In this Issue

A view from the NFTC ChairAlan Wolff, NFTC Chairman

A Word From the PresidentRufus Yerxa, NFTC President

Save the Date for NFTC’s 2017 World Trade Dinner and Award Ceremony

Marshall Lane, Senior Director of Operations

Trade in the Trump AdministrationVanessa Sciarra, NFTC Vice President

Trump Administration’s U.S. Iran Policy Review

Richard Sawaya, NFTC Vice President, USA*Engage

Health Care and Tax Reform Timing Remain Linked

Catherine Schultz, NFTC VicePresident

In Geneva, GIF Discusses Impact of Global E-commerce on Small Business

and DevelopmentJake Colvin, GIF Executive Director

GIF @ South by SouthwestClaire Pillsbury, GIF Deputy Director

GIF Releases New Report on the Role of Trade and Tech in the Success of

American Small BusinessesClaire Pillsbury, GIF Deputy Director

International Human Resources Conference

William Sheridan, NFTC VIce President

Globalization and the Strategic Leveraging & Management of a Globally Mobile

WorkforceGrace O’Rourke, NFTC VIce President

Council HighlightsNational Foreign Trade CouncilServing America America’s Global Business Since 1914

A View from the NFTC ChairBy Alan Wm. Wolff, NFTC Chairman

We now have a few elections behind us, so some reflection is useful on how the cause of international trade was served.

The Washington Post had the following take on the French election: The choice voters faced was between those who favor open, globalized societies and others who prefer closed, nationalistic ones. This is the debate underway across the world. What we are seeing is historic: a choice of two completely different modes of organizing society. These words, adapted only slightly, taken from a recent story, describe the French election of May 7, 2017.

(Continued on page 4)

A Word from the President By Rufus Yerxa, NFTC President

As the Trump Administration begins its consultations with Congress and the American public over what kind of changes the President wants to see in the North American Free Trade Agreement (NAFTA), it is critical for American business to speak up about how trade agreements affect our ability to continue growing production and jobs in this country and to compete with the rest of the world in a globalized economy.

Much of the narrative from opponents of trade liberalization has been focused on the perceived cause and effect between trade agreements generally and the loss of manufacturing jobs in certain sectors highly sensitive to foreign competition. It is an extraordinarily myopic view that disregards the stunning success of all sectors of our economy – manufacturing, services and agriculture – in global competition. If it becomes the guiding logic, it will turn our country towards a dangerously inward-looking set of trade policies and progressively undermine American leadership in opening world markets.

(Continued on page 2)

June 2017 • Vol 18, Issue 02

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A Word From the PresidentBy Rufus Yerxa, NFTC President

(continued from page 1)

That’s why it is so critical for the American people to start hearing the truth from business leaders and politicians alike: While the opening of trade has certainly caused painful declines in certain industries less able to adapt to global competition, an adjustment which calls for much better domestic policy responses, the overall effect of trade on our industries, workers, consumers and economy as a whole has unquestionably been positive.

A close examination of the real facts about trade and the American economy proves this point. Our success in world trade – the internationalization of America’s economy -- has made our GDP over $2 trillion greater than it would otherwise be. We have the largest net job creation in our history, and one out of five of those jobs result from trade. One of every three acres of agricultural production goes to world markets. Our companies, brands and technologies dominate world commerce.

While many politicians focus on manufacturing job losses in certain sectors that traditionally employed large numbers of assembly line workers, they overlook two important facts. First, almost 90% of those job losses have resulted from greater productivity – part of a trend since the 1950s that has seen manufacturing labor decline throughout the entire developed world from over 30% of the work force to around 10% today. In the 1980s it took nearly 12 hours of direct labor to produce a ton of steel, but today it takes less than 3. This is a reality that cannot be changed, and should not be an excuse for turning against open markets. The second fact being overlooked is that, while this trend was occurring, we were also creating millions of new jobs in our most globally competitive sectors. The explosion of the digital economy – dominated by American companies in the Information Technology (IT), internet and digital economy -- played a huge part in this growth. But so too did the success of our global leadership in sectors such as energy, services, machinery and equipment, capital goods, and health products. The phenomenal growth of these industries

has fueled a huge boom in our job market and has made America the undisputed technological leader in the new world economy.

America’s leadership in negotiating better trading conditions worldwide has been a major contributor to that success. Nowhere has that been clearer than in our trade with our two North American neighbors. Canada and Mexico are now our two largest export markets, and together they now pay $600 billion annually for American goods and services. Although our exporters still face some problems in these two markets, NAFTA has succeeded in eliminating all tariffs and significantly reducing non-tariff barriers in both Mexico and Canada. As a result, U.S. exports have increased by more than 350% in real terms since the agreement went into effect. The expanding markets for U.S. manufacturers, service providers and agricultural producers have contributed significantly to the bottom line for our companies.

