The Trans-Pacific Partnership Series: Senator Bernie Sanders

Part 2

Francisco A. Laguna & Amy Turner

The Trans Pacific Partnership (TPP) faces significant opposition from the remaining Democratic and Republican 2016 presidential candidates. The TPP has increasingly become a talking point in the presidential campaign. Hillary Clinton, Bernie Sanders and Donald Trump all oppose the deal. This week, we continue our series on the TPP, focusing on the comments of presidential candidate, Bernie Sanders, on whether the trade agreement benefits the United States.  The information provided in the post is not meant to be political in nature, or an endorsement or critique of the position of Senator Sanders.

By Jonathunder - Own work, GFDL 1.2, https://commons.wikimedia.org/w/index.php?curid=47215151

By Jonathunder – Own work, GFDL 1.2, https://commons.wikimedia.org/w/index.php?curid=47215151

According to Senator Sanders’s website, the TPP is a “disastrous trade agreement designed to protect the interests of the largest multi-national corporations at the expense of workers, consumers, the environment and the foundations of American democracy.”  Sanders asserts that under existing free trade treaties, American workers have been forced to compete against low-wage labor from around the world. This has resulted in the closing of thousands of factories and massive job losses in the United States.  Sanders claims that TPP is “part of a global race to the bottom to boost the profits of large corporations and Wall Street by outsourcing jobs; undercutting worker rights; dismantling labor, environmental, health, food safety and financial laws; and allowing corporations to challenge our laws in international tribunals rather than our own court system.”

Sanders states that the TPP “has been written behind closed doors by the corporate world.” He claims that Wall Street, the pharmaceutical industry and major media companies have full knowledge as to what is in the treaty, but the American people and members of Congress do not.

Sanders has outlined 10 Ways the TPP would hurt working families

1. TPP will allow corporations to outsource even more jobs overseas

The US will lose more than 130,000 jobs to Vietnam and Japan, based on an assessment by the Economic Policy Institute.   Service sector jobs will be affected.  Corporations have already outsourced over 3 million service sector jobs from the US. The TPP allows corporations to more easily outsource call centers, computer programming, engineering, accounting and medical diagnostic jobs. In addition, manufacturing jobs will be lost. The TPP reduces the risks associated with operating in low-wage countries.

2. Sovereignty will be undermined by giving corporations the right to challenge our laws before international tribunals

The TPP establishes a process that gives corporations the right to challenge domestic laws before the United Nations and World Bank that could adversely impact their “expected future profits”. These could allow corporations to be compensated by taxpayers. This process bypasses laws dealing with labor, health, and environment, therefore weakening American sovereignty.

3. Wages, benefits, and collective bargaining will be threatened

Sanders’s website states:  “The TPP will force American workers to compete with desperate workers in Vietnam where the minimum wage is just 56 cents an hour.”

By United States Congress - http://sanders.senate.gov/, Public Domain, https://commons.wikimedia.org

By United States Congress – http://sanders.senate.gov/, Public Domain, https://commons.wikimedia.org

4. Our ability to protect the environment will be undermined

Under the TPP, corporations are allowed to challenge laws that would “adversely impact their future profits”.  Any nation that becomes a party to the TPP can be sued by corporations.  The TPP bypasses domestic courts by allowing corporations to sue directly any nation that signs the agreement in an international tribunal.

5. Food Safety Standards will be threatened

Only 1-2 percent of food imports is inspected.  The TPP will greatly expand these imports, thereby further overwhelming the system. This would make it easier for countries to export contaminated foods into the US, including fish and seafood.

6. Buy America laws could come to an end

Under the TPP, although there are laws that require the US government agencies to buy goods and services made in America, foreign corporations would be given equal access to compete for government contracts with companies that make products in America.   The US would not be allowed to prevent companies that have bad human rights records from being awarded government contracts paid by US taxpayers.

7. Prescription drug prices will increase, access to life saving drugs will decrease, and the profits of drug companies will go up

Pharmaceutical companies are lobbying to assure that the TPP recognize extensions of their patents (which currently exists 20 years or more).  This would expand the profits of big drug companies.

