ICC Archives

Business Can Help Shape the Future of Global Trade

Published on May 31, 2016

The following op-ed was published in the Wall Street Journal on May 26.

The World Trade Organization is seeking input from the private sector on the next steps for trade liberalization.

By ROBERTO AZEVÊDO And SUNIL BHARTI MITTAL

In the span of two short years, the World Trade Organization has given businesspeople around the world a number of reasons to sit up and take notice. Through a series of negotiated trade agreements, it has demonstrated that its efforts can bring massive, widespread benefits. Now the WTO is looking to work in closer partnership with the private sector to bring further gains to the international trade regime.

In 2013, WTO members delivered the Trade Facilitation Agreement. This was the first global trade deal in 18 years. Once ratified, it promises to slash red tape and reduce border delays. Trade costs will be lowered by an average of nearly 15%. Global trade could be lifted by as much as $1 trillion.

This impact is bigger than if every remaining tariff in the world were reduced to zero. Full implementation could create more than 20 million jobs and lift global gross-domestic-product growth by up to 0.5 percentage points. Businesses around the world will get a significant boost.

Then in 2015, a group of WTO members came together to free up trade on a range of information-technology products, including the latest-generation semiconductors, telecommunications satellites, medical devices and video games.

This deal, expanding the existing Information Technology Agreement, eliminates tariffs on approximately $1.3 trillion in annual exports. That’s more than the value of the global trade in automobiles.

That same year, WTO members agreed on a world-wide ban on export subsidies on agricultural products, the biggest agriculture-trade reform in 20 years. Governments had been spending up to $13 billion on these economically distorting subsidies each year. The private sector supported these deals, and their engagement made a huge difference in the outcome.

Before this recent flurry of breakthroughs at the WTO, businesses had very little interest in trade negotiations. Prolonged lack of progress in global trade negotiations had led many countries to focus elsewhere and pursue bilateral and regional trade initiatives. Such initiatives can deliver significant economic gains, but there’s no question that global agreements can deliver even more benefits to more people.

The private sector recognizes this. A complicated patchwork of overlapping trade regulations and standards is less efficient than global rules. That’s why business leaders want and need a strong WTO.

Shared rules and enhanced market access in 162 countries is something no regional trade agreement can offer. Now that the WTO has showed that it can deliver these results, private-sector interest is rising fast and businesses are asking: What’s next?

The precise shape of the WTO’s future negotiating work remains an open question. All members agree that long-standing differences in agriculture, industrial goods and trade in services must be tackled, and that development should remain a central priority.

But at present there’s no agreement on precisely how to proceed with these negotiations, or what specifically should be on the agenda. Areas for discussion include supporting trade by micro-, small- and medium-size enterprises; promoting and facilitating investments; supporting e-commerce; tackling fisheries subsidies; and lowering nontariff barriers.

In this context, the private sector has asked that its voice to be heard, not to dictate the agenda, but to provide perspective. Two major business organizations, the International Chamber of Commerce and the B-20 (the private-sector arm of the G-20) approached the WTO requesting a platform to discuss current trade issues and present their thoughts to WTO members.

That meeting, the first of its kind, will take place on Monday in Geneva. Business leaders from small and large enterprises, from developed and developing countries, along with other stakeholders, will brainstorm with WTO members. We hope that this interaction will help their governments as they shape the WTO’s future agenda.

In recent years the WTO has shown that, with the support of the private sector and others, it can achieve major, economically significant trade agreements. Strengthening this partnership will ensure that the WTO’s record is maintained and that it keeps delivering for growth, development and job creation around the world.

Mr. Azevêdo is the director-general of the World Trade Organization. Mr. Mittal is the first vice chairman of the International Chamber of Commerce.

ICC Welcomes New Dialogue with WTO

Published on May 31, 2016

switzerland-wto-general-councilThe International Chamber of Commerce (ICC) has today welcomed the conclusion of the World Trade Organization’s (WTO) first ever dialogue with the business community as an important step towards strengthening the global trade agenda.

