*{Business and the global economy 
ICC statement on behalf of world business to the Heads of State and Government attending the Cologne Summit 
18-20 June 1999 [http://www.iccwbo.org/home/statements_rules/statements/1999/g7_statement.asp]

French version 

Executive Summary

Paris, 11 May 1999 - The International Chamber of Commerce (ICC), the world business organization, urges the Heads of State and Government attending the Cologne Summit in June 1999 to devote special attention to four key issues of particular concern to world business.

Our overall message to the G7/G8 leaders is that, while globalization is a powerfully beneficial force for raising living standards across the world, it requires much closer cooperation among governments – and between governments and business – for effective multilateral rule-making. The special contribution of business is to help governments strike the necessary balance between freedom and rules that maximizes the scope and stability for business to work productively to create wealth and employment.

Crucial to enabling the benefits of globalization to spread to all mankind is the maintenance of peaceful conditions between and within sovereign states. The absence of political conflict is a precondition for local entrepreneurship to flourish and for foreign business to invest.

1. International trade

ICC, which is strongly opposed to protectionism, fully supports the commitment of the G7 countries to launch a new round of multilateral trade negotiations at the third Ministerial Conference of the WTO in Seattle later this year. This initiative will strengthen the prospects for the recovery of the world economy by sending a positive signal to traders and investors the world over that governments are committed not only to keeping markets open, but also to further reducing barriers to market access. The focus must be on a much broader concept of market access than in previous rounds – on the international rules for business companies to compete freely and on equal terms in a global marketplace.

ICC strongly urges WTO member governments to devise processes to ensure that the new round is concluded in a relatively short period of time. Meanwhile, it remains of vital importance that governments continue to implement, in full and on schedule, the commitments they agreed to during the Uruguay Round and in subsequent multilateral negotiations. World business, as represented by ICC, urges upon governments the following strategic priorities for the new round: 
to further liberalize trade in services by expanding the number and improving the quality of countries' commitments on market access and national treatment; 
to accelerate the process begun in the Uruguay Round of curbing the substantial protectionist measures that severely impede and distort trade in agricultural products; 
to further reduce and eliminate tariffs; 
to push forward the process of creating within the WTO multilateral rules to liberalize and protect foreign direct investment, including longer-term equity capital; 
to develop WTO-consistent criteria for the use of trade measures contained in multilateral environmental agreements, and to address the threat of eco-labelling schemes becoming de facto trade barriers; 
to elaborate comprehensive multilateral rules to simplify and modernize trade procedures, and especially inefficient and costly customs procedures; and 
to extend the membership, sectoral coverage, and transparency provisions of the existing plurilateral agreement on government procurement. 

2. International financial stability

ICC welcomes the initiative of the G7 countries in establishing the Financial Stability Forum with a view to improving the quality of surveillance and supervision of the international financial 'system' in the wake of the emerging markets crisis. We urge them to invite the participation of emerging market countries at an early stage.

We also welcome the work being undertaken by the IMF to encourage more accurate and timely financial reporting by borrower countries and to promote greater transparency and disclosure of information. It is important that as much of this information as possible is shared not only with national regulatory authorities but also with private financialinstitutions. Transparency, full disclosure, and accurate, relevant and up-to-date information are vital to improving risk management in the private sector.

Meanwhile, independently of the measures being taken by governments, private sector firms have a clear responsibility, as well as self-interest, to rectify weaknesses in their own internal control mechanisms that were exposed by the crisis. 

Finally, we stress the importance to emerging markets of avoiding measures that might deter the expansion of inflows of foreign direct investment that has played a major stabilizing role in the recent crisis.

3. Innovation, technology and jobs

Business is becoming increasingly concerned by the negative tone of much public debate about rapid advances in communications and information technologies and in biotechnology that hold out huge potential for raising economic efficiency and creating employment in the knowledge economy, as well as offering the promise of dramatic improvements in human nutrition and health care and in the quality of life generally.

Business recognizes that it must maintain an attentive dialogue with consumers to ensure that their genuine concerns are addressed. At the same time, we urge governments to play their role in ensuring a balanced public debate, and particularly to underline the importance of risk assessment based on sound scientific enquiry. We further urge governments to encourage the development of electronic commerce by avoiding over-regulation of the internet and additional taxation of electronic commerce.

4. Combating bribery and extortion

ICC has long believed that, in addition to being unethical, corrupt business practices distort competition and misallocate economic resources. Way back in 1977, ICC issued its pioneering Rules of Conduct to Combat Extortion and Bribery in International Business Transactions – a set of guidelines to promote high standards of corporate conduct.

ICC has lent strong support to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which entered into force in February this year. We urge the G7/G8 countries to set a good example of leadership by ensuring that each and every one of them ratifies the OECD Convention without further delay.

Clearer and more effective legislation and general rules, and fewer case-by-case decisions of officials, automatically reduce corruption. Ultimately, the strongest remedy for corruption is increased reliance on markets and competition, and governments that are able to refrain from regulation wherever possible whilst standing ready to set and strictly implement rules where necessary.

