Brazil’s Accession to OECD: USCIB Hosts Discussion on Regulatory Good Practices

USCIB co-hosted a third meeting of the Brazil-OECD Business Policy Roundtable last week, gathering U.S. and Brazilian industry and government officials to discuss the advancement of regulatory good practices (RGPs) to facilitate Brazil’s accession to the OECD.

According to USCIB Director for Investment, Trade and China Alice Slayton Clark, Brazil is currently undertaking significant regulatory reform consistent with OECD guidelines, such as Recommendations of the Council on Regulatory Policy and Governance. Ministry of Economy Program Director Kelvia Frota de Albuquerque noted recent actions toward that end, including Decree 10,411 that makes regulatory impact analysis (RIA) mandatory for all significant regulations, which identifies the regulatory problem and assesses available alternatives to direct regulation. The decree was issued pursuant to the Regulatory Agencies Law and the Economic Free Law of 2019, coming into force with respect to the Ministry of Economy this past April, and will apply to other federal administrative bodies on October 14, 2021.

It is part of a whole-of-government effort to harmonize and streamline regulatory functions, according to Frota de Albuquerque. A restructuring of licensing and permitting throughout the country at the regional, municipal and local levels will require a significant cultural shift, high-level intervention from the Ministry of Economy and significant capacity building, data management, stakeholder engagement and ex-post analysis.

“Regulatory reform in Brazil is catalyzed not only by its quest for OECD accession but by regulatory commitments it will undertake when it ratifies the Protocol Relating to Trade Rules and Transparency signed in October 2020, updating the U.S.-Brazil Agreement on Trade and Economic Cooperation,” said Clark.

Deputy Assistant U.S. Trade Representative for Latin America Courtney Smothers said that she hopes other workstreams will also inspire progress, including reforms advanced through the World Trade Organization (WTO) Technical Barriers to Trade (TBT) Committee, the U.S.-Brazil regulator-to-regulator dialogue, the Brazil-U.S. CEO forum and regional avenues, such as the Summit of the Americas.

Australia and Canada will be leading an OECD peer review of Brazil’s reform efforts, issuing recommendations next year for additional regulatory improvement, said Manuel Gerardo Flores Romero, coordinator of the OECD Regulatory Policy Programme in Latin America.

The Roundtable discussions are a private sector collaboration led by the USCIB, the U.S. Chamber of Commerce’s Brazil-U.S. Business Council and the Brazil National Confederation of Industry (CNI). Additional roundtable discussions will be held throughout 2021, covering investment and trade, tax, environment and sustainable development, innovation and intellectual property. Digital issues were discussed at the March Roundtable earlier this year.

USCIB Welcomes Commitment by G7 to Inclusive Global Recovery

New York, N.Y., June 16, 2021—Following the G7 Leaders’ Summit in Cornwall, UK, the United States Council for International Business (USCIB) welcomes the G7’s resolute commitment in this time of crisis to a cooperative and inclusive global recovery built on democratic values, private sector partnership, open trade, investment and sustainability.

We are proud to embrace the G7’s enduring ideals of free open societies and democracies, and its support for inclusive multilateralism in action.

We agree that tackling root causes of human rights abuses and combatting failures of integrity and transparency are essential to any effort to build back better and importantly, to also provide the fullest possible access to healthcare and vaccines worldwide.

We are committed to eliminating forced labor and other human rights abuses from global supply chains, and to advance the uptake of the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. We applaud renewed attention on eradicating corruption as it erodes public trust in government, wastes resources and presents an obstacle to needed economic and social development and our shared vision of achieving the Paris Agreement and UN 2030 Goals.

We are inspired by USCIB members mobilizing to help meet the ongoing pandemic challenge. Vaccinating the world against COVID-19 is essential to economic recovery; this urgent task will require production, as well as widespread distribution and administration of vaccines. The private sector serves as an important partner in this endeavor and can assist with vaccine-deployment strategies based on efficiency and equity. A sustainable, durable solution will address a host of issues, including: re-distribution of excess vaccine supplies to countries that face shortages; removing regulatory and trade barriers to vaccine production and distribution; efficient supply chain operations; procurement challenges; the potential risks associated with counterfeit and illicit trade in medical goods; and addressing hesitancy and misinformation about vaccines. While more needs to be done, the U.S. and G7 support for COVAX and Act-A are big steps in the right direction. Through Business Partners to CONVINCE (BP2C), USCIB is advancing actionable workplace strategies for vaccine adoption while highlighting the vital role employers play in educating their employees on the facts about COVID-19 vaccines.

