March 2008 Report

 

BIG NEWS IN THIS ISSUE

 

1)      REGULATORY DIVERGENCE AND COMPLIANCE NAMED #1 RISK TO BUSINESS GLOBALLY

2)      SAVE THE DATE – May 8^th -Chamber to Host the Release of a New Report on China Standards

3)      Customs Officials Agree to Cooperation Roadmap

4)      Chamber Hosts Indian Competition Chairman

5)      Chamber Submits Supplemental Comments on Standards to OMB/EC Regulatory Impact Assessment Guidelines

6)      Chamber Comments on Proposed Importer Security Rule

 

REGULATION AROUND THE GLOBE

 

U.S. Chamber of Commerce Events

·        Morning Discussion Series on Trade Liberalization and Competitive Markets

·        U.S.-China Competitiveness Agenda

·        2nd Annual Capital Markets Summit: Strengthening U.S. Capital Markets for All Americans

 

Antitrust/Competition

·        Chamber submits comments on China AML

·        ACCJ report highlights potential impact of Anti-Monopoly Act

·        Kroes in the news

·        South Korea plans “poison pill” legislation

 

State-Owned Enterprises and Subsidies

·        Research shows subsidies giving China export advantage

·        EU approves funding to develop Google rival

 

Investment

·        Sovereign fund officials caution against added regulation

·        EC considers code of conduct for SWFs; China says unnecessary

·        SEC announces next steps for implementation of mutual recognition concept

 

New Reports on Regulatory Cooperation

·        FDA to increase presence in China

·        Progressing on Better Regulation

·        Regulatory disputes seen as “top risk”

·        Europe set to capitalize on global markets

·        2008 National Trade Estimate released

 

Promoting North American Trade Cooperation

·        Ministerial meeting focuses on North American trade

·        Report focuses on how to make the SPP more effective

·        North American Steel Industry Border Story Summary

CALENDAR OF UPCOMING EVENTS

 

·                    Morning Discussion Series: Competing with State Owned Companies

·                    The Latest China RFID Market and Regulatory Trends: A discussion on policy, standards and applications

·                    China’s Anti-monopoly Law and Regulation on Abuse of Intellectual Property Rights

·                    Morning Discussion Series: Competition and Regulated Industries: Electricity, Gas, and Telecommunications

·                    Morning Discussion Series: Trade in Financial Services

·                    Chamber Sponsored - NBR Report Release on  Standards Policy in China

 

 

BIG NEWS IN THIS ISSUE

 

REGULATORY DIVERGENCE AND COMPLIANCE NAMED #1 RISK TO BUSINESS GLOBALLY

Ernest and Young’s annual report Strategic Business Risk 2008 – the Top 10 Risks for Business named regulatory and compliance risk as the number one strategic business risk facing global businesses. Over seventy analysts were interviewed from around the world from over twenty disciplines that shape the business environment, including law, finance, the sciences, business strategy, geopolitics, regulation, medicine, economics and demographics to identify emerging trends and uncertainties that will drive global businesses over the next five years. It is a great endorsement for the work that is underway by the Global Regulatory Cooperation Project.

 

SAVE THE DATE – May 8^th -Chamber to Host the Release of a New Report on China Standards

The U.S. Chamber of Commerce, GRC and the National Bureau of Asian Research (NBR) will hold a half day program formally releasing the newest in a series of NBR reports examining standards policy in China. NBR research directors and special invited guest speakers from industry, government, and academe will discuss the role of policy, institutions, and stakeholders in the development of standards and innovation in China. Under Secretary Chris Padilla has been confirmed as the luncheon speaker. Invitations will be headed out shortly. Mark your calendar’s for May 8^th from 8:30 a.m. - 1:00 p.m. for a program that you will not want to miss.   

 

Customs Officials Agree to Cooperation Roadmap – March 28^th
The Chamber welcomed the adoption of a roadmap towards Mutual Recognition of Trade Partnership Programs by the U.S.-EU Joint Customs Cooperation Committee (JCCC). Customs-Trade Partnership against Terrorism (C-TPAT) and the EU's Authorized Economic Operator (AEO) are voluntary programs that aim to secure global supply chains of American and European markets.  Given that the transatlantic relationship represents $600 billion in two way trade, the cooperation of customs officials is critical to security and undisrupted trade flows. 
 
The Chamber welcomes the particular fact that the announcement included a commitment to provide C-TPAT participants with similar benefits to those enrolled in the EU's AEO program. C-TPAT and AEO mutual recognition has been on the regulatory cooperation agenda of the Transatlantic Economic Council (TEC), which was created last year at the U.S.-EU Summit. Broad cooperation between U.S. and EU regulators is one of the primary focuses of the Chamber's GRC Project.  Although a number of tasks remain, the business community is confident that a final mutual recognition agreement can be reached early next year. 

