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U.S. Chamber of Commerce Newsletter – International Policy Update (2/18)

21 February 2022 Monday

U.S. Chamber of Commerce
International Policy Update
February 18, 2022
Chamber Report: Antitrust Bills Threaten U.S. Competitiveness, National Security
Chamber to Host Fourth CEO Summit of the Americas
Senate Passes Resolution Supporting Ukraine; Russia Sanctions Bill Stalled
USTR Says ‘New Tools’ Needed to Address ‘Unfair’ Chinese Trade Policies
Uyghur Forced Labor Prevention Act Implementation Coming into Focus
Biden Administration Outlines Indo-Pacific Strategy
Democratic Senators Support Trade Provisions in House Competitiveness Bill
Chamber Joins Comments on FARA Implementing Regulations
Chamber Joins Letter on Ratifying Kigali Amendment in Montreal Protocol
USTR Releases Notorious Markets List
Commentary
How Antitrust Legislation Threatens U.S. Competitiveness and National Security
The Time is Now for the U.S. to Lead on Digital Trade
Chamber Report: Antitrust Bills Threaten U.S. Competitiveness, National Security
On February 16, the U.S. Chamber of Commerce released a report entitled “U.S. Antitrust Legislative Proposals: A Global Perspective,” which provides a comparative assessment of innovation policy approaches in the U.S., China, and the European Union, and outlines how current antitrust proposals in the U.S. would put American companies at a distinct disadvantage. It explains how proposed antitrust legislation would weaken U.S. technology companies’ ability to compete in the global marketplace and undermine our national security interests.
Upon the report’s release, Executive Vice President and Chief Policy Officer Neil Bradley made the following statement:
“Today, American companies lead the world because they have the freedom to invest, innovate, scale, and compete. That freedom would be significantly curtailed under proposed changes to our antitrust laws. This legislation would hamstring American companies’ ability to compete in the global marketplace while giving our foreign competitors the upper hand. It is the definition of self-defeating.
“Instead of re-writing antitrust law to punish American companies, the U.S. government should focus instead on vigorous enforcement of current law and on vocally opposing and effectively countering foreign regimes that unfairly target U.S. companies.”
According to the report, the United States and other leading world powers are racing to develop and deploy the technologies of the future such as artificial intelligence, quantum computing, and semiconductors. China is pursuing a comprehensive regulatory agenda to dominate technologies of the future while constraining American companies. Chinese companies are heavily subsidized and state-owned companies are overwhelmingly exempt from anti-monopoly law. China’s tech giants operate in a protected domestic environment insulated from foreign competition and are encouraged to aggressively expand into overseas markets.
In Europe, the EU is pursuing a path of “tech sovereignty” through a range of industrial policies—including the Digital Markets Act, AI Act, Data Act, and the Gaia-X project to create a “European” cloud—all of which are designed to boost European technology firms and potentially limit the success of American companies.
While China and the EU aggressively pursue industrial policies to ensure their own dominance, U.S. lawmakers are considering antitrust proposals that would handicap American companies.
The report details how proposed U.S. antitrust legislation could force companies to provide their competitors with equal access to their platform; require them to share user data with other companies; prevent them from making certain new acquisitions or investments; and could even break them apart into smaller businesses, which means less money for cutting-edge research and development, and diminished U.S. technology leadership.
Read a blog post for a quick take on the report’s contents, and access the full report here.
For further information, please contact Senior Vice President for International Regulatory Affairs & Antitrust Sean Heather (sheather@uschamber.com).
Chamber to Host Fourth CEO Summit of the Americas
On February 14, the U.S. Chamber announced that it, in partnership with the U.S. Department of State, will host the Fourth CEO Summit of the Americas, the official private sector stakeholder forum of the IX Summit of the Americas. The administration will host leaders from the Western Hemisphere in Los Angeles the week of June 6th for the Summit of the Americas, which will be carried out in tandem with the CEO Summit and other stakeholder forums designed to set a new precedent for inclusion.
The 2022 CEO Summit will leverage the power of the private sector to bring together diverse business leaders—including those representing small and medium-sized enterprises—from the U.S. and across the hemisphere to drive innovative, practical solutions for a brighter future across the Americas.