We believe that private sector innovation and its wide deployment, whether in healthcare solutions, digital access or climate change, will be fundamental to attain the ambitious targets and actions set out in the communique. The G7 has emphasized the need for urgent reform and revitalization at the World Trade Organization (WTO) and incentivizing innovation as key priorities in all of these areas. We couldn’t agree more.

We appreciate the G7’s ongoing dialogue and cooperation with business, and thank the Confederation of British Industry (CBI) for coordinating this year’s B7 process.

USCIB Supports New Public Education Initiative to Combat Black Market Trade

Washington D.C., June 08, 2021—USCIB joined United to Safeguard America from Illegal Trade (USA-IT) in launching a new public education initiative designed to provide local officials, law enforcement, and thought leaders with information and training programs to help tackle illegal trade and raise public awareness of the depth of the problem as well as the severe consequences inflicted on states and municipalities by black market profiteers.

The campaign will run through 2021 across eight states facing critical illegal trade issues: Arizona, California, Florida, Illinois, Louisiana, Michigan, Pennsylvania, and Texas.

The black market is a $509 billion a year business, and it’s growing. Criminals get rich from illegal trade by robbing revenues meant to provide essential services to Americans. Instead of helping taxpayers, that money is used to fund those who illegally traffic in drugs, weapons, and even people. These groups exploit governments and citizens, manipulate financial systems, spur corruption, and cultivate instability and violence that threaten our communities.

No one government or single industry can address this complex problem on its own. Tackling illegal trade requires cooperation and public-private partnerships and fully utilizing existing expertise, information sharing, innovative solutions, and evolving technologies. Public actors, the private sector, and civil society alike all have a role to play.

For more information about USA-IT’s efforts to combat illegal trade, and to get involved, visit USAIT.org.

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. As the U.S. affiliate of the International Chamber of Commerce, the International Organization of Employers and Business at OECD (BIAC), USCIB provides business views to policy makers and regulatory authorities worldwide and works to facilitate international trade and investment. More at www.uscib.org.

About USA-IT

United to Safeguard America from Illegal Trade (USA-IT) is a public and private sector partnership protecting Americans’ security and prosperity from black market criminals.

Contacts

Sam Dashiell
T. +1 (202) 480 1617
E. contact@USAIT.org

Kira Yevtukhova
T. +1 (202) 617 3160
E. kyevtukhova@uscib.org

Global Business Welcomes New WTO Director-General Dr Ngozi Okonjo-Iweala

Photo credit: Martial Trezzini/EPA, via Shutterstock

USCIB members had two occasions in early June to hear from the new World Trade Organization (WTO) Director-General Dr. Ngozi Okonjo-Iweala on her priorities for global trade and on opportunities for business to engage with her on this agenda in the months ahead.

During the annual International Organization of Employers (IOE) General Council meeting, newly-elected IOE President Michele Parmelee (and USCIB Vice Chair) introduced Okonjo-Iweala, who gave a keynote address and then participated in a panel moderated by Parmelee. The panel, which also featured International Labor Organization (ILO) Director General Guy Ryder and Spain’s Foreign Minister Arancha Gonzales Laya, discussed the linkages between trade and employment, as well as what is needed to fully unleash the potential of trade in order to rebuild a global economy still reeling from the impact of COVID-19.

“Trade integration, underpinned by the multilateral rules framework, has brought about higher productivity, greater competition, lower prices and improved living standards,” said Okonjo-Iweala. She made the point that “trade is about people,” and asked IOE to help explain to the public that the WTO is not only about rules but about touching the lives of people in the street. She encouraged IOE to engage with WTO in demonstrating the impact of trade on job creation.

Later in the week, in another major exchange with international business through the International Chamber of Commerce (ICC), Okonjo-Iweala stressed the importance of engaging more with companies to help the WTO better develop policies for moving goods across borders.

“USCIB, the sole U.S. affiliate of the ICC, will continue to engage through ICC in the development of a process for more frequent, smaller group discussions on industry concerns,” said USCIB Director for Investment, Trade, and China Alice Slayton Clark. “As part of her engagement with industry, Dr. Ngozi Okonjo-Iweala is keen to learn how to better advance micro, small and medium enterprises that struggle to participate in global value chains and are currently handicapped by insufficient trade financing during the pandemic downturn.”

