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JOURNAL OF THE UNITED STATES COUNCIL FOR INTERNATIONAL BUSINESS SUMMER 2014 VOL. XXXVI, NO. 2

INTERNATIONALBUSINESSJOURNAL OF THE UNITED STATES COUNCIL FOR INTERNATIONAL BUSINESS SUMMER 2014 VOL. XXXVI, NO. 2

BUSINESSBUSINESSBUSINESSBUSINESSInside

Internet governance 4

Workforce development 5

New ICC mediation rules 12

Rewriting the Rules of Global Taxationpage 3

2 USCIB International Business Summer 2014 www.uscib.org

It is important, however, to maintain sound principles for determining when a foreign company is subject to tax within a jurisdiction and how much of its income is subject to tax. Although the existing principles do not work perfectly, they have facilitated the development of cross-border trade and investment, and should not be abandoned lightly or in the absence of a new consensus. Any new consensus must be a true, detailed consensus where countries agree not just on a string of words, but on the meanings of those words.

Race to the finish line?

The first group of projects is now heading towards completion. These include work on intangibles as well as such seemingly esoteric topics as country-by-country reporting, tax treaty abuse, hybrids and the arm’s length principle. In today’s modern, highly integrated global economy, these issues are crucial for the operations of multinational companies and the administra-tion of national tax systems.

While the OECD does not have legislative authority, there is substantial political will behind the BEPS project and wide support from the G20 coun-tries, which are participating in the process on an equal footing with OECD member countries. But getting to a fair and reasoned outcome on a 24-month deadline is challenging, given the scale of its ambition and critical need for a consultative process with BIAC and other stakeholders to work toward consensus.

That’s why business must engage positively with the OECD, recognizing the public and political momentum behind change, and the continuing danger of unilateral action if the BEPS action plan falters. Moreover, there are many other pressing tax issues for U.S. legislators and policy makers. The chal-lenge is to pursue these in concert with the reforms being undertaken via the BEPS process, with the goal of creating a simpler, fairer and more competitive tax system for everyone.

Contact Peter Robinson at (212) 703-5046 or [email protected].

Last year, responding to concerns that multinational firms take advan-tage of gaps in the global taxation system to move income to lower-tax jurisdictions, the leaders of the G20 endorsed a plan put forward by the Organization for Economic Cooperation and Development (OECD) to counter what governments called “base erosion and profit shifting,” or BEPS.

This acronym has quickly risen to the top of many CEOs’ “worry list,” and made the annual tax conference we organized with the OECD in June (see story on page 3) even more popular than usual this year. But what’s behind the sudden rush to action in an area as contentious and fraught with complexity as global tax policy? And what might happen if governments get it wrong?

What constitutes “tax abuse”?

Tax is not a moral issue. Indeed, the OECD and others have said repeatedly that tax planning – including planning that results in base erosion and profit shifting – is entirely legal. Companies do not abuse the system by taking advantage of legal methods of reducing their taxes. Corporate tax reduction strategies have, however, caught the attention of politicians (and the public) at least in part because of the financial crisis and the resulting fiscal con-solidation. There is – and should be – a policy debate about the appropriate level of corporate income taxes.

Each country has a sovereign right to make decisions about the amount of revenue it collects, and from whom. Indeed, the ability to make decisions about taxing and spending is a core element of statehood, and a country cannot give up that ability without surrendering its sovereignty. So taxing rights are jealously guarded by countries. What then is the function of the OECD or any other multilateral organization in this core function?

In order to promote international trade and investment, countries need agreed-upon rules of the road to determine which country has taxing rights to how much income when goods or services cross borders. If there is no agreement, then uncertainty and double taxation will reduce trade and investment. The BEPS project arose out of concern that the rules for elimi-nating double taxation have gone too far and the pendulum needs to swing at least part of the way back.

Peter M. Robinson, President and CEO, USCIBthe

first word

What’s Behind the Rush on Global Tax Reform?

In their haste to tackle “base erosion and profit shifting,” governments risk fostering the kind of unilateral action they are seeking to avoid.

USCIB International Business Summer 2014 www.uscib.org 3

In the wake of the global financial crisis, cash-strapped governments have sought to replenish their treasuries, particularly in the Euro-zone where countries have imposed austerity measures. At the same time, multinational corporations have come under scrutiny for tax planning that allows them to report profits in low-tax countries.

As media coverage intensified, the Organization for Economic Cooperation and Development (OECD) and the G20 launched a project last year to revisit the rules applicable to taxation of cross-border enterprises. This project on “base erosion and profit shifting” (BEPS), aims to prevent incidences of non-taxation and develop a single, coherent and fair set of rules that ensure companies pay what they owe without creating unnecessary costs or double taxation.

Given the different interests at play, USCIB organized the OECD International Tax Conference in Washington, D.C. in June with the OECD and the Busi-ness and Industry Advisory Council (BIAC) to the OECD, bringing together national policy makers, business executives, tax experts and OECD officials to review progress on these efforts and to plot a realistic path forward.

A year after G20 leaders endorsed the OECD’s 15-point action plan, gov-ernments have made significant headway in such areas as intangibles, country-by-country reporting, tax treaty abuse, hybrids and the digital econo-my. The conference provided an opportunity to assess progress to date and look forward to the work that will occupy the OECD over the next year.

During the conference, Pascal Saint-Amans, director of the OECD Center for Tax Policy and Administration, said that the OECD was consulting close-ly and extensively with all countries and stakeholders involved in order to reduce uncertainties. “In the long run, the best way to make sure that global businesses can operate smoothly, taxed appropriately and not more than once, is for countries to work together rather than take uncoordinated, uni-lateral actions.”

According to Bill Sample, corporate vice president for worldwide taxes with Microsoft and chair of USCIB’s Taxation Committee, the conference underscored the importance and complexity of the debate around BEPS and global tax policies, and the OECD’s centrality in it. “The OECD process gathers the most important government officials, and benefits from strong business participation,” he said. “While there have been differences of opin-ion, it is clear that the OECD offers the best forum for such discussions.”