Executive Vice President and Head of International Affairs Myron Brilliant released the following statement:
“The Chamber is honored to be organizing the Fourth CEO Summit of the Americas in partnership with the Administration, which presents a tremendous opportunity for the U.S. government and the private sector to work together to promote sustainable growth-oriented policies that advance prosperity and job creation throughout the Americas. The business community has been integral to pandemic response across the Americas and we are equally committed to the hemisphere’s full economic recovery.”
The Summit will foster greater dialogue between heads of government and private sector leaders of the Americas on our mutual goal of fostering an inclusive and sustainable economic recovery.
For further information, please contact Senior Vice President for Americas Neil Herrington (nherrington@uschamber.com).
Senate Passes Resolution Supporting Ukraine; Russia Sanctions Bill Stalled
On February 17, the Senate passed by unanimous consent a resolution introduced by Senators Jeanne Shaheen (D-NH) and Rob Portman (R-OH) calling on the Biden administration “to impose significant costs” on Russia if it further invades Ukraine. It also expresses “support for an independent and democratic Ukraine — one that is secure against further Russian military aggression.” It also encourages unity among North Atlantic Treaty Organization (NATO) allies and the broader transatlantic community to convey solidarity in response.
Senate Foreign Relations Chairman Bob Menendez (D-NJ) and Ranking Member Jim Risch (R-ID) are among the cosponsors. Chairman Menendez introduced in January a bill which his office wrote “would impose crippling sanctions on the Russian banking sector and senior military and government officials.” Ranking Member Risch countered that legislation this week with his own bill, signaling that compromise discussions on a more robust sanctions package were stalled and leading to the bipartisan resolution.
The Chamber has been engaging with our member companies, the Biden administration, and Congress on various proposals for sanctions the United States and its allies may apply to Russia if Moscow launches a further invasion of Ukraine. Several possible forms of sanctions are under consideration, including sanctions on Russian banks and export controls affecting products made with or containing U.S. technologies. For a readout on the current landscape of these potential actions, please click here.
For further information, please contact Director for International Policy Isabelle Icso (iicso@uschamber.com).
USTR Says ‘New Tools’ Needed to Address ‘Unfair’ Chinese Trade Policies
In its 2021 Report to Congress on China’s WTO Compliance, the Office of the U.S. Trade Representative examined China’s compliance under World Trade Organization (WTO) rules since its accession in 2001, concluding that new trade tools were needed to address China’s “unfair, non-market and distortive trade policies...in pursuit of industrial policy objectives.” Ambassador Katherine Tai summarized the report’s findings by saying in an official press release:
“China has not moved to embrace the market-oriented principles on which the WTO and its rules are based, despite the representations that it made when it joined 20 years ago. China has instead retained and expanded its state-led, non-market approach to the economy and trade... China’s policies and practices challenge the premise of the WTO’s rules and cause serious harm to workers and businesses around the world, particularly in industries targeted by China’s industrial plans.”
Additional highlights from USTR’s assessment include:
  • Phase One: The Phase One agreement failed to address fundamental U.S. concerns with PRC trade and industrial policies, including massive subsidies, favorable domestic regulatory support, and limited market access for imported goods and services. China also failed to meet its commitments under the deal, such as ag biotech approvals, ractopamine risk assessments, and publication of maximum residue levels (MRLs). That said, USTR urged China to fully implement the Phase One deal, as it would create a “more solid foundation for bilateral engagement”;
  • Outstanding concerns: Key concerns include China’s non-tariff measures, industrial subsidies, state-owned enterprises, excess capacity, technology transfer, indigenous innovation, investment restrictions, cybersecurity and regulatory transparency, administrative licensing, and standards; and
  • USTR’s next steps: USTR will aim to hold China accountable for its Phase One commitments, engage with China on top U.S. concerns, and seek to find areas where progress is achievable. In addition, USTR will aim to strengthen existing trade tools and forge new ones to counter China’s “unfair policies,” while working with allies and partners to build solutions to “China’s state-led, non-market approach to the economy and trade.”
