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Journaunited nil for internawinter 2011. 412 Vol. XXXiii,o Interna Io tna Bl usiness Greening the Economy Inside page 3 USCIB awa5d dinner OECD Inte6net principles The Big I11a: “World 3.0” The lighTer side of wind power. ™ ™ dow solutions are making turbines lighter and str. ur AirsTone and CoMpAXX materials are helping to create lighter, more durable wind blades. Making sustainable energy even more sustainable.Together, the elements of science and the human element can solve anythingT.hat’s solutionism. the first Peter M. Robinson, President and CEO, USCIB word The Green Economies Dialogue aims to spur discussion of environmentally friendly innovation, jobs and trade in global markets. Green Growth: Getting the Policies Right W hile everyone agrees on the need for greener growth, there is lessreen Economies Dialogue will convene regional workshops around the consensus on how we get there. world. The first of these took place in Washington, D.C. on October 12 in a day-long session bringing together more than 50 experts from busine-ss, gov A new project, tGreen Economies Dialog,ua eims to bring the policy ernment, academia and the NGO communities, hosted by the environmental and business communities together for intensive discussion of the bresearch organization Resources for the Future. forward. Funded by the United States Council Foundation, USCIB’s- educa tional and research arm, the project mobilizes experts from the public andshington workshop was an important first step in exploring the policy options to foster green innovation and resource eff”hsilSharp, private sectors, along with leading academics and NGOs, with the goal of providing a clear road forward on green growth, green jobs and a host ofdent of Resources for the Future. related issues. Another workshop was held at the OECD in Paris in November, hosted by The most recent UN climate talsee page 4) underlined the critical im-AC, the Business and Industry Advisory Committee to the OECD. Over 80 portance – for companies, national governments and global institutions – ofants, including representatives from a dozen OECD member countries finding more environmentally friendly paths for business and economic devel-al OECD Directorates, attended the meeting, which was opened by opment in the years ahead. Effectively addressing our current economic andpton, head of the OECD Environment Directorate. Addition-al work environmental challenges will depend on international cooperation that works planned for Japan and Brazil during the first quarter of 2012. in synergy with global markets and rules. As part of the Green Economies Dialouea, demic researchis being We expect the Green Economies Dialogue project to inform policy debatemissioned for publication in the influentiaatorngy Economics in the lead-up to June’s UN Rio+20 Summit and beyond. Industry, govern-d of the Rio+20 Summit. Research papers by highly regarded experts ment and other actors must work together to make the transition to a globallore a variety of aspects of green growth and green jobs. framework where the private sector and the marketplace have bottom-line motivations to drive improvements in technology and business practices.Green Economies Dialogue website (www.green-dialogue.org) is gathering informative materials from numerous points of view, including The Green Economies Dialogue initiative will provide a platform for discussionstatements and papers from the various workshops, as well as of key international policy ques, wsith the goal of ensuring - co esummaries of theEnergy Economics research. Support for the project is being provided by various private-sector sources through the United States nomic growth and the pursuit of environmental objectives go hand-in-hand. These include: Council Foundation. • How can environmentilnovation in such areas as energy use o-r aghis is just another example of USCIB’s convening power, and our ability to riculture best be shared around the world, providing opportunities tointernational debate and consensus on issues critical to global busi- promote sustainability while maintaining competitiveness? ness, the world economy and the health of the planet. • What role should internatinlstitutions like the G20, the United Nations and the OECD have in coordinating policies among - al gov ernments? • How can the logjam otfrade and climate negotiations be broken, to foster integrated policies that incentivize innovation, broadly depl-oy solu tions and mobilize financial resources? Contact Peter Robinson at (212) 703-5046 or probinson@ui..or • Aresubsidies an effective way to encourage start-ups and investment in new technologies, and what other options can governments pursue to help nurture as yet non-commercial options? USCIB International Business Winter 2011-2012 www.uscib.org 3 At UN’s Durban Conference, Progress on Climate Change D efying low expectations and difficult circumstances, the UN Fr-ame work Convention on Climate Change’s 17th Conference of the Parties, which was held in December in Durban, South Africa, opens the door to a new international climate framework, with appropriate reductions and oth-er ac tions from both developed and developing countries. The Durban platform sets into operation new institutions for financing, adaptation and technology to address climate change. “While it will be challenging for all major economies to construct a new-inter national agreement, we look forward to working with governments to seek opportunities for U.S. companies to offer their insight and practical recom- mendations on implementation in ways that will grow economies, create jobs and advance sustainable development,” stated USCIB President and CEO Peter Robinson. Maite Nkoana-Mashabane, South Africa’s environment minister and president of the COP17 USCIB, which represents American business in global policy deliberations, at a post-conference press briefing. and works to expand trade and investment, applauded U.S. effways to interact with business in the design and implementation of new to promote enabling frameworks for technological innovation that protect intellectual property rights protection, and engage the private sector-’s exons and measures since Cancun. USCIB is the U.S.