But the gains from NAFTA go beyond increased exports to these two markets. North American integration of our production platforms has helped our industries compete more effectively with producers in Asia, Europe and other regions. In the auto sector, for example, integrated production has lifted our export competitiveness, increasing U.S. exports of autos to over two million vehicles annually – more than five times the volume of exports prior to NAFTA. In our most technologically intensive sectors – such as capital goods, machinery, electronics and IT – the wide-scale integration of production in North America has been critical to maintaining US global leadership in innovation and technological development.

NAFTA benefits our economy in a variety of other ways. Our truck and rail transport companies have a huge stake in the vast movement of goods between our three markets, with more than 100 trains and 5,000 trucks crossing our northern and southern borders each day. Our farmers now export close to $40 billion to Canada and Mexico every year. Our banks, insurance companies and accounting firms have made huge gains selling to both Canada and Mexico, part of the

A Word From the PresidentBy Rufus Yerxa, NFTC PresidentA Word From the PresidentBy Rufus Yerxa, NFTC President

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reason we enjoy a $34 billion surplus in services trade with our NAFTA partners. Finally, American consumers benefit every day from a much wider array of goods available at lower prices – from Mexican avocados to Canadian beer.

Any effort to modernize and upgrade NAFTA must preserve these hard-won gains. While it is important to address remaining barriers, especially those affecting the newer technologies and modes of trade that didn’t exist when NAFTA was put in place, any final agreement that diminishes our existing access to these markets will have significant adverse effects on U.S. operations, sales and employment.

NAFTA also has another important benefit: It has given us a much more prosperous, stable and democratic neighbor to our south. Until it began opening up in the 1980s and 1990s by joining GATT and signing NAFTA, Mexico was a one-party state with a highly protected economy, state ownership of most industries, widespread poverty and significant out-migration to the United States. Today, Mexico is a multi-party democracy with a growing middle class, a more open economy, a thriving private sector and net in-migration from the United States. It is worth noting that few big developing countries have opened their economies to a powerful developed partner so completely. In fact, U.S. exports to Mexico now represent 20% of its GDP, a remarkably high percentage (by way of contrast, imports from Mexico represent only 1.8% of our GDP). It is vital to ensure that negotiations to improve NAFTA be guided by the objective of strengthening our trade ties with our North American partners while also improving conditions of access for U.S. producers and exporters. NFTC members are prepared to work closely with U.S. negotiators to identify key potential gains for the United States from an effort to modernize NAFTA. We believe there are many ways the agreement can be improved. In particular, we see important gains to be made from new commitments in areas not contemplated when NAFTA was negotiated over 20 years ago – especially in fields like digital trade, e-commerce, state-owned enterprises and small and medium sized enterprises.

These “upgrades” of NAFTA will set important precedents for any future negotiations with Asia or Europe, and thus it is important to make sure the result of these negotiations can become the template for a new era of trade cooperation.

We are now in the midst of a crucial debate about how best to expand growth and opportunity for Americans. Do we seek to do so through defensive measures that seek to restore market share for a few domestic industries, or do we continue the march towards a more open world where American know-how, innovation and entrepreneurial skill will set the pace, and where our producers and workers will have a chance to sell to the 95% of the world’s consumers who live outside our borders? In the coming months, as the Administration’s effort on renegotiation of NAFTA unfolds, that question will need to be answered.

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A View From the NFTC Chair By Alan Wm. Wolff, NFTC Chairman

(continued from page 1)

Emmanuel Macron was centrist in an era of extremes. He favored regional openness within Europe and defended the European Union’s trade agreement with Canada (CETA) as this was the agreement that was most current and was under attack. He was under no illusions with respect to competition from China and the difficulties of gaining access to that market. He stood his ground against protectionism despite pressures to resist change – such as a plant departing France to relocate Poland. There was risk enough in the French election but a landslide in his favor vindicated Macron.

At home, House Ways and Means Chair Kevin Brady provided the clearest articulation of the free trade point of view. On July 15 last year he said --

“Like the term ‘free speech,’ the term ‘free trade’ doesn’t refer to its cost, it means the freedom TO trade. In America it’s our freedom to buy, sell and compete anywhere in the world with as little government interference as possible. “It’s important to everyday Americans because this economic freedom lies at the heart of America’s marvelous free enterprise system that creates jobs and prosperity. . . .“Given all that’s at stake, we cannot afford to limit our freedom to trade. Nothing will weaken America faster or strengthen our competitors more than rolling back that freedom.”

During the U.S. Presidential candidates, the American voter was not treated to a full-throated debate on the merits of free trade versus turning inward. Each of the three finalists, Trump, Clinton and Sanders, were critical of the Trans Pacific Partnership (TPP), which was the only agreement on offer at the time. They found fault with NAFTA as well. Donald Trump was critical of all past trade agreements, calling them “terrible”. This approach clearly appealed to his base, and may have gotten him elected through the support that he gained in Ohio, Michigan and Pennsylvania.