8. Wall Street would benefit at the expense of everyone else

The TPP would impose restrictions on governments from imposing “capital controls”.  Governments would be barred from creating controls that include financial speculation taxes to curbing massive flows of speculative capital flowing into and out of countries.

9. TPP would reward authoritarian regimes that systematically violate human rights

Authoritarian regimes would be granted duty free access to the U.S. market under the TPP.

10. The TPP has no expiration date, making it virtually impossible to repeal

There is no sunset provision in the TPP.  After it is signed into agreement, a consensus of all member countries is required to amend it.  Other countries, like China, could be allowed to join in the future.

Senator Sanders is clearly opposed to the TPP.

Call TransLegal with your questions concerning the TPP or trade agreements in general.

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United Nations Offers Countless Global Business Opportunities

Francisco A. Laguna & Wojciech Kornacki

Each year, the United Nations Organization (“UN”) spends billions of dollars to support various missions and development projects around the world.  This creates numerous and ongoing international business opportunities for entrepreneurs willing to understand and operate within the UN procurement system.  The last decade shows that UN spending is only going to increase.

United Nations Basics

The UN is an international organization consisting of 193 member states.  It is organized into approximately 30 different specialized agencies, funds and programs, and each entity has its own procurement needs.

One of the four U.N. headquarters located in New York City.  Recent additions include to the U.N. complex include DC-1 and DC-2 located in the center of the picture.  Courtesy of http:// http://en.wikipedia.org

One of the four U.N. headquarters located in New York City. Recent additions include to the U.N. complex include DC-1 and DC-2 located in the center of the picture. Courtesy of http:// http://en.wikipedia.org

The mission of the UN is to preserve international peace and security, promote human rights and disarmament, and to take action to address health and humanitarian emergencies, terrorism, climate change, and sustainable development, among others.  This is primarily done by humanitarian missions, peacekeeping operations and various development projects, all of which require billions of dollars in annual expenditures on services and supplies.  The UN and its entities operate around the world.  Its four headquarters are located in New York, Vienna, Geneva and Nairobi.

United Nations Procurement of Goods and Services

According to the 2014 Annual Statistical Report on United Nations Procurement, the overall procurement needs of the UN exceeded to $17 billion in 2014.  The United Nations Office for Project Services (“UNOPS”) reports that between 2004 and 2014, UN procurement needs increased by about $10 billion.  This shows that UN expenditures are likely to grow in the future.

UN humanitarian mission in progress. UN troops are securing an airdrop of supplies in Haiti.  In the wake of the 2010 earthquake, multiple cargo planes flew missions to deliver food and supplies to Haiti.  Several years later, the UN mission still continues in Haiti.   Courtesy of http:// http://en.wikipedia.org.

UN humanitarian mission in progress. UN troops are securing an airdrop of supplies in Haiti. In the wake of the 2010 earthquake, multiple cargo planes flew missions to deliver food and supplies to Haiti. Several years later, the UN mission still continues in Haiti. Courtesy of http:// http://en.wikipedia.org.

In 2014, the UN spent approximately 52 % of its total expenditures on services and 48 % on goods.  The three most active organizations with the greatest procurement needs were the UN Children’s Fund (“UNICEF”), the UN Procurement Division (“UN/PD”) and the UN World Food Programme (“WFP”)   The United States is the greatest supplier of goods and services to the UN covering approximately 9% of all of UN needs.  India, Afghanistan, Belgium, and Switzerland follow.  Currently, there is a movement within the UN to procure more goods from the developing countries.

UN procurement in developed and developing countries is different.  In the developed countries, UN entities primarily focus on procuring information technology and telecommunications, financial and insurance, testing equipment, motor vehicles and parts.  In the developing countries, the UN procures personal care goods, domestic appliances, educational equipment, fuels, humanitarian aid services, and rural development services.  It is important to note that each UN entity has its own specific needs in different countries.