- affili pertise and resources, as well as its commitment to advancing transparencyernational Chamber of Commerce, which has long served as the business focal point in the climate negotiations, and also participates in and private-sector engagement in the new architecture. the Major Economies Business Forum (BizMEF), which prepared six position USCIB was represented in Durbabyrine Kennedy, vice president forrs for Durban. energy and environment, and executives from a number of member companies. It highlighted the need for integrated solutions that promote energy access and the Durban platform: “It seems that governments are coming to face the reality of a world that has changed in many ways since security, while deploying technologies and market approachesthe Kyoto Protocol was signed in 1997. The challenge now is to set the mate risks, since U.S. businesses doing business in international markets need long-range predictability and stability to plan, invest and operate.r a long-term agreement that involves all major emitters, engages the public and private sectors, and works with globalized markets, i-n har USCIB has encouraged countries to pursue more deliberative and effectiveade and investment rules.” With you whenyou’re expanding your business globally Import-export banking is our business, rely on our network of trade and ﬁnance professionals to help connect you to the world Receive local knowledge expertise and ﬁnancial resources to support your business. With a global network covering important markets in Asia, Europe and the Americas, we have the strength and experience to navigate the complexities of global trade today. Wells Fargo Global Banking Patrick Kenne480-768-5595 © 2010 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. USCIB International Business Winter 2011-2012 www.uscib.org 4 USCIB Award Gala Clinton, Liveris Urge Cooperation Between Business and Government L-R: USCIB President and CEO Peter Robinson, former President Bill Clinton, Dow CEO Andrew Liveris, USCIB Chairman Harold McGraw III I deological bickering must end if the U.S. is to resolve its economic crisis,has distinguished him as one of the global business co-mmu former PresidentBill Clinton told attendees at USCIB’s 2011 Intenity’s leading voices,” he said. Leadership Award Dinner, which took place November 16 at the Wal“No one government alone can solve the challenges we face, nor can one Astoria in New York. business solve these challenges alone. We need to work together to help Public discourse in America today is dominated by two modes of trestore public confidence,” Mr. McGraw said. “combative conflict” and “hangdog cynicism or pessimism,” he said, adding, Mr. Liveris told the audience of over 300 business executives, governm-ent of “both are losers.” Mr. Clinton stressed the need for cooperationficials and diplomats: “We have to make choices, strategic choices about our government and business. “I can’t think of any economy that’s thriving where the government and private sector are at war with each other,” he said.and how we want it to unfold. But we have to first stop throwing stones at each other, Democrats and Republicans, business and government.” The former president praidndrew Liveris, chairman and CEO of The Dow Chemical Company, the evening’s honoree. “I am grateful that antold the audience: “We do not live in a global free market. We live in a global economy where countries are acting more and more like companies: American company with an Australian president and two-thirds of its sales overseas has found a competitive way to keep 40 percent of its employeesg aggressively against one another for business and progress and in this country,” Mr. Clinton said, adding that Mr. Liveris offered the rig-ht apts are boosting business, creating a climate that attracts and rewards investment, spurs innovation and job creation, and appeals to proach in his new book, entitled Make It in America. companies that are less bound by national borders than ever before.” “It is a false choice to say that you can be either pro-busin- vern pro-go ment,” Mr. Liveris said in accepting his award. “We must work in concert.is said every nation that wants to succeed in the new global en-viron If we want to create jobs, if we want to attract the industries of the future,ink deeply about the pillars of government policies, which he listed as regulations, taxes, trade, energy and education. especially those in advanced manufacturing. We must, without hesitation, venture to build bold public-private partnerships that will enabRegulations must balance the need to protect citizens against the need the necessary transformation, because we cannot accomplish this alone.”▯ to give businesses the space to thrive. Taxes must balance the collection Mr. Liveris, co-chair of President Obama’s Advanced Manufacturing P-artner and the distribution of wealth against the need to attract- busi nesses. But, he added, “We are underpaying for our future. The highest ship, said it is not the role of government to prop up industries and sectors that cannot stand on their own. “The goal, instead, is to identify that sectorsuding me, should be paying more.” that are critical to the nation’s future, and then support them just long enough so that they can take off on their own,” he said. “That is how we madeis “the lifeblood of 21st century economies,” he said. “No country our size will succeed in the global economy without constantly opening new microprocessors scalable, and affordable on the mass market. It markets,” he said, noting that it took the U.S. six years to approve free- invented the Internet, which now represents an $8 trillion dollar global-enter