G20: Seven steps to sustained economic growth
The International Chamber of Commerce has put forward a set of business recommendations to help leaders of the world’s major economies prepare for discussions on the world’s most pressing economic policy challenges at next month’s G20 Summit taking place Hangzhou, China.
From climate change and energy to taxation and trade, the recommendations cover seven areas not covered by the 20 principle 2016 policy recommendations developed by the Business -20 (B20), and to which ICC significantly contributed and fully endorses.
“The supplemental ICC recommendations aim to complement B20 work and help drive progress on some of the most intractable economic and social challenges confronting the global economy,” said Jeffrey Hardy, Director of ICC’s CEO G20 Advisory Group.
“As the world business organization, we want to flag some salient areas where G20 leaders can make progress towards sustained and inclusive economic growth.”
Here, we bring you a summary of the full recommendations which have been presented to the senior government officials – known as sherpas – tasked with laying the groundwork for the Summit.
- Achieve coordinated and consistent implementation of the G20/OECD BEPS Action Plan, ensuring that all countries – not just OECD states – work together towards a consistent international tax landscape.
- Continue efforts to align investment and tax policies to facilitate greater consistency internationally and incentivize cross-border trade, investment, jobs and economic growth.
- Ensure effective dispute resolution mechanisms are in place to mitigate double taxation cases and associated tax disputes.
- Maintain the confidentiality of commercially-sensitive business information in CbC tax reports and ensure that all countries and jurisdictions implement the global standards, including new tax transparency measures related to the automatic exchange of financial account information between national tax offices.
- Ensure equitable, risk-aligned and consistent regulatory treatment of trade finance to enable the engagement of developing and frontier economies.
- Advance and multiply the positive impact of trade financing and trade, by actively enabling the deployment of FinTech solutions and propositions in international commerce.
- Call on WTO members to continue to refrain from taxing electronic commerce, and create conditions for the further development of the global digital economy.
- Initiate sectoral negotiations at WTO that can make a significant contribution to economic growth by reducing the cost of trading.
- Make concrete progress on the liberalization of trade in services through alternative negotiating approaches, including plurilateral approaches such as the Trade in Services Agreement (TiSA), with the ultimate aim of transferring results into the WTO. It is estimated that removing barriers to global exports of tradable services could generate world trade gains of US$1.0 trillion and global employment gains of almost 9 million jobs.
- Encourage more countries to join the recently announced plurilateral initiative to eliminate tariffs on environmental goods, expand product coverage using the widest possible definition of green goods and eliminate unilaterally-imposed environmental rules that are trade-restrictive or create barriers to trade. A meaningful WTO agreement in liberalizing trade on environmental goods, even on a plurilateral basis, could deliver US$10.3 billion of additional exports and augment employment gains by 256,000 jobs.
- Include dispute resolution mechanisms in all investment agreements to ensure investors have direct access to effective and independent dispute settlement.
- Avoid sectoral discriminations in the negotiation of investment treaties, which have a direct impact on the inflow of FDI.
- Devote greater attention to state-owned enterprises (SOEs), which can enjoy a range of preferential benefits and compete with the private sector in investment and trade areas.
- Refrain from abusing “national security” provisions in agreements and treaties for protectionist purposes. Such procedures should be applied in a transparent, fair and non-discriminatory manner if they are to be exceptionally used.
- Avoid forced localization provisions which have negative repercussions on both the investor and on the host country’s attractiveness as an investment destination.
- Encourage the utilization of broad energy mix-including conventional fuels such as coal, gas, gas liquids and oil; nuclear power; and renewables such as bioenergy, geothermal, hydro, solar and wind-to drive sustainable development and help alleviate environmental or other sustainability challenges associated with any one form of energy.
- Manage the long-term transition to secure and sustainable global energy systems by establishing stable regulatory frameworks that incentivize energy investment, ensure long-term energy security, and promote sustainable energy delivery and consumption.
- Accelerate energy R&D investment for innovative energy technologies, and strengthen and encourage the expansion of well-trained scientists, engineers and technicians necessary to expand energy-related R&D.
- Continue to promote and support energy efficiency across industries, including establishing government efficiency standards and promoting energy-efficient behaviours and devices by energy consumers through education, regulation and incentives.
- Improve the global governance framework for energy policy, starting with establishing formal business representation in the G20 energy-related working groups. G20 Leaders should also: (i) encourage the completion of the International Energy Forum Joint Oil Data Initiative (JODI) work on oil, gas and coal information and (ii) reform current institutions (e.g., International Energy Agency, International Energy Forum), including increasing collaboration among countries and international energy-oriented organizations.
- Increase access to clean, modern forms of energy in accordance with SDG 7, with emphasis on Africa and the Asia-Pacific region, including support for (i) the UN SE4All initiatives and its High-Impact Opportunity (HIO) partners (including energy efficiency in district energy, green building, transportation, lighting and appliances); (ii) efforts by international organizations to improve energy access in developing countries (e.g., the African Development Bank’s New Deal on Energy for Africa).
- Support and prioritize the development of common rules of the COP21 Paris Agreement on Climate Change to measure, report, and verify commitments. Credibility and predictability will be essential for the long-term success of the Agreement and are vital considerations for private sector planning and investments.
- Promote market-based instruments to achieve the least economic cost emission reduction targets and include them in relevant considerations, documents and strategies at UN and national levels including Nationally Determined Contributions (NDCs) and other national climate policies where appropriate.
- Support global carbon pricing as a policy framework, such as through building upon and extending the G7 Carbon Pricing initiative.
- Generate funding and financial risk-mitigation mechanisms for necessary R&D, deployment and infrastructure.
- Implement mechanisms that rationally incentivize emissions reductions and climate adaptation.
- Strengthen anti-corruption capacity-building by (i) promoting usage of self-regulatory codes and standards; (ii) supporting and scaling-up anti-corruption and compliance training; (iii) enhancing efforts to engage SMEs; and (iv) working together with the private sector to build capacity for high-level reporting mechanisms in G20 members.
- Strengthen enforcement of existing anti-corruption frameworks, with particular focus on enforcing the UNCAC through improved monitoring, peer review processes and partnering with the business community.