Will Morris, director of global tax policy with GE International and chair of the BIAC Committee on Taxation and Fiscal Affairs, stressed that it is naïve to think

governments won’t act on global tax rules, given public and media attention on BEPS. He argued that the OECD tax agreement offers the best option for business. Better to agree on one set of global tax rules, he noted, than to have each country unilaterally impose tax regimes that could result in corporate double taxation with no recourse for businesses if disputes arise.

“If we pay a little more tax for much more certainty, that’s positive for busi-ness,” Morris said.

OECD officials consulted the private sector frequently and openly throughout the course of the BEPS process. Carol Doran Klein, USCIB’s vice presi-dent and international tax counsel, who serves as vice chair of the BIAC Tax Committee, said tight deadlines had made input difficult, but stressed that the conference was the right forum for stakeholders to discuss their views.

“We need to ensure that the private sector can contribute meaningfully to the detailed technical work being done across a range of areas,” said Klein.

The new rules may shrink the U.S. tax base and impose additional costs on business. New rules may also pose challenges to country tax administra-tions. IRS Commissioner John Koskinen, the conference keynote speaker, warned against the development of an overly complex country-by-country re-porting system. “My hope would be that policy and legal determinations not be made without thoroughly considering the practical implications of these decisions, not only for businesses, but for tax administrations,” he stated.

As negotiations on global tax rules continue, it is important that officials remain focused on improving the international tax system with a coherent set of rules. “There is a danger to the OECD’s central mission of promoting cross-border trade and investment if the focus of the BEPS project becomes solely about anti-abuse, rather than about improving the international tax system.” Morris noted. “Furthermore, unilateral action by states is a real risk. It’s in the interest of business to have as broad an agreement as pos-sible, for the sake of certainty.”

Rewriting the Rules of Global Taxation

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IRS Commissioner John Koskinen, the conference’s keynote speaker, urged officials to consider the practical implications of changing international tax rules.

“If we pay a little more tax for much more certainty, that’s positive for business.” – Will Morris, GE


Galvanizing Support for Internet Freedoms

Now that the digital economy has become the actual economy, and a multitude of business and personal transactions take place online, Internet gov-ernance is at the forefront of the Organization for Economic Cooperation and Development’s (OECD) agenda. Who controls the Internet holds important impli-cations for business, economic development and even basic human freedoms.

Business and the world’s advanced democracies support a multistakeholder model of Internet governance that upholds the freedoms of information and ex-pression, and asserts that the liberties people enjoy offline exist online as well.

Internet governance served as the backdrop for a June stock-taking meeting of the UN’s World Summit of the Information Society (WSIS), a summit which took place a decade ago. The June stock-taking meeting in Geneva assembled government officials, business leaders and members of civil society and the technical community to review decade-long progress on promoting the use of Information and Communications Technologies (ICTs) as engines of economic and social development.

USCIB’s Barbara Wanner, vice president of ICT policy, represented private-sector interests regarding efforts to maintain a multistakeholder model for Internet governance and to bridge the digital divide between developed and developing countries.

Coordinated by the International Telecommunications Union and co-organized by three other United Nations agencies – UNESCO, UNCTAD and UNDP – the summit convened high-ranking officials who endorsed the WSIS post-2015 Vi-sion Statement, a proposal that presents a vision of bridging the digital divide by unleashing ICTs as engines of development. A recurring theme throughout the discussions was that a multistakeholder model is the best way to address Internet governance.

Daniel Sepulveda, deputy assistant secretary of state for international com-munications and information policy, captured this sentiment in his remarks: “No one country, no one institution, no one stakeholder can succeed alone. We will

have to fulfill the WSIS goals together, acknowledging our success to date and overcoming remaining challenges together.”

Controversy Over Freedom of Speech

During the meetings, participants hit a stalemate regarding an important element of the Vision Statement that addressed the role of ICTs in promoting freedom of the press. A coalition led by the UK, which included the United States, Sweden, ICC-BASIS (Business Action to Support the Information Society), Cisco and Micro-soft, promoted language that affirmed that:

• the principles of freedom of expression and the free flow of information, ideas and knowledge are essential for society and economic development;

• the same rights that people have offline must also be protected online, includ-ing the right to privacy;

• and the safety of all journalists, media workers, bloggers and their sources must be assured.

Iran, Cuba and Saudi Arabia strongly opposed this language, leading to an im-passe. But in an eleventh-hour effort to salvage a consensus on the document, UNESCO offered a compromise: eliminate the language extending protections to bloggers and sources, but continue to ground the right to free speech in the Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights.

All participants eventually endorsed the Vision Statement, which incorporated the UNESCO compromise. However, it is possible that critics will argue that the discord that emerged during the meetings over freedom of expression warrants greater governmental oversight of Internet governance.

“It will be ever-more important to continue to actively engage in initiatives and outreach aimed at building bridges with developing countries that fortify support for the multistakeholder model of Internet governance,” Wanner said.

USCIB Helps Steer Internet Stewardship TransitionInput from USCIB helped shape the decision to expand the representation of business in a transition committee tasked with devolving Internet stewardship from the Internet Assigned Numbers Authority to the global multistakeholder community, according to Barbara Wanner, USCIB’s vice president of ICT policy.

USCIB’s comments were cited in a document released by the Internet Corporation for Assigned Names and Numbers regarding the transition of Internet stewardship. The International Chamber of Commerce’s Business Action to Support the Information Society was assigned a seat on the coordination com-mittee to serve as a representative of the larger business community. USCIB is the American affiliate of ICC.

IRS Commissioner John Koskinen, the conference’s keynote speaker, urged officials to consider the practical implications of changing international tax rules.


Calls for Education Reform at the IOE Leaders’ Summit

The June Interna-tional Organization of Employers (IOE) Lead-ers’ Summit in Geneva convened business or-ganization leaders from around the world who discussed the main op-portunities and challenges to future business sustainability. The summit took place during the International Labor Or-ganization (ILO) Conference, which focused on closing the workforce skills gap and reforming the labor market. USCIB is the IOE’s U.S. affiliate.