prise. It is how we saved the U.S. auto industry from bankruptcy.”ade agreements with Korea, Colombia and Panama. During those same six years, the European Union went ahead with 35 new FTAs. USCIB ChairmanHarold McGraw I,IIchairman, president and CEO of The Education is the most important pillar, he said, describing it as “the kernel of McGraw-Hill Companies, joined Mr. Clinton in praising Mr. Liveriultimate competitive advantage. The fuel that feeds innovation.” thrilled to honor Andrew for his commitment to global business and-to re viving the American manufacturing sector as a pathway to job growth ando Mr. Liveris’s remarks, as well as a variety of videos and photos from long-term prosperity. Andrew’s leadership at Dow and on importana very memorable event, are available at www.uscibgala.com. USCIB International Business Winter 2011-2012 www.uscib.org 5 Business Welcomes OECD Internet Principles U .S. companies and the broader global holder approach to international discussions of Examining Chemicals in Products business community welcomed adoption in the Internet’s development. December of the 34-nation OECD’s Principles Helen Medin,aUSCIB’s director of life scie-nc Last June in Paris, BIAC members played a cenes and product policy, took part in a November for Internet Policy-Making, which call for role in an OECD High Level Meeting on the Internet touch on regulation, saying this is essential to meetinginBelgradeundertheUN’sInternational promote economic growth. USCIB applauded Economy, which highlighted that the strength Conference on Chemicals Management (ICCM), dynamism of the Internet depends on its ease which is charged with ensuring that chemicals the OECD Council’s call for member countries to “promote and protect the global free flow ofss to high-speed networks, openness and on are produced and used in ways that minimize information” online. user confidence. The OECD Council’s adoption significant adverse impacts on the environment of the new principles is based on a communiquénd human health. In 2006, the UN adopted a “The OECD principles balance two mutually sissued at a meeting in June, when their broad-outtegic Approach to International Chemicals portive goals: maintaining an open, dynami-lines were drawn up. Management (SAICM), which seeks to ensure ternet that can generate economic growth, and that chemicals are produced and used in ways “Born at a U.S.-initiated high-level meeting earlier ensuring closer international cooperation on I-nter that minimize significant adverse impacts on net issues,” said USCIB President anPeter this year, these principles are a major step the environment and human health. efforts to ensure the Internet remains an open M. Robinson. “While the Internet has no borders, The November meeting of SAICM’s Open-Ended and countries should set their own policies andform, continuing to spur innovation, pros-per regulations, they must do so judiciously, in c-oop job creation,” said U.S. Ambassador toorking Group focused on financing and te-chni the OECDKaren Kornbluh in a statement. “This cal resources for implementing SAICM’s goals, eration with each other and with the private-sec and to make recommendations for the next full tor. The OECD has given governments urgentlylatform, that produced more growth in its first needed guideposts in this area.” 15 years than the Industrial Revolution did in itsng of the ICCM, which will be held in-Sep tember 2012 in Nairobi. first 50, mustn’t be balkanized. We will work with Both USCIB and BIAC, the Business and Indusothers to continue building consensus for theAs a voluntary policy framework, SAIC- ain Advisory Committee to the OECD, which USCIBglobal norms that nurture openness and freedom tains a multi-stakeholder process, and sets as represents in the United States, have endorsed on the Internet.” one of its main objectives that information and the OECD principles and sought to promot-are knowledge about chemicals contained in -prod ness of them in key international forums. In -SepCD principles are non-binding. However, they will be included in the criteria used to assesss available, accessible, user friendly, tember, at the UN’s Internet Governance Forum in adequate and appropriate to the needs of all Nairobi, USCIB representatives underscored the suitability of candidate countries for OEstakeholders.” importance of maintaining an open, multi-stmembership. USCIB International Business Winter 2011-2012 www.uscib.org 6 World Business Responds to Cannes G20 Summit Outcome T he International Chamber of Commerce (ICC), theEOs, including the 20 members of ICC’s G20Business Looks to Push world business organization which USCIB representssory Group, presented policy recommendationTrade Liberalization in the United States, urged G20 governments to put20 heads of state participating in the business Forward trade and investment at the heart of their follow-up toovered trade and investment, financialWorld Trade Organization efforts to October’s G20 Summit in Cannes. lation, commodities and raw materials, food security, further open up government procu-re “Trade has lifted millions out of poverty over the pastonomic policy imperatives and other toment markets, admit Russia as a WTO 60 years by stimulating economic growth and job cre-ChairmanHarold McGraw III, CEO of The member and identify new ways to ation,” said ICC Chairnerard Worms. “At a timeMcGraw-Hill Companies and also vice chairman ofexpand global trade won cheers from ICC, took part in the B20 Summit, which began with business community. USCIB w-el when governments are grappling with excessive debt, a new approach to trade negotiations can be a cost-efing for participating CEOs hosted by Frenched the outcomes from December’s free stimulus to growth and job creation.” PresidentNicolas Sarkozy at the Elysée Palace inTO ministerial in Geneva, saying they The Organization for Economic Cooperation an-d Deis, and then continued with a series of roundtableprovide a shot in the