UN Procurement Opportunities

The UN Procurement Division divides business opportunities into Expressions of Interests (“EOI”), Requests for Information, (“RFI”) and Tender Opening Schedule.  Expressions of Interests are company responses to UN planned solicitations.  Requests for Information allow the UN to assess vendor capabilities and assist companies in preparing them for the planned procurements.  Tender openings mean formal openings of sealed bids or proposals.  The first step in taking advantage of the opportunities is to register.

Being successful in UN procurement necessitates careful attention to detail and a clear understanding of the organization’s requirements. Call TransLegal with your questions concerning UN procurement opportunities.

Cyber Security is the New Business Opportunity

Francisco A. Laguna & Wojciech Kornacki

Recent massive and coordinated cyber-attacks on governments and businesses alike reveal the urgent need for global cyber security.  As digital transformation and technical advances have changed the way we communicate and do business, cyber threats and cyber-attacks have become more common.  In order to respond to the ever increasing demand for cyber security, in the next several decades billions of dollars will be spent around the world to combat the new and emerging cyber threats and prevent attacks.  This creates new business opportunities for information technology entrepreneurs.

Air Force First Lieutenant responds to potential threats in the Incident Response Team Net Forensics Lab. Members of the team have two minutes to evaluate incoming threats. (USAF photo)

Air Force First Lieutenant responds to potential threats in the Incident Response Team Net Forensics Lab. Members of the team have two minutes to evaluate incoming threats. (USAF photo)

What is Cyber Security?

Cyber security is the activity or process, ability or capability, or state whereby information and communications systems and the information contained therein are protected from and / or defended against damage, unauthorized use or modification, or exploitation.

Chances are that most of us received an email from an unknown source asking us for personal information, and we did not know that we were under a cyber-attack.  However, this is actually called “phishing”, and phishing is considered a form of a cyber-attack.  Other forms of cyber-attacks include:

  • “pharming”: fraudulently redirecting a website’s traffic to another, fake website
  • “malware”: software that performs unauthorized functions without your knowledge
  • “Trojan horse”: software that appears to have a useful function, but also it has hidden and potentially malicious functions, or
  • “spyware”: software that enables a user to obtain covert information about another’s computer activities by transmitting data covertly.

The particular challenge with cyber security is that most governments and businesses are completely unprepared for these new types of constantly evolving attacks and threats.  In addition, some businesses and governments are not even aware that they are being attacked.  This means that they may lose critical operational information, trade secrets and business information, without even knowing.

Domestic Cyber Security Opportunities 

The U.S. Government requested US$ 19 Billion to improve cyber security defenses in the 2017 budget.  In addition, the U.S. Department of Defense plans on spending an additional US$ 5 Billion on cyber security.  Most likely a significant portion of these amounts will be awarded to private businesses specializing in cyber security, and many of the large defense contractors are rapidly developing their cyber security capabilities.  However, even the biggest cyber security contractors will require a number of subcontractors to meet the demand.

While the U.S. Government is attempting to counter cyber threats for itself, it cannot protect private businesses from similar attacks.  It is likely that private businesses will also have to improve their cyber security.  Thus, many private businesses will have to develop their own cyber-attack detection and prevention safeguards and protocols.

estonia

Tallinn, Estonia. In the past, Estonia has been a subject to multiple well-coordinated cyber-attacks. The attacks have taken down many official and private websites including webpages of the Estonian parliament, and many Estonian newspapers. The attacks coincided with the heavy Russian criticism over the removal of the Bronze Soldier Statute from Tallinn. Courtesy of http:// http://en.wikipedia.org

International Cyber Security Opportunities

The cyber security market is expected to grow from US$ 77 Billion in 2015 to US$ 170 Billion by 2020.  While North America and Europe greatly contribute to the growth of the international cyber security market, the Asian and South East Asian markets are quickly developing.

Similarly, many Arab governments have experienced cyber-attacks in the energy sector.  Increasing their defenses will result in spending of approximately US$ 9.5 Billion by 2019.