Senator Bernie Sanders was opposed to free trade

agreements beginning with NAFTA in 1993 and extending to the free trade agreement with Korea and TPP. Hillary Clinton moved to become more critical of both NAFTA and TPP, saying that she could no longer support the latter. These positions were taken despite Pew and Gallup polls showing that the majority of Democrats favored free trade agreements, particularly the younger age group of eligible voters by a margin of 3:1.

In history, an election that stands out as a stark contest between free trade and protection was in the UK, and not so much in 2016, which was perhaps mostly about relations with Brussels and immigration, but in 1906. That election is remembered in large part due to the eloquence of Winston Churchill and the fact that he changed parties two years earlier, from Conservative to Liberal, in order to be true to his free trade convictions. He spoke from the same perspective that characterizes Kevin Brady’s remarks quoted above, namely that free trade was good for his country: … our Free Trade plan is quite simple. We say that every Englishman shall have the right to buy whatever he wants, wherever he chooses, at his own good pleasure, without restriction or discouragement from the State. That is our plan;… .

Churchill also understood that access to foreign markets depended on openness at home: If it be economically wise for England to shut out foreign imported manufactures, it must be economically wise for India to shut out British imported manufactures.

Early 20th century Britain had a full debate on the merits of free trade. In 2016, America did not. In our Presidential election, the American people were not well-served by the absence of the case being made for trade.

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The National Foreign Trade Council (NFTC) Foundation’s 2017 World Trade Dinner and Award Ceremony will be on Tuesday, October 24, 2017, in the Great Hall of News at the Newseum, 555 Pennsylvania Ave., NW, Washington, DC.

The reception will begin at 6:30 pm and dinner will follow at 7:30 pm.

It is anticipated that approximately 350 guests will attend the event drawn from our member companies, the diplomatic corps and U.S. governmental officials. The event involves a reception, seated dinner and awards presentation. Last year, our honorees were Chairman Kevin Brady and Congressman Jared Polis for Leadership on Trade. Incorporated in 1979, the NFTC Foundation is the educational arm of the NFTC. It is a 501(c)(3) organization incorporated under the laws of the state

of New York. The NFTC Foundation provides an opportunity to educate policy makers and the public about trade and globalization issues in ways that support the broader mission of the NFTC.

Founded in 1914, the NFTC advocates for an open, rules-based world trading system on behalf of its some several hundred member companies from all sectors of the U.S. economy. We look forward to seeing you at the NFTC Foundation’s 2017 World Trade Dinner as we honor those who have made significant contributions throughout their careers to the expansion of global, rules-based trade. For table sponsorship packages or individual tickets, please contact Marshall Lane.

Save the Date... 2017 World Trade Dinner & Award CeremonyBy Marshall Lane, Senior Director of Operations, mlane@nftc.org

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A Word From the PresidentBy Rufus Yerxa, NFTC President

Trade in the Trump Administration By Vanessa Sciarra, Vice President for Legal Affairs and Trade & Investment Policy, vsciarra@nftc.org

Trade was a big player in the Presidential election and the Trump Administration has undertaken several trade-related actions since January 2017 that affect the development of trade policy. By far the most significant of these actions are the Administration’s withdrawal from the TPP and its planned modernization of NAFTA, but there are other actions which warrant monitoring. Below is a summary of those actions and deadlines to keep in mind.

NAFTA Renegotiation

On May 18, 2017, the Administration filed notice with Congress of its intent to commence negotiations with Canada and Mexico regarding the modernization of NAFTA. This filing kicks off a 90-day consultation process with Congress and stakeholders regarding the Administration’s negotiating objectives for the modernization process. On May 23, 2017, USTR published a Federal Notice requesting input from stakeholders, with written comments due by June 12th and a hearing date of June 27th. Requests to testify at the hearing must be filed by June 12th and must be accompanied by a summary of the proposed testimony. Under the procedures of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA 2015), USTR must publish “formal negotiating objectives” no later than July 17th and can begin negotiations with Canada and Mexico on August 16th.

Trade Deficits Report

On March 31, 2017, the President issued an Executive Order which directed the Secretary of Commerce and the USTR to prepare a report for the President entitled the “Omnibus Report on Significant Trade Deficits” (Trade Deficits Report). The Trade Deficits Report is due to the President on June 29, 2017. (See https://www.whitehouse.gov/the-press-office/2017/03/31/presidential-executive-order-regarding-omnibus-report-significant-trade).

NFTC filed comments related to this report on May 10th, and a public hearing was held on May 18th. The

countries with which the U.S. had a “significant trade deficit” in goods in 2016 — Canada, China, the EU, India, Indonesia, Japan, Korea, Malaysia, Mexico, Switzerland, Taiwan, Thailand and Vietnam — are the main focus of the report.