USCIB President and CEO Peter Robinson delivered remarks during a summit panel discussion, titled “Predicting the Unpre-dictable: Skills for the 21st Century.” He outlined some of the challenges employers and workers face as a result of rapidly developing technologies – such as the possibility of machines displacing human workers – and made the case for education reforms that will equip the workforce with the skills necessary to thrive in the digital economy.

In order to address the challenges posed by new technolo-gies, Robinson argued that the education system must instill future employees with the character traits needed to succeed in the new economy: curiosity, enthusiasm, a strategic mind-set and the ability to construct systems that leverage vast computational power. Old teaching methods, such as rote memorization and test-taking, will not be as valuable.

Robinson also called for an improved connection between school-based learning and work-based training, with more sensible and coherent apprenticeship and internship pro-grams, and made the case for lifelong learning rather than just childhood education. Companies must also develop training programs that prepare workers for both current and future jobs.

“We also need governments and the private sector to work together to provide the kind of robust infrastructure needed to access the transformational power of the Internet and other technologies.” Robinson said, and cited the Colombian gov-ernment’s recent efforts to upgrade citizens’ access to Inter-net through a broadband rollout program as a good model.

“We need to prepare ourselves as best we can, working to-gether to help determine what people need to learn for the 21st-century workplace. And we need to get started right now,” Robinson concluded.

ILO Conference HighlightsUSCIB represented American employers at the 103rd Session of the International Labor Conference in Geneva from May 28 to June 12. The International Labor Conference is the highest decision-making body of the International Labor Organization (ILO), which brings together government delegates from the organization’s 185 member states, rep-resentatives from workers’ organizations and employers’ organizations to discuss a wide range of employment and workforce development issues.

Goldberg Re-elected to ILO Governing Body

Ronnie Goldberg, USCIB’s senior counsel, represented the International Organization of Employers (IOE) Management Board and stood for re-election to the Governing Body of the ILO and for reappointment as an IOE regional vice president. She also participated in the International Labor Conference Committee on Employment, which focused on setting ILO employment priorities. Goldberg was re-elected to the governing body with the high-est number of votes among all candidates standing. She will serve from 2014 to 2017.

Honoring Ed Potter

During the IOE Leaders’ Summit, the Employers’ Group paid tribute to Ed Potter, the employers’ spokesperson, thanking him for his many years of expertise and service to the employer cause at the International Labor Conference. Potter chairs USCIB’s Labor and Employment Committee and is the director of global workplace rights at The Coca-Cola Company. After three decades of championing business at the ILO Confer-ence, Potter will retire next year. His work in this year’s discussion on forced labor was described as “masterful.”

USCIB held a dinner in Geneva at the Cercle de la Terasse, hosted by USCIB President and CEO Peter Robinson, in honor of both Potter and USCIB Senior Counsel Ronnie Goldberg, who had been reelected as U.S. member of the ILO Governing Body. Robinson and USCIB Vice President for Labor Affairs Ariel Meyerstein toasted Potter and Goldberg “for their decades of service representing business and employers, working in tripartite partnership to promote economic growth, job creation and social development.”

Peter Robinson (USCIB)

Ed Potter (Coca Cola) addressing the ILO Conference


Business Participates in UN Climate Talks

Ahead of a planned global climate agreement in Paris next year, government negotiators as-sembled in Bonn, Germany in June for the next round of UN climate talks. These summer sessions of the United Nations Framework Convention on Climate Change (UNFCCC) focused on “raising am-bition in areas of urbanization and land use.”

Negotiators have been tasked with designing the 2015 agree-ment and finding ways to raise political ambition to address climate change before 2020.

USCIB’s Norine Kennedy, vice president for strategic international engage-ment, energy and environment, attended the Bonn climate talks and spoke on behalf of business and industry groups.

“We want to work with you so we can achieve a deal that involves all coun-tries, motivates all actors, and delivers economic and environmental benefits to all,” Kennedy told government officials at the meeting.

She stressed that governments will benefit from listening to what business considers priority elements that should be reflected in the 2015 climate agreement. Kennedy noted that the agreement should work with markets on issues such as carbon pricing, and she urged governments to build flexibility into the treaty so that countries can adjust to future scientific, technological and economic innovations. Due to limited resources, Kennedy said the final agreement should promote cost-effective, market-based actions.

“The UNFCCC’s attention to non-state actors, such as business, has opened a promising area of cooperation and further work to supplement and amplify govern-ment efforts,” Kennedy noted.

Ultimately, the new global climate agreement will include sections on greenhouse gas reduction commitments, adaptation to cli-mate change impacts, technol-ogy and finance for developing countries, transparency and re-

porting, and “nationally determined contributions” (NDCs).

NDCs are a U.S. proposal to allow each country, whether developed or devel-oping, to set out its pledges for action on climate change. The NDC model differs from the previous Kyoto Protocol approach, which was built on top-down targets. Business representatives in Bonn sought to understand where the private sector would weigh in during the national and international stages of this pledge model.

During the talks USCIB met with members of the Inter-Governmental Panel on Climate Change, and with the “Umbrella Group” – a coalition of countries including the U.S., Canada, Norway, Israel, New Zealand, Australia, Japan, Russia – to discuss information needs from business for the NDCs, the fu-ture of carbon markets and the role of business in the new climate treaty to be finalized in Paris. USCIB is working with the Major Economies Business Forum, and the International Chamber of Commerce, which serves as the official business focal point for the UNFCCC.

continued on page 7

Coalition for Green Trade Endorses WTO’s Environmental Goods AgreementUSCIB joined with other U.S. business groups in July to form the Coalition for Green Trade to support new negotiations by World Trade Organization (WTO) members that would remove trade barriers on environmental technologies. The coalition has called on members of the WTO to negotiate an ambitious Environmental Goods Agreement (EGA), which would eliminate trade barriers on a broad range of environmental goods, such as solar panels and recycled materials.

In addition, USCIB joined with a broad range of business associations and companies from around the world in calling for an EGA. An open letter to WTO negotiators signed by USCIB stated: “We are committed to working with governments around the world to ensure a commercially meaningful Environmental Goods Agreement that promotes economic growth, improves environmental outcomes and advances innovation.”