Cyber Security Stocks are Increasing in Value

Many companies that specialize in cyber security are seeing their stocks increase.  This rise is largely due to the perception that cyber-attacks benefit private cyber security companies.  Close analysis of the ISE Cyber Security Index reveals that this index has gone up by 22% in 2015 alone.  There seems to be a correlation between the number of cyber-attacks and the rise of stocks of companies specializing in cyber security.

Cyber Security Insurance gains Importance

Cyber security insurance has also seen rapid growth.  Many insurance companies have begun to offer it to private business.  These new policies also cover third-party loss resulting from the cyber-attack, all costs associated with the cyber-attack, extortion, and on-line trade secret protection.

Cyber security is here to stay.  The domestic and international markets show tremendous opportunities for growth.  If you are interested in learning more about future business opportunities involving cyber security, contact TransLegal or call 703-566-9427.

The African Growth and Opportunity Act Continues to Grow Trade

Francisco A. Laguna & Wojciech Kornacki

In 2000, the United States opened its domestic markets to sub-Saharan African nations. At that point, no one expected that within 14 years, Africa would be exporting over $400 billion in goods and services to the United States. Currently, with the increased competition from the European Union and China, the US and its African partners are developing new trade and training opportunities that could benefit your business.

Background

Africa

Africa

 In 2000, the United States decided to expand, simplify and diversify its trade relations with sub-Saharan African countries. In part, this was in response to the trade agreements the EU signed with 79 countries in Africa, the Caribbean and Pacific during the same period. Through the African Growth and Opportunity Act, the United States unilaterally opened its domestic markets to the African countries in the sub-Sahara so long as the African countries reformed their economies and made them more transparent, among other requirements.

The benefit for US companies was that this created many new opportunities to provide credit and technical expertise to various sector in Africa. It also allowed many American companies to benefit from new business-to-business opportunities with the African businesses. Continue reading

Commercial Space Flight and Exploration Opportunities with NASA

Francisco A. Laguna & Wojciech Kornacki

The National Aeronautics and Space Administration (NASA) has opened the gates to commercial space flight, and, as a result, new business opportunities for the private sector are becoming available in the space industry. Before now, in the United States, all space travel was state-controlled, state-owned and taxpayer paid-for. Now, NASA is partnering with private businesses and high-technology companies to take space exploration and travel beyond the limits of any other government space agency. The first $6.8 billion in space travel contracts with Boeing and SpaceX are just a preview of what is yet to come.

The Evolution of NASA Continue reading

Overview of Investment Opportunities in Morocco

Francisco A. Laguna & Annapurna Nandyal

 The Kingdom of Morocco is one of the most thriving in the African continent and is a popular tourist destination. Morocco is in a strategic location that places it at the crossroads of the main international trade routes linking Europe, the Americas, Africa and the Middle East. Due to its political stability, economic openness and tolerance, Morocco has attracted a relatively constant flow of foreign capital, despite the global recession, the euro zone crisis and political revolutions in the Arab world. According to United Nations Conference on Trade and Development (UNCTAD), Morocco led the African region in foreign direct investment (FDI) in 2012.

Map of Morocco Photo Credit: US CIA WF via Wikimedia Commons

Map of Morocco
Photo Credit: US CIA WF via Wikimedia Commons

In the recent years, the Moroccan government has adopted various measures to enhance its attractiveness to foreign investors. In 1995, the country passed “The Investment Charter” which liberalized foreign investment laws and which applies to both foreign and Moroccan investors. Virtually, all sectors of the economy are open to FDI.  Equally important, capital investments and investment returns, whether through capital gains, dividends, interest or sales, can be freely repatriated.

The Investment Charter replaced the old code and mainly provides for:

Continue reading

Overview of Investment Opportunities in Ghana

Francisco A. Laguna & Annapurna Nandyal

Ghana is a rapidly growing country located on West Africa’s Gulf of Guinea – a few degrees north of the Equator. It is a strategic gateway to Africa’s trade and investments due to its location and the relative stability of the region. Ghana is rich in minerals and natural resources, making it the region’s second largest economy.  It is one of the world’s largest gold and diamond producers, second largest producer of cocoa, and an important petroleum and natural gas producer. According to the World Bank 2014 Doing Business report, Ghana is easiest member of the Economic Community of West African States (ECOWAS) in which to do business.