Executive Order on Trade Agreement Violations and Abuses

On April 29, 2017, the President issued an Executive Order which directed the Secretary of Commerce and the USTR to engage in a series of “performance reviews” of certain trade agreements and programs to identify any violations of the agreements (including WTO agreements and trade preference programs) as well as any “unfair treatment” that is harming American workers or domestic manufacturers. Each performance review is to be conducted on a country-specific basis and the reviews are all due to the President no later than October 26, 2017. The reviews must include:

• All 20 countries with which the U.S. has an FTA;

• All 42 countries with which the U.S. has an investment agreement (i.e. a BIT);

• Any of the 164 members of the WTO with whom the U.S. does not have an FTA but with whom the U.S. runs a significant trade deficit in goods.

h t t p s : / / w w w. w h i t e h o u s e . g o v / t h e - p r e s s -office/2017/05/01/presidential-executive-order-addressing-trade-agreement-violations-and.

U.S.- China Comprehensive Economic Dialogue

As a result of President Trump’s meeting with Chinese President Xi in early April, the two leaders restructured the existing U.S.-China bilateral forums into a new U.S.-China Comprehensive Dialogue, overseen by the two Presidents and focused on four areas: (a) security concerns; (b) economic relations; (c) law enforcement and cybersecurity; and (d) social and cultural issues. The economic component of the dialogue held its first

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session during the Trump-Xi meeting and produced a “100-day action plan” for progress on trade. The 100th day from the announcement of the plan is July 16, 2017.

On May 11th, the U.S. and China issued a joint statement of their progress to date. The statement identified ten “initial actions” under the Comprehensive Economic Dialogue, with many of them pegged to the July 16th deadline. The statement also announced that the first official meeting of the Comprehensive Economic Dialogue will be held in the summer of 2017.

U.S.- Japan Economic Dialogue

Vice President Mike Pence, along with Japanese Deputy Prime Minister Taro Aso, have been charged with leading a new U.S.-Japan Economic Dialogue, which was agreed to by President Trump and Japanese Prime Minister Abe during their February 2017 meeting. The dialogue is to consist of “three pillars”: (a) development of a common strategy for trade and investment rules, to include discussion of market access barriers; (b) fiscal and monetary issues; and (c) an effort to improve cooperation between specific industry sectors in each country.

Executive Order on Procurement

As part of the “Buy American, Hire American” Executive Order issued on April, 18, 2017, the Administration has put in place a four-part plan to review all aspects of federal procurement policy and the application of the two main pieces of legislation that provide preference for U.S.-made products – the 1933 Buy American Act (which relates to all federal government procurement) and various “Buy America” provisions (which contains domestic content requirements for certain transportation infrastructure programs). The four-part plan consists of the following: (a) strict monitoring, enforcement and compliance with the Buy American laws; (b) direction on how to limit use of public interest waivers and exemptions under those laws; (c) an assessment of the value of international commitments made in the procurement area; and (d) a renewed commitment to

the “melted and poured” standard for iron and steel products. See https://www.whitehouse.gov/the-press-office/2017/04/18/presidential-executive-order-buy-american-and-hire-american.

Under the EO, the Secretary of Commerce is directed to prepare a report, working with USTR, State and OMB, which will (a) advise the President on how to strengthen implementation of the Buy American laws and (b) provide an assessment of the impacts of all U.S. free trade agreements and the WTO Government Procurement Agreement on the operation of the Buy American laws, including their impacts on the implementation of domestic procurement preferences. The report to the President is due on November 24, 2017, with further annual reports due from the Secretary to the President in January of each year (starting in 2019).Pursuant to an Executive Order dated April 29, 2017, the President established a White House Office of Trade and Manufacturing Policy (OTMP), to be headed by Peter Navarro. OTMP will have primary responsibility for ensuring that EO 13788 is implemented. See https://www.whitehouse.gov/the-press-office/2017/05/01/presidential-executive-order-establishment-office-trade-and.

Sector-Specific Actions

Finally, there are a number of sector-specific actions, targeted at commodities (e.g., steel, aluminum, oil and gas pipeline materials), which the Administration has initiated. Under these investigations, the Administration is considering implementation of trade-restrictive measures (such as new tariffs) to address the Administration’s concerns about maintaining U.S. sources for these products. Decisions with respect to all three commodities are expected this summer.

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Trump Administration’s U.S. Iran Policy ReviewBy Richard Sawaya, Vice President, USA*Engage, rsawaya@nftc.org

Since 1979, U.S. administrations have found Iran’s conduct adversarial to U.S. national security interests in the Middle East. The Reagan administration sided with Iraq during the Iran-Iraq war. The Clinton administration instituted a primary embargo, as part of a policy of “dual containment” of Iran and Iraq. After September 11, in which Iran had no part, the George W. Bush administration labelled Iran a member of the “axis of evil” with Iraq and North Korea.

