ON OUR DESKS
- Engaging in U.S. stakeholder discussions and updating clients on status of negotiations for a global plastic waste treaty
- Assessing U.S. government information requests and input opportunities related to packaging restrictions on U.S. ag and food exports
- Connecting clients with U.S. government and embassy contacts for Mexico
How can we help you? Email any IBC counsellor for assistance or consult our issues list to find the expert you’re looking for.
In case you missed it:
- Republican legislative priorities affecting international business with Senior Advisor to the Senate Republican Leader Erica Suares
Up next: Register for upcoming WIBC discussions here
WIBC discussions are open to WIBC members only. Not a member? Contact Christina for membership inquiries.
YOU NEED TO KNOW
Global tax developments
The United States took the rare step on July 8 of announcing it will terminate a 1979 U.S.-Hungary tax treaty, citing the disparity between Hungary’s 9% corporate tax rate and the United States’ 21% rate and linking the decision to Hungary’s opposition to the OECD global minimum tax proposal. The treaty cancellation will have little impact on U.S. companies investing in Hungary but will impact Hungarian and non-Hungarian investors in the United States. In part due to Hungary’s opposition, the EU and the OECD coordinating body have delayed introduction of the global minimum tax from 2023 to 2024.
In a July 8 report, the Congressional Research Service assessed that even if Congress does not act, other countries could impose taxes on U.S. earnings of multinational firms triggered by a low U.S. effective tax rate. Congressional Republicans have opposed moving ahead of other countries in introducing a global minimum tax and several have strongly supported Hungary’s opposition (including Senator Pat Toomey (R-PA) and Congressmen Adrian Smith (R-NE) and Mike Kelly (R-PA)). Congressional Democrats, on the other hand, have introduced proposals to conform the U.S. tax system to the OECD plan. These provisions may be included in the budget reconciliation bill likely to be released at the end of July, which must be approved by September 30.
Contact: Chris Benscher
Mexican President Lopez Obrador (AMLO) visited the White House on July 12 to discuss economic competitiveness and cooperation, migration, energy and food security, and climate change. AMLO opined at length on the bilateral relationship, monologuing in the Oval Office on oil and energy, trade, labor, and immigration. Remarking on trade, AMLO said USMCA has “made progress” on eliminating tariffs but other barriers “could be immediately suspended… [like] regulations, regulatory measures, and tedious procedures or red tape in terms of trade… so that we can lower prices for consumers in both our countries.”
In a joint statement released following the visit, the two presidents called for cooperation on inflation, infrastructure, climate, and migration – including through the High-Level Economic Dialogue (HLED) whose next meeting will be held in September. The two countries committed to greater outreach to relevant stakeholders in advance of the HLED, especially regarding investment and critical supply chains. AMLO also met with Vice President Harris to discuss joint efforts to manage migration from the Northern Triangle and Mexico.
In its first enforcement action under the Uyghur Forced Labor Prevention Act (UFLPA) that entered into force on June 21, U.S. Customs and Border Patrol (CBP) reportedly halted shipments of solar panels connected to polysilicon sourced in Xinjiang, China. CBP has not disclosed the importer impacted by the detention, but the importer is rumored to be a large company with experience importing from China under an earlier import regime for the products in question.
Relatedly, Democratic lawmakers questioned the Department of Homeland Security’s decision not to include certain Chinese solar firms on the recently-established UFLPA Entity List.
Contact: Pat Sheehy
Russia and food security
The United Nations has reported that ongoing discussions with Russia, Ukraine, and Turkey represent a “critical step forward” to allow the “safe and secure export” of millions of tonnes of grain via the Black Sea. Turkish Defense Minister Hulusi Akar issued a statement announcing that talks had reached agreement on “basic” and “technical” issues but that further negotiations would be required before a final agreement could be signed. Additional negotiations will be held in Turkey next week.
In other efforts to address the food security crisis linked to Russia’s war in Ukraine, the U.S. Office of Foreign Assets Control (OFAC) loosened restrictions on agricultural trade and telecommunications with Russia on June 14 , updating guidance on agricultural trade, medical trade, and digital services. OFAC also broadened General License 6 to authorize humanitarian trade of agricultural equipment, rather than narrowly defined “agricultural commodities.” The license was also expanded to include certain medical research activities.
Contact: Pat Sheehy
- On July 14, USTR announced the launch of the United States-Kenya Strategic Trade and Investment Partnership (STIP) focused on labor, environment, digital trade, trade facilitation, and good regulatory practices. USTR intends the STIP to be a model for trade policy engagement in Africa, but it will not initially focus on tariffs.
