The Budapest Business Declaration

French Version

Presented by Adnan Kassar, President of the International Chamber of Commerce at the conclusion of the 33rd World Congress, Budapest, 5 May 2000

The global economy: an opportunity, not a threat

World business, as represented by ICC, believes strongly that the global economy is a powerful force for raising living standards across the world. Indeed, it has already brought unprecedented advances in material welfare to billions of people. Business accepts that it has an indispensable role to play, together with governments, in explaining the benefits and opportunities that flow from the global economy and a readiness to adapt to change. The fears and misconceptions must be dispelled. Business will work with governments to promote change and support their efforts to establish the good governance necessary to spread the benefits of globalization more widely.

All countries can and must participate in the gains from globalization, though the least developed require technical and financial assistance to enlarge their capacity for doing so. Moreover, the maintenance of peaceful conditions between and within sovereign states is crucial to enabling the benefits of a global economy to spread to all mankind. The absence of political conflict is a precondition for local entrepreneurship to flourish and for foreign business to invest.

1. The balance between freedom and rules

· Freedom can only work within rules, and the same holds true for markets. A balance between freedom and rules needs to be achieved for the smooth functioning of the market economy and the good management of globalization.

· Increased reliance on free enterprise, open markets and competition implies less detailed governmental regulation. At the same time, an orderly, stable society able to prosper economically from private entrepreneurship requires a framework of essential rules administered impartially by strong, efficient and transparent government - the essence of "good governance". Governments and business must work closely together to design the multilateral rules for the rapidly emerging global marketplace.

· ICC urges the appropriate UN agencies to develop internationally accepted legal and technical norms to facilitate cross-border economic transactions, when necessary to complement those initiated by business itself. Growing commercial networks among nations underscore the importance of supportive institutional frameworks at the global level.

2. The global knowledge economy
· Business and governmental rule-setters must respond to the most important challenge of today; the emergence of the global knowledge economy and the opportunities it opens to spread more widely the benefits of globalization.

· The UN, multilateral development agencies, and governments should give special attention to capacity-building in least developed countries, particularly as regards human resources development, physical infrastructure and institutional reform, to assist them to link themselves into the global information society. The UN and the multilateral agencies should increasingly focus their technical and financial assistance, and especially their concessionary aid, on helping those countries that have particular difficulties in attracting foreign investment.

· Rapid advances in communications and computer technologies have opened up a huge potential for improving economic efficiency through electronic commercial transactions, as well as creating the wider basis for a global knowledge economy. However, the necessary legal and regulatory framework to enable business and consumers to take full advantage of these technologies is not yet in place. The development of this framework requires a new partnership between business and governments, since each has distinct roles to play. Because of the fast-moving technology in this area, technical and regulatory standards and solutions should be primarily developed by the private sector. The essential role of governments is to establish a flexible and internationally consistent legislative and institutional framework. Within such a framework business can push forward with technological innovation.

3. Innovation, technology and development

· 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 human progress.

· Major advances in communications and information technologies are creating valuable tools for enhancing the capacity of developing countries and economies in transition to integrate themselves into the global economy and share in the benefits of globalization. At the same time, new technologies in agriculture and life sciences are holding out the promise of dramatic improvements in human nutrition - especially in developing countries with rapid population growth - and in health care.

· 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 econom ic and social lives.

· Business recognises the need for an informed dialogue to ensure that genuine public concerns are addressed. 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 that it is vital for governments to cooperate closely in developing a common approach to health and safety standards and regulatory requirements in order to accelerate the global diffusion of new technologies.

4. International trade and investment

· The free flow across borders of goods and services, investment, know-how, technology and information is a key element in spreading the components as well as the benefits of economic growth throughout the world. For this reason, ICC has for over half a century lent strong support to the successful efforts of the GATT/WTO to break down barriers to commercial exchanges between nations.

· Despite the failure of the WTO Ministerial meeting in Seattle to launch multilateral negotiations to further liberalize international trade, ICC will continue to press governments to create a consensus to begin a new, broad-based round at an early date. This consensus should include full recognition of the specific needs of developing countries. In trade as in other areas, 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.

5. Non-trade issues for the UN

· History has shown that improvements in human rights and in labour and environmental standards are more readily attainable in conditions of rising prosperity, produced by the interaction of the market economy and good governance. On behalf of world business, ICC has taken up the challenge of the Secretary General of the UN to join a Global Compact to demonstrate how companies in their corporate practices are contributing to raising standards in these areas.

· The WTO-based multilateral trading system should not be called upon to deal with such non-trade issues as human rights, labour standards and environmental protection. To call on it to do so would expose the trading system to great strain and the risk of increased protectionism while failing to produce the required results. The right place for addressing these issues is the UN and its appropriate agencies.

· Business recognizes that the implementation of the rules and disciplines of the multilateral trading system can sometimes have a significant impact on other policy areas. We would therefore welcome a more coordinated collaboration between the WTO and other intergovernmental organizations with different but related policy responsibilities - and especially in the fields of development and environmental policies.

· Currently, too much duplication and inadequate coordination are preventing intergovernmental bodies from taking effective global action to ensure the protection and conservation of international "public goods" in such areas as the oceans, the atmosphere, water, biodiversity and public health. Business looks to the UN to give a lead in tackling such global problems that cannot be resolved by isolated national or regional initiatives. There is a particular need for the UN to provide a strong single focal p oint on environmental issues, which have important linkages to the work of a host of other intergovernmental organizations.

· World business recognizes the need for the UN to have sufficient resources and authority to tackle effectively the complex and often inter-related global problems of today, while urging further streamlining as part of the institutional reforms being undertaken by the UN system to tackle bureaucracy and the duplication of tasks. The UN should assume responsibility for coordinating international decision-making more efficiently.

6. A government/business partnership at the global level

· Governments cannot resolve alone the myriad interlinked problems of a complex global economy. They have to engage world business, as represented by ICC, in an ongoing policy dialogue to draw upon the wealth of experience and expertise possessed by business.

· Cooperation between ICC and a large number of intergovernmental organizations within the UN system is now well established. ICC believes it can become an even more valuable partner to the UN system, not as a narrow pressure group but rather by providing a business voice which is global, multisectoral, and represents a broad and diverse community.

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