TRANSATLANTIC BUSINESS DIALOGUE RECOMMENDATIONS FOR THE

UNCLAS SECTION 01 OF 02 BRUSSELS 001426 SIPDIS E.O. 12958: N/A TAGS: ECON PREL BEXP ENRG EINV EUN SUBJECT: TRANSATLANTIC BUSINESS DIALOGUE RECOMMENDATIONS FOR THE TEC BRUSSELS 00001426 001.2 OF 002 ¶1. (U) Summary: The Transatlantic Business Dialogue (TABD) has submitted their annual recommendations to the Transatlantic Economic Council (TEC). TABD requests to the TEC include focus efforts on avoiding protectionism, ensuring aligned regulation, and promoting transatlantic innovation. They stress the importance of coordinated actions between the U.S. and EU in order to increase global competition, create jobs and bolster transatlantic economic growth. End Summary. ¶2. (U) TABD notes that the TEC should focus on issues related to the global financial and economic crisis and recovery with the same degree of intensity as is dedicated to the G20 process. Owing to its valuable transatlantic focus, the TEC can add the perspective necessary to coordinate transatlantic input into the G20. ¶3. (U) With respect to trade restrictions and protectionism policies, the TEC should ensure that no discriminatory measures are taken in domestic stimulus packages, and that no unilateral regulation or investment restrictions are initiated. It is particularly important that the U.S. and EU maintain open investment policies, keeping in mind that more than 14 million "insourced" jobs in the transatlantic market are a direct result of transatlantic investment. ¶4. (U) The TABD recommends that the TEC also consider proposing "rollback" measures in the case where transatlantic trade restrictions already exist or are anticipated. These efforts should encompass trade and investment restricting measures taken since November 2008. The TABD is particularly concerned about the U.S. requirement for 100% scanning of sea and air freight port before shipment to the U.S. and believes that the TEC should initiate policy changes to roll back such measures. In order to stem domestic protectionist measures, TABD proposes that the TEC implement the agreement previously reached on mutual recognition of the secure trade programs, AEO and C-TPAT. It should also re-invigorate the High-Level Regulatory Cooperation Forum, seeking to advance regulatory convergence in the automobile, pharmaceutical and chemical sectors. ¶5. (U) In terms of promoting regulation alignment, TABD recommends work in the following five areas: coordinating transatlantic work on financial market regulatory projects of the G20 process, regulatory convergence in insurance markets, global acceptance of International Financial Reporting Standards (IRFS) and promotion of International Standards on Auditing (ISA),supporting increased collaboration between the Public Company Accounting Oversight Board (PCAOB) and EU regulators, and carrying out greater transatlantic regulatory alignment and impact assessments. ¶6. (U) With respect to insurance, the TEC should develop a work plan with specific goals and reporting requirements in order to achieve regulatory convergence. Another policy objective is to create a single barrier-free U.S.-EU financial market, to which end TABD recommends the preparation of a detailed work program on transatlantic financial market integration. ¶7. (U) TABD also recommends that the TEC reinvigorate the Transatlantic Investment Dialogue and charge it with the responsibility of removing bilateral barriers to trade. The Investment Dialogue should also be the place where the U.S. and the EU coordinate positions regarding Sovereign Wealth Funds (SWF) in light of the Organization for Economic Cooperation and Development (OECD) and International Monetary Fund (IMF) principles, develop a joint approach on investment policies vis-`-vis third countries, and implement OECD guidelines on freedom of investment in a coordinated way. ¶8. (U) Stimulating innovation is the third goal prioritized by the TABD in its recommendations to the TEC. TABD proposes the following steps to achieve this: the creation of an inter-agency intergovernmental council to focus on transatlantic energy cooperation, the establishment of an expert panel to recommend best practice models in healthcare innovation, and a greater focus on upstream cooperation for new technologies, in particular prioritizing RFID, nanotechnology and internet technologies. The TEC should also be a strong advocate for International Property Rights in international organizations such as the UN, WIPO, OECD and the WHO. ¶9. (U) TABD proposes that governments need to remove barriers to collaboration and provide economic stimuli to advance innovation in new technologies, particularly for energy and healthcare. They also suggest that the TEC initiate analysis of risks and opportunities for the long-term security of raw materials supply and sustainability. ¶10. (U) The TABD considers energy innovation to be especially important, and suggests that the TEC add transatlantic cooperation on research, development and deployment, energy efficiency and regulatory alignment to its work program. Carbon-trading systems and energy efficiency are also important areas for transatlantic BRUSSELS 00001426 002.2 OF 002 alignment. ¶11. (U) Cncluding on the general approach of the TEC, theTABD suggests that the TEC's strategic focus should have a five-year timeline, with the goal of achieving tangible outcomes in the first two years. TABD believes that the approach of one-size-fits-all should be abandoned in order to speed up regulatory cooperation. The effectiveness of the TEC could also be enhanced through improved stakeholder involvement, including the TACD and TLD, so that they can better contribute to TEC meetings and provide more meaningful advice. MURRAY