Though the report’s findings do not come as a surprise, the issues identified in the 72-page assessment underscore the severe challenges posed by China’s state-driven economy and industrial policies on the international trading system. The report appears to mark the end of the road for the Phase One deal as it highlights all the areas where China failed to meet its obligations (and existing structural concerns). With a “mini deal” nowhere in sight, it is likely the administration will pivot to an enforcement posture in short order, possibly to include the long-rumored new Section 301 investigation into China’s industrial subsidies and policies.
For further information, please contact the Chamber’s China Center President Jeremie Waterman (jwaterman@uschamber.com).
Uyghur Forced Labor Prevention Act Implementation Coming into Focus
On February 14, the U.S. Chamber hosted an expert panel of trade attorneys focused on supply chain and compliance issues related to the implementation of the “Uyghur Forced Labor Prevention Act,” which was signed into law on December 23. The panel included: Jeffrey Kessler, Partner at WilmerHale and former Assistant Secretary for Enforcement and Compliance at the U.S. Department of Commerce; Nazak Nikakhtar, Partner at Wiley Rein and former Assistant Secretary for Industry and Analysis at the U.S. Department of Commerce; and Victor Ban, Partner at Wiley Rein Maureen Thorson, and Associate at Covington and Burling.
While the panel discussion was off the record, Chamber staff have identified a number of common themes and priorities identified by a cross-section of experts. These themes center on the need for companies to be proactive in getting visibility across suppliers and conducting comprehensive supply chain mapping before June 21, which is when the legislation officially takes effect. Public comments informing the Forced Labor Working Group’s enforcement strategy are due March 10. A public hearing has not yet been scheduled but is expected to take place by the end of April or early May.
The key challenge companies are facing is that guidance for complying with the legislation is slated to be issued the same day the legislation takes effect. Accordingly, there will likely be no advance notice of what precise steps firms should take to comply (or the preferred tools to use).
Among the identified issues is “sequencing,” a need for further clarity on which entities will be subject to the rebuttable presumption, and the potential use of prior disclosure as areas likely to be addressed via the public input process.
To prepare, companies are being counseled generally to:
  • Start with Tier 1 supplier analysis: Figure out risk factors, then begin gathering documentation (certificates of origin/affidavits/purchase orders) that certify the importers goods are not made with forced labor. Work your way up to Tiers 2/3 if needed.
  • Keep files organized so when Customs and Border Protection issues guidance you will be ready.
  • Keep your ears to the ground to understand which goods have a particular political salience. For example, one government focus has been silica products. Companies can use the previous business advisory document (Annex 2) to get a sense of sectors that could be prioritized.
  • Importers should look at supplier contracts and ensure language is included assuring no forced labor exists in the subjected supply chains.
With regard to supply chains, additional advice includes:
  • Companies with shorter supply chains in China should start collecting documentation to get ahead of detention risk and look for red flags.
  • Companies with longer supply chains in China should start thinking about risk-based approaches, including by first identifying high-value or high-volume sourced products from China.
Companies with mixed supply chains should be bolstering supply chain review procedures (e.g., getting familiar with supplier codes) and then develop supplier questionnaires. Finally, firms should look at contingency plans and assemble “quick reaction” teams in case detentions are applied.
For further information, please contact Director for International Policy Isabelle Icso (iicso@uschamber.com).
Biden Administration Outlines Indo-Pacific Strategy
On February 11, the Biden Administration outlined its Indo-Pacific strategy. This framework builds on an effort to strengthen relationships with members in the region and to establish a “Free and Open Indo-Pacific” that challenges China’s strategic pursuit of influence in the region. The administration outlined steps to help drive prosperity in the Indo-Pacific in a fact sheet, which includes the development of the Indo-Pacific Economic Framework (IPEF), hosting the Asia-Pacific Economic Cooperation (APEC) in 2023, and closing the infrastructure gap with G7 partners.
Specifically, the fact sheet states the IPEF will include new approaches to trade that meet high labor and environmental standards, a new digital economy framework, advancements in resilient and secure supply chains, and shared investments in decarbonization and clean energy. The U.S. Chamber recently published a major report on digital trade that could provide valuable insights for the digital efforts in the IPEF.
