The meeting was open to the public; however, participants’ statements, other than those cited, are not for attribution. The meeting room was full to capacity with individuals from the membership, general public and media.
Committee Chairman Theodore 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 reminded participants that the meeting would be conducted under the Chatham House Rule and introduced Jose W. Fernandez, Assistant Secretary of State for the Bureau of Economic and Business Affairs (EB).
The meeting focused on the topics “India’s Infrastructure and the Opportunities and Challenges for U.S. Business” and “Advancing the Role of Women in International Economic Policy.” Assistant Secretary Fernandez welcomed a new member to the ACIEP and introduced the meeting topics and presenters. He began the discussion by citing President Obama’s historic visit to India and giving background on the meetings he hosted in preparation of the President’s visit. At one of those meetings, Government of India representatives pointed out the lack of U.S. investment in India’s infrastructure sector despite the openness of the sector to foreign investment, and asked for insight on the factors constraining U.S. investors in this sector. Accordingly, Assistant Secretary Fernandez sought the advice of ACIEP members regarding how to support U.S. participation in the trade and investment opportunities presented by India’s infrastructure development.
Assistant Secretary Fernandez then explained that the Administration has established women’s economic security as a key component of its strategy to grow the U.S. economy and ensure America’s prosperity in the future. The Secretary’s Office of Global Women’s Initiatives, the EB Bureau, and other offices in the Department are involved in various programs, many with a regional focus, designed to empower women by providing access to other entrepreneurs, job training, and mentors. ACIEP members and the companies they represent want to play a greater role in this effort by establishing programs, collaborating on public-private partnerships, and supporting existing initiatives.
Alyssa Ayres, Deputy Assistant Secretary of State for South and Central Asia, then reported on President Obama’s recent trip to India, where he affirmed strong U.S. support for India’s rise as a 21st Century global leader and the U.S. commitment to deepen the bilateral strategic partnership. The Government of India (GoI) is committed to spending $500 billion on India’s modernization by 2012 and $1 trillion by 2030. Even if these plans fall short, investment in infrastructure will still be the most the Indian Government has made and its commitment demonstrates India’s embrace of the public-private partnership development model. Prior to 2007, there were no public-private partnerships in India for infrastructure development, but today the GoI predicts that more than one-third of infrastructure investment will be financed through public-private partnerships.
Deputy Assistant Secretary Ayres further explained that India also presents substantial opportunities to increase U.S. exports consistent with President Obama’s National Export Initiative objective of doubling U.S. exports by 2015. Over the last decade, India became the United States’ 14th largest goods trading partner, with trade in goods in 2009 reaching $37.6 billion. Trade in services was $22.6 billion in 2008. U.S. companies can provide the goods and services needed to build India’s railroads, airports, power plants, and fiber optic cables to facilitate the country’s development.
Deputy Assistant Secretary Ayres discussed some of the key partnerships announced during the President’s visit. The United States and India agreed to work more closely on technology cooperation, strengthen energy and climate change cooperation, and to fortify the global non-proliferation and export control framework; and the two governments signed a memorandum of understanding on civil nuclear issues. The two countries share one of the world’s fastest growing trade and investment relationship. The United States is the world’s largest recipient of foreign direct investment and India is among the fastest growing investors in the United States. India’s investment in the United States has contributed to the economic growth and job creation. In the last 10 years, investment capital from India grew by 53%. India is a key market for U.S. exports.
U.S.-India economic cooperation thus already has increased the integration of the two economies, increased U.S. exports and supported tens of thousands of jobs. More needs to be done to assist U.S. companies in capitalizing on India’s rise, however. Foreign investors have expressed concerns about political and bureaucratic continuity; the lack of transparency when bidding on projects; the Government of India’s delay in passing critical reforms; the risk on returns for their investments; and the size of infrastructure projects, which are often perceived as too small to be profitable. While government-to-government cooperation is growing, the private sector remains key to expanding this strategic economic relationship.
