ICC G20 Policy Consultation – Berlin 2013

ICC Secretary General Jean-Guy Carrier explained how ICC’s role in providing input into the G20 was a natural extension of ICC’s historic mission since 1919 of representing global business views and promoting world peace through world trade.

ICC saw value in the G20 as a high-level platform and a continuous policy development process to which global business should seek to contribute “before G20 summits, during summits and after summits”, in order to ensure a positive interaction between business policy recommendations and the G20 agenda. Developing tools and mechanisms to keep track of G20 outcomes and their implementation — especially on topics of particular concern to business — was a key feature of being able to measure the results of the business contribution.

Stefano Bertasi, Executive Director, ICC Department of Policy and Business Practices, introduced the discussion on trade, investment and infrastructure, and the G20’s role in job creation by outlining the main outcomes of the Los Cabos G20 Summit and the preliminary recommendations developed so far by the B20 task forces on these issues.

Points made in the ensuing discussion moderated by Mr Carrier included the following:

• The availability (including fair competition) and affordability of trade finance especially for small and medium-sized enterprises in developing economies was essential to international trade and should be captured by the “B20”/G20 process.
• Greater convergence of financial regulation and its implementation were necessary to foster global economic integration and stability.
• Bilateral and regional trade agreements should be complementary to the multilateral trading system rather than substitutes, and avoid creating additional costs and distortions to
  international trade especially for SMEs.
• The Los Cabos B20 recommendations on anticorruption were a “jewel” that needed follow-up and implementation. It was encouraging to see that the Russian Presidency of the G20 and the B20 were engaged toward these objectives.
• Attention should be given to the dynamics of the international financial architecture by monitoring the short-term and longer-term interaction between rules.
• On several issues, such as job creation and human capita for example, one of the challenges the “B20” needed to consider was the delicate balance to be struck between strategic policy advice and detailed policy prescriptions.
• In order to provide effective input the “B20” was mindful of the need to consolidate its recommendations and focus on the most relevant items.
• The “B20” contribution could be particularly useful to the G20 in highlighting how to enhance the financing of SMEs through long-term investment financing for example.
• The impact of Basel regulations on fair competition, and the appropriate role of state subsidies in the financing of investment should be taken into consideration by the “B20”/G20 work.
• Inconsistency in the implementation of financial regulation and in differing levels of transparency and disclosure increased the fragmentation of the global financial system and
  should be avoided.
• One participant suggested that an intergovernmental organization should have the mandate to monitor the implementation of financial regulation in order to safeguard the stability of the international financial system.
• It was essential to relate B20 recommendations to key G20 objectives of creating growth and jobs to ensure that these would resonate with G20 governments.
• What was occurring in Greece was a useful testing ground for determining which policy measures were effective and which were not.
• Stimulating investment in infrastructure would have positive impacts on growth and job creation but what was needed was a more systematic approach to infrastructure investment
  projects and public-private partnerships to make them more effective.
• The B20 should seek to develop “authentic” business recommendations, with replicable examples if possible, relating to specific G20 priorities such as investment financing for
  example.
• The central role of SMEs in creating growth and employment should be recognized across the broad range of issue areas considered by the B20 and G20. Facilitating the financing of SMEs and their capacity to trade would have positive impacts, as would taking into account their limited capacity to absorb and implement new regulation.
• The EU-US FTA announcement increases the pressure to reach some outcomes at the WTO Ministerial in Bali.
• Monitoring of G20 outcomes by business is necessary, and the focus should be on implementation of existing commitments. The G20 should be encouraged to creating a
  positive business environment, and encouraging Russia to play a proactive role as a new WTO member.
• Key elements of the Doha Agenda should be moved forward and bilateral and regional trade agreements should be negotiated with a view to being integrated into the multilateral trading system.
• Ex-post monitoring of financial regulations and their implementation, including through a G20 peer review process would be helpful. However, peer review was seen as an ambitious objective and the G20 itself did not have the necessary capacity, other than by mandating intergovernmental organizations.
• The G20 had already taken significant “systemic” steps in financial regulation despite the informal nature of the G20, such as the institutionalization of the Financial Stability Board.
• The G20 should be considered a global public good. Under the Russian Presidency, progress would be sought on the following elements of the finance track: the rebalancing of IMF
  quotas, mid-term fiscal targets, Basel 3, and credit rating agencies.
• Input into the G20 represents a huge opportunity for business to seize.