The dialogue was initiated off the back of the successful outcome of the WTO’s ministerial conference in Nairobi last December, and in response to growing concern within the global business community about faltering global trade growth.

Addressing WTO members, ICC’s First Vice-Chairman Sunil Bharti Mittal said:”To be clear: business wants predictable, modern and up-to-date multilateral trade rules, negotiated and agreed at the WTO…Trade is expected to grow by less than 3 percent for the fifth consecutive year in 2016. We should not accept this as the new normal and we are ready to work constructively with WTO members to restore trade as a central driver of global growth.”

The first-of-its-kind event identified a broad range of possible WTO initiatives to help boost trade-led inclusive growth. These included:

SME growth

Business leaders encouraged the WTO to explore possible initiatives to make trade easier for small- and medium-sized enterprises (SMEs), going beyond trade facilitation reforms to identify where harmonized rules and end-to-end standards can help small businesses access global markets. Access to financing was also highlighted as a priority to support SME trade growth.

Investment

Many participants in the dialogue expressed an interest in a new WTO dialogue to explore the scope for global standards in the field of investment promotion, protection and facilitation.

Sectoral liberalisation

The dialogue highlighted an interest from a range of sectors in pursuing sector-specific talks as a complement to the ongoing Doha Round.

E-commerce

There was a strong call from business leaders for the WTO to play a central role in underpinning an open, reliable and secure global digital economy. Participants expressed particular interest in possible “e-commerce negotiations” which could encompass a broad range of issues such as customs duties, electronic signatures, data protection and localization requirements.

Speaking on the systemic importance of an e-commerce initiative, Mittal said:”The global nature of e-commerce means that the WTO has a vital role to play in the further development of rules and standards for this area. E-commerce has the potential to revolutionize global trade flows. Today, even the smallest of businesses can go global if they can access the Internet.”

At the conclusion of the dialogue, ICC has called on WTO members to maintain contacts with the business community in taking forward possible new trade talks and initiatives.

ICC Secretary General John Danilovich said: “We have seen a positive discussion today about how we can work together to maximize the contribution of trade and investment to achieving inclusive growth and sustainable development. We hope that today’s initiative can be followed up with concrete steps including further meetings of this kind. ICC stands ready to support this dialogue in any way possible.”

ICC Arbitration Posts Strong Growth in 2015

Published on May 12, 2016

gavelParis, May 11, 2016 – The International Court of Arbitration of the International Chamber of Commerce (ICC) has announced strong growth in 2015—underscoring the ICC Court’s position as the world’s leading arbitral institution.

The Court recorded the second highest number of new cases in its 93-year history, with some 801 cases filed over the course of 2015. New cases administered by the Court involved a total of 2,283 parties—with multiparty disputes accounting for more than 30% of the total new caseload for the first time.

New records were set in 2015 for the average value of new ICC disputes and the aggregate value of cases before the Court. The average monetary value in dispute in new ICC cases rose to $84 million from $63 million in 2014—with the largest dispute valued at over $1 billion. The aggregate value of all disputes pending before the Court at the end of the year stood at $286 billion.

The disputes submitted to the ICC Court in 2015 covered a broad range of sectors. Construction and engineering disputes accounted for a quarter of all cases received during the year, while energy disputes made up just under 20 percent of all new cases. Thirteen percent of cases filed in 2015 involved state or state-owned entities.

Commenting on the release of these results, President of the ICC Court Alexis Mourre said: “In a fiercely competitive market, the ICC Court continues to enjoy strong growth throughout the world. Our 2015 results show that the ICC Court is increasingly seen as the go-to institution for complex and high-value disputes.”

SICANA provides ICC arbitration and other ICC dispute resolution services in North America. USCIB’s Arbitration Committee promotes ICC arbitration services as an expeditious and economical means of settling commercial disputes, with several subcommittees located all over North America.

Cases filed in 2015 involved parties from 133 countries and independent territories worldwide—far outstripping the global reach of any other commercial arbitration institution. Parties from the United States remained the most numerous, while a significant rise was seen in parties from Australia, China and the United Arab Emirates.

