The International Chamber of Commerce brings the voice of business to global and multilateral forums. For the past five years, Jeffrey Hardy has served as Director of the ICC’s G20 CEO Advisory Group. He says the G20 was instrumental in preventing a total meltdown in the world economy during the darkest days of the financial crisis, but the ICC believes more can be done at G20 level to ensure the recovery remains on track, particularly in relation to trade, investment and financial regulatory reform
You have been the ICC’s G20 Advisory Group Co-Ordinator for the past 5 years. The ICC forms a key component of the international B20 grouping. Whose voice does the ICC in particular represent at G20 level?
The ICC’s nickname is the ‘World Business Organization’ so, basically, we represent companies, large and small, worldwide. We have offices in 90 countries, and we express business priorities primarily to intergovernmental organizations or multilateral forums like G7, G8, and G20. That's really our mission. For years the world has looked at the G7 and G8 as an important multilateral forum. Since the 1990s when George Bush in the United States met with our Chairman, the ICC has presented a shortlist of priorities to the head of the host state.
When the G20 emerged out of the financial crisis, there was clearly a change in emphasis. The G20 policy agenda was much broader and more reflective of a lot of businesses' interests and concerns. So, ICC shifted our focus, not away from the G7 and G8, but more towards the G20, especially since their constituency was more reflective of ICC's global membership. We have members in China, India, Brazil, South Africa, South Korea and all the rest.
A lot of our policies are oriented towards the UN agencies like the WTO, the UN Framework Convention on Climate Change, the World Intellectual Property Organization, World Customs Organization; that's where our member companies see that added value from ICC: to help in leveraging business priorities in inter-government arenas.
You spoke about the G20 being formed during the darkest days of the global financial crisis; we're still emerging from this crisis today. What does the ICC think are the biggest challenges facing the global economy at this time, and how will these be reflected in B20’s priorities?
In terms of emerging from the financial crisis, I think we've come a long way. I think the global community thinks that the G20 certainly headed off a complete meltdown of the economy, and, quite simply, the global cooperation in those first few years was a success. I think G20 is still riding on that success and I think that most followers of the G20 would agree that its agenda now mixes the financial reform agenda with broader development issues. In terms of the things that need to continue to be done; clearly the G20 needs to finish their work on financial regulatory reform that has been in process for six years. Progress has been made though, and the FSB has been an important player there.
We think that trade is certainly a driver for economic growth – that's one of ICC's main policy pillars. The G20 leaders exhibited some real leadership on trade in St Petersburg, where they collectively agreed to rally behind the Trade Facilitation Agreement. And now, I think they've set out a pretty clear agenda in just two short lines of the Brisbane statement, where they agreed to complete the Bali package, and they've called for a plan to resolve the remaining issues on the Doha Government agenda. I think that exhibits the type of leadership that we want to see, or that we saw from the G20 in the early days.
In the B20 we were very pleased with the responsiveness on trade because that was an area where we saw some traction between what we've been working on, what we've been recommending, and the responses that we were getting from the G20 leaders. I think that is only the beginning of where we are going to go with infrastructure; you may have noticed that all the country growth strategies that each of the G20 nations agreed to put together have a required section on infrastructure, and if you look through those you see that the countries have a long way to go if they’re going to make much progress towards their goals. I think we need to take a look at that, to see really how far they actually go because infrastructure part of the pillar that will help us reach the G20’s 2.1% growth target. Whether they can achieve that target is going to depend on whether the words on the report translate into actual investments.
In terms of areas we think they could do more, trade protectionism has been around for a long time. That's the type of thing that governments fall back on when times get tough. The G20 again showed leadership with the standstill agreement but the business community thinks: "Ok, that's good, the standstill agreement says that we can stop protectionism in its tracks but we think that more needs to be done to roll back protectionist measures that were already in place." Just agreeing not to put new ones out there is one part of the story, but rolling back the measures that are out there already is another big part of the story.
Also, the G20 hasn't really taken on energy and climate issues, in any kind of a serious way.