Global trade in environmental goods is estimated to be $1 trillion annually, and trade in environmental products more than doubled from 2001 to 2007. An EGA would further increase global trade in environmental goods and lower the cost of addressing climate challenges by removing steep tariffs, the groups said.


USCIB Chairman Meets with Chinese Premier

The second annual International Chamber of Commerce (ICC) Asia Pacific CEO Forum concluded in May in Kunshan, China, showcasing the vibrancy of Asia’s business community. The two-day forum explored the ways in which the Asia-Pacific region can help stimulate the global economy as it rebounds from crisis.

Garnering the views of the region’s business leaders, the forum featured interac-tive panel discussions and networking opportunities for some 300 international business leaders. Forum participants also joined an ICC G20 policy consulta-tion, contributing business views from the region into ICC’s business recommen-dations to G20 leaders. The ICC’s activities in China underscore the international business community’s efforts to establish a greater presence in Asia.

Following the CEO forum, a delegation of leaders from ICC that included USCIB and ICC Chairman Terry McGraw met with the Premier of the People’s Repub-lic of China, Li Keqiang, in Beijing. Led by McGraw, the delegation included Jean-Guy Carrier, ICC secretary general; Jiang Zengwei, chairman of the China Council for the Promotion of International Trade; Lin Shunjie, secretary general of ICC China; and ICC executive board member Andrea Tomat, CEO of Lotto Sport Italia.

Joined by Chinese government officials, the high-level meeting focused on ICC’s work to promote multilateral trade and investment. World business leaders praised the premier for China’s new pathway to economic reform and encour-aged greater focus on trade and investment initiatives, including working to implement the World Trade Organization (WTO) Trade Facilitation Agreement, protecting intellectual property, lowering barriers to trade and investment, and fighting corruption.

“China is a vital economy and a key player in helping design global economic governance and reform in key forums such as the G20,” said McGraw. “One important step now for China to pave the way for greater market opening that creates more opportunity and higher growth throughout the world, is to demon-

strate strong support for implementing the WTO agreement reached last year in Bali.”

The meeting also raised awareness of ICC’s essential products and services that can support Chinese companies expanding to international markets and meet the challenges and opportunities of an increasingly integrated global economy. These include ICC’s commercial dispute resolution services, practical trainings, and voluntary rules, guidelines and codes that facilitate cross-border transactions and help spread best practice among companies.

Prior to the meeting with the Chinese premier, McGraw advocated for a post-Bali World Trade Agenda to create jobs and growth during the opening of the CEO forum.

ICC Launches Marketing Code in MandarinICC has unveiled the first official Mandarin translation of the Consolidated ICC Code of Advertising and Marketing Communications Practice, the updated version of a document first published in 1937. The ICC Code serves as an ethical rule-setting guide for self-regulatory bodies across all sectors, and is designed to build consumer trust in advertising practice while reducing the need for government regulation.

The Mandarin version of the ICC code was shared with the 1,300 delegates attending the 43rd World Advertising Congress in Beijing in May. The code serves as the gold standard for self-regulation around the world, offering a globally consistent baseline for economies developing standards while also providing flexibility for local laws and culture.

This ninth revision of the ICC code, published in 2011, expands its global principles to address new technology and practice changes. Now published in 11 languages, the code is used as a foundation and resource for most national and sector self-regulatory systems. Self-regulatory bodies implement the principles to monitor advertising and provide consumers with easy access to make complaints and redress problems.

USCIB Chairman Terry McGraw (left) shakes hands with the Premier of China, Li Keqiang during the ICC Asia-Pacific CEO Forum in China.

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Former Ambassador John Danilovich Elected ICC Secretary GeneralGlobal business leader and diplomat John Danilovich became ICC’s new secretary general in June. A selection committee appointed by the ICC Executive Board reviewed the qualifications of more than 300 candidates before selecting Danilovich based on his credentials in the international arena and extensive experience with trade related issues. “John will be an outstanding secretary general,” said ICC and USCIB Chairman Harold (Terry) McGraw III, who is chairman of McGraw Hill Financial. “His ex-perience and deep understanding of global markets as a business leader will be incredibly important to ensure public-private sector engagement in driving economic growth, creating jobs and raising standards of living around the world. We are pleased he will be taking the lead of the world’s business organization.” Danilovich has been active in the international maritime industry for several decades, holding executive board positions in a number of companies. USCIB President and CEO Peter M. Robinson said he looked forward to working with Danilovich. “We believe ICC has made an excellent choice,” he said. “The entire USCIB team stands ready to help John develop ICC into an even more authoritative and effective business voice on the global stage.” Danilovich served as the U.S. Ambassador to Brazil and to Costa Rica, and from 2005 to 2009 was the chief executive officer of the Millennium Challenge Corporation, an innovative and successful foreign aid program. “I greatly look forward to working with ICC professionals, leadership and national committees around the world to strengthen the organization’s role and visibility,” Danilovich said. “This is an exciting organization at a crucial moment in its development.”

At OECD, Business Urges Push on Growth and Jobs“We are at a critical juncture in the quest for a sustainable global economic recovery,” said BIAC Chair Phil O’Reilly at the OECD’s annual Ministerial Council Meeting in Paris in May. He led a large business delegation that urged governments to provide a consistent and enabling framework for companies to invest, create jobs and grow. BIAC encouraged Ministers to make good use of the potential the OECD holds in the struggle for greater policy consistency in and across OECD economies and on the global level. “The work of the OECD to come to a better understanding of the challenges we are facing today with growth remaining below its potential in many economies is highly valuable,” said O’Reilly. “Good knowledge about the significance of global value chains is vital for informed policy decisions concerning trade and investment. We also advocate a strong role for the OECD to facilitate International Regulatory Cooperation to mitigate regulatory burdens for companies and barriers to trade”.