In a landmark move, ICC has for the first time disclosed statistics on the gender balance of ICC tribunals. Women arbitrators represented just over 10% of all appointments and confirmations in 2015—and were more frequently appointed or confirmed as co-arbitrators (43%) than they were as sole arbitrators (32%) or tribunal presidents (25%). The statistics show that parties were less likely to select women arbitrators than the ICC Court.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world. With a unique global network encompassing leading international business organizations, including BIAC, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More information is available at www.uscib.org.

Contact:
Jonathan Huneke,
VP communications, USCIB
+1 212.703.5043 or jhuneke@uscib.org

Business Calls for Improved Trade and Investment at B20

Published on April 22, 2016

International Chamber of Commerce (ICC) and USCIB Chairman Terry McGraw joined global business leaders at a B20 meeting in Washington, D.C. and urged the private sector to intensify engagement with the G20 to promote international trade and investment.

Presided by B20 China Sherpa Yu Ping, the B20 Joint Task Force meeting was held on the margins of the Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group and in the lead up to the G20 Summit in Hangzhou, China next September.

Leading an ICC delegation of 40 CEOs from major multinational corporations, McGraw said: “We need more cooperation by the G20 to reignite world economic growth. That means that G20 leaders need to make trade and investment central to their growth agendas, making investments easier, reducing red-tape and cutting the cost of doing business.”

Zhu Min, IMF Deputy Managing Director stressed that structural reform must be a top priority for the G20 this year: “It’s absolutely important to bring the private sector into this global debate. In this critical junction, while we are facing global challenges and uncertainties, the private sector once again will play a pivotal and key role to stabilize world economic growth, financial markets, to push for growth and bring the world into the next high level.”

Read more at ICC’s website.

Global Business Body Highlights Crucial Importance of FDI for Growth and Development

Published on April 11, 2016

Money_globeNew York, N.Y., April 12, 2016 – In the face of growing populist rhetoric from some quarters calling into question the very nature of global trade, investment and private sector-led growth, the International Chamber of Commerce (ICC) has issued a ringing defense of foreign investment as a driving force in improving people’s lives around the world.

In its statement, Foreign Direct Investment – Promoting and Protecting a Key Pillar for Sustainable Development and Growth, the Paris-based global business body – which encompasses companies from all sectors in some 130 countries, developing as well as developed – voices its strong support for FDI as an effective tool to foster economic growth and sustainable development. ICC calls on governments to both maintain and strengthen investment protection and promotion agreements, including the investment provisions now common in many U.S. free trade agreements.

The statement was released by ICC’s American national committee, the United States Council for International Business (USCIB).

“A key lesson from the past half century and more is that investment, including foreign direct investment, is crucial in influencing a country’s overall prospects for economic progress and prosperity,” said James Bacchus, the former chief judge for the World Trade Organization and former U.S. Congressman who chairs ICC’s Commission on Trade and Investment Policy, which developed the paper. “Countries that put in place strong, well-considered policies both to promote and protect investment, and ensure the rule of law, benefit more from FDI as well as from domestic investment. Those countries have more effective institutions and higher standards of living.”

The ICC statement encourages governments to pursue high-standard bilateral and regional investment agreements. These important agreements should continue to include strong dispute resolution provisions, through investor-state dispute settlement (ISDS) with independent proceedings to settle investment disputes, the paper says. It further proposes that, in the longer term, an equally high-standard multilateral framework on investment could further foster FDI in support of growth and sustainable development.

Other key messages from the ICC policy statement include:

  • Discrimination is never a good idea. ICC calls on national governments to avoid any sectoral restrictions in investment agreements coverage or access to dispute settlement.
  • Governments around the world should give greater attention to investment challenges related to State-Owned Enterprises (SOEs) so as to ensure a level playing field when private companies (domestic or foreign) compete with SOEs.
  • National security or “essential security” reviews by governments should be narrowly focused on true national security issues and not become an excuse for discrimination against foreign investors.
  • All governments should avoid “forced localization” requirements against foreign investors.