In the recently released annual report on China’s compliance with WTO rules, the Office of the U.S. Trade Representative, in a section labeled "New Strategies," stressed the importance of a strong Indo-Pacific Economic Framework with like-minded trading partners.
For further information, please contact Senior Vice President for Asia Charles Freeman (cfreeman@uschamber.com) or Senior Vice President for International Policy John Murphy (jmurphy@uschamber.com).
Democratic Senators Support Trade Provisions in House Competitiveness Bill
On February 17, Senators Bob Casey (D-PA), Sherrod Brown (D-OH), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), and Richard Blumenthal (D-CT) sent a letter to House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) “urging them to prioritize the pro-worker, pro-environment trade provisions in the China competitiveness bill, known as USICA in the Senate and the America COMPETES Act in the House,” according to the press release. The senators specifically called for a final package to include “funding for adjustment assistance for workers, environmental safeguards against chronic pollution from foreign production and bipartisan proposals addressing trade enforcement and security issues.”
There has been no clear indication whether the conference process will be formal, with designated conferees to reconcile differences, or informal, with House and Senate leadership offices making the final determination as to the make-up of the final bill.
The Chamber weighed in with a letter to the House opposing the “America COMPETES Act” due to numerous provisions, including a trade title dramatically inferior to the bipartisan one in USICA, “that would undermine U.S. competitiveness.” The letter also voices support for the CHIPS for America Act funding to bolster U.S. semiconductor capacity and new tools for supply chain resiliency, which the Chamber reinforced in a multi-association letter to House and Senate leadership on February 16.
The Chamber is engaged in efforts to shape the final bill as House and Senate lawmakers look to reconcile differences in their two versions. For further information, please contact Director for International Policy Isabelle Icso (iicso@uschamber.com).
Chamber Joins Comments on FARA Implementing Regulations
On February 11, the U.S. Chamber joined comments to the Department of Justice regarding clarification and modernization of Foreign Agents Registration Act (FARA) Implementing Regulations. The comments aim to promote further transparency and clarity in the administration and enforcement of FARA. Specifically, the comments address the registration triggers under FARA, exemptions under the statute, and the filing mechanics for registered foreign agents with respect to informational materials, short forms, deadlines, and the supplemental statement. The Chamber’s interest in the matter relates to a large degree to the manner in which FARA regulations may impact representatives of U.S. subsidiaries of foreign-headquartered companies.
For further information, please contact Senior Vice President for International Policy John Murphy (jmurphy@uschamber.com).
Chamber Joins Letter on Ratifying Kigali Amendment in Montreal Protocol
On February 16, the U.S. Chamber joined a multi-association letter to the Senate Committee on Foreign Relations on the ratification of the Kigali Amendment to the Montreal Protocol. The letter urges Chairman Robert Menendez (D-NJ) and Ranking Member Jim Risch (R-ID) to expeditiously consider the Kigali Amendment so it can move to the full Senate.
The business groups support the Kigali Amendment “for the economic and environmental benefits associated with phasing down the production and use of hydrofluorocarbons (HFCs)” and further states ratification “would safeguard the competitiveness of American manufacturers and showcase American climate leadership.” The letter also asserts the amendment would enhance economic opportunities, including through increasing manufacturing jobs, and “avoid up to 0.5° C of warming by 2100.”
For further information, please contact Vice President for Environment and Sustainability Chuck Chaitovitz (cchaitovitz@uschamber.com).
USTR Releases Notorious Markets List
On February 17, the Office of the United States Trade Representative (USTR) released the findings of its 2021 Review of Notorious Markets for Counterfeiting and Piracy (the Notorious Markets List). The Notorious Markets List highlights online and physical markets that reportedly engage in or facilitate substantial trademark counterfeiting or copyright piracy.
The list identifies 42 online markets and 35 physical markets that are reported to engage in or facilitate substantial trademark counterfeiting or copyright piracy, including two significant China-based online markets that are new to the list. In a nod to the Biden administration’s worker-centered trade policy, the list includes a section that “examines the adverse impact of counterfeiting on workers involved with the manufacture of counterfeit goods.”
Commentary
U.S. Chamber (February 15) by Sean Heather
U.S. Chamber (February 9) by Mary Kate Carter

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