Business bolstered by G20 progress in Los Cabos

  • 28 June 2012

The International Chamber of Commerce (ICC) is encouraged that business recommendations for boosting the global economy, including those aimed at unblocking trade negotiations, were taken into account by G20 leaders at their recent Summit in Los Cabos, Mexico.

ICC executives, who met in Paris on Thursday, agreed that while much progress still needs to be made, the measures announced by G20 leaders represent a positive step towards creating favourable conditions for improving economic growth and creating jobs.

The G20 final communiqué, issued on 19 June at the close of the Summit, took into account recommendations that had been delivered to the G20 by several business organizations, including ICC, on behalf of global business.

“ICC welcomes that G20 leaders have reasserted their shared belief in multilateralism and picked up on our trade and investment recommendations,” ICC Chairman Gerard Worms said. “Their agreement to negotiate on this issue is an indicator of progress and presents an opportunity to reinvigorate the global economy.”

“Despite the challenges we all face domestically, we have agreed that multilateralism is of even greater importance in the current climate, and remains our best asset to resolve the global economy’s difficulties,” the G20 leaders stated in the final communiqué, which also expresses appreciation for the contributions of the G20 Business Summit process.

CEOs from the ICC G20 Advisory Group and partners, the World Economic Forum (WEF) and Mexican business associations COPARMEX and COMCE, delivered business views on a host of topics including trade and investment to Mexican President Felipe Calderon on 19 April in Puerto Vallarta, Mexico, in preparation for the G20 Summit.

Among these recommendations was a call for increased tools for global governance, namely for reinforcement of the role and powers of the International Monetary Fund (IMF). G20 leaders subsequently reaffirmed in Los Cabos their commitment to fully implement the 2010 Quota and Governance Reform by the time of the IMF/World Bank annual meetings, set to take place 12-14 October 2012.

“Strengthening the IMF’s surveillance powers provides an insurance policy of sorts for the world economy at a time when even more coherence between countries is necessary to bring them out of the economic crisis,” said ICC Secretary General Jean-Guy Carrier.

ICC is encouraged that the G20 leaders reiterated commitments made at the Cannes Summit, in November 2011, to roll back any new protectionist measures. According to the ICC Open Markets Index, released in November 2011, G20 countries only ranked average out of 75 countries for their openness to trade.

“The rise in protectionism among the world’s major economies has been very troubling. At a time when trade could stimulate economic growth and job creation, the G20 needs to lead by example and open markets instead of putting up barriers,” said ICC Vice-Chairman Harold McGraw III.

According to a recent WTO-OECD-UNCTAD report (1), 124 new trade restrictive measures have been recorded since mid-October 2011, affecting around 1.1% of G20 merchandise imports (0.9% of world imports).

The G20 leaders also suggested in their final communiqué that the current economic climate presents an opportunity for implementing inclusive green growth, echoing advances made at the recent United Nations Rio+20 Conference.

“Inclusive green growth in the context of sustainable development and poverty eradication can help achieve our development and economic goals, while protecting our environment, and improving social well-being on which our future depends,” the communiqué states.

ICC presented its Green Economy Roadmap – a comprehensive guide for business, policymakers and civil society to build a green, more inclusive economy – at the Rio+20 Conference. This roadmap serves as both a tool for integrating sustainability into business strategies and government policies as well as a platform from which to improve best practices.

“Governments must harness the potential of trade and investment to meet the sustainability challenge and raise even more people out of poverty. Trade and investment will be the global accelerators of green growth, provided that governments work together to avoid protectionism,” Mr Worms said.

(1)7th report on G20 trade and investment measures. World Trade Organization (WTO), Organisation for Economic Co-operation and Development (OECD), United Nations Conference on Trade and Development (UNCTAD). 31 May 2012.