International Trade, Investment and Regulatory Policy

Policy Accomplishments for 2011

Approval of Trade Agreements with South Korea, Colombia, and Panama

• Led the business community’s successful advocacy for congressional approval of the long-pending trade agreements with South Korea, Colombia, and Panama through a multi-faceted campaign featuring extensive congressional and administration lobbying, research projects, strategic communications, coalition building, and grassroots advocacy. Helped secure renewal of the Andean Trade Preference Act, the Generalized System of Preferences, and Trade Adjustment Assistance.

Asia-Pacific Economic Cooperation (APEC)

• Innovation Policy: Supported the U.S. business community’s efforts to secure new APEC guidelines for governments to promote effective, non-discriminatory, and market-driven innovation policies.
• Customs: Advocated successfully for adoption of a de minimis value of $100 for customs duty assessments in the APEC region, lowering transaction costs and making customs procedures more efficient.

Brazil

• U.S.-Brazil Temporary Agreement on Cotton: The Chamber’s Brazil-U.S. Business Council (BUSBC) successfully opposed four amendments introduced in the House and Senate that aimed to dismantle the 2010 U.S.-Brazil temporary agreement allowing U.S. firms to avoid nearly $1 billion in Brazilian trade retaliation against U.S. goods and intellectual property rights in connection with the WTO cotton case.
• Agreement on Trade and Economic Cooperation: BUSBC led a successful advocacy push for this agreement, which was signed during President Obama’s visit to Brazil in March. The accord creates a framework for U.S. trade officials to engage with their Brazilian counterparts to remove barriers to bilateral trade and investment.
• Open Skies Agreement: BUSBC led a successful advocacy push in favor of the U.S.-Brazil Air Transport Agreement, signed in March 2011. The agreement establishes a timetable for liberalization of air transport services between the United States and Brazil.
• World Customs Organization (WCO) Istanbul Convention: BUSBC led a successful advocacy push in favor of Brazil’s implementation in August of the WCO Istanbul Convention, allowing U.S. companies active in Brazil to use the ATA Carnet, which provides duty-free treatment of imports slated for re-export.

Canada-U.S. Action Plan on Perimeter Security and Economic Competitiveness

• Advocated for closer U.S.-Canadian cooperation to ensure goods, services, and people move smoothly and safely across the border and address regulatory barriers to trade. The December 2011 announcement of the Canada-U.S. Action Plan follows many of the recommendations included in the recent joint U.S. Chamber and Canadian Chamber report titled Finding the Balance: Shared Border of the Future.

China

• Indigenous Innovation and Discriminatory Government Procurement Measures: Led U.S. industry advocacy efforts, in coordination with other business groups and foreign governments, that resulted in a series of Chinese commitments to delink government procurement from indigenous innovation policies at all levels of government. These efforts culminated in a new Chinese State Council directive issued at the November U.S.-China Joint Commission on Commerce and Trade (JCCT) meeting instructing government agencies at all levels to avoid linkage to government procurement in indigenous innovation policies.
• Intellectual Property Enforcement: Led U.S. industry efforts through JCCT advocacy and testimony before the U.S. administration that contributed to moderate improvements to China’s IP enforcement environment. U.S. Chamber advocacy contributed to Chinese Premier Wen Jiabao’s November 9, 2011, announcement that China’s State Council would reestablish its State Council IPR Leading Group under the revised Special IPR Campaign. Chamber advocacy also contributed to positive outcomes for U.S. software companies.
• Forced Technology Transfer: Led industry advocacy efforts for China to forgo technology transfer requirements in developing its new electric vehicles (NEV) sector. In November, these efforts culminated in new commitments that will help U.S. auto companies access the Chinese auto sector on commercial, market-based terms and secure national treatment with respect to subsidies that the Chinese government may provide for NEV purchases by Chinese consumers.
• China’s Currency: Led U.S industry advocacy efforts to forestall unilateral, WTO inconsistent, and counterproductive legislation in Congress targeting China’s currency policies. Simultaneously bolstered efforts with like-minded business organizations in Washington and globally to increase multilateral pressure on China to adopt a market-determined exchange rate and revalue its currency.

Europe

• High-Level Working Group on Jobs and Growth: Successfully advocated for the establishment of a U.S.-EU trade working group to consider options ranging “from enhanced regulatory cooperation to negotiation of one or more bilateral trade agreements” as outlined in the Chamber’s proposal for a Transatlantic Economic and Trade Pact. Won support for the proposal from BusinessEurope and the Transatlantic Business Dialogue.
• International Investment: Won a joint U.S.-EU commitment to promote principles governing the treatment of foreign investment in third countries and secured broad U.S. and European industry support for a Chamber-led draft of those principles.

Export Control Modernization

• Supported the administration’s work to modernize U.S. export controls. Drawing on recommendations submitted by the Chamber and its partners in the Coalition for Security and Competitiveness, the administration in June 2011 launched the Strategic Trade Authorization license exception allowing essentially license-free exports of thousands of high technology products to 44 of America’s closest allies.

General Capital Increase for Multilateral Development Banks

• Helped secure U.S. funding for the first general capital increase in many years for the World Bank, the African Development Bank (AfDB), the Asian Development Bank (ADB), and the Inter-American Development Bank (IDB), protecting the U.S. leadership position and influence over policy as the largest shareholder at the World Bank and the IDB and one of the largest at the AfDB and the ADB.