-  View Chamber press release

 

Chamber Hosts Indian Competition Chairman - March 24^th

The U.S.-India Business Council, along with the U.S. Council for International Business and the GRC Project, hosted a roundtable featuring Mr. Vinod Dhall, Chairman of the Competition Commission of India, in New York City. India amended its Competition Act in 2007, setting ambiguous parameters for when mergers and acquisitions would be subject to review in India, as well as very broad guidance on the review process itself. Chairman Dhall is currently undertaking a process of setting up the specific regulations that will guide the process. Chairman Dhall made a slide presentation on the status of the Law, the purpose of the CCI, the current work of the CCI, and the status of preparing the governing regulations. He also mentioned a few areas of the most recent draft regulations where the CCI was considering making further amendments at the request of many international experts. For copies of Chairman Dhall’s presentation, summary of the event, and other information, contact Rick Rossow.

-  Joint Comments of the American Bar Association’s Section of Antitrust Law, Business Law and International Law on Proposed Draft of the Competition Commission of India (Combination) Regulations

 

Chamber Submits Supplemental Comments on Standards to OMB/EC Regulatory Impact Assessment Guidelines – March 21^st

The Chamber submitted supplemental comments to the Office of Management and Budget (OMB) and the Secretariat General of the EC on their Joint Draft Report for Comment – Review of the application of EU and U.S. regulatory impact assessment guidelines on the analysis of impacts on international trade and investment. The supplemental letter focused on the need to utilize private sector standards in regulations over agency-developed specifications.

 

Chamber Comments on Proposed Importer Security Rule – March 18^th
The Chamber filed comments to U.S. Customs and Border Protection (CBP) on “Importer Security Filing and Additional Carrier Requirements.” This proposed rule, otherwise known as “10+2,” would require importers of maritime cargo to provide 10 additional data elements to CBP 24 hours in advance of lading. Ocean carriers would be required to provide 2 additional data sets. While the Chamber supports the strategy of CBP collecting and analyzing of trade data as a preferable alternative to 100% inspections, there are some serious reservations about the rule. Among other things, the proposed rule would require importers to provide data elements that are clearly inconsistent w/ those agreed to under the WCO SAFE Framework. Contact Jason Conley for more information.

 

 

REGULATION AROUND THE GLOBE

 

U.S. Chamber of Commerce Events

 

Morning Discussion Series on “Trade Liberalization and Competitive Markets”

The GRC’s morning discussion series with Shanker Singham continues as he discusses specific chapters from his book A General Theory of Trade and Competition: Trade Liberalisation and Competitive Markets. There are three more upcoming events:

 

• Competing with State Owned Companies – April 4^th 
• Competition and Regulated Industries: Electricity, Gas, and Telecommunications – April 29^th
• Trade in Financial Services – May 1^st

 

Free registration and continental breakfast will begin at 8:40 a.m. The program will begin at 9:00 a.m. sharp and run until 10:00 a.m. Please RSVP by replying to [email protected] and signify which dates you would like to attend.

U.S.-China Competitiveness Agenda
On March 13th the U.S. Chamber hosted a forum with Congressmen Rick Larsen (D-WA), Mark Kirk (R-NY), and Steve Israel (D-NY) to discuss the U.S.-China Competitiveness Agenda.  The Congressmen shared their views on the nature of the U.S.-China economic relationship, how the U.S. can bolster its competitiveness with China, and how to expand resources for bilateral engagement.

The U.S.-China Competitiveness Agenda is a series of four pieces of legislation introduced last year by Representatives Larsen, Kirk, Israel and Susan Davis (D-CA) that seek to offset punitive China legislation currently under consideration in Congress. The bills would among other things: increase resources for small and medium-size American businesses exporting to the China market; create new cooperative energy ties between the U.S. and China; make more funds available for Chinese language teaching in the U.S.; and expand America's diplomatic infrastructure in China.
-  View the webcast
-  View the USCC press release

2nd Annual Capital Markets Summit: Strengthening U.S. Capital Markets for All Americans
The U.S. Chamber’s Center for Capital Markets Competitiveness held its 2nd Annual Capital Markets Summit last week and called for regulatory modernization to ensure long-term U.S. competitiveness. The Chamber specifically addressed the impact that the current financial crisis has on our broader economy and on Main Street America. It also focused on the financial services regulatory environment and emerging trends in securities litigation reform, the attorney-client privilege, and the globalization of accounting and auditing rules.

 The Chamber’s Center for Capital Markets Competitiveness also released Strengthening U.S. Capital Markets: A Challenge for All Americans. This publication builds upon the Chamber’s March 2007 Capital Markets Commission report and provides an action plan that includes the center’s priorities and efforts to address the short- and long-term challenges faced by our markets.

