baird would revert to the DCM role. Assistant Secretary Singh had a confirmation hearing before the Senate Foreign Relations Committee (SFRC) on August 6. The SFRC will now need to vote on her nomination and then, if voted out of committee, the Full Senate would have to vote on her confirmation before she could be sworn in as the next U.S. Ambassador to the OECD and take up the post in Paris. Until that time Baird will head the U.S. Mission as Chargé d’Affaires.

Note: If members have questions or suggestions related to ongoing OECD issues, please work with the appropriate USCIB policy manager and/or relevant USCIB committee leadership.  USCIB staff stand ready to assist member companies with any OECD-related issues, including introductions to new Chargé Whitney Baird and her senior staff.