arm for meetings between the business and government- leadbal growth, even if a more ambitious velopment (OECD) estimates that for every 10 pers gathered in Cannes. Doha Round trade deal appears incre-as of trade that opens among G20 countries, around one ingly out of reach. million jobs are created. “Business leaders have come together to share policy priorities and to emphasize that G20 deliberationssiness has been pushing for an- am While acknowledging the stalemate in the Doha must be aligned with core business goals of openitious Doha deal since day one, but G20 leaders instructed their trade ministers to “en- trade and investment, economic growth and - crewe recognize the difficulty faced by gage into discussions on the challenges and opation,” said Mr. Worms. “We are responsibl-nsur eO members in making the necessary nities to the multilateral trading system in a globalized economy” and to report back at the next G20 Summitthat the voice of world business is heard.”concessions for a balanced package,” said USCIB Senior Vice PresideRnt b in June 2012 in Los Cabos, Mexico. Among the G20 leaders participating in the B20 Mulligan, who was in Geneva for the-min Summit were Australian Prime Miniurlia Gillard, Business leaders gather isterial. “We are encouraged, however, South Korean PresideMtyung-Bak Lee, Japanese that governments are looking seriously at Earlier, ICC and partner organizations, includPrime MinisterYoshihiko Noda, South African French business federation MEDEF and the WorldPresidentJacob Zuma, Argentine PresiCnrtistina ways to move forward on trade absent a global consensus on Doha. These have Economic Forum, held two days of intensive busFernandez de Kirchner, Turkish Prime Minister the potential to give a significant boost to meetings under the banner of the G20 Business-Recep Tayyip Erdogan and Russian Federation mit, or B20. jobs, growth and recovery.” President Dimitri Medvedev. 35297Active Health Happy v6.p1f 9/20/11 2:18 PM The Coca-Cola Company is proud to inspire youth everywhere to lead active, healthy, lifestyles. By consuming a sensible, balanced diet combined with regular physical activity, you can balance the calories you consume with the calories you burn. Of course, all calories count, whatever food or beverage they come from, including those from our caloric beverages. So everyone must be mindful of the total number of calories they consume. And we can help. We provide fact-based nutrition information on our products (including calorie information front-of-pack), and offer a variety of products and sizes to meet individual needs for refreshment, enjoyment, nutrition, energy and hydration. Through our long-running support of programs that inspire and promote physical activity around the world like our 83-year involvement with the Olympic Games, and our support of more than 250 programs in over 100 countries, we’re making a positive difference by encouraging youth to be active, stay healthy, and have fun. USCIB International Business Winter 2011-2012 www.uscib.org 7 global network International Chamber Business and Industry Advisory International Organization of Commerce Committee to the OECD of Employers www.iccwbo.org www.biac.org www.ioe-emp.org USCIB Welcomes Latin Leaders L-R: Claudio Piacenza (Uruguay), Raquel Acosta (Costa Rica), François Gabriel Ceyrac (ICC), Patricia Hurtado (Bolivia), Mick Fleming (ACCE), Milagros J. Puello (Dominican Republic), USCIB Chairman Harold McGraw III, María Fernanda Garza (Mexico), USCIB President Hardy (ICC), Gizelle Reginato (Brazil), Jordi Sellarés Serra (Spain), Louise Kantrow (ICC), Jorge Rubén Aguado (Argentina).), Jeff In November, USCIB hosted three days of meetings among ICC representatives from across Latin America and the Western hemisphere. The meetings, which coincided with USCIB’s International Lead- ership Award Dinner, provided a supportive environment for national committee heads and key staff from ICC headquarters in Paris to share best practices and discuss the world business organization’s key initiatives in policy advocacy and business services. Discussion cen▯tered on the varying working conditions faced by ICC national committees in Latin America, resources available from ICC headquar- ters, and ways to coordinate action among national committees on important public policy matters, whether these be global, regional or in-country. USCIB at Your Service USCIB Policy and Program Spectrum Shortage Revised ICC Rules Boost G20 212-703-5082 USCIB President’s Office ICC called for governments and regulators to ac-orts to Curtail Corruption celerate efforts to allocate and assign adequate 212-703-5049 ICC has launched the ICC Rules on Combating USCIB Member Services spectrum to support the ever-increasing traffCorruption in response to the G20’s call on business demand for mobile broadband. ICC emphasized to stamp out corruption. The new ICC rules delineate 202-682-1291 USCIB Communications that mobile broadband spectrum policy must measures companies should take to prevent co-exist with other critical societal prioritcorruption, including strong measures to end bribery 212-703-5063 such as broadcast services. Eric Loeb, chair USCIB Washington Office and extortion. ICC pointed out that G20 efforts to of the ICC Task Force on Internet and Telecomstabilize the economy and stimulate economic growth, 202-371-1316 Infrastructure and Services (IT IS), said: “Given ATA Carnet Export Service trade and employment must address the drain on the the enormous contribution of mobile broadbandeconomy caused by corruption. ICC Secretary General 1-800-5-DUTYFREE to innovation, competition, job and economic Jean-Guy Carrier said: “Corruption is a real threat ICC Arbitration and Dispute growth in developed and developing countries, Resolution to the integrity of markets, especially at a time when it is crucial that the unprecedented potentiaconfidence and stability are most needed. Stamping 212-703-5044 of mobile broadband is not stifled