ICC Statement  Business and the Global Economy

The International Chamber of Commerce (ICC), the world business organization, is pleased to present this statement to the Heads of State and Government attending the Cologne Summit (18-20 June 1999). The statement addresses four key issues of particular concern to world business, to which ICC urges the leaders of the Group of Seven/Eight (G7/G8) countries to devote special attention.}

Our overall message to the G7/G8 leaders is that, while globalization is a powerfully beneficial force for raising living standards across the world, the emerging markets crisis has served to underline in particularly dramatic form that much closer cooperation is needed among governments – and between governments and business – for effective multilateral rule-making. Markets, like freedom, only work well within a suitable framework of laws, rules and institutions. The particular contribution of business to this task is to help governments strike the necessary balance between freedom and rules that maximizes the scope and stability for business to work productively to create wealth and employment.

Crucial to enabling the benefits of globalization to spread to all mankind is the maintenance of peaceful conditions between and within sovereign states. The absence of political conflict is a precondition for local entrepreneurship to flourish and for foreign business to invest.

ICC strongly supports the multilateral system and attaches great importance to the work the UN and several other major intergovernmental organizations are carrying out to tackle the complex and frequently interrelated problems emerging in the global economy at the dawn of the new millennium. We urge the G7/G8 governments to ensure that these institutions are afforded sufficient resources and authority to meet the growing demands upon them.

*partie=titre 1. International trade *partie=nil

ICC, which is strongly opposed to protectionism, welcomes the stated commitment of the G7 governments to pursue further trade liberalization by launching a new round of multilateral negotiations at the third Ministerial Conference of the WTO in Seattle later this year. ICC very much supports this initiative, and calls upon the G7 governments to act swiftly to resolve the current spate of trade disputes among themselves in order to create a climate of goodwill conducive to rapid progress in the new round.

The launching of a new round will send a positive signal to traders and investors the world over that governments are committed not only to keeping markets open, but also to further reducing barriers to market access. It will make a significant contribution to restoring confidence in the prospects for the recovery of the world economy in the wake of the emerging markets crisis.

The world of today is very different from when the Uruguay Round was launched in 1986, and the focus of the new round must be on a much broader concept of market access – on the international rules for business companies to compete freely and on equal terms in a global marketplace. Inevitably, extending the scope of market access will entail the development of further multilateral disciplines on national regulatory regimes.

ICC strongly urges WTO member governments to devise processes, including precise interim deadlines and frequent reviews of progress at ministerial level, to ensure that a new round is concluded within a relatively short period of time. There must be a firm commitment to avoid repetition of the damaging delays that characterized the Uruguay Round. Multilateral rule-making has to adapt itself to the faster pace of change in a global marketplace in order to keep the rules aligned with rapidly-evolving business realities and requirements.

Meanwhile, ICC continues to attach the highest importance to the faithful implementation, in full and on schedule, of the commitments agreed to by governments during the Uruguay Round and in subsequent multilateral negotiations that formed part of that round's unfinished business. Adherence to the letter and spirit of those agreements, together with strict respect for the role and authority of the WTO's dispute settlement mechanism, are essential foundations for the further liberalization of 
world trade in the context of a new round.

World business, as represented by ICC, has a number of strategic priorities for the new round. It urges the G7 governments to give a lead to: 

Expand the number and improve the quality of countries' commitments on market access and national treatment under the General Agreement on Trade in Services. An important consideration is that the breaking down of domestic regulatory barriers across a wide range of service sectors is essential to permit the robust development of electronic commerce.
 
Accelerate the process begun in the Uruguay Round of curbing the substantial protectionist measures that severely impede and distort trade in agricultural products – and that have a particularly damaging effect on the export capability of many developing countries. Of growing importance is the need to promote food safety regulations that are grounded in scientific consensus about risk. 

Further reduce and eliminate tariffs, in consultation with business in the relevant sectors, and to make permanent the current provisional commitment of governments not to impose customs duties on electronic transmissions. 

Seize the opportunity of the new round to push forward the process of creating within the WTO multilateral rules to protect and liberalize foreign direct investment (FDI), including longer-term equity capital, in order to afford greater security to the enormous existing stock of FDI and to encourage its continued rapid expansion in a new era when countries everywhere are keen to attract it. 

Develop WTO-consistent criteria for the use of trade measures contained in multilateral environmental agreements; and clarify the application of the Uruguay Round Agreement on Technical Barriers to Trade to the expanding array of eco-labelling schemes in view of their potential for creating de facto trade barriers. Develop comprehensive and effective multilateral rules to simplify and modernize trade procedures, and particularly antiquated and bureaucratic customs procedures that impose heavy costs on business and on consumers. 

Broaden the membership of the existing plurilateral Agreement on Government Procurement and extend its sectoral coverage – including to services. The aim must be a truly multilateral agreement with strong provisions to increase transparency, openness and due process in government procurement. 

Finally, ICC reaffirms its strong support for the decision taken at the WTO's first Ministerial Conference in Singapore in 1996 that the competent body to deal with labour standards is the International Labour Office. We believe that trade sanctions are neither an appropriate nor an effective means to improve labour standards.