Map of Ghana

Map of Ghana

Ghana follows the British common law system and has the most liberalized market in the ECOWAS. Investors are attracted by Ghana’s wealth of gold, minerals, diamonds and oil and natural gas exploration. Recent trends show an increase in foreign direct investment (FDI) in the energy sector.  To promote, encourage and facilitate investments, the Ghanaian government has established the Ghana Investment Promotion Centre (GIPC) under the Ghana Investment Promotion Act, 1994. The GIPC is charged with assisting domestic and foreign investors in most sectors of the economy; it does not provide assistance in the minerals / mining, oil / gas sectors or to entities operating in the country’s free zones. The GIPC regulates foreign investment in acquisitions, mergers, takeovers and new investments.

An investor interested in doing business in Ghana must register an in-country, wholly-owned limited liability company, a joint venture with a Ghanaian partner or a branch office in Ghana. Foreign investors are required to satisfy the minimum requirement provisions for investing in Ghana.

  • For a joint venture, the minimum requirement is $10,000 or equivalent in capital goods
  • For a 100% foreign-owned company, the minimum requirement of equity should be $50,000
  • For trading companies, whether wholly or partly foreign owned, the minimum requirement for an investor is $300,000 and the firm must employ at least 10 Ghanaians.
Skyline of Capital, Accra Photo Credit: Elegant Machines via Wikimedia Commons

Skyline of Capital, Accra
Photo Credit: Elegant Machines via Wikimedia Commons

The minimum capital requirement does not apply to portfolio investments, enterprises set up for export trading or branch offices.

The Investment Promotion Act carves out specifies areas of investment reserved for Ghanaians, including small-scale trading, operation of taxis and rental services (except when a non-Ghanaian operator has a fleet of at least 10 vehicles), pool-betting businesses, lotteries (except soccer pools), and the operation of beauty salons and barber shops.

While investors are mainly attracted to Ghana’s natural resources, the government actively promotes FDI in other sectors. To diversity investment in non-traditional sectors, Ghana established the Free Zone Board (GFZB) in 1995. The GFZB has identified the following sectors as having tremendous FDI potential:

  • Agriculture and Agro-food processing
  • Textile / Apparel Manufacturing
  • Sea Food Processing
  • Floriculture
  • Information and Communication Technology
  • Jewelry / Handicraft Production
  • Pharmaceuticals
Savanna, North Ghana Photo Credit: CIAT via Wikimedia Commons

Savanna, North Ghana
Photo Credit: CIAT via Wikimedia Commons

The GFZB provides a variety of incentives for foreign investors interested in developing and operating in these priority areas, including:

  • 100% exemption from direct and indirect duties and levies on all imports for production and exports from free zones
  • 100% exemption from income tax on profits for 10 years and, thereafter, taxes at a rate that shall not exceed 8 %
  • Total exemption from withholding taxes on dividends arising out of free zone investments
  • Relief from double taxation for foreign investors and employees
  • No import licensing requirements
  • Minimal customs formalities

Traditionally, Europe, and in particular the United Kingdom, has been a major source of FDI in Ghana. However, the introduction of free zone incentives, political stability and reasonably skilled, low-cost labor force has attracted Asian investors from China, India and Malaysia who are playing an important role in the development of the region.

Ghana has the potential to be a front runner in FDI in West Africa. Investors interested in doing business can contact TransLegal to discuss possible opportunities.

U.S. National Defense Authorization Act of 2014 – Big Changes in the Making

Francisco A. Laguna & Wojciech Kornacki

The United States National Defense Authorization Act of 2014 is expected to reflect the growing political dilemma for many lawmakers in the next fiscal year – how to maintain national security during the era of dwindling resources and uncertain future.  The following information pinpoints the spending priorities for the U.S. Government in fiscal year 2014, based on the drafts of the proposed legislation which you can find here.