- President Biden traveled to the Middle East this week, visiting Israel, the West Bank, and Saudi Arabia. While in the region, he announced a host of new initiatives, including a new I2U2 group composed of India, Israel, United Arab Emirates, and the United States, as well as Strategic High-Level Dialogue on Technology, which will touch on pandemic preparedness, climate change, implementation of artificial intelligence, and trusted technology ecosystems.
- The House passed by a wide margin its 2023 National Defense Authorization Act (HR 7900), sending the bill to the Senate. The House version would authorize appropriators to spend up to $840.2 billion in national defense spending, including $1 billion in new military aid for Ukraine, and would place conditions on U.S. military sales to Saudi Arabia and Turkey.
- Vice President Harris addressed the Pacific Islands Forum (PIF) virtually on July 12, announcing significant new U.S. economic and diplomatic commitments to the region. Specifically, she announced the United States will open new embassies in Kiribati and Tonga, appoint a new envoy to the PIF, re-establish a USAID mission in the region, and design a regional strategy.
NOTICES, BILLS & HEARINGS
Federal Register Notices
- Commerce/ITA, ITA Trade Mission to Indonesia, July 12
- DHS/CBP, Temporary Entry of Business Persons Under the USMCA, July 11
- EOP, National Emergency With Respect to Hong Kong, July 13
- EOP/OSTP, Request for Information on PFAS Research and Development, July 13
- MCC, Renewal of Advisory Council and Call for Nominations, July 14
- Treasury/OFAC, Mexico Sanctions Designations, July 14
- Treasury/OFAC, Sudan Sanctions Designations, July 12
- Treasury/OFAC, Belarus Sanctions Designations, July 12
- State, Notice of Biodiversity Beyond National Jurisdiction Meeting, July 14
- H.R.8365 (McGovern, D-MA) To amend the Tibetan Policy Act of 2002 to modify certain provisions of that Act.
- H.R.8348 (Bacon, R-NE) To provide it is the policy of the United States that the NATO-Russia Founding Act, signed May 27, 1997, in Paris, does not constrain the deployment of United States or NATO forces.
- H.R.8339 (Pfluger, R-TX) To modify the annual report on military and security developments involving the Russian Federation.
- H.R.8329 (Bacon, R-NE) To require a public report on the military capabilities of China, Iran, North Korea, and Russia.
- H.R.8320 (Torres, D-NY) U.S.-Albania Cooperation Act
- S.4509 (Shaheen, D-NH) A bill to provide for security in the Black Sea region.
- S.4506 (Van Hollen, D-MD) A bill to provide for the consideration of the human rights records of recipients of support of special operations to combat terrorism.
Upcoming Congressional hearings
- Foreign Affairs: Russian-Ukraine Invasion, July 19, 10:00 am
- Foreign Affairs: Russian War Crimes Accountability, July 20, 10:00 am
- Foreign Affairs: UN World Food Program, July 20, noon
- Foreign Affairs: Russia’s Latin America/Caribbean Influence, July 20, 2:00 pm
- Foreign Affairs: U.S. Multilateral Approach to Africa, July 21, 9:30 am
- Judiciary: Russian Oligarchs’ Illicit Asset Forfeiture, July 19, 10:00 am
- Foreign Relations: Pending Nominations, July 19, 10:00 am
- Foreign Relations: Global Food Security Crisis/U.S. Response, July 20, 10:00 am
- Will Smethers, Legislative Director for Representative Dan Meuser (R-PA)
- Michael Barr, Federal Reserve Board Member and Vice Chair for Supervision
- Richard Mills Jr., Ambassador to Nigeria
- Ann Marie Yastishock, Ambassador Papua New Guinea, Solomon Islands, and Vanuatu
Want more scoops on personnel moves? Find the most recent Who’s Who here.
- President Biden travels to Saudi Arabia, July 15-16
- Gulf Cooperation Council plus Egypt, Iraq, and Jordan (GCC+3) Summit, July 16
- Japan and U.S. co-hosted COVID-19 Ministerial (Virtual), July 19
- State and Commerce Departments’ Supply Chain Ministerial Forum, July 19-20
- G20 W20 Summit (Danau Toba, Indonesia), July 19-21
- Mercosur Summit (Asunción, Paraguay), July 21
- UN Annual Conference of the High Contracting Parties (Geneva, Switzerland), July 20-21
Looking farther ahead? Find the most recent full international events calendar here.