“We need sensible policies to promote and defend FDI in order to meet the numerous challenges we face in the years ahead,” said USCIB President and CEO Peter M. Robinson. “This strong and timely policy statement, coming as it does from the leading global business organization, provides a useful contribution to the ongoing debates on investment, investment agreements and, more specifically, ISDS. We urge policy makers in the United States and other nations, as well as the policy community more broadly, to read and digest its recommendations.”

About ICC:
ICC is the largest, most representative business organization in the world. Its global network comprises over six million companies, chambers of commerce and business associations in more than 130 countries, with interests spanning every sector of private enterprise. A network of ICC national committees mobilizes and supports business in its interactions with governments and international organizations around the world. The United Nations, the World Trade Organization, the G20 and many other intergovernmental bodies, both international and regional, are kept in touch with the views of international business through ICC. More at www.iccwbo.org.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world. With a unique global network encompassing leading international business organizations, including ICC, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More at www.uscib.org.

Contact:
Jonathan Huneke, USCIB
+1 212.703.5043, jhuneke@uscib.org

Boao Forum Focuses on G20 Policy Agenda

Published on March 24, 2016

jdboao_sourceWith less than six months to go to the 2016 G20 Summit, a special session of the Boao Forum for Asia brought together leaders from both business and government to discuss policy priorities to support growth and job creation.

International Chamber of Commerce (ICC) Secretary General John Danilovich moderated the high-level roundtable, which featured keynote addresses from Wang Shouwen, China’s vice minister of commerce and Thomas Lembong, Indonesia’s minister for trade. A major theme of the discussions was the importance of public-private partnership and dialogue to address key global challenges ranging from weak global growth to climate change.

Commenting at the roundtable on the strategic importance of this year’s G20 process, Danilovich said: “It’s vital that this year’s G20 process develops a comprehensive and credible strategy to reinvigorate trade and global growth… As business, we also look to the G20 to drive forward implementation of the landmark UN agreements which were forged last year on sustainable development and climate change.”

The roundtable explored recommendations being developed by the five B20 task forces on trade and investment, infrastructure, employment, financing and small business (SME) development. The issue of SME growth remains a particular priority for ICC’s global outreach, building on engagement throughout last year’s B20 process which lead to the creation of the World SME Forum.

 Read more from ICC

ICC: Trade Policymakers — Here are Your Priorities

Published on March 10, 2016

newspapers_lo-resInternational Chamber of Commerce (ICC) Secretary General John Danilovich urged policymakers to revitalize cross-border trade in a letter to the editor of the Financial Times on March 9.

The letter is available on the Financial Times’s website, and has been reproduced below:

Sir, Your editorial on the regulation of cross-border services (“New global trade under old national rules”, March 7) rightly highlights the imperative for trade policymaking to keep pace with changing patterns of global commerce. But the growing importance of data, services and investment does not obviate the need for policymakers to take urgent action to revitalize cross-border merchandise trade.

The tendency to explain sluggish trade growth by reference to structural shifts in the global economy obscures some of the key factors underlying the recent fall in global merchandise trade — and, in doing so, underplays the potential for simple policy levers to be deployed to boost global growth. Three areas, in particular, warrant further attention.

First, urgent action is needed to address the growing shortage of bank finance to support trade. According to the Asian Development Bank, there is currently a $1.4tn financing gap for trade globally — with small businesses often facing severe difficulties accessing the credit they need to trade internationally. Second, it is time for the international community to get serious when it comes to tackling protectionism. Recent research shows that the sectors in which world trade has fallen the most are those which have been hit hardest by trade barriers over the past two years. This is a worrying trend and one which should be a first-order priority for the G20 in the year ahead.

Finally, governments should ratify and implement the World Trade Organisation’s landmark Trade Facilitation Agreement without delay. This deal — forged in 2013 but ratified by only 70 governments to date — would have a transformational effect on the ability of small business to access global markets by reducing unnecessary red tape at borders. Official estimates suggest that the deal could add more than $1tn to global trade flows, creating 20m jobs in the process. A push to realise the real-world benefits of this agreement would bring a somewhat more optimistic outlook for the future of trade-led growth and development.