According to Clark, Okonjo-Iweala acknowledged that the WTO is facing a credibility crisis, no longer viewed as an institution “for people.” ​She indicated that to dispel this image, the WTO must return to the goals laid out in its preamble: trade negotiation should increase living standards, create jobs, and support sustainable development, yielding tangible benefits for all.  According to Okonjo-Iweala, this will also help industry overcome the misperception that it neglects civil society concerns.

Finally, Okonjo-Iweala expressed hope that, to reestablish the WTO as a functional body, the twelfth WTO Ministerial Conference in Geneva in December 2021 will yield results in four key areas:

  • Conclude twenty-year-old negotiations to curb fishery subsidies, delivering on goals from the UN 2030 Agenda for Sustainable Development.
  • Agree on a Trade and Health Initiative, to enhance international rules on addressing public health emergencies and supply chain resiliency.
  • Agree to strengthen food security, including a permanent solution to the issue of public stockholding programs especially in the face of global pandemics.
  • Agree on how to reform the dispute settlement mechanism so the WTO can resume adjudicatory functions.

She also hopes the ministerial will mark significant advancement in the Joint Initiative on E-commerce, the Joint Initiative on Services Domestic Regulation, and women empowerment initiatives. ​Further, Okonjo-Iweala looks for nations to relaunch negotiations on an environmental goods agreement and push for measures that enhance sustainability and the circular economy. Okonjo-Iweala would like ​business to ​support and assist ​​in the advancement of these outcomes.

USCIB Members Present at USTR Webinar on WTO Trade Facilitation Agreement

In partnership with the United States Trade Representative (USTR), USCIB and NTFC collaborated on a webinar related to the accelerated implementation of the World Trade Organization (WTO) Trade Facilitation Agreement (TFA) for the Committee on Trade Facilitation at the WTO.

At the core of the May 27 event was the communication that has been co-sponsored by nineteen countries, including two new co-sponsors North Macedonia and Switzerland: Australia; Brazil; Canada; Colombia; European Union; Iceland; Japan; Republic of Korea; Mexico; New Zealand; Norway; Singapore; the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; Thailand; Turkey; United Kingdom and the United States, all of which “support the timely and efficient release of global goods through accelerated implementation of the WTO Trade Facilitation Agreement (TFA).” Linked to this communication is the U.S. and Norway communication to abolish consularization.

USCIB Director for Customs and Trade Facilitation Megan Giblin and private sector representatives from Amazon, Cargill, FedEx, and Intel, joined a responsive conversation about the importance of accelerating the implementation of the WTO TFA. According to Giblin, this was a great opportunity for USCIB members to share private sector experiences related to COVID and the need for accelerated implementation of the WTO TFA.

“The TFA, from negotiation to country implementation and all stages in between, has been a priority for USCIB,” said Giblin. “We are dedicated to robust implementation of the TFA down to the best practices, such as customs bonding (Article 7) and ATA Carnet (Article 10 – Temporary Admissions), that underpin the Articles of the Agreement.  Many of the hurdles faced during COVID, and many noted in our early recommendations, could have been reduced or eliminated through accelerated implementation of TFA commitments.”

“USCIB believes that the U.S. government-led webinar sets a high bar for other governments as these domestically focused private sector dialogues continue in the Committee on TF,” added Giblin.

USCIB calls on WTO Members to sign-on to both the communication for accelerated TFA implementation and communication related to the abolishment of consularization.

USCIB Board Member Rick Johnston (Citi) Elected Chair of Business at OECD

Charles R. Johnston in 2015

USCIB Board of Directors member and Chair of USCIB’s Trade and Investment Committee Charles (Rick) Johnston has been elected as the new Chair of Business at OECD (BIAC). BIAC’s General Assembly elected Johnston on May 19 and will succeed Phil O’Reilly.

According to a BIAC media release, Johnston will lead high-level engagement opportunities, including BIAC’s participation in the annual OECD Ministerial Council Meeting and the annual meeting with the OECD Secretary General and Ambassadors. He will also guide BIAC’s overall strategy ensuring that BIAC represents the broad interests of its members.

“It is a time of transformation and rejuvenation,” Johnston said at the General Assembly meeting. “The OECD is about to hand the reins over to Mathias Cormann, its new secretary general. In that position, Mr. Cormann will lead the Organization as it takes on an enhanced role for guiding its Members and others in a sustainable recovery from a devastating global pandemic, and in an era that sees fundamental challenges to the potency of democratic governance and market-based economies. Our service as a trusted and credible adviser to the OECD has never been more important.”

Click here to view BIAC’s media release.