 

Antitrust/Competition

Chamber submits comments on China AML
The U.S. Chamber of Commerce, in coordination with the Legal Committee of the AmCham China, submitted comments on the draft Rules on Notifications of Concentration of the State Council (Draft Regulation) for implantation of the Antimonopoly Law of the PRC (AML). Contact Becky Fraser for more information.

ACCJ report highlights potential impact of Anti-Monopoly Act

The American Chamber of Commerce in Japan (ACCJ) released its viewpoint report, Potential Negative Impact of Expanded AMA Surcharges. The ACCJ Competition Policy Task Force and Legal Services Committee released this viewpoint supporting the current ongoing review of the Anti-Monopoly Act (AMA) as important to the continuing success of the Japanese Fair Trade Commission and its mission. 

 

Kroes in the news
Our favorite competition commissioner is keeping busy. These articles take a look at how recent EC decisions are being viewed as anti-business with Commissioner Neelie Kroes leading the charge, but how she doesn’t seem to see it that way.

-  Is the EU friend or foe to industry? – Int’l Herald Tribune

-  Cowboy socialism - WSJ

-  EU's Kroes says EU, US antitrust policies continue to converge - Forbes

 

South Korea plans “poison pill” legislation

South Korean plans introduce poison pill laws in order to prevent hostile takeovers by foreign investors. Economists are opposing the plan, saying that it does not meet global trade standards and that such protective action will impede foreign investment.

-  Poison pills sought to protect firms – Korea Times

State-Owned Enterprises and Subsidies

 

Research shows subsidies giving China export advantage
The secret of China's exporting success may lie in unfair production subsidies, according to new research by the Globalisation and Economic Policy Centre (GEP). The research shows a clear link between Chinese government subsidies and increases in firm exports, leading the economists behind the research to say it raises serious questions about whether China is being fair with its trading partners.

-  Production subsidies -- the secret to China's success? - PhysOrg

EU approves funding to develop Google rival

The EU approved funding to several companies for a five-year, $306 million project to build a European rival to U.S. search giant Google Inc. The hope is to kick start European research that is viewed as fragmented.

-  EU okays funding to build Google rival – CBC News

Investment

Sovereign fund officials caution against added regulation
Two officials representing sovereign wealth funds said they are worried U.S. lawmakers are leaning towards protective measures and if regulations increase, foreign investment could go to other places.
-  Sovereign fund officials caution against added regulation – Financial Week

EC considers code of conduct for SWFs; China says unnecessary
The Economic and Financial Affairs Council (Ecofin) of the EU released a preparatory document on sovereign wealth funds (SWFs) prior to the spring European Council meeting held in the middle of March. The report advocates the need for the EU to form a uniform position on sovereign wealth and to establish a code of conduct. It also acknowledges the useful role that SWFs have played in the context of the current financial turmoil, while at the same time highlighting transparency concerns. At the same time, China stated that it saw no need for a code of conduct that would increase outside scrutiny.

SEC announces next steps for implementation of mutual recognition concept
The Securities and Exchange Commission announced a series of actions it intends to take to further the implementation of the concept of mutual recognition for high-quality regulatory regimes in other countries.
-  SEC announces next steps for implementation of mutual recognition concept – Mondo Visione

New Reports on Regulatory Cooperation

 

FDA to increase presence in China
The U.S. Food and Drug Administration received approval by the U.S. State Department to add eight FDA positions at diplomatic posts in China. The news comes on the heels of a recent investigation into problems with pharmaceutical ingredients produced in China.
-  FDA to increase presence in China – Chicago Tribune

Progressing on Better Regulation
BUSINESSEUROPE submitted comments on the Commission’s Communication Second strategic review of Better Regulation in the European Union. Good progress on better regulation has been made in a relatively short period of time. Impact assessments on regulatory proposals are carried out more frequently and at a higher level of quality under the watch of the new Impact Assessment Board and concrete steps have been made to reduce administrative burdens on business and simplify existing legislation. The adoption of simplification proposals is still too slow though, and there should be more transparency and independence in the impact assessment process.

Regulatory disputes seen as “top risk”
Regulatory disputes in the U.S., China, and Russia are viewed by in-house counsel in five major European countries as a "top risk," according to a recent study by Lovells, an international law firm based in London, called The Shrinking World. The study found that regulatory compliance disputes are viewed as "medium to high risk" by 45 percent of the respondents, who included 180 counsels in Europe's largest companies in France, Germany, Italy, the Netherlands, and the UK.

Europe set to capitalize on global markets

AmCham EU released a new report titled Europe and Globalization: Prospering in the New Whirled Order explaining how economic globalization has affected Europe and how well European countries are positioned to capitalize on economic globalization’s gains while minimizing its pains.