by a lack of ICC Books USA out corruption will stimulate job creation, boost adequate spectrum.” The speed at which gov- business confidence and open doors for emerging 212-703-5066 ernments implement additional spectrum plans markets to attract foreign direct investment.” Visit www.uscib.org is critical.” for a full list of staff including e-mail addresses (click “Business Services”) USCIB International Business Winter 2011-2012 www.uscib.org 8 Needed: Tax Policies to Foster washington wire Sustained Growth Writing in the Financial Times, executives from ICC and BIAC state their opposition to the so-called “Tobin tax” on financial transfers stating that the business community opposes this tax for many reasons including that a financial a reduced burden on employees transaction tax would raise some government revenues in Tax Reform the short term and it would immediately negatively affectUSCIB welcomed proposed tax reform of companies which report to the Securities and Exchange Commission the economy and not foster growth. Other reasons include measures put forward by Rep. David the financial transaction tax will reduce the number o-f trans(R – Mi.), chairman of the stating that current FBAR rules are House Ways and Means Committee. burdensome, complex and “create actions and hinder optimal reallocation of assets. This will the potential for inadvertent errors by increase costs and will make corporate investments more “We are pleased to see Chairman expensive. Camp’s proposal on tax reform,” corporate finance employees.” The primary objective of FBAR filings is to said USCIB President and CEO Peter help the government detect money IOE Takes Part in G20 M. Robinson. “The high rates and Employment Session worldwide system of taxation of the laundering or other criminal activity through the use of foreign financial As host duties for the G20 transitioned from France to United States are out of step with the rest of the world. U.S. business accounts. Mexico, Mexico City was the site on December 15 of the supports efforts to achieve reform first meeting of the G20 Employment Task Force, with Postal Authorities youth unemployment as its principal focus. The IOE and of these rules. Chairman Camp’s proposal represents an important As postal revenue dries up around the BIAC were invited by the Mexican government to organize world, many publicly operated postal the participation of the business delegation, which was first step.” Mr. Robinson underscored organizations may be tempted to get the importance of maintaining a level led by USCIB Executive Vice President Ronnie Goldberg, playing field for all companies in the into new lines of business presenting who serves as the IOE’s regional vice president for North a vexing challenge to private-sector America and chairs BIAC’s Employment, Labor and Social context of U.S. tax reform. “We must ensure that legislative alternatives companies that may find themselves in Affairs Committee. An IOE-BIAC paper prepared for the intended to protect the tax base do competition with these state-supported meeting focused on enhancing youth employability, creat- entities. To address these concerns, ing inclusive labor markets for young people, and ways tonot disfavor U.S. companies versus their competitors,” he said. “We look USCIB and three other business groups foster youth entrepreneurship. sent a letter in November to the Obama forward to working with Chairman Camp ILO Director General to Step and other members of Congress and Administration urging the U.S. to the administration to achieve bipartisanprepare diligently for the next ministerial- Down level congress of the Universal Postal business tax reform.” After 13 years as director general of the International Union (UPU), which will take place in Labor Organization, Juan Somavia of Chile has decided Business Groups Qatar in September 2012. “We see Seek Reporting Relief potentially important issues on the table to advance his departure from his post as director generafor Employees at from March 2014 to September 30, 2012. No successor Worldwide Firms at the UPU session, including unhelpful has been named yet. efforts from some quarters to extend Earlier in November, USCIB joined the scope of government-run postal IOE Secretary-General Steps several leading business groups in monopolies into new areas, potentially Down sending a letter to the U.S. Treasury competing with the private sector,” Department, requesting less After 33 years of service to the IOE, including the past 12 stated Shaun Donnelly, USCIB’s vice burdensome rules for Foreign Bank president for investment and financial as Secretary-General, Antonio Penalosa has stepped and Financial Accounts (FBAR) filings services. The business groups urged the down from his position and has become Special Adviser required by employees of worldwide to the IOE President and Management Board. IOE’s Brent administration to form an interagency American companies involved in global committee to develop coordinated pro- Wilson has assumed the role of Acting Secretary-General. finance. In the letter to James H. USCIB expresses its appreciation for Antonio’s leadership market, pro-competition positions for in modernizing the governance and activities of the organi-eis, Jr., the director of the Treasurythe U.S. delegation leading up to and at Financial Crimes Enforcement Network the UPU congress. zation and enhancing its visibility in representing emplo(FinCEN), the business groups sought interests and advancing the business agenda in high-level forums on the global stage. USCIB International Business Winter 2011-2012 www.uscib.org 9 apec usa 2012 APEC Moves Forward on Privacy, Region-Wide Travel Cards U SCIB welcomed a number of developments at Novem- based on a one-stop validation mechanism against the APEC ber’s APEC (Asia-Pacific Economic Cooperation) CEO Summit principles, simplifying processes and reducing costs.” and Leaders Meeting in Honolulu. It was represented at the