John Danilovich
Secretary-general,
International Chamber of Commerce,
Paris, France

University of New South Wales Wins 11th ICC International Commercial Mediation Competition

Published on February 11, 2016

Mediation_awardLauded as the International Chamber of Commerce’s (ICC) biggest educational event of the year, the International Commercial Mediation Week is the premier international mediation moot, run by the ICC International Centre for ADR.

After six days and 147 rigorous and fast-paced mock mediation sessions, the University of New South Wales’ Katherine Mackellar, Connor Taylor, Roshan Evans and Self Rumbewas have been crowned as the winners of the 11th ICC International Commercial Mediation Competition, which was held on February 10 in Paris at the Maison du Barreau.

The final capped off an exciting Mediation Week that originally began with 65 teams from 32 countries who put their problem-solving skills to the test in real cross-border commercial dispute scenarios. However, it was the efforts of the University of New South Wales (Australia) that turned out to be the most victorious against Auckland University (New Zealand). Two U.S. schools – Cornell Law School and Pepperdine University – qualified for the competition’s quarterfinals.

The final problem was drafted by Rosemary Jackson, who is part of an international working group of mediation experts. It involved a dispute between a world-renowned pastry chef and an exclusive caterer to the stars with a failed icing situation. The bittersweet issue was observed by 350 spectators.

The winners not only walk away with coveted internships at the International Chamber of Commerce (ICC) International Centre for ADR, as well as the Centre for Effective Dispute Resolution as part of the Competition’s prize, but an ample amount of first-hand experience, advice from and connections with world renowned mediators.

The team, which was headed by Competition veteran, Rosemary Howell, was selected for their communication skills, strong presence and teamwork after a thorough selection process that included an interview, written application and several other examinations.

“It is my last year at university, so it is an incredible high note to go out on,” said Mackeller who represented her team in the final.

“My sincere congratulations go out to everyone who participated in this year’s Mediation Competition,” said Andrea Carlevaris, director of ICC’s dispute resolution services and secretary general of ICC’s International Court of Arbitration. “We certainly hope that all students will return home having forged some exceptional connections in addition to having further built upon their already outstanding skills and knowledge in support of mediation as an alternative form of dispute resolution.”

ICC Report Examines How Arbitrators Make Decisions on Costs

Published on February 5, 2016

Decisions on Costs in International Arbitration_source_sourceThe International Chamber of Commerce (ICC) Commission on Arbitration and ADR has released a new report as part of its continued work to improve the management of time and costs in international arbitral proceedings.

The ICC Report, “Decisions on Costs in International Arbitration,” examines how the costs of an arbitration can be allocated between parties and sheds light on the specific roles of arbitrators, parties and counsel in using cost allocation as a case management tool.

Under the 2012 ICC Arbitration Rules, an arbitral tribunal has a broad discretion when it comes to allocating the costs of the arbitration between the parties.

While affirming that there is no definitive approach to costs allocation in international arbitration, the report, produced by the Task Force on Decisions as to Costs of the ICC commission on Arbitration and ADR, describes current approaches and practices that can help arbitrators and parties to conduct ICC proceedings in an effective and cost efficient way.

The report identifies the cost allocation considerations that arbitrators take into account and considers how decisions on costs can be used not only to allocate costs fairly, but also as a means to improve efficiency during the proceedings.

“Users would like decisions on costs to be predictable, but at the same time, the discretion enjoyed by arbitrators needs to be preserved so as to ensure that a fair result can be achieved in each case,” said Christopher Newmark, Chair of the ICC Commission. “The report describes how arbitrators can address both these needs – but it does not establish guidelines or endorse a specific approach,”

Topics covered in the report include the relevance on costs allocation of the procedural behaviour of the parties, how costs issues may be discussed at the early case management conference, how interim decisions on costs can be taken, dealing with in-house costs, the potential impact of third party funding and success fee arrangements, and how tribunals assess the reasonableness of costs.

