IT MAY have been dominated by discussions on the war in Syria, but the G20 Leaders' Summit in St Petersburg last week was far from the failure described by many sections of the mainstream media. Significant progress was made on global trade, jobs, tax, anti-corruption and finance issues, according to the International Chamber of Commerce (ICC).
According to the ICC, the G20 Summit maintained a focus on shared economic objectives for re-balancing the world economy through sustainable growth and jobs.
Among the detailed commitments was the G20 declaration's call to achieve a trade facilitation agreement at the World Trade Organization (WTO) Ministerial Conference in December.
This standalone agreement could increase global GDP by US$960 billion annually, generate US$1 trillion in world export gains, and thereby create 21 million new jobs, according to a recent study commissioned by the ICC and conducted by the Peterson Institute.
The untold business story from St Petersburg was the steady progress G20 leaders are achieving between Summits on their shared economic agenda to increase sustainable growth and encourage job creation.
"The substantive nature and the deep degree of policy stewardship embodied in the Leaders' declaration is evidence that the annual Summit is only the most visible part of an ongoing, collaborative and productive process that has evolved since the G20's inception at head of state level in 2009," said ICC secretary general Jean-Guy Carrier.
"The work carried out by G20 officials over the last year has produced agreements on trade, trade finance, protectionism, taxation, anti-corruption and other measures central to the global business agenda."
G20 leaders spoke confidently about the value of their deliberations and conveyed highlights of their work programme to business leaders invited to a special session for social partners.
Members of the ICC delegation participating in the so-called Business-20 meeting with G20 Leaders included Mr Carrier, ICC chairman and president Harold (Terry) McGraw III, who is also the chairman, president and CEO of McGraw Hill Financial; ICC G20 Advisory Group chairman Marcus Wallenberg, who is also chairman of Sweden's SEB; and Mexico's Cinépolis CEO Alejandro Ramirez.
During the meeting, French President Francois Hollande told business leaders, "Agreements reached between G20 governments have the objective of creating economic growth and jobs, particularly for the young. We have also given a strong signal on trade, and there is a convergence of interests to agree."
German Chancellor Angela Merkel emphasized that the G20 had agreed strong measures to fight protectionism, which she said is the worst enemy of jobs and of growth.
President of the European Commission José Manuel Barroso highlighted the importance of the G20's extension of the stand-still on protectionist measures to 2016 and the G20's consensus to "get a deal done" at the December WTO Ministerial Conference in Bali.
"ICC has been promoting policy recommendations to the G20 on these issues for several years," the ICC's Mr Carrier said.
"It's both rewarding to see progress and gratifying to receive endorsement from G20 leaders on the crucial role of Business-20 contributions," said Mr Carrier.
"The special session for social partners, held within the framework of the G20 Leaders' Summit, represented a significant development in the ongoing government-business dialogue in the G20 since Korea sponsored the first Business-20 Summit in 2010."
For the fourth consecutive year since Seoul, ICC and CEOs of the ICC G20 Advisory Group served as a strategic partner in the Business-20, holding leadership positions in the policy development process, publishing recommendations and progress reports on G20 implementation, and meeting with G20 leaders, sherpas and government officials.
"Remarks from UK Prime Minister David Cameron, reiterating that the G20 takes business issues seriously, are encouraging," Mr Carrier said. "This validates our mission, as the voice of international business, to press for the inclusion of business priorities in deliberations by G20 leaders."
Business attaches great importance to the G20 process, especially given that many of today's major economic problems require a global approach.
The ICC prepared a concise list of progressive outcomes emerging from discussions at St Petersburg:
The G20's agreement to freeze the introduction of protectionist measures by extending the standstill agreement until 2016 is a significant achievement amidst different perspectives on trade, and one that, due to the resolve and commitment of G20 nations, will stabilize conditions to generate growth and more jobs. If the G20 builds on this type of consensus and begins the process of removing trade barriers, global GDP could increase by as much as US$7 trillion.
In the face of proliferating Regional Trade Agreements (RTAs), the timely recognition by the G20 of the need to ensure consistency between RTAs and WTO principles and rules for the multilateral trading system provides essential leadership to the world's trading partners, especially with the emergence of preferential trade pacts between large trading blocks and in a world where trade is increasingly organized on the basis of global supply chains.
The G20 mandate to the Basel Committee on Banking Supervision (BCBS) can be strengthened by including an assessment of the impact of banking regulations on trade finance so as to avoid restricting the availability, stability and sustainability of trade finance. Increasing the availability of trade finance by 5% could increase global production and jobs by 2%.
The G20 commitment "... to facilitate domestic capital market development and improve the intermediation of global savings for productive long-term investments, including in infrastructure and to improve access to financing for SMEs" is critical to encouraging private sector investment and SME generated jobs and growth. ICC, through its network of more than 6 million companies, stands ready to work with the G20 and intergovernmental organizations to realize these objectives.
