Business outlines trade policy actions to minimize supply chain disruptions and address Covid-19 outbreak.

Paris, 7th April, 2020 – Today, we released a statement outlining priorities for a Covid-19 trade policy response with three overarching objectives for OECD:

• support OECD member and partner countries in establishing necessary, effective, and evidence-based measures to address the Covid-19 pandemic;
• safeguard that governments do not misuse these developments to adopt or keep arbitrary, discriminatory or protectionist policies that disrupt supply chains and put further strains on the economy;
• highlight the crucial role of open trade and global value chains as fundamental drivers to recover from this global crisis.

We submitted this paper as business input into the virtual OECD Trade Committee meeting of senior trade officials from OECD member and partner countries.

Among others, the paper calls for:

• OECD to establish a framework to monitor and analyze trade policy measures that are introduced by governments in response to the Covid-19 pandemic
• OECD in-depth analysis of the impact of COVID-19 on world trade, investment, and global value chains, with policy guidance on international cooperation
• OECD work towards a reduction in tariff and non-tariff barriers as an effective tool in stimulating the economy, and as part of a holistic economic policy response.

Commenting on the role the OECD can play in supporting international coordination on the global pandemic:

• “The OECD should support measures that are targeted, risk-proportionate, transparent, WTO-compliant, and temporary – ideally with sunset clauses and a clear exit strategy’’ – said Clifford Sosnow, Chair of the Business at OECD Trade Committee.
• “Businesses face serious cash-flow constraints that threaten their sustainability and ability to exist in the short-term. Trade Ministers can design effective policies to stimulate the economy, and should be a critical part of a holistic economic policy response.” said Marta Blanco, Vice Chair of the Business at OECD Trade Committee, and President of the Spanish CEOE International. Spain will chair the OECD Ministerial this year.
• “Trade responses will need to be integrated into the OECD-wide strategy to help coordinate a “Global Marshall Plan” based recovery policy. Unilateral measures that disrupt the required trade and investment would have devastating consequences, delay recovery and further aggravate countries’ pandemic preparedness and resilience.” Said Russel Mills, Secretary General, Business at OECD.

The OECD Trade Committee meeting takes place from 7 to 9 April 2020 – a little more than a week after G20 Trade and Investment Ministers committed “to presenting a united front against this common threat.”[1]

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[1] G20 (2020): G20 Trade and Investment Ministerial Statement 30 March 2020

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Paris, 16th January, 2020 – “G20 leaders must step up their game to strengthen cross-border coordination and remove artificial obstacles to improve the business and financing environment for SMEs, or we risk missing out on their potential”, said Business at OECD Chairman Phil O’Reilly at the Inception Event of the Saudi B20 Presidency. “We must also better address the unintended consequences of domestic and cross-border regulations. Digital technologies bring opportunities for more accessible and affordable finance and can benefit small companies worldwide, but also mitigate the risk of illicit financial flows which are said to amount to USD 1 trillion.”

On the occasion of the Saudi B20 Inception event, a new Business at OECD report released today (available here) highlights that trade finance, key to business trust in global trade activities, is a case in point for the need to make additional efforts to tackle regulatory fragmentation:

• The role and further development of trade finance is central to business trust in global trade activities, with four-fifths of those activities – worth USD 15 trillion a year – underpinned by specialized loans or guarantees.

• Access to services supporting trade transactions, especially financing and risk mitigation, should be made more easily and affordably accessible especially to SMEs to address the unmet demand for trade finance.

• Further developing “trade ecosystems” can support payments and enable trade financing, accessible to both SMEs and large corporates, leveraging both traditional data sources and new data arising from digital technologies.

Gianluca Riccio, Vice-Chair of the Business at OECD Finance Committee and member of the B20 Finance and Infrastructure Taskforce added: “We should carefully consider the cumulative burden of regulation, look at reforms with small players in mind, and have a holistic view across players to achieve sustainable, balanced growth. As highlighted in our paper, it is imperative for all policy-makers and standard-setting bodies to have an overarching view across regulations.”

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Paris, 19^th November, 2019 – Today Business at OECD published a joint business position “Joint Business position on the modernization of the OECD arrangement” calling for the modernization of the Arrangement on Officially Supported Export Credits (the Arrangement).

“Over the last decades we have seen important geographical shifts in the balance and scope of international trade and an increasing importance of global value chains. Today, unfair competition in the financing of exports is a reality many businesses operating in OECD countries face,” said Russel Mills, Business at OECD Secretary General. “It is thus crucial that OECD work contributes to levelling the playing field with respect to the provision of officially supported export credits offered by Export Credit Agencies.”