The report sets out the research upon which it is based, which comprises a review of decisions on costs in hundreds of ICC awards as well as reports from eight other arbitration institutions and summaries of reports on national approaches to cost decisions from over 40 ICC national committees.

Following significant revisions made to the ICC Arbitration Rules in 2012, the new report is ICC’s latest tool for encouraging greater control of time including ICC’s 2012 Report on Techniques for Controlling Time and Costs in Arbitration and 2014 Guide on Effective Management in Arbitration .

For a copy of the full report visit: Decisions on Costs in International Arbitration – ICC Arbitration and ADR Commission Report

IBM: Maritime Piracy Hotspots Persist Worldwide

Published on February 4, 2016

Piracy and armed robbery on the world’s seas is persisting at levels close to those in 2014, despite reductions in the number of ships hijacked and crew captured, the International Chamber of Commerce (ICC) International Maritime Bureau’s (IMB) annual piracy report reveals.

IMB’s Piracy Reporting Centre recorded 246 incidents in 2015, one more than in 2014. The number of vessels boarded rose 11 percent to 203, one ship was fired at, and a further 27 attacks were thwarted. Armed with guns or knives, pirates killed one seafarer and injured at least 14. Kidnappings – where crew are taken away and held for ransom – doubled from nine in 2014 to 19 in 2015, all the result of five attacks off Nigeria.

A total of 15 vessels were hijacked in 2015, down from 21 in 2014, while 271 hostages were held on their ships, compared with 442 in 2014. No hijackings were reported in the last quarter of 2015. IMB says one key factor in this recent global reduction was the drop in attacks against small fuel tankers around South East Asia’s coasts, the last of which occurred in August 2015.

SE Asian gangs

“IMB particularly commends the robust actions taken by the Indonesian and Malaysian authorities in the arrest and prosecution of two gangs that hijacked tankers. We also applaud the subsequent arrest of some of the alleged masterminds,” said Pottengal Mukundan, director of IMB, which has monitored world piracy since 1991.

However Mukundan urged shipmasters to maintain strict anti-piracy and robbery watches. South East Asia still accounts for most of the world’s incidents. Almost 55 percent of the region’s attacks were against vessels underway compared to 37 percent in 2014. Most were aimed at low-level theft. IMB cites this rise on moving vessels as a cause for concern as it increases potential risks to the vessels and their crew.

The IMB continues to work closely with the Indonesian Marine Police and other Indonesian authorities to monitor high-risk areas. Thefts are down in the majority of the 11 designated anchorages with only Belawan and Nipah recording marked increases in attempted thefts, reporting 15 and 26 incidents respectively in 2015.

Nigeria: oil and kidnappings

Nigeria is a hotspot for violent piracy and armed robbery. Though many attacks are believed to go unrecorded, IMB received reports of 14 incidents, with nine vessels boarded. In the first of these, ten pirates armed with AK47 rifles boarded and hijacked a tanker and took all nine crewmembers hostage. They then transferred the fuel oil cargo into another vessel, which was taken away by two of the attackers. The Ghanaian navy dispatched a naval vessel to investigate as the tanker moved into its waters, then arrested the pirates on board.

Somalia still risky

No Somali-based attacks were reported in 2015. Following a new 55 percent reduction in the industry-defined High Risk Area, IMB warns vessels transiting the Gulf of Aden and Indian Ocean to stay particularly vigilant.

“Somalia remains a fragile state, and the potential for an attack remains high. It will only take one successful hijacking to undo all that has been done, and rekindle this criminal activity,” Mukundan explained.

Elsewhere…

Incidents in Vietnam surged from seven in 2014 to 27 in 2015. The main cause is low-level theft against vessels anchored in Vietnam, with 15 reports from around the port of Vung Tau alone.

In China four incidents were recorded in December 2015, the first in a long time. These include three thefts of bunker diesel oil from large bulk carriers off Tianjin, and one failed attempt to do the same.

Meanwhile, low-level incidents in Bangladesh dropped to 11 in 2015, from 21 in 2014.