 

USCIB Letter to Trade Representative Tai Supports Greener Trade Policy

USCIB submitted a letter to United States Trade Representative (USTR) Ambassador Katherine Tai in response to Tai’s recent comments at the Center for American Progress Greening U.S. Trade Policy program. In her remarks, Tai outlined both the Biden Administration’s vision to green U.S. and multilateral trade policy and welcomed business engagement to share experience and ideas in this effort.

“We are keen to support a trade agenda that reinvigorates negotiations on environmental goods and services, addresses fossil fuel and fisheries subsidies, ensures compatibility between environmental and trade rules, and considers the circular economy holistically,” said USCIB Senior Vice President for Innovation, Regulation, and Trade Brian Lowry.

Lowry added: “USCIB and its members understand that resource conservation is a critical environmental consideration and that a resilient supply chain must recognize and account for the finite supply of planetary resources.”

In line with the explicit recognition of the criticality of resource conservation, the letter emphasized that outdated trade policies and international rules that restrict cross border flows of used products and secondary material feedstock continue to be obstacles to effective and efficient resource recovery. Reducing these barriers, alongside the encouragement and implementation of environmentally sound options to recycle and recover waste, will enable creative solutions that work in synergy with trade rather than impose counter-productive barriers.

Donnelly Talks Biden Administration Trade Policy With Canada’s AmCham Pacific 

USCIB Senior Advisor Shaun Donnelly was the guest speaker on a webinar titled, “Biden Trade Policy: What’s Ahead?” hosted by the Vancouver-based Pacific Chapter of the American Chamber of Commerce (AmCham) Canada. Donnelly, a former USTR trade negotiator and retired U.S. Ambassador, offered his candid assessments of the economic and political factors shaping President Joe Biden’s trade policy, with a special focus on Canada, the US-Mexico-Canada (“USMCA”) agreement, China, and the World Trade Organization (WTO).

Questions from webinar participants focused on concerns about a turn toward protectionism in the U.S., especially on government procurement in light of strong statements from the President and other Administration officials endorsing “Buy American.”

According to Donnelly, it was a “return gig” for him; in 2018, he had traveled to Vancouver as the dinner speaker at the AmCham’s annual dinner.

“It’s always good to get beyond our Washington trade policy wonk cocoon and speak with, and listen to, real business people, whether here at home in the U.S. or in key trade partners like Canada,” said Donnelly.  “Canada is obviously a unique trade partner with our integrated North American marketplace. I told the webinar participants that I am confident that the Biden Administration would be an engaged partner with Canada on USMCA implementation issues, as well as on shared global priorities like WTO reform and confronting China’s abusive trade practices as well as, of course, the full range of bilateral issues. It was a very good session. And no jet lag!”

Donnelly, Hampl Help Lead Business Input on OECD China Work

USCIB Senior Advisor Shaun Donnelly and member company Dell staffer Eva Hampl led a significant “kick-off” session for Business at OECD (BIAC) and its China Experts Group to elevate and deepen a dialogue with the OECD’s Ambassadorial-level Informal Reflection Group on China on May 3.

The BIAC China team presented concerns and recommendations on four China-related items: state-owned enterprises (SOEs) and government support; inward and outward foreign direct investment (FDI) policies; innovation and digitalization policies; and a “climate neutrality” agenda. Other key topics will be addressed in future OECD and BIAC China discussions. Over 100 participants were on session, including OECD country Ambassadors and senior delegates, OECD staff, and BIAC participants, including USCIB members.

Representing BIAC, Donnelly led on FDI issues, focusing on both sides of the China investment coin – foreign investment into China and Chinese investment in our home countries and in third country markets.  With regards to investing in China, Donnelly highlighted business concerns over lack of a level-playing field, formal and informal discrimination against foreign investors, and a lack of effective rule of law in China. On the side of Chinese FDI in our countries, he highlighted two priority concerns, including establishing strong, targeted, and enforceable national security rules on foreign investors while avoiding investment protectionism. Donnelly also noted potential problems in competing against Chinese companies , often state-owned enterprises, which have invested in our markets can be heavily subsidized back home. Donnelly’s comments sparked a good discussion on the substantive issues and on priorities for OECD Investment Committee work going forward.

Hampl, a former USCIB policy director now with Dell’s Washington office, is Vice Chair of the BIAC China Experts group. Hampl was one of three BIAC presenters on innovation and digitalization issues, highlighting that supply chain resiliency, especially in the semiconductor sector, is at the top of global concerns with China and praising the OECD for its ability to decouple economics from politics on such vital issues. Hampl also noted the importance of engaging China constructively on a range of issues related to standards, privacy, intellectual property protections, as well as the broader issues of leveling the playing field and competition against Chinese SOEs.