 

2008 National Trade Estimate released

On March 27, the Office of the U.S. Trade Representative (USTR) announced the release of its 2008 National Trade Estimate Report (NTE).  The NTE report describes significant barriers to U.S. trade and investment, as well as the actions taken by USTR to address those barriers. The USTR press release gives a brief summary of the NTE and successes of 2007.

 

Promoting North American Trade Cooperation

 

Ministerial meeting focuses on North American trade

On February 27, 2008, Canadian, Mexican, and U.S. members of the North American Competitiveness Council (NACC) met with the ministers responsible for the Security and Prosperity Partnership of North America (SPP) as part of their Ministerial in Los Cabos, Mexico. The ministers asked for assistance from the NACC on four specific action items: achieving higher automotive industry efficiency and competitiveness; deepening cooperation in food safety and products with a consideration of a North American recall system for unsafe products; exploring the possibility of a North American initiative on carbon capture and sequestration; and working toward a commitment on transportation and infrastructure under the Smart and Secure Borders initiative.  In addition, there was considerable focus on IP protection, including the upcoming SPP Working Group meeting in Vancouver and stalled legislation in Canada, and discussion on the growing danger of protectionism, particularly in the U.S. around the presidential campaign. The three governments called on the NACC to defend NAFTA. Contact Adrean Rothkopf for more information.

-  Joint Statement by Ministers Responsible for the Security and Prosperity Partnership of North America

 

Report focuses on how to make the SPP more effective

The Fraser Institute, a Canadian based research group that studies the impact of competitive markets and government interventions on individuals and society, released Saving the North American Security and Prosperity Partnership: The Case for a North American Standards and Regulatory Area. This report examines the state of the SPP and how it can be more productive and transparent.

 

North American Steel Industry Border Story Summary
The North American Steel Trade Committee (NASTC) prepared a compilation of the common issues experienced by the North American steel industries in their intra-NAFTA trade titled “The Border Story – A North American Steel Industry Perspective.” The report notes that this work is intended to complement the border facilitation priorities identified in the 2007 Report to Leaders from the North American Competitiveness Council (NACC), and to reinforce the commitment to smart and secure borders made by the leaders of Canada, the United States, and Mexico at the August 2007 North American Leaders’ Summit.

 

 

CALENDAR OF UPCOMING EVENTS

To find out more about calendar events call Ben Kester at 202-463-5802. All events are at the U.S. Chamber of Commerce (1615 H St. NW) unless noted otherwise.

 

April 4^th                       Morning Discussion Series: Competing with State Owned Companies

The GRC Project hosts Shanker Singham as he discusses topics from his new book, A General Theory of Trade and Competition: Trade Liberalisation and Competitive Markets, which establishes a general theory of trade and competition and attempts to solve market access problems for firms using this new paradigm. Free registration and continental breakfast will begin at 8:40 a.m. The program will begin at 9:00 a.m. sharp and run until 10:00 a.m. Please RSVP by replying to [email protected].

 

April 11^th                     The Latest China RFID Market and Regulatory Trends: A discussion on policy, standards and applications

The U.S Chamber of Commerce and US Information Technology Office will host a roundtable discussion of with leading Chinese RFID experts from industry and government. In 2007 China became the largest market for RFID by value and home to the largest of any RFID project in the world. April’s session will offer a unique opportunity to learn how China’s massive market is driving RFID standards and policies which may impact companies operations globally. The program will run from 8:30 a.m. - 11:00 a.m.

 

April 26-27^th               China’s Anti-monopoly Law and Regulation on Abuse of Intellectual Property Rights
Beijing, China
Contact Zhang Jian Hu Zhe for more information.

 

April 29^th                     Morning Discussion Series: Competition and Regulated Industries: Electricity, Gas, and Telecommunications

Free registration and continental breakfast will begin at 8:40 a.m. The program will begin at 9:00 a.m. sharp and run until 10:00 a.m. Please RSVP by replying to [email protected].

 

May 1^st                       Morning Discussion Series: Trade in Financial Services

Free registration and continental breakfast will begin at 8:40 a.m. The program will begin at 9:00 a.m. sharp and run until 10:00 a.m. Please RSVP by replying to [email protected].

 

May 8^th                       NBR Report Release and Standards Policy in China

                                    The U.S. Chamber of Commerce, GRC and the National Bureau of Asian Research (NBR) will hold a half day program formally releasing the newest in a series of NBR reports examining standards policy in China. NBR research directors and special invited guest speakers from industry, government, and academe will discuss the role of policy, institutions, and stakeholders in the development of standards and innovation in China. The program will run from 8:30 a.m. - 1:00 p.m.

 

 

 

***The Global Regulatory Cooperation (GRC) Project issues a monthly report of recent and planned activities.  This report reflects the work that the GRC Project has underway in partnership with other divisions across the U.S. Chamber of Commerce.  If you have any questions about what is contained in this report or to be added/removed from this distribution list contact Ben Kester at [email protected].***