Beginning with Clinton, Congress legislated a succession of secondary economic sanctions on Iran for its support of terrorism – primarily Hezbollah – and its human rights abuses; and, later, for its ballistic missile and nuclear development.

In response to Iran’s expanding nuclear program, the Obama administration orchestrated multilateral enforcement of increased economic sanctions, reducing Iran’s crude oil exports by one half. It agreed, however, to negotiate the nuclear issue with Iran based on the country’s right as a signatory of the NPT (nuclear non-proliferation treaty) to enrich uranium for civilian nuclear power.

The P5plus1 negotiation of the 2015 Joint Comprehensive Plan of Action (JCPOA) ensued. While the JCPOA was explicitly divorced from Iran’s other conduct in the region, President Obama acknowledged Iran’s position as a regional power.

Key constituencies in the U.S. and Iran criticize the JCPOA. Both Supreme Leader Khamenei and President Rouhani accuse the U.S. of bad faith, because remaining U.S. sanctions presumably prevent major European banks from financing major investment in Iran. While Iran’s oil exports have rebounded, its non-oil sectors have remained moribund.

Khamenei and the IRGC (the Revolutionary Guards who conduct Iran’s regional activities and ballistic missile program) remain opposed to accommodation with the U.S. Ironically, the sanctions enabled the IRGC to assume effective control of much of Iran’s economy, to the detriment of the traditional private sector.

For its part, national security principals in the Trump administration – Secretaries Mattis and Tillerson and National Security Advisor McMaster – have severely criticized Iran’s regional behavior and announced an interagency U.S. Iran policy review. Senate Foreign Relations Committee Chairman Bob Corker with Ranking Member Ben Cardin introduced S 722, “Countering Iran’s Destabilizing Activities Act of 2017” with 45 bi-partisan co-sponsors. House Foreign Affairs Committee Chairman Ed Royce and Ranking Member Elliot Engel introduced HR 1698, “Iran Ballistic Missiles and International Sanctions Enforcement Act” with 233 bi-partisan co-sponsors. Both bills would impose more secondary sanctions on Iran for its regional conduct. Their introduction coincided with AIPAC’s annual conference in late March.

On April 18th, Secretary Tillerson sent the following letter to Congress:

“This letter certifies that the conditions of Section 135(d)(6) of the Atomic Energy Act of 1954 (AEA), as amended, including as amended by the Iran Nuclear Agreement Review Act of 2015 (Public Law 114-17), enacted May 22, 2015, are met as of April 18, 2017.

“Notwithstanding, Iran remains a leading state sponsor of terror through many platforms and methods. President Donald J. Trump has directed a National Security Council-led interagency review of the Joint Comprehensive Plan of Action (JCPOA) that will evaluate whether suspension of sanctions related to Iran pursuant to the JCPOA is vital to the national security interests of the United States. When the interagency review is completed, the administration looks forward to working with Congress on this issue.”

Common sense would argue that Congressional action on sanctions legislation await the conclusion of the policy review and the outcome of Iran’s presidential elections. Moreover, there are the complications of events on the ground in Iraq, Syria, Yemen, Bahrain,

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and on the water in the Persian Gulf. All are cited as theaters of Iranian activity that threaten U.S. national security interests.

It is noteworthy that Secretary Tillerson’s letter not only covers the distinction between the JCPOA and Iran’s non-nuclear regional transgressions, but also whether the JCPOA itself is in the U.S. national interest. This reprises the assertion that the JCPOA de facto legitimizes Iran’s eventual path to an “industrial-strength” nuclear weapons program coupled with first strike ICBM delivery. Ironically, many of the critics, in and out of Congress, who take this view in the next breath state that the U.S. should not unilaterally abrogate the JCPOA so long as Iran observes it, as per the certification of the letter.

Indeed, Secretary Tillerson renewed the suspension one set of U.S. nuclear-related sanctions on May 17. The countries of the EU (including post-Brexit vote Britain), not to mention P5plus1 members China and Russia, are not bound up in such conundrums. All would find an Iran with nuclear weapons not in their respective national interests. All have diplomatic relations with Iran. All have governments and companies pursuing unsanctioned trade and investment with Iran, given the demographics, educational attainments, and consumer preferences of Iranians.

U.S. anti-Iranists do make a distinction between the citizens of Iran and the regime of the Islamic Republic – that is, the Supreme Leader and the IRGC – which regime, they declare, is neither Islamic nor a republic. Such a distinction is indubitable – witness the regime’s rhetoric about the state of Israel, support for Hezbollah and Hamas, and systematic abuse of human rights – but could also be applied to other countries whose foreign policies and domestic practices are at odds with the U.S., yet with whom the U.S. maintains diplomatic, trade and investment relations.