The position paper lays out a vision for modernizing the Arrangement and proposes a parallel two-tier reform package that contains both much-needed immediate interventions and a broader revision of the overall Arrangement. The paper highlights the importance of:

• Immediate measures to restore the level playing field with aggressive non-OECD member countries on government supported export finance.
• An easy to understand, transparent, predictable, market-reflective and consistent framework.
• A good basis for international competition in official trade-related finance in the long-term.

Adapting quickly to future market changes and closing the financing gap of investment in the developing world.

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Paris, 30^th October, 2019 – At its 4th Annual Forum on Health, senior representatives from business, governments, and the OECD agreed on the critical role multi-stakeholder partnerships play to break silos and leverage collective action towards the health-related Sustainable Development Goals (SDGs).

Moderated by Riz Khan, the Forum showcased the on-the-ground initiatives across the innovative, agri-food, and sports sectors for populations to adopt healthier lifestyles and for governments to drive better health outcomes through innovation.

“Reaching the SDGs is fundamental to global growth and prosperity. But no sector can do it alone. Business, governments, and civil society must collaborate closely to meet the goals on time,” said Russel Mills, Business at OECD Secretary General. “Healthy populations are the backbone for a sustainable economy and interventions should recognize the positive impact well-designed health policies can have to strengthen tomorrow’s workforce.”

Participants pointed to ways in which the OECD can promote best practices and measure progress. “Business looks to the OECD as a platform where we can strengthen the evidence base, have timely dialogue with governments, and ensure stakeholders can navigate towards the right direction,” said Thomas Cueni, Chair of the Business at OECD Health Committee and Director General of IFPMA. “We must continue translating horizontal thinking into action, and we need policies to support the required innovation ecosystem to deliver on the SDGs.” Commenting on the potential of Artificial Intelligence, Nicole Denjoy, Vice Chair of the Business at OECD Health Committee and Secretary General of COCIR, stated, “business is at the forefront of AI with innovative solutions. It is critical that both public and private sectors work together to optimize the use of this technology for the benefit of society, and we look forward to our continued collaboration with the OECD in this field.”

 

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Paris, 23rd October, 2019 – Business at OECD released its flagship publication “Getting Trade Back on Track: Business priorities for future OECD work on trade” in the context of this week’s fall 2019 OECD Trade meetings. The paper strongly calls upon the OECD to reinforce its evidence-base on the benefits of trade, and gives a considered assessment of key trade topics concerning the leading business federations in all 36 OECD member countries and beyond.

“Businesses in OECD countries remain committed to a global rules-based trade and investment system that opens markets and removes barriers and unfair trading practices.” said Business at OECD Trade Committee Vice Chair Rob Mulligan (USCIB). “As many trade and investment regimes do not yet address today’s most pressing challenges, the potential to significantly boost our economies through further trade initiatives is enormous.”

“It is important that the OECD continues to provide the evidence-base to enable governments to address trade distorting measures. Assisting the design of policies that level the playing field and reconciling trade liberalization with other key objectives can make a critical contribution to meet the global challenges business faces today.’ said Business at OECD Trade Committee Vice Chair Pat Ivory (Ibec).

The publication is released in the context of ongoing trade policy tensions among OECD members and non-member countries, and provides consensus business views on trade policy questions to be addressed going forward.

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Paris, 9^th October 2019 – Business is encouraged by the OECD proposal for amended international taxation rules, which was released today and represents an important step forward in addressing the tax challenges arising from the digitalization of the economy.

Business welcomes in particular the attempts to balance levels of accuracy and simplicity for both taxpayers and tax administrations. The proposal also addresses many of the high-level principles that we in the business community outlined to the OECD/G20 Inclusive Framework in August 2019.

Will Morris, Chair of Business at OECD’s Committee on Taxation and Fiscal Policy, commented:

“The Secretariat’s “Unified Approach under Pillar One” represents an advance on earlier proposals by combining three approaches into one.  It weaves together common elements from various views among OECD/G20 Inclusive Framework members in order to move the project forward toward a high-level political agreement.

Questions remain regarding the technical details and implementation framework necessary for this project to succeed. Those, in combination with the ambitious time schedule, highlight the critical need for OECD and business to work together with the aim to modify international tax rules in a principled manner. We remain committed to constructively engaging in the OECD/G20 process as the only forum for reaching a practical and sustainable global outcome.”