Business Priorities on TradeBIAC held its bi-annual trade committee meeting in Paris in May, where 15 participants from a wide range of countries contributed to shaping BIAC’s strategic directions on trade. USCIB’s Senior Vice President for Policy and Government Affairs Rob Mulligan attended the meeting, which was followed by a strong BIAC delegation participating in a series of OECD Trade Committee meetings. Members to the committee discussed next steps for the recently released Business Priorities on Trade paper, and had an opportunity to present their work and views to the OECD Trade Committee. The Business Priorities on Trade paper provides recommendations to OECD on trade in services, global value chains, localization barriers to trade and the movement of business persons. BIAC will work closely with its members and OECD to explore these issues further throughout 2014 and 2015.

International Chamber of Commerce www.iccwbo.org

Business and Industry Advisory Committee to the OECD www.biac.org

John Danilovich


International Organization of Employers www.ioe-emp.org

Support for “Invest in America” BillUSCIB joined the Organization for International Investment and a number of other trade associations in May in sending a letter to Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell promoting the Global Investment in American Jobs Act of 2013 (S. 1023/H.R. 2052). H.R. 2052 passed the House of Representatives in September 2013, and was approved by the Senate Committee on Commerce, Science and Transportation on April 9 of this year. The coalition letter urges Senators Reid and McConnell to take swift action on the bill. “Foreign direct investment is vital for American jobs and economic growth,” said Shaun Donnelly, USCIB’s vice president for investment and financial services. “In order to remain globally competitive and attractive to foreign investors, the United States should undertake the measures provided for in this bill.”

Yohannes Sworn in as U.S. Ambassador to the OECDDaniel W. Yohannes, former CEO of the Millennium Challenge Corporation, was sworn in at the State Department as the United States Ambassador to the Organization for Economic Cooperation and Development (OECD) in June. Deputy Secretary of State Bill Burns presided and swore in Ambassador Yohannes. OECD Secretary General Angel Gurria was a special guest. Shaun Donnelly, vice president for investment and financial services and himself a retired U.S. ambassador, represented USCIB at the ceremony. A philanthropist and businessman from Englewood, Colorado,

Yohannes has more than 30 years’ experience in banking and economic development. As CEO of the Millennium Challenge Corporation, Yohannes oversaw the independent U.S. foreign aid agency in its fight against global poverty. The United States Mission to the OECD is headed by the ambassador, who will communicate U.S. views and interests to other OECD members and will represent the United States in the OECD’s governing council.

“Insourcing” is Only Part of the PictureIn May, as a White House event celebrated “insourcing” – investment in the United States by foreign companies – USCIB’s Shaun Donnelly spoke with the public radio program “Marketplace” on the importance of supporting both inward and outbound investment. The latter, he said, also underpins American jobs and improves U.S. growth and competitiveness. Donnelly has also been regularly making the case for foreign direct investment on his blog at Investment Policy Central, a news portal run by USCIB and other business associations that serves as an information center that supports an open investment climate globally and contributes to understanding of how FDI translates into jobs, exports, innovation and economic growth for the U.S. economy.

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New IOE President Daniel Funes de Rioja Assumes RoleThe new president of the IOE, Daniel Funes de Rioja, began his three-year mandate in May following his unanimous election at last year’s IOE General Council. Prior to his election, Funes de Rioja, from Argentina, served as IOE’s executive vice president under outgoing President Tan Sri Dato’ Azman of Malaysia. Speaking to the IOE General Council upon his election, Funes de Rioja thanked his predecessor for “firmly establishing the IOE as the global voice of business on the inter-national stage.” IOE Secretary General Brent Wilton congratulated Funes de Rioja and said the incoming president “brings to the presidency of the IOE decades of experience representing employers across the range of international forums affecting business.”

Employer Warning on Proposed Human Rights TreatyThe IOE issued a statement about Ecuador’s push for a new, binding UN treaty on business and human rights, saying the initiative “risks shifting the state’s responsibil-ity to protect human rights to the private sector” and “may result in new forms of extraterritorial jurisdiction.” The treaty may also cause companies to incur ad-ditional liabilities. In June the UN Human Rights Council voted to adopt the Ecuador initiative – with 20 states in favor, 14 states opposed and 13 abstentions – break-ing the unanimous consensus on business and human rights achieved in 2011 with the endorsement of the UN Guiding Principles on Business and Human Rights. The IOE stated the vote is “a genuine setback to the efforts underway to improve the human rights situation and access to remedy on the ground.”


Business Coalition Action on WTO Trade Facilitation Agreement

The World Trade Organization (WTO) Agreement on Trade Facilitation holds the potential to significantly bring down transaction costs borne by business and consumers. WTO members reached a consensus on the agree-ment at the Bali Ministerial Conference last December. If the agreement is implemented after almost a decade of ne-gotiations, it could increase global GDP by over $1 trillion.

Representing American business inter-ests, Kristin Isabelli, USCIB’s director of customs policy, attended International Chamber of Commerce (ICC) Trade Facili-tation and Customs Commission meetings in Paris in June, where she showcased the work of the Global Trade Facilitation Agree-ment Coalition – a partnership between US-CIB, the U.S. Chamber of Commerce, the National Foreign Trade Council and the Express Association of America – in helping to move the agreement forward.

The international business community, represented by the coalition, has much to gain from the WTO trade agreement. The agreement is estimated to cut the cost of trade by 10 percent in developed countries and by 15 percent in developing countries. It will also create new jobs and slash red

tape at the border. The coalition came together to organize private sector interests and to develop a strategic action plan to optimize the agreement’s implementation.

Isabelli noted that the coalition seeks to work closely with ICC, the WTO and the World Customs Organization and stressed the importance of working with different countries’ local business com-munities.

“The agreement is going to be a heavy lift,” said Isabelli. “We want our coalition to be a global initiative.”

The coalition aims to be inclusive within the business community and plans to coordi-nate among the private sector and among the WTO member governments. Given that

the agreement’s implementation will take a long time, Isabelli described the process as a “marathon versus a sprint,” and that business needs to be pre-pared to put its energies into the agreement for the long term.

“We are working very closely with our own government, and they are thrilled that we are setting up this coalition,” Isabelli said of the U.S. government. “They want to work closely with us.”