Global Regulatory Cooperation (GRC)

• At the urging of the Chamber’s GRC project, the Administrative Conference of the United States (ACUS) updated its 1991 recommendations to urge U.S. regulatory agencies to engage with their foreign counterparts to avoid trade-disrupting regulatory divergence and to provide guidance on how to do so.
• As a direct result of the GRC project’s engagement with the Office of Management and Budget (OMB), the Office of Information and Regulatory Affairs (OIRA), and the Office of the U.S. Trade Representative (USTR), the administration is working to redefine the international role and responsibility of U.S. regulatory agencies. OMB, in its annual report to Congress on the costs and benefits of federal regulations, recommended for the first time that U.S. regulators cooperate with regulators from key trading markets to support trade and exports. OIRA and the USTR issued a guidance memo to U.S. regulatory agencies outlining the regulatory tools at their disposal to ensure regulations enhance, rather than obstruct, trade.

India

• Bilateral Aviation Safety Agreement: The U.S.-India Business Council (USIBC) successfully advocated for a Bilateral Aviation Safety Agreement (reached in July) and subsequent Implementation Procedures for Airworthiness (November). The agreement permits U.S. certification of Indian-manufactured aeronautical equipment and will reduce maintenance, repair, and overhaul costs in the long run.
• Business Jet Landing Rights: In direct response to USIBC advocacy, India’s Ministry of Civil Aviation allocated funds and launched a study to improve and update general and business aviation guidelines and on-the-ground infrastructure in line with USIBC recommendations.
• Civil Nuclear Technology Transfer: In response to USIBC advocacy, the U.S. and Indian governments resolved the issue of India providing sufficient nonproliferation assurances as required by 10 CFR Part 810. This milestone brings the implementation of the U.S.-India civil nuclear agreement one step closer and will allow tier-1 suppliers, such as reactor vendors, to export nuclear technologies to India.
• Competition Commission and Merger Guidelines: The Chamber’s Global Regulatory Cooperation project and USIBC worked with the Competition Commission of India to address concerns relating to the draft version of its merger guidelines. As a result, the final guidelines adopted several international best practices, including the exemption for ordinary business transactions and a requirement for a significant local nexus.
• Defense Offsets Implementation: USIBC advocacy resulted in the amendment of Ministry of Defense guidelines on offsets to allow tier-1 sub-vendors to participate in meeting prime OEM vendor offset obligations, enabling for a greater level of collaboration between U.S. suppliers and Indian entities.
• FDI Caps in Pharmaceuticals: USIBC advocacy successfully fought back Indian government moves to introduce caps on foreign direct investment (FDI), maintaining a fully open regime for brownfield investments.
• FDI Caps in Retail: USIBC advocacy resulted in eliminating the FDI cap in Single-Brand Retail. While liberalization of FDI caps for Multi-Brand Retail is on hold, the issue has moved closer to resolution due to sustained USIBC advocacy.
• Pistachio Tariffs: USIBC successfully advocated for the government of India to reduce a symbolically and commercially significant tariff barrier on the export of U.S. pistachios, leading to a near doubling of sales in just a matter of months.
• Telecom Infrastructure Security: After concerted USIBC advocacy, the Indian government amended its telecom infrastructure security regulations to remove provisions mandating third-party source code escrow requirements, the mandatory transfer of technology requirements, and a mandatory contract Template Agreement.

International Affairs Budget

• Helped avert disproportionate cuts to the Office of the U.S. Trade Representative, the U.S. Commercial Service, and the International Affairs budget generally.

Japan: Public-Private Partnership to Aid Reconstruction Efforts

• In the wake of the March 11, 2011, earthquake and tsunami, the Chamber led U.S. business efforts to support reconstruction and strengthen bilateral economic ties. Chamber President and CEO Tom Donohue traveled to Japan with Secretary of State Hillary Clinton in April to announce a public-private partnership that reinforced confidence in Japan’s economy and is applying lessons learned from Japan’s experiences to strengthen global supply chain management in the wake of natural disasters.

Mexico-U.S. Cross-Border Trucking Dispute Resolution

• Led the business community’s successful advocacy for a resolution of the 16-year-old cross-border trucking dispute with Mexico, in which U.S. failure to comply with its trade agreement obligation resulted in steep Mexican tariffs on $2.4 billion worth of U.S. exports. Successfully advocated against killer amendments to several bills. As a result, Mexico lifted its retaliatory tariffs in October.

Pakistan: Adjustment of Excise Duty on Beverage Concentrate

• Helped secure the adjustment of an excise duty on beverage concentrate, providing significant benefit to the beverage industry in Pakistan.

Russia’s Accession to the World Trade Organization (WTO)

• Successfully advocated for Russia accession to the WTO on commercially meaningful terms. The Chamber provided critical support for Russia to join the Information Technology Agreement upon accession, eliminating tariffs on information and communications technologies (ICT) products entering the Russian market.

Trans-Pacific Partnership (TPP)

• Led the business community’s advocacy for U.S. negotiators to include strong disciplines in the TPP trade agreement on intellectual property and path-breaking new rules on regulatory coherence, due process in antitrust enforcement, and state-owned enterprises. In these and other areas, U.S. negotiators have proposed negotiating text that hews close to the Chamber’s recommendations.

WTO Government Procurement Agreement

• Lent support for a revised, more robust Government Procurement Agreement clinched at the 8th Ministerial Conference of the World Trade Organization (WTO), opening new market access opportunities worth between $80 billion and $100 billion in more than 150 central and sub-central government entities, such as Canada’s provinces. Additional sectors are being opened as well, and countries will enhance transparency by bidding for contracts through electronic methods.
   

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