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Paris, 27 May 2019 – A strong delegation of global business leaders participated in the 2019 OECD Ministerial Council Meeting, stressing the need for integrated policies that will enable business to fully deliver on the potential from the digital transformation for economies and societies. This pivotal exchange platform allowed our global members and corporate leaders to convey what business needs from international collaboration to promote both economic growth and inclusion. Our high-level dialogue featured multiple interactions with Economy, Trade, Foreign Affairs, and Finance Ministers from 36 OECD countries and key non-member economies. Senior leaders including Peter Robinson, CEO and President from the US Council for International Business, Alexandre Ricard, CEO of Pernod Ricard, and Saori Dubourg, Board Member from BASF, formally addressed Ministers during the program.

 

The OECD Ministerial outcomes and adopted instruments reflected critical policy recommendations from our 2019 Business at OECD Statement to Ministers, notably the need to appropriately involve stakeholders as future policy recommendations are developed, guidance that will enable data governance based on trust, and continued support for OECD evidence and facts on tax, competition, and trade, including on tracking market distorting support measures and barriers. We commend the adoption of the OECD Artificial Intelligence principles and the creation of an OECD Observatory on AI—business involvement in this area will be critical to achieve innovation in a number of fields including health, environment, and anti-corruption.

We also convened for the 5th occasion the current G20 and Business-20 presidencies to share business recommendations to G20 leaders ahead of the Osaka Summit. The event featured the participation of the Foreign Minister of Japan Taro Kono, the president and CEO of ANA Holdings Shinya Katanozaka, and OECD leadership. Business speakers from our French and German national members MEDEF and BDI, our Argentinian observer UIA, and from Accenture also debated views with five G20 Sherpas and senior government officials. In this meeting, Business at OECD Chair Phil O’Reilly affirmed the importance of ensuring continuity and frank exchanges across presidencies to achieve tangible outcomes in G20 declarations and implementation actions. 

About Business at OECD

Established in 1962, Business at OECD stands for policies that enable businesses of all sizes to contribute to growth, economic development, and societal prosperity. Through Business at OECD, national businesses and employers’ federations representing over 7 million companies provide and receive expertise via our participation with the OECD and governments promoting competitive economies and better business. 

For more information, contact Ali Karami-Ruiz, Senior Director, Strategic Engagement and Communications

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Melbourne, 22^nd March 2019 – Over 300 international VAT/GST experts from government, international business, and academia met in Melbourne for the 5^th OECD Global Forum on VAT.  Discussions focused on learning from practical experiences and exploring how VAT/GST revenues can be safeguarded, while ensuring a global level playing field and efficient VAT/GST collection for business and tax administrations—key elements for fostering economic growth.

“To safeguard VAT/GST revenues for governments and ensure a level playing field for business, business calls for a consistent global implementation and application of the neutrality and destination principles, as recommended in the OECD International VAT/GST Guidelines. This includes efficient VAT/GST collection based on a well-functioning cooperative compliance regime, and simple, proportionate and consistently applied measures, that allow an efficient use of modern technology”, said Karl-Heinz Haydl, Business at OECD VAT/GST Chair and Business Co-Chair of the OECD VAT Technical Advisory Group (TAG).

 The Global Forum also endorsed a forthcoming OECD report on the role of digital platforms in the VAT/GST collection process. “Business at OECD welcomes this report and calls for consistent implementation by governments around the world, looking at all possible roles digital platforms can play, as highlighted in the report”, Haydl said. We welcome the development of further Implementation Guidance by the OECD for the consistent implementation of the policy options provided in this new report.

In light of digitalization and the global nature of VAT/GST, we believe global dialogue and cooperation between business, which serves an important function in VAT/GST collection, and governments under the lead of the OECD and its Global Forum on VAT, is more important than ever.

“Consultation with business to shape sound future policies and appropriate lead time for business to implement these policies in practice are key aspects to make global VAT/GST systems more consistent and futureproof”, Haydl pointed out.  “We will continue to actively support this work under the lead of the OECD´s Working Party 9 on Consumption Taxes, through the well-established OECD VAT/GST TAG process”, Haydl emphasized.

About Business at OECD

Established in 1962, Business at OECD stands for policies that enable businesses of all sizes to contribute to growth, economic development, and societal prosperity. Through Business at OECD, national businesses and employers’ federations representing over 7 million companies provide and receive expertise via our participation with the OECD and governments promoting competitive economies and better business.

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