In the lead-up to Australia 2014, ICC encourages G20 leaders to mandate multilateral development banks and international financial institutions to frame and promulgate global project preparation guidelines for sustainable infrastructure projects. These measures will help identify 'bankable projects' for investors and provide the confidence to begin supplying capital to the US$600 billion annual shortfall in infrastructure investment projected over the next 25 years.
The establishment of a high-standard multilateral framework for investment, led by G20 countries and based on ICC Guidelines for International Investment could help restore FDI flows by as much as 25% and help create a more stable and predictable investment environment while lifting impediments to the mobilization of private capital.
ICC has for many years led the fight against corruption on behalf of world business and therefore welcomes continuation of the dialogue between the G20 Anti-Corruption Working Group and the Business-20 group on anti-corruption, as an effective means to reduce remaining challenges. Implementation of Business-20 recommendations could result in the eradication of $1 trillion in bribes, and lead to a 1% increase in economic growth in developing countries and a 5% increase in investment.
The G20 endorsement of the OECD action plan addressing base erosion and profit shifting (BEPS) is a welcome development. As the G20 takes its BEPS work forward, ICC encourages close consultation with the business community to develop an international tax system that promotes the transparent and non-discriminatory treatment of foreign investment and earnings and eliminates obstacles to trade and investment.
The extended mandate for the G20 Energy Sustainability Working Group (ESWG) is important to the G20's ability to address cross-border sustainable development challenges, clean energy, and energy efficiency. A key priority for the G20 should be to address recurring business recommendations on energy efficiency, especially given their potential to spur investments and reduce economic leakages caused by inefficient energy consumption. Energy efficiency improvements have the potential to generate $1 trillion in annual energy cost savings in the OECD alone.
The Australian representatives on the ICC G20 Advisory Group were Corrs Chambers Westgarth CEO and partner John Denton and ANZ Bank CEO Michael Smith. However another key contributor is Australia's Andrew Liveris who is chairman and CEO of the Dow Chemical Company, headquartered in the United States, who has also been on US President Barack Obama's economic advistory panel.
Other members of the Business-20 group include Yassin S. Al-Suroor, president and CEO, A'amal Group (Saudi Arabia); Cesar Alierta Izuel, executive chairman, Telefonica (Spain); Emilio Azcarraga Jean, CEO, Televisa (Mexico); Antonio Brufau, Chairman & CEO, Repsol (Spain); Paul Bulcke, CEO, Nestle (Switzerland); Carlos Bulgheroni, Chairman, Bridas Corporation (Argentina); Kimball Chen, Chairman & CEO, Energy Transportation Group (United States); Marijn Dekkers, CEO, Bayer (Germany); Eduardo Eurnekian, Chairman and CEO, Corporacion America (Argentina); Pierre Froidevaux Chavan, Chairman, ICC Mexico (Mexico); Victor K Fung, Chairman, Li & Fung (Hong Kong); Kris Gopalakrishnan, Executive Vice Chairman of Infosys Ltd (India); Ilham Habibie, CEO and President Director, PT Il Thabi Bara Utama (Indonesia); Rifat Hisarc?kl?oglu, Chairman, Eskihisar Group and President of the Union of Chambers and Commodity Exchanges of Turkey (Turkey); Alexander Izosimov, Partner, Deep Roots Capital (Russia); Sheikh Al-Thani Khalifa, Member of the Board of Directors, Doha Insurance and Chairman of Qatar Chamber of Commerce and Industry (Qatar); Seung Youn Kim, CEO, Hanwha (Korea); Young Tae Kim, Chairman, Daesung (Korea); David Kinyua,, Chairman, Aberdares Water Company (Kenya); Gérard Mestrallet, CEO, GDF Suez (France); Yogendra Kr. (YK) Modi, chairman and CEO, Great Eastern Energy (India); Raghu Mody, chairman, The Rasoi Group (India); Peder Holk Nielsen, CEO, Novozymes (Denmark); Mahendra Sanghi, chairman, MK Sanghi Group (India); Martin Senn, CEO, Zurich Insurance Group (Switzerland); Jean-Pascal Tricoire, president and CEO, Schneider Electric (France); Peter Voser, CEO, Royal Dutch Shell (United Kingdom/Netherlands); Gérard Worms, vice chairman, Rothschild Europe and chairman of the ICC (France); and Zola Tsotsi, chairman, Eksom Holdings (South Africa).
* ICC is the largest, most globally representative business organisation in the world. Its global network comprises more than six million companies, chambers of commerce and business associations in more than 130 countries, with interests spanning every sector of private enterprise. ICC represents business views and priorities to the United Nations network of agencies, the World Trade Organization, the G20 and other international and regional intergovernmental bodies. ICC's worldwide network of national committees operates at the doorstep of governments in over 90 countries, enabling ICC to channel business priorities to policymakers and stakeholders where it matters most. More than 2000 experts drawn from ICC's member companies feed their knowledge and experience into crafting the ICC stance on specific business issues.
The Peterson Institute report, Payoff from the World Trade Agenda 2013, can be found at: