Category: Press Releases and Statements

NFTC Announces Promotion and Staff Addition

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Colvin Promoted to VP for Global Trade Issues, Frank to Direct USA*Engage

Washington, DC – The National Foreign Trade Council (NFTC) today announced the promotion of current USA*Engage Director Jake Colvin to NFTC Vice President for Global Trade Issues and the addition of Susan Frank as the new Director of USA*Engage.
          
“This is a great opportunity for Jake to move into a new role where he will help lead our trade advocacy efforts alongside Dan O’Flaherty, Chuck Dittrich and the rest of the NFTC team. His experience with foreign policy issues and deep understanding of the politics of trade will be invaluable as we work to advance our vision of a bipartisan 21st century trade agenda,” said NFTC President Bill Reinsch.
 
“Similarly, at a time when unilateral sanctions are often used as the first, and not the last, resort, we are lucky now to count Susan as a member of our team. She comes to USA*Engage with a wealth of knowledge and experience in sanctions and export controls, and we look forward to tapping into her expertise.”
 
The NFTC has adopted a team approach to its trade policy programs and priorities.  Colvin, as Vice President for Global Trade Issues, will oversee the NFTC’s Special Project on the WTO Doha Round as well as focus on a number of other global issues including climate change, food and product safety concerns, labor and global mobility. He will also seek to strengthen the Council’s relationships with international organizations like the United Nations and Organization for Economic Cooperation and Development (OECD). Colvin will work closely with NFTC Vice President for Regional Trade Initiatives Chuck Dittrich, who leads NFTC’s efforts in support of bilateral and regional free trade agreements, currently Colombia, Panama and South Korea, including associated labor issues, trade adjustment assistance, and trade preferences legislation.  Dittrich also plays a key role in the U.S. business community’s Trade and American Competitiveness Coalition, of which the NFTC is a member, and leads the U.S.-Middle East Free Trade Coalition.

Since August 2005, Colvin has served as Director of USA*Engage, an affiliated coalition of businesses, agriculture groups and trade associations that advocates for U.S. diplomacy, trade and humanitarian assistance around the world.  Susan Frank will take over leadership of USA*Engage in September. In her new role, Frank will oversee the advocacy efforts of USA*Engage, promoting alternatives to the use of unilateral economic sanctions by the United States and will also contribute to the NFTC’s efforts to reform U.S. export controls.  Colvin will continue to oversee the coalition’s Cuba initiative.

Before joining USA*Engage, Frank served as Deputy General Counsel at Science Applications International Corporation (SAIC) in McLean, Virginia for the past fourteen years.  Prior to that she was a partner at the law firm of Sonnenschein, Nath & Rosenthal in Washington. 
 
“Given the recent setback to the Doha Round and the erosion of public support for free trade, it is critical to continue informing perspectives about the importance of global economic engagement, diplomacy and multilateral solutions to America’s economic and foreign policy challenges,” said Reinsch. “We’re equipped with an excellent team to take on this important task.”

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New NFTC Study Explores the Importance of Global Supply Chains in International Commerce

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Analysis Shows OECD Nations Score Highest, African Nations Lowest as Attractive Sites for Foreign Investment

Washington, DC ­- The National Foreign Trade Council (NFTC) today released a new study, Connecting the Dots: The Global Economy and Supply Chain Management, which explores emerging trends in global commerce. Premised on the idea that the international community has shifted from a trading system primarily based on exporting and importing goods to a more integrated system of corporate supply chains spanning the globe, the study analyzes the trade and investment environments of 117 countries based on data from OECD and the World Bank, among others.

“For corporations, globalization has come to mean breaking the supply chain into pieces and carefully assessing the profitability, viability, and sustainability of each part in the process of making a decision on where to locate them,” reads the study. Though the phenomenon of supply chains has long existed, as the study points out, “advances in technology and decreases in the time and cost of transportation and communication have accelerated the process,” said National Foreign Trade Council President Bill Reinsch.
 
Structured as a country-by-country analysis of supply chain performance, each country was evaluated in comparison to benchmark nations and “exemplars.” The study evaluated countries based on a number of criteria, including national policies for openness in trade and markets, best practices for international trade, infrastructure for a global economy, financial services for cross-border commerce, human capital, and effective legal and enforcement systems.
 
The top ten highest scoring countries were Singapore, Luxembourg, the United Kingdom, the Netherlands, Sweden, Switzerland, Canada, the United States, New Zealand and Norway. In contrast, the lowest scoring nations were Angola, Burkina Faso, Zambia, Rwanda, Burundi, Guinea, Mali, Venezuela, Algeria and Benin.
 
“As an organization dedicated to an open, rules-based international trading system, and comprised of more than 300 member companies – many with multinational operations – it is critical to examine how countries are performing in this new environment.  We believe this study, which we will update periodically, will be a useful tool for our members as they consider future investment locations,” Reinsch concluded.

NFTC Applauds House Approval of Trade Preference Bill, Urges Senate to Take Action ‘Expeditiously’

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Washington, DC – The National Foreign Trade Council (NFTC) today praised the U.S. House of Representatives for approving H.R. 6560, which includes provisions to enhance and extend key trade preference programs. The legislation passed by the House last night honors commitments made in the Dominican Republic-Central America Free Trade Agreement to create a duty-free program for apparel imports from the Dominican Republic, enhances certain aspects of the Africa Growth and Opportunity Act, and extends for another year under existing terms the Generalized System of Preferences, which expires at the end of this year. The NFTC urged the Senate to approve the bill as soon as possible.

“Amid the discouraging news coming out of Geneva this week on the Doha Round negotiations, the leadership of House Ways and Means Chairman Rangel and ranking Member McCrery to move this important legislation reaffirms the United States’ commitment to free trade as a mechanism for development for the world’s impoverished nations, and assures American jobs through the ability to continue record levels of exports,” said NFTC President Bill Reinsch.
 
Reinsch continued, “In this uncertain political climate, making sure that America’s trade preference programs continue without interruption is critical to our economy and the developing world. We urge the Senate to move this legislation expeditiously.”
 
The NFTC also called on Congress to consider and approve the pending free trade agreements with Colombia, Panama and Korea, work through remaining obstacles to pass an enhanced and modernized Trade Adjustment Assistance Program, and extend the Andean Trade Preference Act before its expiration at the end of this year. 

“The action taken by the House shows that bipartisan cooperation to forge a positive U.S. trade agenda is possible. Both sides of the aisle should take note and find ways to work through the current stalemate,” Reinsch concluded.

NFTC Statement on Collapse of Doha Round Negotiations

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Washington, DC – Following news that the Doha Round of World Trade Organization (WTO) negotiations have reached an impasse that cannot be overcome, the National Foreign Trade Council (NFTC) today issued this statement.
 
“We deeply regret the news coming from Geneva today. After seven long years of negotiations, we certainly hoped that a breakthrough on negotiating modalities and a successful signaling conference on services liberalization this week would lay the groundwork for an ambitious conclusion of the Round,” said NFTC President Bill Reinsch.

“In the Round, the international community had a chance to come together to reject the protectionism and isolationism that seems to be creeping slow but steady across the globe, and stand together to achieve a universal goal larger than the ambitions of each individual country,” Reinsch continued. “It is unfortunate that not all countries at the negotiating table were committed to such an outcome.”

NFTC Senior Vice President Catherine Bennett, who just returned from Geneva, said, “Just last week it seemed that there was a basis for optimism at the Ministerial gathering.  Ministers of the G-7 countries had come together to keep the talks intact and were working with Director General Lamy to advance positions with a fair balance of demands and concessions. While the U.S. Government agreed to move forward on this basis, it now seems that not all countries had the same level of commitment to the process.

“The Round appeared to be standing the test of time, but today’s news makes it clear that no matter how long the process could have gone on, its success depended on all of its participants. Unfortunately, while the spirit of cooperation and compromise had a positive effect on some, others were not moved. It is truly an opportunity lost,” Bennett concluded.

NFTC Issues Statement on Doha Round

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Washington, DC – National Foreign Trade Council (NFTC) Senior Vice President Catherine Bennett, who just returned from Geneva following a U.S. business community delegation visit last week, today issued the following statement:
 
“It would be premature to comment definitively on the Lamy text. For one thing the negotiations are not over. In addition, we have not had the chance to talk with our member companies or the opportunity to fully analyze the proposed formulas. The devil is in the details and we are concerned about the extent to which ‘flexibilities’ diminish the commercial benefits of any trade liberalizations. Many of our member companies also have a strong interest in sectoral trade negotiations. As you know, the Lamy text sites the possibility of two sectorals. If key countries like China, India and Brazil choose not to participate, then even this benefit is illusory.
 
“We were heartened by the apparent results of the services signaling conference held yesterday. A number of countries, including the United States, made some positive, forthcoming comments. The outcome on services will be critical to how companies judge the overall balance of concessions in the negotiations.  Finally, many of our companies have opposed the inclusion of the expansion of GIs and provisions relating to the Convention on Biodiversity in the single Doha undertaking. It is our understanding that a decision on the TRIPS issues has not yet been made.
 
“The NFTC has long supported an ambitious and balanced outcome of the Doha Round. That means significant liberalization in all three pillars of the Round – agriculture, NAMA and services. We do not believe WTO trade negotiators are there yet, but remain hopeful for positive developments in the next few days.”

NFTC Opposes Germany’s Proposal to Transfer Accounting Records to EU/EEA Countries

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Accounting Changes Unnecessary, Would Unfairly Penalize U.S. Companies

Washington, DC – The National Foreign Trade Council (NFTC) today sent letters to 16 German finance and economic ministers, in response to Germany’s proposal to transfer electronic accounting records to European Union (EU) and European Economic Area (EEA) countries. The NFTC opposes the proposal because it would inflict undue penalties on U.S. companies already acting in compliance with international accounting and audit rules.

“We welcome Germany’s interest in attracting and retaining investment and the German tax rate reductions recently enacted to that end,” wrote NFTC President Bill Reinsch. “Our member companies are concerned, however, about the proposed change in the rules relating to the transfer of electronic accounting records to EU/EEA countries. By requiring records to be kept in Germany, the EU or the EEA, Germany is failing to recognize the global nature of today’s marketplace.”

Reinsch continued, “The provision requiring the immediate relocation of electronic financial records to the tax entity’s home country, if so requested by the German Tax Authorities, is unreasonable in today’s global marketplace….The NFTC opposes the imposition of the new territorial restrictions. Generally, all accounting activities not located in EU countries, e.g. the United States, would be considered illegal, and would be subjected to penalties of up to €250,000. The penalties should be eliminated.”

“For a US-based multinational, the main accounting function is likely to reside in the U.S., and this typically includes data relevant for the companies’ German operations. Under current law, companies have generally been able to maintain records in a third country without incurring punitive penalties,” wrote Reinsch. “It has been possible to satisfy the record maintenance requirements by preparing regular secure backups of the data and transferring this information, when needed to the Germany-based subsidiary. The pending proposal will nullify these arrangements.”

The NFTC letter requests that Germany modify the proposed rule significantly, pointing out that Germany’s proposal goes beyond the reach of comparable rules in other EU member states. Reinsch concluded by citing the tax treaty recently ratified by the United States and Germany, arguing that “under the provisions of the tax treaty, financial records of U.S.-based multinationals doing business in Germany, should be permitted to be retained in the U.S., or another non-EU or non-EEA country, without penalty.”

For a full copy of the letter, please click here.

NFTC Urges Sweden to Refrain from Adopting New Tax Proposal with ‘Dramatic’ Interest Deductibility Restrictions

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Washington, DC ¬– National Foreign Trade Council (NFTC) President Bill Reinsch today sent letters to Swedish Minister of Finance Anders Borg and State Secretary Ingemar Hansson, urging the ministry to refrain from adopting tax policies, which would place greater restrictions on the deductibility of interest. The NFTC sent the letters in response to a recent report developed by Sweden’s Tax Administration.

