U.S. Chamber of Commerce

International Policy Update

July 22, 2022

Chamber Commends USTR Decision on Mexican Energy Policy

“CHIPS Plus” Package Takes Shape in Congress

USTR Seeks Input on Broader Forced Labor Strategy

From the Home Front

New National Poll: Voters Oppose Proposed Antitrust Regulations for Technology Companies

Commentary

UPDATE: Resolution Reached in Panasonic Rapid Response Labor Mechanism Case

Chamber Commends USTR Decision on Mexican Energy Policy

On July 20, the Office of the U.S. Trade Representative (USTR) requested dispute settlement consultations with Mexico under the United States-Mexico-Canada Agreement (USMCA), which Canada joined the same day. The dispute centers on “certain measures by Mexico that undermine American companies and U.S.-produced energy in favor of Mexico’s state-owned electrical utility, the Comisión Federal de Electricidad (CFE), and state-owned oil and gas company, Petróleos Mexicanos (PEMEX).”

U.S. Trade Representative Katherine Tai said:

“We have repeatedly expressed serious concerns about a series of changes in Mexico’s energy policies and their consistency with Mexico’s commitments under the USMCA. These policy changes impact U.S. economic interests in multiple sectors and disincentivize investment by clean-energy suppliers and by companies that seek to purchase clean, reliable energy. We have tried to work constructively with the Mexican government to address these concerns, but, unfortunately, U.S. companies continue to face unfair treatment in Mexico. We will seek to work with the Mexican government through these consultations to resolve these concerns to advance North American competitiveness.”

The consultations are the first step in the USMCA dispute settlement process, a timeline for which appears as Figure 2 here.

Senior Vice President for the Americas Neil Herrington welcomed the decision in a statement:

“The Chamber applauds this important step toward addressing troubling measures Mexico is advancing in its energy sector that we believe violate the country’s commitments under USMCA. We have repeatedly expressed our concerns with the direction of these policies, which have unfairly disadvantaged U.S. companies and are at odds with our common goals of generating reliable energy, sustainable growth, and a durable economic recovery.

“We appreciate the Biden Administration’s attention to these important issues, and we are committed to working with both governments to successfully address them and ensure North America is the most dynamic and competitive region in the world.”

The U.S. Chamber co-hosted the 12th U.S.-Mexico CEO Dialogue on July 13, which convened business and government leaders for conversations on challenges and opportunities in the bilateral relationship. In addition to Herrington, CEOs expressed concern over the investment climate in Mexico and called on the Mexican government to uphold its USMCA commitments, particularly in energy.

Additionally, U.S. Chamber President and CEO Suzanne Clark addressed this issue in an op-ed published ahead of her late March visit to Mexico, originally appearing in Mexico City’s El Financiero, entitled American Businesses See Challenges and Opportunities in the U.S.-Mexico Relationship. Clark highlighted the importance of holding the governments accountable for their USMCA commitments and emphasized the need for open and transparent energy investment.

For further information, please contact Senior Vice President for the Americas Neil Herrington (nherrington@uschamber.com).

“CHIPS Plus” Package Takes Shape in Congress

On July 19, the Senate voted by a broad 64-34 bipartisan majority to proceed with what has been dubbed a “CHIPS Plus” package to incentivize semiconductor research, design, and manufacturing in the United States. The package includes the following elements:

• It appropriates $52 billion in grants for domestic semiconductor manufacturing under the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, which was enacted but not funded 18 months ago;
• It creates an investment tax credit for semiconductor manufacturing;
• For both of the above, it establishes “guardrails” on the grants and the investment tax credit to ensure that these benefits support semiconductor manufacturing investment in the United States;
• It authorizes (but does not appropriate) support for basic research and R&D at the National Science Foundation, the Department of Commerce’s Regional Technology Hubs, and the National Institute of Standards and Technology (NIST);
• It includes language to develop processes to ensure research security;
• It provides $1.5 billion in funding for a Public Wireless Supply Chain Innovation Fund (including open architected networks) and $500 million for an American International Technology Security Fund, which will support secure and trusted telecommunication development and use of open, interoperable, software-based technologies.
• The CBO score for the entire package is $79.3 billion through FY2031.