*partie=titre 2. International financial stability *partie=nil

Fortunately, the worst of the emerging markets crisis that began unfolding in the second half of 1997 now seems to be over, and a global recession has been averted. The current mood of cautious optimism, however, should not be allowed to slow the momentum behind international efforts to draw important lessons from that very damaging episode and to introduce reforms aimed at preventing any repetition of a systemic threat to global finance and world economic growth on so dangerous a scale.

A vital distinction must be drawn between short-term financial inflows and foreign direct investment (FDI). It is clear that FDI – which is a long-term commitment of capital, usually accompanied by modern technology, organizational and managerial skills – has played a major stabilizing role in the recent crisis. It is in the strong interest of emerging markets to avoid measures that might deter the expansion of FDI inflows and jeopardize mutually-beneficial long-term partnerships.

ICC welcomes the initiative of the G7 countries in establishing the Financial Stability Forum with a view to improving the quality of surveillance and supervision of the financial 'system' at both the national and international levels, and covering both borrowing and lending countries. We urge them to invite the participation of emerging market countries in the Forum at an early stage. We also welcome the work being undertaken by the IMF to encourage more accurate and timely financial reporting by borrower countries and to promote greater transparency and disclosure of information. It is important that as much of this information as possible is shared not only with national regulatory authorities but also with private financial institutions. Transparency, full disclosure, and accurate, relevant and up-to-date information are vital to improving risk management in the private sector.

Meanwhile, independently of the measures being taken by governments, private sector firms have a clear responsibility, as well as self-interest, to rectify weaknesses in their own internal control mechanisms that were exposed by the crisis and that contributed to a widespread excess of imprudent short-term borrowing and lending and of unsound investment. 

ICC recognizes full well that the sources of instability in the international financial 'system' are many and varied. Ultimately, there is no good substitute for sound fiscal, monetary and exchange rate policies, timely structural adjustment abetted by adequate public social safety nets, honest public administration, and high standards of corporate governance. But the reforms currently being pursued within the Financial Stability Forum, the IMF, the World Bank and other intergovernmental bodies are solid steps in the process of building firewalls against the outbreak of a further crisis of comparable proportions and gravity to that endured in the recent past.

Globalization is creating new risks as well as new wealth. ICC urges the G7/G8 countries to persevere in their efforts to strengthen international cooperation to develop improved rules and procedures that, while maintaining the opportunities for emerging markets to benefit from global capital flows, substantially reduce the risks of sudden and internationally contagious collapses in investor confidence.

*partie=titre 3. Innovation, technology and jobs *partie=nil

Business believes strongly that the freedom to research and innovate is one of the main engines of wealth and job creation. Technological advances have been the driving force in the history of material progress.

As this millennium closes, rapid advances in communications and information technologies are opening up a huge potential for improving economic efficiency through electronic commercial transactions, as well as creating the wider basis for a global knowledge economy. Governments must be very careful not to stifle this process by over-regulation of the internet and additional taxation of electronic commerce.

At the same time, new technologies in agriculture and the life sciences are holding out the promise of dramatic improvements in human nutrition and health care and in the quality of life generally – as well as creating many new jobs for skilled knowledge workers.

For these reasons, business is becoming seriously concerned by what we perceive to be a growing public fear of, and even hostility to, a number of today's leading-edge technologies and their impact on people's economic and social lives. We particularly regret the emotional terms in which the public debate on developments in biotechnology is being increasingly conducted. 

Business recognises that it must maintain an attentive dialogue with consumers to ensure that their genuine concerns are addressed. At the same time, we urge governments to play their role in ensuring a balanced public debate, and particularly to underline the importance of risk assessment based on sound scientific enquiry. We also believe it vital that the G7/G8 governments cooperate closely to develop a common approach to health and safety standards and regulatory requirements in relation to the new technologies in order to limit their obvious potential for sparking serious new trade wars between nations.

*partie=titre 4. Combating bribery and extortion *partie=nil

CC has long believed that, in addition to being unethical, bribery and extortion in international business transactions distort competition, misallocate economic resources, and can threaten economic and financial stability.

ICC played a pioneering role in fighting corruption when, way back in 1977, it issued its path-breaking Rules of Conduct to Combat Extortion and Bribery in International Business Transactions – a set of guidelines to promote high standards of corporate conduct. These rules were updated in 1996 and expanded to cover a broader range of corrupt practices. ICC is currently working to produce further rules to tackle 'private-to-private' extortion and bribery, as opposed to corrupt practices between private and governmental entities. 

ICC played a substantive role in the elaboration of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which entered into force in February this year. We call upon the G7/G8 countries to set a good example of leadership by ensuring that each and every one of them ratifies the Convention without further delay and by supporting the OECD monitoring programme that is critical to the successful implementation and enforcement of the Convention. 

Clearer and more effective legislation and general rules, and fewer case-by-case decisions of officials, automatically reduce corruption. Ultimately, the strongest remedy for corruption is increased reliance on markets and competition, and governments that are able to refrain from regulation wherever possible whilst standing ready to set and strictly implement rules where necessary.

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