meetings byRob Mulligan, senior vice president and head of In addition, just in time for the summit, USCIB welcomed- Con gressional passage of the Asia-Pacific Economic Cooperation USCIB’s Washington, D.C. office, aJustine Badimon, man- ager for APEC affairs. Business Travel Cards Act of 2011, a bill to speed business travel in the Asia-Pacific region. This move will allow American USCIB applauded APEC leaders for agreeing to begin to put business and government personnel traveling in the APE-C re into operation a long-awaited system to recognize corporategion access to expedited visa processing and designate-d air privacy practices in order to facilitate international commerce.travel lanes. USCIB and other U.S. APEC Business Coalition In their joint communiqué, APEC leaders pledged to implementartners had urged passage of the bill in the House and Senate the APEC Cross-Border Privacy Rules System to reduce barriersring 2011, the U.S. APEC host year. to information flows, enhance consumer privacy, and promote interoperability across regional data privacy regimes. “Adoption of the APEC Business Travel Card will provide a big boost for American companies and executives doing business “Cross-border data transfers are vital to conducting business ine Asia-Pacific region, and will contribute to improved com- a global economy,” saideather Shaw, USCIB’s vice president petitiveness and job growth at home,” said USCIB President for information, communications and technology policy. “-Hownd CEOPeter M. Robinson. “It comes as our engagement ever, differing government regulations on transfers of personal Asian and Pacific markets is deepening, and policy-mak information can create impediments to the flow of informations need to take new measures to open up trade, investment across borders, which is the lifeblood of today’s dynamic globalravel in this rapidly growing market. It also levels the economy. We are pleased that, with the APEC Cross-Borde- r Priying field, since the United States already gives expedited vacy Rules System, companies will be able to transfer cu-stomeatment to business travelers from the other APEC member er or employee information for processing across the regioneconomies.” Global Reach and a World of Experience As one of the first law firms to establish a presence in key global ▯markets, Shearman & Sterling has led the way in serving clients wherever they do ▯business. From major financial centers to emerging markets, we have the reach an▯d depth necessary to advise the world’s leading corporations, financial institutions, emerging growth compan▯ies, governments, and state-owned enterprises on their international business▯ needs. Abu DhAbi | beijing| bruSSelS |üD SSelDorF |rF AnkFurt | hongkong | lonDon | milAn | munich | new York pAlo Alto | pAriS | r ome | SAn FrAnciSco| São pAulo | ShA nghAi| SingA por| tokYo | t oronto | wAShington, Dc www.shearman.com USCIB International Business Winter 2011-2012 www.uscib.org 10 The Big Idea Our Not-So-Flat World Editor’s note: In our last issue, we launched “The Big Idea,” a forum for thought leadership from USCIB members and oth- policy comusiness and munities, with a column by Dow ChemiEnOdrew Liveris on rejuvenating American manufacturing. In this issue we look at another thought-provoking perspective on international business and public policy. Views expressed by authors and those interviewed are their own, and no endorsement by USCIB is implied. To submit a column or suggest a topic, please contact Jonathan Huneke (firstname.lastname@example.org). T he world is flat, right? Well, consider therld, he says, is far from flat, and in fact isto expand prosperity by increasing in- following facts: still largely defined by national borders.tegration. • Only 20 percent of the world’s equityGhemewat sat down with USCIB to discuss hishat’s more, with protectionism on the rise, shares are held by investors outside ideas. World 3.0 encourages companies and Ghemawat points out how exploding some company’s home market. policy makers to look at globalization differently.ths about globalization’s scope can • Just three percent of people live outsidexplains how, for too long, governments,-busi anxiety about its purported side-effects. ness, and the general public have been stuck in their country of birth. • Less than one percent of all Americana tug of war between two opposing worldvieWe’re not as globalized World 1.0 (a protectionist, regulated world) and companies have any foreign operationsWorld 2.0 (in which the world is seen as flat andhink, according to – and most of them operate in just oncorporations as stateless entities). country, primarily Canada. Pankaj Ghemawat, author He argues that both these views are flawedof “World 3.0.” • Worldwide public opinion surveys indicate that people care about their fellow citizensn’t fit the facts, and they don’t provide practical direction toward a better futureFor example: from 100 to 10,000 times more than thproposes a more accurate and useful w-orld do about foreigners. view, based on evidence that we are in a stateRecognizing that goods made in China Pankaj Ghemewat, professor of global s-trof semi-globalization. account for just 1-2% of U.S. personal egy at IESE Business School in Barcelona and consumption expenditures undercuts those author of the well received book “World 3Pointing to data on flows of trade, capital-, inking to blame the trade deficit for Global Prosperity and How to Achieve It,”formation and people, Ghemawat shows that America’s problems – shifting the focus on thought a lot about this. Ghemewat takes issue actual levels of globalization are far lower thanfrom protectionism and toward with common assumptions about globalization.y of us think, and that there is tremendousomestic policies. continued on page 12 The McGraw-Hill Companies is proud to support the United States Council for International Business for its global business leadership. USCIB International Business Winter 2011-2012 www.uscib.org 11 The Big Idea: Our Not-So-Flat World continued from page 11 • Recognizing that international air transportation accounts for 1-2% ofbeen to drastically reduce the greenhouse gas emissions – one-tenth as much as ground transporta-price-setting power of oligopolies. tion – would help prevent an overemphasis on localizing production that sacrifices important production efficiencies. Ghemewat says governments can foster integration at both the nat-ion • Recognizing that foreign aid accounts for just 1% of the U.S. federal al and global levels through policies budget – instead of the 30% or so that Americans tend to guess – csuch as improved infrastructure and help build support for more cross-border aid. education. Poor road and por-t in Pankaj Ghemawat World 3.0 recounts the track records of numerous companies in adapting –rastructure in his native India, for example, is a huge constraint on growth, because it limits access to global markets. or failing to adapt – to this semi-globalized world, where attention to national differences can still spell the difference between success and failure.Ghemewat criticizes the view that deregulation is the best way to achieve Perhaps most intriguing for USCIB members are Ghemawat’s polic -y prewth. “A hands-off approach to regulation is untenable,” he says. Minimum wage laws, for example, help reduce inequality. scriptions. Here he places the emphasis on the importance of more or less unilateral decisions by national governments. And while popular perceptions of globalization’s impact on unemployment Interestingly, he contends that trade liberalization by itself offers limitedstly out of line with reality, Ghemewat stresses the importance of improving the social-safety net for people who are negatively affected. prospects for growth. Success in the Doha Round, he says, would lift global GDP by a mere 0.1 percent, and even the complete elimination of trade He’s skeptical about trade adjustment assistance laws, and says im- barriers would raise growth by only 0.5 percent. proved unemployment benefits, access to health care, and education are In contrast, Ghemawat contends that very rapid increases in integrationa better approach. undertaken unilaterally or by small groups of governments could spur farorld 3.0 makes for fascinating reading, and while you may not agree with greater growth. One example, says Ghemewat, is Mexico under NAFTA, everything Ghemawat prescribes, he presents a very convincing case that where the single biggest benefit of integration with the U.S. and Canadahere is still a long, long way to go before the world is truly flat. USCIB International Business Winter 2011-2012 www.uscib.org 12 Business Seeks Reversal of Self-Regulation in Marketing at Chile Conference Foreign Trade Zone Changes With business facing calls from Chilean legislators for significant new regulation in marketing and advertising, Chile’s D-t Mar keting Association invidhris Martin, USCIB’s manager for Looming changes to the way goods are treated in U.S. Foreign Trade Zones have drawn an appeal from a range of pro-trade business groups, which say the changes will undercutnd ICT policy, to address an October conferen-ce pro the Obama administration’s National Export Initiative and cost American jobs.moting self-regulation as a better alternative. USCIB’s Marketing USCIB and other industry groups have appealed to Acting Commerce Secretary & Advertising Committee is focused on promoting strong -and ef fective marketing self-regulation around the world. Rebecca Blank and Treasury SecretT aiy othy Geithner to halt a planned rule change by the U.S. Foreign Trade Zone Board (FTZB), an interagency body chaired response to some privacy concerns around the potential tracking of consumer information, Chile is considering an across- by the Commerce Department, that would automatically apply U.S. anti-dumping and countervailing duties on imports processed through foreign trade zones. the-board “opt-in” provision, which would require consumers to opt in to marketing communications on any platform, including mail, “Given the administration’s high priority for export growth, the FTZB rules stelephone, and digital. While some countries have privacy laws strongly promote, rather than inhibit, U.S. exports,” the business groups wrote in their around marketing and advertising, very few have in place or are letter. “Unfortunately, the proposed FTZB regulations would harm President Obconsidering quite as sweeping regulation as that being proposed National Export Initiative and result in a loss of manufacturing jobs in U.S. Foreign Trade Zones.” in Chile. “It is important for Chilean businesses and policymakers to un- For the past 20 years, such duties have been waived on imports provided the fderstand how self-regulation is addressing similar privacy issues products were not ultimately imported into the customs territory of the Unitein other jurisdictions like the U.S. and Europe,” said Mr. Martin. new rule would make such a waiver dependent on a finding that it was in the public interest, “Especially with regard to digital advertising, the U.S. business effectively nullifying the benefit to businesses of utilizing U.S. foreign trcommunity has pioneered self-regulation that responds to privacy concerns and USCIB has been a forceful advocate for harmonizing “Foreign Trade Zones are one of the critical avenues for promoting exports and manufacturing jobs in the United Statetaeerdy Cook, vice president, internationalobal self-regulatory approach, one that balances these-impor tant privacy issues with the need to ensure that innovative content with HanesBrands, Inc. and chair of USCIB’s Customs and Trade Facilitation Committee. “We must do all that we can to foster these vital functions, rath▯ hibit them.”d services on the Web can continue to be funded through-adver tising in order to keep them free or low-cost to consumers.” In their letter, USCIB and the other business groups noted