The meeting was open to the public but conducted under Chatham House rules. Only cited participants statements are for attribution. The meeting drew more than 70 attendees from the membership, general public and media.
Committee Chairman Theodore (Ted) Kassinger, of O’Melveny & Myers, LLP, opened the meeting of the Advisory Committee on International Economic Policy (ACIEP) and welcomed the members and participants. Chairman Kassinger called for Chatham House Rules and introduced David Nelson, Acting Assistant Secretary of State, Bureau of Economic, Energy and Business Affairs. The speakers and ACIEP respondents for the discussion topic were identified. The topic for the meeting was “The Global Economic Crisis: Recession and Recovery.”
Acting Assistant Secretary Nelson stated that the State Department values the insights, opinions and advice of the ACIEP. He introduced Michael Froman, Deputy Assistant to the President and Deputy National Security Advisor for International Economic Affairs. Mr. Froman provided a readout of the April 2 G-20 Summit in London, which focused both on resolving the current crisis and preventing similar crises in the future. He noted that the Summit had achieved progress on four areas of the growth agenda: stimulus, the rehabilitation of financial systems, anti-protectionism, and strengthening the lending capacity of the IMF and multilateral development banks. Regarding regulatory measures to prevent future crises, Mr. Froman emphasized the Summit’s agreement to expand the scope of regulatory coverage to include all systemically important institutions, its statement on tax havens and tax information exchange, the broader mandate given to the Financial Stability Forum and its conversion into a Financial Stability Board including all G-20 members, and the commitment made to reform the governance structures of the international financial institutions to give greater voice and vote to emerging economies. In addition, Mr. Froman said, Summit participants committed themselves to investing in food security for the poorest nations and reaffirmed their commitment to maintain official development assistance levels. Finally, he said, Leaders agreed to hold another G-20 meeting before the end of the year.
ACIEP member respondents commented that the fact the G-20 even took place is a positive development in and of itself, and complimented the Administration on the result. Members welcomed the G-20 leaders’ commitments on assistance to emerging economies and improved financial sector regulation. Some members suggested that the World Trade Organization Doha round talks be re-energized. Members agreed with the globally coordinated effort demonstrated by the G-20. In reference to the G-20 leaders’ commitment to avoid protectionist actions, some commented that it is important to define “protectionism”; as an example, they stated that the enforcement of existing trade legislation should not be considered protectionist. Some respondents stated that the $800 billion stimulus package is probably not enough. Other concerns were raised about the position of the U.S. as a leading agricultural exporter in view of the decline in global demand; the reduced availability of trade financing; the value of the dollar; and increasing tariffs. Members opined that there is much work to be done on trade, climate change, anti-corruption/transparency, and exchange rate issues. Several members questioned where global growth would come from after the crisis, stating that the strong U.S.-centric demand that had powered the global economy in recent years had led to imbalances that were not sustainable. Several members reiterated that any Doha trade agreement must contribute to global economic growth.Subcommittee Updates:
General Dan Christman, Vice-President of the U.S. Chamber of Commerce and Chair of the Strategic Regions Subcommittee, gave an overview of the Economic Empowerment in Strategic Regions (EESR) initiative and progress made since the December ACIEP meeting. EESR is designed to promote sustainable job creation in regions where poverty and isolation have left their populations vulnerable to exploitation by extremists. To date, Gen. Christman reported, we have received approximately 60 business proposals from Iraq, Afghanistan, Pakistan and the Philippines plus communication from parties with interests in North Africa and Latin America. MBA students are currently reviewing approximately 20 proposals. Two of these proposals are on the State Department website; information is also on the U.S. Chamber website.
William Reinsch, President of the National Foreign Trade Council and Chair of the Economic Sanctions Subcommittee, reported to the ACIEP that the Sanctions Subcommittee had developed a work plan for 2009. The Subcommittee will focus on: transactions with Iran; state-level involvement in foreign policy via state sanctions and divestment statutes; support for normalization of trade with Cuba; class action lawsuits under the Alien Tort Statute; national security controls on science and technology; and, reduction of the humanitarian impact of sanctions on Burma.
Acting Assistant Secretary Nelson announced the launch of a new Investment Subcommittee. Mr. Nelson said that the Administration is giving the U.S. model bilateral investment treaty (BIT) a fresh look and that the Subcommittee’s main task will be to provide input to the ACIEP on this review, but it will also provide input to the Committee on other significant international investment issues. Alan Larson, Sr. International Policy Advisor, Covington & Burling LLP, and Thea Lee, Policy Director, AFL-CIO, will co-chair the new Subcommittee. The Subcommittee will represent a broad range of stakeholder interests.Closing
Acting Assistant Secretary David Nelson gave final remarks, including mention of the launch of the Secretary of State’s 2009 Award for Corporate Excellence (ACE) program for which he encouraged ACIEP members to contact U.S. Chiefs of Mission with recommendations. He reiterated the importance of the ACIEP in providing insights, opinions and advice to the State Department.
Chairman Ted Kassinger summarized the meeting’s remarks and adjourned the meeting.