It’s a fait accompli that the U.S. will continue to direct primary and secondary sanctions at the entities that comprise the Iranian regime. It’s also a decent bet

that JCPOA will continue to be observed, given the alternative. And it remains the case the U.S. has no strategy for dealing with Iran as a powerful, and critical, sovereign state in the region going forward. So herewith a modest proposal:

• Maintain the U.S. commitments under the JCPOA – that is, the suspension of the enumerated nuclear-related sanctions and the licensing of Boeing’s commercial airlines sales.

• Allow U.S. persons (“entities” in sanctions-speak), including U.S. financial institutions, to engage in commerce with Iranian entities not sanctioned as part of the regime. This would place U.S. persons and their global competitors under the same sanctions prohibitions and give opportunity for Iran’s private sector.

• Maintain the direct diplomatic contacts that were established between Iran and the U.S. in the course of the JCPOA negotiation.

• Given President Rouhani’s re-election, explore whether steps toward diplomatic relations can be established between the U.S. and Iran.

If the Trump administration can imagine direct negotiations with North Korea and accommodate the domestic practices of the governments of Turkey, Egypt, Saudi Arabia and the Philippines in the U.S. national interest, it can pursue diplomacy and trade with Iran in the U.S. national interest.

This article was shared with the Senate Foreign Relations Committee on May 22, 2017.

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Health Care and Tax Reform Timing Remain LinkedBy Cathy Schultz, Vice President for Tax Policy, cschultz@nftc.org

Although the House passage of the Affordable Care Act (ACA) repeal and replace legislation has gotten most of the media’s attention, the legislation faces a much tougher fight in the Senate. The Senate will write its own health care bill, and it will be even more difficult to reach agreement among the Senate Republicans than it was with the House Republicans. The Senate moderates have vowed not to accept the same limitations on pre-existing conditions that was included in the House passed bill, and they will also not cut back on Medicaid spending to the same extent. The tight GOP majority in the Senate means that they cannot afford to lose more than 2 Republican Senators and pass a bill on a party line vote through reconciliation. Getting the Senate far right Republicans, including Senators Cruz, Lee and Paul to agree to a bill that will also get the support of Senators Collin, Murkowski and Cassidy will take a long time, if it is even possible. If the Senate does somehow reach agreement on a health care bill, reaching agreement with the House on a conference report is equally difficult. The health care debate in the Senate could stretch on for a few months, which causes problems for the timing of tax reform.

There can only be one budget reconciliation package moving forward at any time. The health care bill is included in the FY 2017 budget reconciliation bill. To get to tax reform under budget reconciliation, another bill cannot be moved until the previous bill expires. Technically, the FY 2017 budget reconciliation package expires in the House on September 30, 2017, which is the last day of the fiscal year. The Senate rules may permit the reconciliation bill to be left open after September 30, but the budget experts are not sure how that could proceed. The House and Senate anticipate using a FY 2018 budget reconciliation bill for tax reform. If the health care debate drags on in the Senate, then the House cannot move to marking up and voting on a tax reform package without the FY 2018 budget reconciliation instructions in place. Even getting a FY 2018 budget resolution through the House could be difficult, because it would likely also include other spending priority issues. The House Freedom Caucus did not get all of their spending priorities included in the recently passed Continuing Resolution. They could

hold up the budget resolution that will contain the budget reconciliation instructions for tax reform until they get some spending concessions.

Of course, both the House and Senate could opt to do a bipartisan tax reform bill that would not need the protections of the budget reconciliation rules, but so far, this does not appear to be in the Senate’s game plan for tax reform. Senate Finance Committee Ranking Democrat, Ron Wyden would like to do a bipartisan tax reform bill, but said that so far, he has not had any discussions with Senate Finance Republicans about it. The Democrats would have to be part of the negotiations from the on-set, if they are going to asked to vote for a final package. House Chairman Brady has met with Ways and Means Democrats, but it was more a perfunctory meeting, rather than an opening of negotiations.

There are hints from some of Chairman Brady’s recent statements that he is working with Steve Mnuchin and the Treasury team, and Gary Cohn and the NEC team, along with Senate Finance Chairman Hatch to come up with a tax reform package that they can all agree to, and that will then pass both the House and Senate quickly. Whether or not the closed door negotiations will yield those intended results remain to be seen.

As has been the case all year, the fate of the health care repeal and replace effort will determine if we are able to move forward with tax reform in a timely manner.

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NFTC’s Global Innovation Forum led a delegation of companies to Geneva the week of April 24 to discuss the role of global e-commerce in economic development and supporting small businesses.

On April 27, GIF hosted a workshop with the Friends of e-Commerce for Development, an informal group of delegations in Geneva led by the Heads of Mission for Costa Rica and Pakistan. The discussion focused on the role of internet-based services in the global success of small businesses.