According to Donnelly, other BIAC colleagues made assertive presentations on the unique challenges of competing with Chinese SOEs, especially in China, but also in the U.S. and around the world.  Several participants urged that disciplines on SOEs be added to the World Trade Organization (WTO) agenda and included in bilateral trade and investment agreements.  Finally, the climate neutrality agenda item provoked broad agreement that the OECD must play a leading role in the broader effort to enlist China constructively in the global climate effort; while much remains to be done, participants agreed that engaging China on climate should be somewhat easier now that the U.S. has rejoined the Paris Climate Accord.

BIAC Executive Secretary Hanni Rosenbaum, who led BIAC in this novel, in-depth BIAC/OECD session on China, was delighted with participation and the quality of debate. Rosenbaum sees potential for deepening and expanding the BIAC/OECD dialogue on China with new leadership coming to the OECD and a growing consensus among OECD member countries that China poses unique challenges.

“I thought it was an excellent session,” said Donnelly. “The discussion was substantive, candid and forward-looking. The four agenda items are crucial, but there are plenty of other important China-related issues where BIAC can make useful contributions to OECD’s work. These high-level, cross-cutting China discussions, hopefully to be held regularly, can complement in-depth work in specific OECD committees. There is a lot of challenging work with China and the OECD can play a valuable role in this effort.”

Alice Slayton Clark, USCIB’s new director for investment, trade and China will be leading USCIB’s work on China, both specific to the OECD and more generally, going forward. If you have issues, questions, or suggestions related to China, please get in touch with Clark.

USCIB Leads in Preparations for Upcoming China Meetings at OECD

USCIB members and staff played leading roles in the April 23 China Expert Group’s preliminary meeting to preview and discuss Business at OECD (BIAC) presentations that will be made at the kick-off session of the OECD’s Informal Reflection Group on China in May. During the preliminary meeting, BIAC experts, including USCIB Senior Advisor Shaun Donnelly and Dell’s Eva Hampl (formerly USCIB and now a Vice Chair of BIAC’s China group), advanced key points that BIAC will emphasize including on state-owned enterprises (SOEs), investment, innovation and digitalization, and climate neutrality.

With regards to SOEs, Donnelly and others emphasized the importance of including provisions on SOEs in future investment and trade agreements, updating World Trade Organization (WTO) rules on subsidies, drawing China into multilateral consensus on export and development finance, as well as engaging China to reduce excess capacity in steel and rejoin the Global Forum on Steel Excess Capacity. The investment dialogue between China and the OECD should also be intensified and made more substantive, rather than political, according to Donnelly. Updating the investment policy review of China is also critical since the last review was done in 2008.

On innovation and digitalization, Donnelly noted the need to review efforts to onshore production in the name of supply chain resiliency, to study global value chains to ensure that policies are driven by OECD-generated facts and not politics and protectionism, to foster cooperation on IT and Artificial Intelligence (AI) information-sharing and standards’ development, engaging China on implementation and dissemination of AI principles and policies, as well as monitoring and acting on China’s development of virtual currency along with its impact on major currencies.

“Engaging China on harmonizing carbon pricing and emission trading schemes, pushing China more toward sustainable investment policies at home and abroad (such as their Belt and Road projects use of fossil fuels) and continuing to press for mitigation and strong environmental commitments from China is key,” said Donnelly.

Donnelly also led a discussion urging BIAC, as a business forum, to press the OECD and its member governments for substantive reform and results in its engagement with China and to worry less about protocol and diplomatic formalities.

“It was great to have USCIB and American business actively involved in BIAC’s preparations for this important China strategy session at the OECD,” added Donnelly.  “With a new Secretary General coming to OECD in June, a new U.S. Administration looking to play a leadership role at the OECD, and steadily growing concerns around the world about some of China’s policies and practices, it’s vital that Business at OECD and its American members focus on these issues of how the OECD can play a useful role with China.”

Donnelly added: “Eva Hampl from Dell did a great job leading Friday’s discussion on the innovation and digitalization issues.  She and I look forward to our roles as BIAC lead speakers in the session with the OECD China group.  It was also great to see several USCIB members logging on for the BIAC discussion, confirming that China issues, broadly defined, remain important priorities for USCIB and its broad, cross-sectoral membership.”

If members have issues, questions or suggestions related to this BIAC and OECD effort on China, please contact Allice Slayton Clark (asclark@uscib.org).