Trade and investment have become more intertwined, reinforcing and in-terdependent, USCIB President and CEO Peter Robinson told the annual OECD Forum in Paris in May, stressing the importance of global value chains and the need for smarter policies to foster foreign direct invest-ment – 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. 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 discus-sion along with trade.

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 Partner-ship, the Transatlantic Trade and Investment Partnership, 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.”

Scoping Out the Future of Global Trade


The global economy has much to gain from the full empowerment of women in the work-force. Business initiatives remain necessary for driving women’s advancement, but progress toward that goal remains slow and uneven ac-cording to a survey report released in June by the Business and Industry Advisory Council to the OECD and Deloitte entitled Putting All our Minds to Work: An Assessment.

The report assesses recent changes in corpo-rate practice to advance women into leadership positions. Women’s entrepreneurship served as the focus of a BIAC Workshop in Paris in June, which brought together companies, en-trepreneurs, governments and OECD officials to discuss the challenges women face in starting and growing their businesses.

USCIB’s Ronnie Goldberg, senior counsel and chair of BIAC’s Committee on Employment, Labor and Social affairs, said: “This is an ex-citing opportunity for BIAC to stimulate creative and innovative thinking on best practices and policies necessary to support women’s enter-prises across all sectors of the economy.”

Some 66 percent of surveyed companies report-ed an increase in the percentage of women in executive leadership positions since 2010. Forty-seven percent of companies have introduced policy and practice changes aimed at women at the managerial level, and 44 percent have done so for women in executive leadership positions.

Despite progress, more than half of the respon-dents had not recently introduced new plans to promote women in their workplace.

“The survey results show that while progress is being made, more effort is required across the board before organizations can generate greater economic empowerment of women,” said Ber-nhard Welschke, secretary general of BIAC. “Neither economies nor companies can afford to miss out on the contributions of women. Prog-ress depends on senior leadership in business and government, as well as in society working together to support women in the workforce and encouraging them as entrepreneurs.”

The report explains that the greatest catalysts for female empowerment within organizations are the CEO, senior managers and the board. Laws, political leadership and corporate gov-ernance were seen as comparatively more

promising in markets without female hiring quotas, and the media and academia in markets with quotas, all pointing to the fact that more must and can be done.

“Talented women are making their own choices - and too many are choosing simply to step off the corporate ladder believing further ad-vancement is not available to them. This has to change and change needs leadership,” said Steve Almond, chairman of Deloitte Global.

New Report on Companies’ Efforts to Empower Women

© 2014. For information, contact Deloitte Touche Tohmatsu Limited.

Empowering more women within the workforce not only makes good business sense,

but creates economic growth and social development. Deloitte is proud to support the

USCIB and BIAC report, Putting ALL our minds to work: An assessment. The report looks

at changes in company practices and the policy environment to advance women in work.

www.deloitte.com

Putting ALL our minds to work


ICC Launches New Mediation Rules in North AmericaAt any given moment, multinational corporations are involved in thousands of cross-border legal disputes around the world. Big companies like Shell have 10,000 disputes going on at any given time, many of which are international, according to Doug McKay, vice president of international organizations at Shell. Since going to court takes time and costs money, companies find alternative dispute resolution (ADR) outside of courts increasingly attractive. One form of ADR, mediation, in which a third party mediator assists the disputants to negotiate a settlement, offers companies an efficient way to resolve cross-border disputes.

Last May, the International Chamber of Commerce (ICC) held a promotional event to celebrate the North American launch of its revised mediation rules, hosted by the law firm Simpson Thacher in New York City. The event was or-ganized by SICANA, the U.S. corporate entity responsible for the administra-tion of North Ameri-can cases under ICC dispute resolu-tion rules and the promotion of ICC dispute resolution services. Josefa Sicard-Mirabel is the executive direc-tor of SICANA and heads up the team in charge of the educational and training programs in North America.

Administered by the ICC International Center for ADR, the new rules were drafted by the Commission on Arbitration and ADR, a task force of dispute resolution specialists and company representatives from 29 countries. The new mediation rules replace the former ICC ADR rules, a name-change that “re-flects the reality that 90 percent of cases are mediation cases,” said Andrea Carlevaris, secretary general of the ICC International Court of Arbitration®.

“The main value of the ICC mediation rules is they can help parties overcome hurdles,” said Hannah Tümpel, senior counsel and manager at the ICC In-ternational Center for ADR, during a panel discussion. Tümpel was involved in the revision of the new mediation rules.

She said that the new rules make it easier for parties to overcome common obstacles that thwart mediation. If one disputant wishes to mediate, but is wary about approaching the other party for fear of showing weakness, the disputant can contact the ICC International Center for ADR, and the center will assist the parties in considering a proposal to mediate even if there is no prior mediation clause in their contract. The ICC will also help pick a neutral mediator, and can even provide a list of qualified mediators that both parties agree upon. Once both parties agree to mediate, the new rules describe the conduct of mediation and stipulate that both parties must bear the cost of mediation in equal parts, unless agreed upon otherwise.

During the event, the first panel discussion covered mediation’s relevance to businesses today. The participants noted that mediation has become a more common and important form of cross-border dispute resolution, and companies are increasingly interested in law firms’ success rates with mediation.

“If you’re not into mediation, you’re not the right lawyer for us,” said panelist Theresa Garcia-Reyes, senior counsel, litigation, GE Oil & Gas at General Electric.”

Deborah Masucci, chair of the International Mediation Institute, noted that organizations like ICC help add credibility to the mediation process, particularly when disputants involve an American corporation in foreign jurisdictions where the foreign party may be distrustful of a U.S. mediator.

The evening’s sec-ond panel discus-sion focused on the new mediation rules and how they help disputants ini-tiate, conduct and pay for mediation proceedings. Car-levaris and Tümpel explained the new rules and their at-

tendant guidance notes, while Robert Smit, partner and co-chair of the Inter-national Arbitration and Dispute Resolution Practice at Simpson Thacher offered the American perspective on the new rules.