It featured Omar Bawa, Head of Product, Goodwall (Switzerland), a social network that connects high school students from 180 countries to the world; Darko Dujic, CEO at Ceneje Group & Shopper’s Mind, ‎Ceneje.si (Slovenia), the largest portal for comparative shopping in Slovenia; Hai Ho, Founder, Triip.me (Vietnam), which turns ordinary locals into an amateur tour guide overnight; Fernand Matendo, CEO, Burundi Shop (Burundi), the leading company in digital communications and related services in Burundi; and

Marc Refabert, President & CEO, Fromages.com (France), which sells the best of French cheeses.

GIF also hosted a reception with the FEDs group honoring WTO Director General Azevedo, who emphasized the importance of global e-commerce for businesses from around the world. GIF’s delegation also met privately with Ambassadors from countries including Australia, Costa Rica, Japan, Mexico, New Zealand, and the UK.

The delegation found significant enthusiasm for understanding and engaging on topics related to global e-commerce in Geneva, including at UNCTAD, where almost 1,000 people participated in the group’s e-commerce week programming.

At the WTO, countries – through the Friends of e-Commerce for Development and other small groups – are beginning to think through how to craft rules that would enable access to the global digital marketplace.

In Geneva, NFTC’s Global Innovation Forum Discusses Impact of Global E-Commerce on Small Businesses and Development

By Jake Colvin, Executive Director, Global Innovation Forum, jcolvin@nftc.org

GIF workshop with the Friends of e-Commerce for Development in Geneva

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GIF @ South by SouthwestBy Claire Pillsbury, Deputy Director, Global Innovation Forum, claire@globalinnovationforum.com

NFTC’s Global Innovation Forum (GIF) traveled to Austin, Texas for the third year in a row to participate in South-by-Southwest (SXSW) Interactive 2017, which took place from March 10 to 14.

On Sunday, March 12th GIF hosted a brunch with Intuit and Google alongside the official SXSWi program to discuss simple steps to encourage global startup success. The event brought together corporations, startups and governments from around the world to share thoughts on best practices to encouraging global startup success.

GIF moderated an informal group discussion during the brunch to highlight a few simple steps that startups can take to set them up for global success as well as a few key policy foundations that enable them to do so: recognizing that startups are able to be global from the get go; embracing technology can help startups access global markets; engaging professional advisors can help avoid costly mistakes; and governments from

around the world play a role in helping global startups succeed.

Participants included government representatives, organizations and startups from the US, Australia, EU, Latin America and Asia. More information about the event, participants and takeaways can be found online at globalinnovationforum.com.

Jake Colvin, Executive Director of GIF, also participated in an official panel at SXSWi on March 16th on Tech Advocates and Trump: Best Strategies So Far. The panel included thought leaders from the Consumer Technology Association, Entertainment Software Association and Ericsson who shared their insights on how best to engage with the new administration.

NFTC’s GIF has found SXSW to be a unique forum to generate discussion about the role of global markets between policymakers, entrepreneurs and experts.

GIF SXSW salon brunch event

June 2017 | 13

On May 9, NFTC’s Global Innovation Forum (GIF) released a new report on American small businesses, international trade and technology at a salon breakfast at Google’s DC offices.

GIF’s New Faces of American Trade report profiles 16 small businesses across the United States and explores the role of technology and trade in enabling them to strengthen their business.

The small businesses represent a variety of industries, from mining and manufacturing to cloud-based translation and biotech. Together the 16 small businesses support more than 1,000 American jobs.

Several of the small businesses featured in the report participated in the launch event at Google, alongside a host of technology providers, policymakers and key stakeholders. San Diego-based Deering Banjo, Rochester-based LoveBook and Erie-based SleepPhones shared their global journeys, the role of the internet and technology platforms in their operations and how governments can provide support.

The three companies highlighted how international markets support their businesses and allow them to

increase their domestic workforce. While the benefits of being global are significant, the small businesses reminded us that they are not without their challenges. At the event, small businesses pointed to challenges around understanding international regulations, currency fluctuations and tariffs.

In the report, business leaders expressed strong views about the importance of maintaining and improving access to open markets overseas, and concern about the prospect of new taxes or tariffs that would make it harder for them to compete abroad. “I think breaking down barriers through trade agreements is a good thing,” said Dr. Christopher Jacobs, CEO of medical device company Genteel. He added that, “from my personal experience, it doesn’t take jobs away; it actually makes jobs possible.”

“The world is going global and there is no going back,” added Dr. Wei Shin Lai of SleepPhones, who joined GIF in DC for the launch of the report. She suggested that, “you have to make sure that you are negotiating well and that you’ve got what you need on the table to ensure you are benefiting your own country – but not being at the table may be a mistake.”

