A broad range of new trade actions from both the U.S. and EU have shown renewed interest in attacking long-standing problems and some newer ones. This has been driven in part by the continued global economic slowdown and renewed tensions with China and Russia. These actions include global banking, MNC taxation, trade sanctions, sovereign debt, and cybersecurity. The U.S. has named a new USTR who was formerly concerned with national security in the White House. This clearly evidences a renewed focus on global trade policy as an item of great national and strategic importance to the Obama administration. The TPP, the TTIP, fast track authorization, renewed WTO negotiations, export promotion, trade reorganization, and trade enforcement actions have obviously become principal trade objectives of the second Obama term.
….The EU is considering moving more aggressively against tax havens perhaps along the lines of the U.S. “Foreign Account Tax Compliance Act” (FATCA). This issue will be discussed at the upcoming G-20 meeting and the European Union Summit. “Support Grows for European Efforts to Fight Tax Havens.” New York Times (April 15, 2013).
….The Supreme Court in Kiobel v. Royal Dutch (2013) declared that the general presumption against extraterritoriality of U.S. legislation was not overcome (and thus upheld the presumption of territoriality of U.S. legislation unless Congress says otherwise). The Supreme Court held that the Alien Tort Statute could not apply to a foreign multinational corporation for its human rights violations in another country involving foreign plaintiffs. “S.Ct. Restricts Alien Tort Statute.” New York Times (April 18, 2013); “Wall Street Journal — Editorial — Alien Tort Statute.”Wall Street Journal (April 18, 2013); “New York Times — Editorial — Alien Tort Statute.” New York Times (April 18, 2013). This is a major win for multinational corporations and a significant loss for human rights groups. This decision reversed a thirty-year interpretation of the legislation. Predictably the New York Times editors were dismayed and the Wall Street Journal editors were joyous.
…. The new foreign direct investment report for 2012 and projections for 2013 has been released by the Financial Times. There was a 9.48% decline in FDI into the U.S. Virginia did not rank within the top 10 states. Global projections are grim. The U.S. remains the top source and destination country. FDI Report for 2012 (FT 2013).
….The SEC has release draft regulations implementing parts of the 2010 Dodd-Frank legislation requiring U.S. oil and mining companies to disclose payments to foreign governments. “Venue Set for Foreign-Payment-Rule Case.” Washington Post (April 27, 2013).
Dodd-Frank legislation also gives greater authority to the CFTC (more than to the SEC) to regulate derivatives trading and to require foreign subsidiaries of U.S. firms and foreign institutions with connections to the U.S. to turn over information of U.S. customers concerning foreign trades. “Banks Resist Strict Controls of Foreign Bets.” New York Times. (May 1, 2013).
…. The Financial Times Series entitled “Global Tax” discusses the building global resentment over billions of dollars of tax avoidance by multinational corporations in the context of national austerity policies. The FT discusses the building demand for global reform of international business taxation. This demand is spurred on by various countries, the G-20 and the OECD. The OECD has termed the current situation a “race to the bottom.” But countries are now on the defensive in granting tax breaks to the multinationals. The series examines EU tax havens such as Holland and Luxembourg. “Nations on Defensive as Anger Grows Over Tax Avoidance.”Financial Times (April 29, 2013). This series includes a good global interactive map of corporate tax rates and % of GDP.
…. Michael Froman has been named the new USTR which is subject of Senate confirmation. This confirms President Obama’s focus on global trade as a central issue for his second term. Froman is currently the Deputy National Security Adviser for International Economic Affairs. He holds both a law degree and a D.Phil in International Relations from Oxford University. “Barack Obama Cements Focus on Trade for Second Term.” Financial Times(April 29, 2013); “Froman for USTR.” Washington Post (May 3, 2013).