 Overseas Combat Spending

Seal of the House Armed Services Committee.  This committee, along with the Senate Armed Services Committee, is responsible for shaping general defense policies of the United States Armed Forces, including reforming the Department of Defense, counter-drug operations, acquisition and industrial base, and ongoing military operations.   In FY14 National Defense Authorization Act, the Committee will have to make very difficult choices between defense spending and dwindling resources.  Courtesy of http://armedservices.house.gov

Seal of the House Armed Services Committee. This committee, along with the Senate Armed Services Committee, is responsible for shaping general defense policies of the United States Armed Forces, including reforming the Department of Defense, counter-drug operations, acquisition and industrial base, and ongoing military operations. In FY14 National Defense Authorization Act, the Committee will have to make very difficult choices between defense spending and dwindling resources. Courtesy of http://armedservices.house.gov

Overseas combat spending will continue at the levels seen in 2013, $85.8 billion is expected be spent on overseas military operations, primarily taking place in Central Asia.  Special Operations Forces and anti-drug operations will receive priority funding.  The US Armed Forces will continue to procure resources at historic levels, as it seeks to bring Operation Enduring Freedom to a speedy conclusion.  Section 1222 places specific requirements to accelerate transition of the US military efforts in Afghanistan.  This means that businesses can still find and benefit from international opportunities with the US Government or other businesses in Central Asia.  According to the Office of the Secretary of Defense, Justification for FY 2014 Overseas Contingency Operations Afghanistan Infrastructure Fund (AIF), investing in Afghan power grid and infrastructure is critical for the success of counter-insurgency operations.  Therefore, contingency contracting will continue in Afghanistan with specific focus on several industries.  TransLegal is here to advise you on how it can benefit your business. Continue reading

Business Opportunities under the European Union Budgetary Framework 2014-2020

Francisco A. Laguna & Wojciech Kornacki 

Janusz Lewandowski, European Union (“EU”) Financial Programming and Budget Commissioner, forecast that the EU’s new 2014 – 2020 budget would result in 6 years of growth.  The goal of the Commission is to transform the EU into a “knowledge-intensive, low-carbon, and highly competitive economy” supported by flexible energy, transport and infrastructure networks.  The budgetary framework of € 959 billion presents ample opportunities for both EU and non-EU businesses.

Screen shot 2013-10-16 at 3.19.59 PM

The EU consists of 28 countries.  Its economy, measured by Gross Domestic Product (“GDP”), is currently bigger than that of the United States (“US”). The US economy is estimated at $15.4 trillion (2012), while the EU economy is estimated at around $17.3 trillion, after conversion, placing it as the world’s largest economy. Continue reading

Africom Means More U.S. Government and Regional Business Opportunities in Africa

Francisco A. Laguna & Wojciech Kornacki

Zambian Air Force furthers military relations with the U.S. by training on flight simulators.  (U.S. Air Force photo/Senior Airman Caitlin O’Neil-McKeown) (Courtesy of www.africom.mil)

Zambian Air Force furthers military relations with the U.S. by training on flight simulators. (U.S. Air Force photo/Senior Airman Caitlin O’Neil-McKeown) (Courtesy of http://www.africom.mil)

The U.S. Department of Defense established the U.S. Africa Command (AFRICOM) in 2007.  Since then, AFRICOM has expanded its operations and spending across 38 out of 54 African nations.  The increased involvement of the U.S. Department of Defense and AFRICOM in the continent offers enormous potential for international business opportunities relating to U.S. procurement, construction and defense law, as well as interactions with various African states.

As Al-Qaeda operators began to shift their focus from Central Asia to several African nations with weak national governments, the U.S. Department of Defense determined that it needed a concrete presence in Africa to strengthen the defense capabilities of states and regional organizations to deter and defeat transnational threats and to foster rule of law and good governance.  Each fiscal year, Congress has allocated more and more funding for AFRICOM; from $274 million in fiscal year 2010, to $276 million in fiscal year 2012.  This trend is likely to continue, and the amounts do not include covert funding.  Continue reading