GIF Releases New Report on the Role of International Trade and Tech in the Success of American Small Businesses

By Claire Pillsbury, Deputy Director, Global Innovation Forum, claire@globalinnovationforum.com

GIF launch event for New Faces of American Trade Report, Report Cover

June 2017 | 14

International Human Resources ConferenceBy William Sheridan, Vice President for International Human Resources Services, wsheridan@nftc.org

Upcoming International Human Resources Events

June 13, 2017 - International Human Resources Seminar in Orange County, California

June 15, 2017 - International Human Resources Seminar in Seattle, Washington

June 27, 2017 - International Benefits Committee Meeting in New York City

October 3-4, 2017 - Expatriate Management Committee Meeting

On June 1, 2017, the NFTC Foundation hosted its 24th Annual International Human Resources Conference in New York City. This year, the theme of the conference was ‘Global Business and Human Resource Issues in an Era of Disruption’. More than 80 people participated in this year’s conference, held at the Yale Club of New York. While managing the costs of cross-border assignments continues to be an issue for multinational enterprises, the topics of interest at the conference related primarily to the identification, recruitment, training and retention of talent. Speakers from ENGIE, DNB Bank of Norway, Electrolux of Sweden and Johnson & Johnson highlighted the importance of focusing on staff development within functions and across business units. Attendees at this year’s conference also expressed concern with immigration barriers which hinder expansion into markets of interest such as Australia, China and the U.S. These barriers often impede the transfer of knowledge that expatriates can bring into the host country.

In light of recent terrorist attacks in Belgium, England, France, Germany, Tunisia and elsewhere, the conference included a session on Best Practices in Case of Emergency. The NFTC joined with Ernst & Young and Net Expat in a global study related to the challenges faced by dual-career expatriate couples. The study was launched a few months ago and already has drawn strong interest from multinational enterprises around the world, including members of the diplomatic corps. The results of this study will be released in the Fall 2017 and shared with NFTC members. Austin Fragomen, Chair of Fragomen Worldwide, closed the conference with an update on “What Business Needs to Know About the U.N. Compact on Migration,” a major initiative that has been underway for several years and includes the U.N., major MNCs, the OECD and the Council for Global Immigration.

June 2017 | 15

NFTC’s IAMC: Globalization and the Strategic Leveraging & Management of a Globally Mobile Workforce

By Grace O’Rourke, Vice President, and NFTC-IAMC Chairperson, gorourke@nftc.org

In April 2017, NFTC President Rufus Yerxa joined executives from thirty-nine (39) global corporations, who convened in Wilmington, Delaware, USA, for the NFTC’s International Assignment Management Committee (IAMC) meeting.

The NFTC’s IAMC is a premier working group of experienced executives, who specialize in developing, leveraging and overseeing globally mobile talent management strategies and programs for their respective companies. In this role, IAMC members must remain current on a wide array of ever-changing international economic, social, and political issues with the potential to impact global business and, more specifically, the development and management of a globally mobile workforce.

Increasingly, with globalization, top management of cutting-edge global corporations have been validating the role of these international human resources management executives as a strategic partner in achieving overall business goals. Recognizing this, NFTC President Rufus Yerxa met with the IAMC members to provide an update on the NFTC’s recent and ongoing work. President Yerxa, also, shared the NFTC’s perspective regarding potential opportunities in the coming year for advancing global business.

Additional topics at the recent spring IAMC meeting were presented and/or moderated by various IAMC members and guests which include Accenture, Amazon, Amgen, AstraZeneca, Bank of New York Mellon, Bell Helicopter, Bloomberg, BMW, Booz Allen Hamilton, BP, Chanel, CH2M, Dell, IFF, Genworth Financial, GDIT, General Mills, Ingersoll Rand, Jacobs Engineering, JP Morgan, KBR, Kimberly Clark, Lafarge, Laureate Education, LVMH, Mars, Medtronic, Microsoft, Newmont Mining, Northrop Grumman, Northern Trust, SC Johnson, Seagate, Skanska, Target, TE Connectivity, Volkswagen, Walt Disney (The), Whirlpool and more.

Established in 2004 as a corporate-only peer working group, the NFTC’s IAMC is intentionally industry diversified and by exclusive invitation only*. Each year,

the IAMC meets in the spring and fall. Highly regarded as a confidential information sharing forum, IAMC members attest to this exclusive NFTC working group as being the most significant contributor for keeping abreast on diverse issues, such as, the strategic value of linking corporate talent management and global talent mobility, immigration, cross-border tax, best practices, duty of care, policy trends, repatriation, process streamlining, vendor management, compliance, technology, employment law, data analytics and more related to the strategic leveraging and management of a globally mobile workforce. The NFTC’s IAMC members are innovative leaders on the cutting edge of these developments.

National Foreign Trade CouncilServing America’s Global Businesses Since 1941

The National Foreign Trade Council is a leading business organization advocating an open, rules-basedglobal trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now

serves hundreds of member companies through its offices in Washington and New York.

For membership opportunities, please contact us atnftcinformation@nftc.org or 202-887-0278.

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