While the new rules aren’t relevant for purely domestic U.S. disputes, Smit ex-plained that for the U.S. market, “the real value of ICC mediation rules lies in international dis-

putes.” He said that under the new rules an American corporation can ask the ICC center to contact the other disputant to get the ball rolling on mediation. Smit also cited the benefit of having the ICC pick the location and language of the mediation, which eliminates the burden of leaving those contentious choices up to the mediator. Also, most American disputants don’t know where to find a qualified mediator in jurisdictions outside the United States, so Smit appreciates that the ICC can provide a list of qualified mediators to the disputants.

“Mediation has imposed itself as the main form of amicable dispute resolution,” Carlevaris concluded. The new ICC rules facilitate the mediation process, help-ing to avoid common obstacles and stalling.

“If you’re not into mediation, you’re not the right lawyer for us.” – Teresa Garcia-Reyes, GE

L-R: Hannah Tümpel (ICC International Center for ADR), Robert Smit (Simpson Thacher), Jason Fry (Clifford Chance LLP) and Andrea Carlevaris (ICC International Court of Arbitration ®)


By presidential decree, the third week of May is World Trade Week, an occasion for events around the country celebrating trade’s contributions to the American economy. USCIB was once again a lead organizer of World Trade Week in New York City, a series of conferences, panels and celebrations that drew trade organizations and businesses from across the country to promote global commerce. Cynthia Duncan, USCIB’s senior vice president for trade services, sits on the World Trade Week steering committee.

World Trade Week provides a unique networking opportunity for small businesses seeking to go global, and it serves as a reminder to stakeholders of the importance of international trade to New York City and the U.S. economy. This year’s celebration stressed how businesses can take advantage of technology to innovate and expand internationally.

Festivities began with the 9th Annual International Trade Awards Breakfast at Baruch College. Eight companies were recognized for outstanding contributions to global trade. After the awards breakfast, USCIB’s Duncan presented the inaugural World Trade Week NYC Next Generation Program scholarships to college students who demonstrated “strong scholastic achievement and service to their community.”

The World Trade Week NYC committee of the New York District Export Council developed this scholarship fund to inspire young professionals to pursue careers in international trade. Duncan awarded $1,000 scholarships to Kyaw Htoon, majoring in international business at Baruch College,

and Elizabeth Pulos, enrolled in the Department of International Trade and Marketing at the Fashion Institute of Technology.

World Trade Week events run the gamut from talks on “The Politics of Trade: TTP, TTIP, TPA” to information sessions about “Copyright Strategies for Your Business.” Duncan spoke at one such event, “Export Smarter: Tricks of the Trade,” where she gave a presentation on USCIB’s ATA Carnet trade services to an audience of exporters.

“It’s a merchandise passport,” Duncan said of the ATA Carnet. “Think of it as a tool that allows you to explore markets outside the U.S.”

The ATA Carnet is a customs document that allows businesses to easily export commercial merchandise without paying duties or value-added taxes. Seventy-four countries participate in the Carnet International Convention, and the Carnet can be applied to a wide range of items for trade and commercial purposes, including, Duncan noted, five human skulls that were shipped to a museum in Sweden.

USCIB serves as the U.S. national guaranteeing association for the ATA Carnet. Merchandise passports are good for the temporary importation of commercial samples, professional equipment and goods for trade exhibitions and fairs.

Each year, the World Trade Week steering committee works together to highlight the link between international trade and New York City’s economic growth, as well as to help businesses share knowledge, resources and ideas for succeeding internationally.

USCIB Celebrates World Trade Week in New York City

Bahrain Set to Accept Merchandise PassportsIn June, Bahrain joined the community of countries that accepts ATA Carnets, the international customs documents that allow goods to enter signatory countries and their territories tax- and duty-free for up to one year. USCIB administers the Carnet system in the United States.

The United States has a strong trade relationship with Bahrain, which was cemented in 2006 with the signing of the U.S.-Bahrain Free Trade Agreement. “Though the FTA has nurtured the relationship between Bahrain and the United States, there is still room for additional growth, and the ATA Carnet will only encourage that growth,” said Cynthia Duncan, USCIB’s senior vice president for trade services.

Bahrain is one of the United States’ largest trading partners. The export of U.S. goods to Bahrain in 2012 totaled $1.2 billion, giving the U.S. a trade surplus with Bahrain of $508 million. “ATA Carnet implementation will only help continue to grow our trade relationship and specifically our exports to Bahrain,” said Duncan.

USCIB’s Cynthia Duncan (center) awards the inaugural World Trade Week Next Generation Program Scholarships to Elizabeth Pulos (left) and Kyaw Htoon (right).


USCIB member

and staff news

Eric H. Loeb, vice president of international external affairs with AT&T, has been named the new chair of USCIB’s Information, Communications and Technology (ICT) Committee.

Loeb, whose term began July 1, will oversee the committee’s development and delivery of business views on information technology and Internet policy developments worldwide. He will succeed Ambassador David Gross, a partner with Wiley Rein, who is stepping down as chair of the USCIB committee to become president of the Federal Communications Bar Association.

“We are delighted that Eric Loeb will lead our ICT work at this important juncture in global discussions about the digital economy,” said USCIB President and CEO Peter Robinson. “As an active participant at bilateral and multilateral meetings every year, a frequent speaker at international ICT events and a practitioner with experience working in countries around the world, he brings hands-on experience shaping policy on the global stage.”

Loeb also chairs the International Chamber of Commerce (ICC) Task Force on the Internet and Telecommunications. He is a member of the board of the U.S. Telecommunications Training Institute, and serves on the U.S. State Department Advisory Committee on International Communications and Information Policy.

USCIB’s ICT Committee advocates sound international policy to ensure the continued growth of ICTs, emphasizing free and fair competition, minimal government intervention, free information flows and a user orientation. It works through USCIB’s overseas network of business groups, including ICC and the Business and Industry Advisory Committee (BIAC) to the OECD, to secure strong industry representation and input to major multilateral discussions of ICT issues.

“I am eager for this new opportunity, especially to build on the positive contributions that U.S. business makes to the global digital economy,” said Loeb. “USCIB is the consensus voice of American business in international ICT policy forums, and colleagues around the world value the quality and balance of its contributions.”