“Sweden has, in part, been a favored destination for inward investment both because of its stable tax regime, and because of a consistent effort by Swedish lawmakers to provide an attractive investment environment. However, the Ministry of Finance has now released a report from the Tax Administration which proposes dramatic restrictions on the deductibility of interest in certain related party settings,” wrote Reinsch. “Were this proposal to be enacted in its current form, it could have a very serious effect on inward investment into Sweden.”

Reinsch continued, “We would, at the very least, encourage you to postpone the effectiveness of any provisions until 2010, and extend the comment period to allow proper consultation on, and consideration of, these proposals.” Further, while Reinsch acknowledged that Sweden is entitled to protect its tax base through a potential law change, he argued, “any such rules should take into account international norms, as well as legitimate business practices. The proposed rules, as currently drafted, would not do this.”

The NFTC outlined its objection to the proposed rules, including that they would put companies doing business in Sweden at an unfair disadvantage, as they are much stricter than any other similar rules. The proposed rules also ignore “several important areas of normal and legitimate business,” including post-acquisition restructurings, and the loan tracking provisions could potentially be “exceptionally burdensome.”

 “We would urge you not to jeopardize your hard-won reputation as a stable, welcoming environment for multinational business and investment. You could do this by a hasty adoption of an interest restriction regime which would hit legitimate business transactions, and greatly add to the cost of doing business in Sweden,” Reinsch concluded.

For a full copy of the letter, please click here.

NFTC Warns Against Including TRIPS Amendments in Doha Negotiations

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Council Says Ministerial Meetings Should Instead Focus on ‘Three Pillars’ of the Round

Washington, DC – In response to reports from Geneva that the European Union (EU) and several nations are pressing for inclusion of Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement amendments as part of the Doha Round negotiations, the National Foreign Trade Council (NFTC) today sent letters to U.S. Trade Representative Susan Schwab and EU Trade Commissioner Peter Mandelson, warning against such action.

“Specifically, this group is advocating expanded coverage of geographical indications and mandatory disclosure of genetic resources in patent applications, along with provisions relating to access and benefit sharing,” wrote NFTC President Bill Reinsch. “In our view, both these issues are beyond the negotiating mandate of the Doha Round and have no place in the crucial discussions taking place in Geneva this week.”

“Negotiators should focus their attention on making substantive progress on the three pillars of the Doha Round – agriculture, NAMA and services – and not be diverted by the introduction of new and controversial topics. This could only undermine the chances for a successful ministerial gathering and progress toward completion of the Round this year,” he wrote.

For full copies of the letters, please click here.

NFTC Calls on Advanced Developing Nations to Help Break Doha ‘Deadlocks’ Next Week

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Washington, DC – The National Foreign Trade Council (NFTC) today in advance of next week’s World Trade Organization (WTO) ministerial meeting on the Doha Development Round, sent letters to the Ambassadors of the key advanced developing nations, urging each country to constructively contribute to a successful outcome to the negotiations. As the letter points out, an estimated 40 Trade Ministers of WTO member countries will gather in Geneva next week to try to achieve progress in the areas of agriculture, non-agricultural market access (NAMA) and services.

“Unless substantial progress is made next week, we fear that the Doha Round will flounder for the foreseeable future,” wrote NFTC President Bill Reinsch in letters to the Ambassadors of Brazil, China, India, Malaysia and South Africa.

“If, however, countries step up to the challenges and hard choices necessary to achieve breakthroughs on the modalities relating to agriculture and NAMA as well as real commitments on services, there is an opportunity for substantial progress towards concluding negotiations in 2008 and completing the Round in 2009. Your country is critical to a successful outcome in Geneva next week,” he continued.

“As an advanced developing country, your government should see the tremendous opportunities presented by a successful Round for future economic growth… The potential benefits are real and significant, and it would be a shame to lose this opportunity,” Reinsch concluded.

For full copies of the letters, please click here.