The U.S. Chamber sent a July 19 Key Vote letter to the Senate expressing strong support for moving ahead with the CHIPS funding, which would “strengthen the U.S. economy, national security, and supply chain resilience.” The Chamber also issued a statement calling on Congress to swiftly approve the package.

The Senate is tentatively planning to hold a cloture vote on Monday, setting up final passage on Tuesday. The House will likely take up a vote before the August recess and as soon as next week. House Speaker Nancy Pelosi (D-CA) expressed support for the legislation and said a floor vote could take place next week. The possibility that the House stays in session a few extra days to ensure the legislation is wrapped up is also being discussed as a contingency plan. The bipartisan House Problem Solvers Caucus also endorsed the CHIPS-Plus package. However, House Ways & Means Republican Leader Kevin Brady (R-TX) voiced opposition to the package, asserting that it does not address broader competitiveness challenges and could be better solved by broad-based tax incentives.

The Chamber continues to engage with key offices on the pending legislation. For further information, please contact Director for International Policy Isabelle Icso (iicso@uschamber.com).

USTR Seeks Input on Broader Forced Labor Strategy

The Office of the U.S. Trade Representative (USTR) is seeking comments to help develop its forced labor strategy. The strategy, announced in January, will establish an “action plan for utilizing existing and potential new trade tools to combat forced labor in traded goods and services,” according to a July 6 notice. Comments are due by August 5.

Specifically, USTR is inviting comments that address the following:

·    What actions could the U.S. government pursue with like-minded trade partners and allies to combat forced labor as an unfair trade practice?

·    How can the U.S. government bolster the forced labor components of trade agreements and trade preference programs to have greater effect?

·    What new and innovative trade tools can the U.S. Government develop and utilize to advance efforts to combat forced labor in traded goods and services?

·    How can the U.S. government make the development of trade policy on forced labor a more inclusive process?

·    Do you have additional recommendations for monitoring, tracing, or eliminating forced labor in traded goods and services in supply chains?

If your company has interest in submitting comments, please reach out to Director for International Policy Isabelle Icso (iicso@uschamber.com) and China Center Director Don Giolzetti (dgiolzetti@uschamber.com) by July 28 after which we will assess whether we have a quorum to move forward with a submission.

From the Home Front

New National Poll: Voters Oppose Proposed Antitrust Regulations for Technology Companies

On July 21, the U.S. Chamber released a new national poll conducted by AXIS Research. The poll found that 70% of voters oppose Congressional proposals to add new antitrust regulations for technology companies, and a majority of voters are more likely to oppose candidates who support such regulations.

Upon hearing descriptions of the proposed policies in the American Innovation and Choice Online Act, 79% of Republicans, 72% of Independents, and 59% of Democrats say they strongly oppose or somewhat oppose the bill which would impact services they rely on.

Candidates running for office who support the proposed regulations are likely to lose support from voters. Sixty-one percent of Republicans and 53% of Independents say they are more likely to oppose candidates who support the bill, and Democrat voters are more likely to oppose candidates who support the legislation (42%), than support candidates who back it (35%).

The poll reveals that more than anything else, voters want Congress focused on the economy (30%) and inflation (28%). And only 1% of voters think Congress should prioritize regulating technology companies, making it one of the lowest overall priorities for voters.

Executive Vice President and Chief Policy Officer Neil Bradley made the following statement on the results:

“Congress should abandon unnecessary, harmful changes to America’s antitrust laws that would drive up prices and reduce choices for American families. It makes zero sense for Congress to pursue proposals that would make it illegal for companies to offer free shipping, discount goods, or complimentary services. Voters have made it clear they don’t like this bill and they want Congress to focus on taming inflation. Amazingly, the proposed legislation would likely lead to higher prices.”

Voters also see a direct correlation between government regulation and prices with 67% of voters worried that more government regulation of companies will increase prices on consumers.

And when it comes to technology, voters think the most important issue for Congress to focus on is protecting data privacy (21%) followed by protecting consumers from scams and malware (12%).

The national poll surveyed 1,219 likely 2022 voters and was conducted July 5-10, 2022. Results from the full survey have a margin of error of plus or minus 2.86 percentage points.

Full poll results can be viewed online here, and a blog post laying out the findings and additional insights can be found here.

Commentary

UPDATE: Resolution Reached in Panasonic Rapid Response Labor Mechanism Case

U.S. Chamber (July 21) by Stephanie Ferguson