ICC statement on behalf of world business to the Heads of State and Government attending the Kananaskis Summit, 26-27 June 2002

French version

Paris, 8 May 2002 - The International Chamber of Commerce (ICC), the world business organization, is pleased to submit this statement to the Heads of State and Government attending the G8 Summit in Kananaskis, Canada (26-27 June 2002). The statement addresses several key issues of particular concern to world business, with the focus on promoting the conditions that enable developing countries to participate in the benefits of the global economy.

1. The global economy: an opportunity for all

World business, as represented by ICC, believes that "globalization" is a powerful force for raising living standards. It has already contributed substantially to unprecedented advances in the lives of billions of people. The challenge facing government and business leadership is how to draw into the global economy those countries that remain on the margins. Aid can alleviate localized poverty and stimulate development; but it can never eradicate generalized poverty. The key to that goal is peace, good governance, the encouragement of entrepreneurship, and strong links to the outside world through trade, investment and technology flows.

Fears and misconceptions surround the phenomenon of globalization. Business and governments have an essential role in addressing these reactions and explaining the benefits that globalization brings.

Business is concerned that the anti-globalization groups are pressuring governments to hinder progress in the very areas that can eradicate poverty and narrow the gap between rich and poor. Opening export markets, expanding foreign direct investment, and developing new technologies - p articularly biotechnology, with its promise of the potential to end starvation - will help cure poverty, and not aggravate it.

ICC calls upon the G8 governments, with the authority they derive from mass democratic elections, to stand firm in the face of groups that are mostly unaccountable and represent small minority views or narrow vested interests. We cannot curb the chances of poor people to profit from participation in a thriving global economy.

2. International trade policy post-Doha

ICC warmly welcomed the World Trade Organization agreement in Doha last November to launch a new round of multilateral trade negotiations. And we applaud the leadership of several of the countries represented at Kananaskis. However, the more difficult task remains - bringing the negotiations to a successful conclusion and within the agreed time frame.

The prospects for the new round have not been improved by new trade disputes in recent months, particularly between the world's leading trading nations. We fear that the spirit of cooperation at Doha is under threat from a new outbreak of protectionism.

Furthermore, we are concerned that the WTO's dispute settlement is becoming overburdened. That mechanism cannot be a substitute for good-faith efforts to find solutions through patient negotiation and diplomacy. Litigation must be the last, and not the first, resort in international trade disputes.

For the past 50 years, thanks in large part to new trade agreements, international trade has expanded significantly faster than the world economy. Last year, however, the growth rate of trade actually declined - and took its toll on the world economy.

ICC calls upon the leaders at Kananaskis to underline their commitment to renewed growth in trade and the world economy. We look to them to give strong political backing, at the highest level in government, to the new trade negotiations and to lead to a successful conclusion the broad trade liberalization agenda outlined at Doha.

ICC's position is that the negotiations must address the interests and concerns of developing countries. The primary goal must be to improve substantially their access to developed country markets, and especially for products in which they possess a competitive advantage. This will require difficult reforms and adjustments in certain sectors of the economies of developed countries. But it will have a vital bearing on the ability of poor countries to lift themselves out of poverty.

Governmental declarations must be accompanied by actions. This will mean refusing protectionist demands - including those from business. It will mean resisting the pressures and temptations of short-term political expediency. And it will mean taking a strategic view of the political as well as the economic benefits of a prosperous global economy that embraces an ever-increasing number of nations. For its part, ICC will continue to argue the case within the business community worldwide that trade liberalization contributes strongly to raising living standards and enlarging consumer spending power.

ICC understands that a key item on the agenda of the Kananaskis Summit is the fight against terrorism and the promotion of peace and stability. As an organization of businesspeople with members across the globe, our mission has long been to promote international trade, investment and cross-border business exchanges in the belief that these linkages reduce political conflicts. The big idea upon which ICC was founded - just after the 20th century's First World War - was 'world peace through world trade'. We commend this inspiring and enduring notion.

3. Innovation, technology and development

Business believes that the freedom to research and innovate is one of the main engines of economic growth and job creation. Technological advances have been a key driving force in the history of human progress.

ICC applauds the leadership of the G8 in initiatives to help developing countries to take advantage of the opportunities offered by the digital era. Business shares this goal of digital development. We stress, however, that this goal cannot be separated from overall economic development. The factors that will enable poorer nations to adopt new information technologies are the same ones required for their overall economic development - a competitive marketplace, an entrepreneurial culture, a positive and efficient regulatory framework, a focus of resources on education and training, and an ability to attract foreign partners to help build the necessary infrastructure and technical capability.

New technologies in agriculture, biotechnology and health care hold the promise of dramatic improvements in human nutrition and treatment of diseases. They are our greatest hope of feeding and curing the rapidly growing population of a world in which 800 million people are already seriously undernourished.

As new technologies offer brighter horizons for all mankind, business is seriously concerned at the emerging crescendo of suspicion and hostility. We recognize that there are genuine and legitimate concerns about some new technologies - especially on health and safety grounds - that must be addressed with candour and transparency. But we also recognize that much of the resistance to the new technologies is motivated by an ideological aversion to capitalism and risk-taking, or by plain protectionism.

ICC urges governments to work with business to ensure an informed and balanced public debate, with the emphasis on risk assessment based on sound scientific enquiry and reasonable caution. A policy that seeks to exclude all risk would exclude all progress.

We strongly encourage the G8 countries in their efforts to promote an agreed
international approach to health and safety standards and regulatory requirements to facilitate the global diffusion of new technologies and reduce the potential for trade conflicts.

Technological breakthroughs do not just happen. They are the product of conditions that are conducive to scientific research, inventiveness, and entrepreneurship. They happen most readily in societies that:

• respect the commercial, as well as the health and safety, risk of developing new technologies - and reward it accordingly, including by the robust protection of intellectual property rights;
• allow small ventures to breathe, prosper and multiply; and
• maintain moderate taxation levels, pro-competitive regulation, and efficiently functioning product, service, capital and labour markets.

4. Public-private partnerships and Africa

Business is aware that the Kananaskis Summit is due to ap prove an Action Plan for Africa. We applaud this focus on Africa and G8 support of that continent's home-grown New Partnership for Africa's Development (NEPAD) initiative, which recognizes the need for improvements in governance to attract more resources for development.

ICC itself has cooperated with the UN to create a practical mechanism to contribute to the aims of NEPAD: an Investment Advisory Council (IAC) that brings together chief executive officers of companies in developed nations and government leaders from the least developed countries.

The principal focus of IAC is to overcome obstacles to investment in the poorest countries and to identify projects for local business development, particularly in joint ventures with companies from other parts of the world who can contribute capital, technology and management skills. We applaud African leaders' determination to stimulate domestic - as well as foreign - investment and entrepreneurship.

ICC calls on the G8 leaders at Kananaskis to endorse the public-private partnerships for economic development that are expanding rapidly in number with the growing recognition that governments and business have separate but complementary roles, and depend on each other to achieve many of their objectives.

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