Following Deputy Assistant Secretary Ayres’s presentation, Chairman Kassinger opened the floor to comment from ACIEP members. An ACIEP member representing infrastructure machinery manufacturers commented that the biggest barrier to trade is the lack of infrastructure--this is a problem for importers and exporters alike. Infrastructure projects are good investments because they make the economy more efficient. Sixty percent of the Millennium Challenge Corporation’s funding is for infrastructure projects. Companies looking to have successful investments in foreign markets need to have a larger view of how to succeed in any market, including by having in-country expertise, developing sustained local relationships, investing in people, and increasing direct investments. Another member highlighted the issue of corruption in India and discussed the statistics on corruption from the World Bank’s Doing Business Report. India has a reputation for problems in enforcing contracts, and with corruption. India has not ratified the United Nation’s Convention Against Corruption. The U.S. Foreign Corrupt Practices Act does not apply to many competitors of U.S. businesses in India, while U.S. companies must invest significant efforts in their FCPA compliance programs. Other members noted the importance of ensuring India’s openness toward U.S. sectors of importance to U.S. companies, including retail and insurance.
The meeting then turned to the second agenda topic, Advancing the Role of Women in International Economic Policy. Ms. Ginger Lew, Senior Advisor at the White House National Economic Council, discussed the Administration’s commitment to providing economic security for American women and the recently released report, “Jobs and Economic Security for America’s Women.” The role of women in the economy has grown significantly. Women-owned businesses contribute significantly to the U.S. economy. More than 30% of small businesses are owned by women. Between 1997 and 2007, the number of women-owned businesses grew by 44%, twice the rate of men owned businesses, and added about 500,000 jobs.
Ms. Lew explained that jobs and economic security for women are a top priority for the Obama Administration. The Administration’s policies seek to promote economic expansion and job growth for women, to train and educate women for quality jobs, to support working women at home and in their jobs, and to support women in retirement and between jobs. Previously, women’s issues were dealt with in civil society forums; now, women’s issues have moved into the broader discussion of revitalizing the economy. Critical areas where the government can play a role in enhancing opportunities for women entrepreneurs and business leaders include access to capital, including through means such as microfinance, and counseling and general technical assistance. For example, the U.S. Small Business Administration assists about 1.7 million entrepreneurs each year. Diversity supplier programs also allow women-owned businesses to reach out to non-traditional clients and expand their presence in markets.
An ACIEP member responded to the presentation by recognizing that this is a revolutionary time for women and highlighting that the Administration’s report on “Jobs and Economic Security for America’s Women” was the first report in ten years to study the role of women in the U.S. economy. Gender issues should be better integrated into the tools to eliminate poverty globally, e.g., trade capacity building and trade preference programs. It is important to research the impact of trade agreements and how they will affect women before trade deals are made. Other members commented on the impact of foreign investment on women’s wages; the enforcement of environmental and labor standards; separating gender issues within the context of immigration policies; and the issue of higher trade barriers against the poorest countries that depend on women.
ACIEP Chairman Kassinger then announced the establishment of a Subcommittee on Women in International Economic Policy, to be led by Co-Chairs Judith Barnett, President of the Barnett Group LLC, and Jeffrey Volk, Partner of J2M Holdings. Co-Chairs Barnett and Volk described initial potential projects and solicited other ideas for the Subcommittee’s agenda. One initial project will be to catalog the positive engagement of ACIEP members, and possibly some non-ACIEP member companies, on women’s economic empowerment issues. The purpose of the project is to highlight existing private sector programs and reveal opportunities for coordination with U.S. government policy initiatives on women’s economic empowerment in foreign countries. Another project is to identify ACIEP members to be potential speakers as U.S. private sector “ambassadors” to women’s organizations overseas, eventually opening the program to additional private sector colleagues.
Investment Subcommittee Co-Chair Thea Lee gave an update on the status of the Subcommittee’s current review of the U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises. The Subcommittee’s recent meetings have focused on the issues of the structure of the National Contact Point (NCP), establishing an oversight/advisory board for NCPs, the process of filing a complaint, transparency in the process, and promoting the OECD Guidelines. The Subcommittee will submit its recommendations soon to the ACIEP.
Sanctions Subcommittee Chairman Barry Carter reported on recent individual sanctions on Iran by the U.S., European Union, and United Nations. For the first time, the U.S. has sanctioned a company under the new sanctions policy. The Sanctions Subcommittee plans to study the implications of these actions and identify issues where a recommendation could be useful.
Chairman Kassinger thanked the Committee members and other participants for their active participation in the discussion. The meeting was adjourned.