Especially last time, during Australia’s Presidency…
Well, yes and no; because in the run-up to the 2014 summit the Australian leadership had de-emphasized climate change as an issue, but by the time they got to the summit they actually had a break-out meeting on energy and climate. I think that might have surprised a few people but it certainly said that the G20 is not going to shy away from tackling those issues that require some kind a global coordination. Energy and climate issues are global problems that have no borders. That's why we really need the G20 to steer and command; to lead the way for the rest of negotiators in the UN arena. I think they're doing that at the right time. There are certainly lot of expectations for the Climate COP (convention of parties) that's coming up this year in France. There's a lot of hope that this might be the year, but it is not the first time that we've heard that. So, anything that the G20 can do to help focus on some of the key issues, like carbon pricing and climate finance flows, would really be helpful.
There is also more and more discussion on whether the G20 should shed some light on the digital economy. And related to that would be whether the G20 might be able to help strengthen Intellectual Property enforcement, which is a big part of the WTO TRIPS agreement. The ICC would certainly think that the G20 could help on trade finance issues. So, it's a long list, and what we found in the B20 task force meetings recently is that there is a desire to focus on the most important and solvable issues. Australia’s B20 Presidency tried to focus on 20 recommendations that the G20 could adopt now. But, at the same time, the intractable problems that face the global economy can't be shortlisted to twenty.
The G20 coming together in the financial crisis and staying together was important, and as things have gotten better it will be important to stick to an agenda, take on a broader portfolio of issues and to provide some guidance. We're probably still in the first stage of the G20’s long run evolution, but it is a forum that will become more and more part of the global economic governance landscape as time goes on.
This year we have the three "I's" guiding the focus of the Turkish Presidency. One of these is ‘implementation’, and there has been criticism in the past that the G20 has not followed through on its commitments. You mentioned last year’s shortlist of achievable recommendations. How focused is the B20 this year on the ‘implementation’ aspect?
I think there is no doubt that the implementation element of the Turkish platform is the most valuable. No question about that. Implementation is the point of the game. That's what it’s all about. So, it's certainly right for the Turkish government and the Turkish B20 to be focused on implementation. But the B20 always features an element of implementation in its work. Each recommendation that they've put forward then calls on governments to ultimately either do something at the national level or empower another body, like the WTO, OECD, FSB, or the IMF to implement the recommendations. This is one reason that ICC publishes the ICC G20 Business Scorecard, to help monitor G20 responsiveness and track progress on implementation.
On the other hand, the business side of our recommendations has always tried to offer things that the business community can do too; but a lot of times, businesses’ ability to act and implement is dependent on whether the governments can create the right regulatory or investment environments for them to do so.
I don't think that there is any question that business is willing to implement, that's what business does. We create products; we invest in the development of those products. We build and develop those products, we ship and sell those products, we hire people to do it; and that's what drives the economy. So, there's no question that business has ever hesitated to do anything. We engaged in the B20 because we believe in fair shared responsibilities and we know what governments need to do to ensure that we have the right climate to do business.
Another of the three I’s is ‘Inclusiveness’. Part of this is the element of involving more Low Income Developing Countries and SMEs in the discussion process. Another aspect is focused on women and youth employment. Where does ICC want to see more ‘inclusiveness’ in the global economy and in discussions on economic governance?
There are two types of inclusiveness: there's inclusiveness in the process and then there is inclusiveness in terms of whether smaller economies or less-developed economies have access to capital, to banking services, and whether they have the right infrastructure in place to conduct business. So the inclusivity eye is a very broad eye.
Deputy Prime Minister Ali Babacan has been extremely vocal and transparent in saying that he wants to make sure that this G20 process is as open as possible, and includes the voices of not just the big companies but also the world's SMEs. On that subject, ICC has been honored that he's reached out to us and our global membership of companies, large and small, that we represent worldwide, and asked us to partner with him in helping to reach out to the SMEs; and not just to learn what their business priorities are but also to help service them.