that foreign trade zones accounted for $28 billion in exports in the most recent year available and employhe U.S. affiliate to the International Chamber of Commerce (ICC), USCIB actively promoted new principles and standards 330,000Americanworkers. Theysaidtherulechangewould “driveU.S.manufacturing to other countries, where the same activity could take place without undue delay, riskline advertising in the ICC’s recently revised Marketing & Advertising Code available and searchable online at w-ww.co or expense.” U.S. manufacturers would suffer in competition with foreign factdescentre.com. which will lead to the further loss of U.S. manufacturing jobs, they wrote. WHAT MATTERS T ODAy BESTTRAdE BANiN THE wORld Trade & Forfaiting Review 2010, 2011 Strength GLOBAL TRADE REQUIRES GLOBAL STRENGTH. In today’s challenging environment, we know strength and stability are some of the characteristics you’re looking for in a banking relationship. In addition to providing a global banking franchise, J.P. Morgan offers a variety of solutions that help manage your entire physical supply chain — helping you deliver goods and materials and a reliable financial performance. TO HEAR MORE ABOUT THE STRENGTH OF J.P. MORGAN, go to jpmorgan.com/info/strength. The products and services featured above are offered by JPMorgan Chase Bank, N.A., member FDIC, or its affiliates. ©2011 JPMorgan Chase & Co. All rights reserved. 83333 USCIB Ad_Bollard_FIN.indd 1 9/14/2011 2:59:45 PM USCIB International Business Winter 2011-2012 www.uscib.org 13 USCIB member and staff news Adam Green,eUSCIB’s vice president for labor Reach Out! 2012 USCIB affairs and corporate responsibility, has been Member-Get-a-Member Drive named by Secretary ofoirlda Solis to serve on the National Advisory Committee for Labor By Abby Shapiro Provisions of U.S. Free Trade Agreements. The Senior Vice President for Business Development, USCIB recently reconstituted advisory co- proee For over 60 years, USCIB has been the voice and we’ll send them a membership info-rmadvice to the Secretary of Labor on the for American multinationals around the world by tion package. implementation of labor rules in existing free trade working to shape a level playing field where trade agreements, and on the labor provisions of FTAs and investment can flourish. You depend onu canmake a personal introducet,oln being negotiatedAdam joins other business them know why you support USCIB and asrepresentatives (all from USCIB’s membership): USCIB to represent your interests, both them to talk with us about membership.Darryl Knudsen of Gap E, Potter of The direct representations to the U.S. and fus their name and contact information and governments, and through our engagement Coca-Cola Company (chair of USCIB’s Labor and in international policy-making and regulatory contact them. Employment Committee) dnna Walker of bodies. And we count on you, too! • You caninvite a colleague to join you at a Strauss & Co. … We know our current members are the bestUSCIB event or committee meeting to exIn October,Charlene Flick, USCIB’s director of possible source for new members who couldnce USCIB in action. Let us know and intellectual property and competition at USCIB, benefit from all USCIB has to offer. Every time to flag this for follow up. addressed the Silicon Valley Association of General Counsel in Santa Clara, California. Ms. you recruit a new member, you strength• You candirect them to www.uscibtgr Flick discussed emerging legal challenges for USCIB. And a stronger, growing and vitalsee what we offer. Again, let us know your means greater recognition of our missioncolleagues’ name and contact information socompanies as they expand internationally, the advancement of our global advocacy twe can follow up. and specifically how USCIB helps America-n in dress international regulatory policies affecting dustry navigate an increasingly complex global your business. So help usReach Out! And together we’ll marketplace… make 2012 a banner year for membership This year, witrMember-Get-a-Member” in USCIB. For more information on how you Justine Kharnak has joined USCIB as develop- drive, we’re made referring a colleague tocan help, contactAlison Hoiem, Manager ofassistant for our ATA Carnet department. Justine will support outreach to customers with USCIB easier than ever. There are several waysMember Services at 202-682-1291 the goal of growing the Carnet business across the you can help USCIB grow: her at email@example.com. United States. She comes to us from the law firm • You can simply provide us with rl-uoContactAbby Shapiro,at 212-703-5064 or Jones Day, and is a graduate of Baruch College. leagues’ names and contact firstname.lastname@example.org. Spend le SStime with cu Stom S, more time with cu Stomer S. Save money on import duties and taxes and save time clearing sm customs with an ATA Carnet for your boomerang freight . Contact us: (800) 282-2900 ATACarnet.com Corporation for International Business. An ATA Carnet Service Provider to USCIB USCIB International Business Winter 2011-2012 www.uscib.org 14 upcoming events Engaging Business: Addressing Save the Date! Human Trafficking in Labor 2012 OECD International Tax Sourcing Conference February 14, 2012 June 4-5, 2012 The Coca-Cola Company Headquarters Four Seasons Hotel Atlanta, GA Washington, DC Sponsored by USCIB, the U.S. Chamber of Commerce and the InternatJoin the OECD, USCIB and BIAC, in cooperation with a number of zation of Employers and jointly hosted by The Coca-Company and Letax-focused business groups, for our latest annual conference on 5th International Business Forum on “Engaging Business: Addr-n Trthe OECD’s new international taxation initiatives. Panels will address ficking in Labor Sourcing” will focus on solutions, networks and current OECD tax projects and will include speakers from business, eliminating human trafficking in labor sourcing. Attendees will lthe OECD, and U.S. government. The event provide-e opniqu understanding