New USCIB MembersWe are delighted to welcome the following companies and organizations as the latest additions to USCIB’s diverse membership:

To learn more about how USCIB membership can benefit your organization, contact Alison Hoiem (202-682-1291 or [email protected]).

EvershedsFoley & Lardner LLPGoDaddy

AT&T’s Loeb to Spearhead Internet Policy Work

Eric H. Loeb (AT&T)

Now Available in the USCIB International Bookstore

To celebrate a new title, Using Franchising to Take Your Business International, the US-CIB International Bookstore is offering a 10 percent discount on this title and two bundle options.

International franchising can be highly rewarding. Why, when and how a successful franchi-sor should go international are some of the questions addressed by this book. This guide will help you decide whether to take the next step by outlining the difference between com-mon law and civil law, as well as legislation in different countries and states. Aside from legal considerations, this title covers the business issues of potential risks and pitfalls, market and financial research, and candidate choice. Country-specific information and checklists will allow you to customize your franchise contracts.

For more information on any of our titles and to place your order, please visit the USCIB International Bookstore at http://store.internationaltradebooks.org/ or contact us at 212.703.6066.


upcomingevents

Save the date!International Arbitration in Latin America: The ICC PerspectiveNovember 2-4, 2014 Miami

ICC’s annual Miami conference is the key forum for understanding international commercial arbitration in Latin America. This confer-ence provides an indispensable update on developments in the region and is the most important gathering for the Latin American arbitration community. Not only does it offer a line-up of top-class speakers, topical discussions and relevant news, but also an excel-lent opportunity to network. The conference attracts approximately 400 participants representing about 30 nationalities. The confer-ence will be held in English, Portuguese and Spanish with simultaneous interpretation. Don’t miss the one day advanced level training on “Conduct of the proceedings and case management – the arbitrator’s perspective” on Sunday, November 2. Contact Alexan-dra Akerly ([email protected]) for more information.

Save the date!International Leadership Award DinnerNovember 19, 2014 Four Seasons Hotel Washington D.C.

Last year was a watershed moment for global trade, as World Trade Organization members concluded a long-awaited global agreement on trade facilitation at their Bali Ministerial. Join USCIB members and friends as we honor a prime architect of the agreement, WTO Director General Roberto Azevêdo at our 2014 International Leadership Award Dinner, held for the first time ever in our nation’s capital. Director General Azevêdo is the first public-sector official to be honored with USCIB’s International Leadership Award, which recognizes outstanding contributions to world trade and investment and for improving the competitive climate for U.S. business. This year’s award gala coincides with a meeting in Washington, D.C. of the International Chamber of Com-merce’s Executive Board, chaired by USCIB Chairman Terry McGraw, whose members will be among our special guests at the dinner gala. For information on sponsorship opportunities, please contact Abby Shapiro ([email protected]).

International Business Forum on Integrating Respect for Human Rights in BusinessLearning from Best Practices of Leading CompaniesSeptember 18, 2014National Center for Civil and Human Rights Atlanta

USCIB, the U.S. Chamber of Commerce and the International Organization of Employ-ers are again partnering to hold a major business forum on business and human rights. The forum will include a frank and open discussion on the importance and challenges of integrating human rights in business. It will provide a unique opportunity to engage with business leaders and other experts in this emerging field, and partici-pants will come away with a better understanding of how to integrate human rights as part of their overall corporate responsibility. Progress made at the global level will be discussed based on guidance provided in the UN Guiding Principles on Business and Human Rights. Contact Rachel Spence ([email protected]) or visit www.engaging-business.org for more information.

1212 Avenue of the Americas, New York, NY 10036

august 2014

18 - 19 Harbin, China APEC 3rd Senior Officials Meeting (SOM III)

september 2014

2 - 5 Istanbul Internet Governance Forum2 - 3 Beijing APEC Energy Ministerial9 New York 9th Annual ICC New York Arbitration Conference16 - 29 New York 69th Session of the UN General Assembly18 Atlanta 7th Annual USCIB Human Rights Conference23 New York UN Climate Summit

october 2014

2 New York ICC Commission on Marketing and Advertising6 - 7 Houston 2nd Annual ICC Houston Arbitration Conference13 - 16 Geneva UNCTAD World Investment Forum18 Tokyo ICC Commission on Arbitration and ADR21 Washington, DC USCIB Corporate Responsibility Committee22 Washington, DC USCIB Labor and Employment Policy Committee22 - 23 Paris ICC Supply Chain Financing Summit30 Washington, DC USCIB/OECD/BIAC Conference on Trade

november 2014

2 - 4 Miami International Arbitration in Latin America: The ICC Perspective3 - 7 Istanbul ICC Banking Commission8 - 10 Beijing APEC CEO Summit13 Geneva IOE Working Group on Business & Human Rights15 - 16 Brisbane, Australia G-20 Summit19 Washington, DC 2014 USCIB International Leadership Award Dinner

december 2014

1 - 12 Lima, Peru UN climate talks (COP 20)

International Business is published quarterly by the United States Council for International Business. It is intended for infor-mational use only and should not be construed as an authoritative statement of USCIB views or policy.

We welcome your comments and submissions E-mail them to [email protected] or submit by mail to: Editor, International Business, United States Council for International Business, 1212 Avenue of the Americas, New York, NY 10036.

Visit www.uscib.org or see our monthly e-newsletter, “What’s New at USCIB,” for the latest news and information from USCIB and our global business network. USCIB members may also visit our password-protected Members Only section to review materials from USCIB committees and other exclusive information.

How to subscribe: USCIB members may request this publication free of charge by con-tacting USCIB Member Services (212-703-5095, [email protected]). Non-members may subscribe to this and other USCIB print publications for a nominal fee by contacting USCIB Commu-nications (212-703-5063, [email protected]).

Editor: Christopher Zoia, Communica-tions Manager, USCIB United States Council for International Business 1212 Avenue of the Americas New York, NY 10036 Tel: 212-354-4480 Fax: 212-575-0327 Web: www.uscib.org

Copyright © 2014 United States Council for International Business. All rights reserved.

ISSN 1939-8301

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