Draft history of ICC: final chapters

Last year, I com­pleted the man­u­script of a cen­ten­nial his­tory of the Inter­na­tional Cham­ber of Com­merce (ICC). It’s a long work: 400 pages, more or less. It will be only the sec­ond his­tory of this remark­able insti­tu­tion. The first was pub­lished in 1938.

ICC com­mis­sioned the his­tory in 2013, but has recently decided to wait until 2019 — the actual cen­te­nary of its cre­ation — before pub­lish­ing, updat­ing the most recent chap­ters in 2018.

The final chap­ter of the cur­rent man­u­script, “Future Chal­lenges”, will likely be out of date by then. For good or ill, over­taken by events.

Or maybe not… what do you think? Here is the draft text of the final two chap­ters in the cur­rent man­u­script. Judge for yourself.

Chap­ter 68: Achievements

We could say that longevity is an achieve­ment. Cer­tainly, in the ever-shifting ter­rain of inter­na­tional busi­ness and pol­i­tics it is a kind of vin­di­ca­tion. But what dis­tin­guishes ICC most among inter­na­tional orga­ni­za­tions, pri­vate or inter­gov­ern­men­tal is its record, over almost a cen­tury, of organic growth and devel­op­ment. As any his­tory of world affairs in the past cen­tury shows, inter­na­tional insti­tu­tions have come and, mostly, gone over a few decades’ span. ICC, too, has strug­gled. But it has not merely sur­vived; it has, finally, thrived. Only two or three pri­vate or inter­gov­ern­men­tal orga­ni­za­tions of the same vin­tage still exist and none can make quite the same claims.[1]

No other inter­na­tional NGO, let alone inter­na­tional busi­ness group, has the same wide hori­zons or broad base. It imposes a respon­si­bil­ity on ICC, rare among NGOs, to adopt deci­sions and plans that rec­on­cile the many inter­ests of its diverse mem­ber­ship. ICC derives its author­ity still, in 2014 as in 1920, from its direct rep­re­sen­ta­tion of inter­na­tional busi­nesses in almost all trad­ing nations. The “Char­ter” signed by every national com­mit­tee guar­an­tees ICC’s rep­re­sen­ta­tive struc­ture. It ensures the NC’s access to ICC rep­re­sen­ta­tion and ser­vices and its respon­si­bil­i­ties to adhere to ICC poli­cies. ICC retains the com­mit­ment of multi­na­tional enter­prises that account for most inter­na­tional trade. Today, as in 1919, top lead­ers of inter­na­tional busi­nesses give years of pub­lic ser­vice to ICC, con­fer­ring an invalu­able stamp of author­ity. The col­lec­tive ‘Chair­man­ship’ — now a for­mal arrange­ment but prac­ticed from the start — ensures that ICC’s lead­ers are among the world’s most accom­plished and expe­ri­enced. Also, ICC speaks through, as well as for its mem­ber­ship. The chairs of the Com­mis­sions and of the CEO-led ini­tia­tives asso­ci­ated with ICC (BASIS, BASCAP, G20 Advi­sory Group) have a promi­nent role in deliv­er­ing ICC’s message.

ICC sur­vived the early trans-Atlantic mis­al­liance to build a world­wide mem­ber­ship. It endured the World War and adapted to con­tin­u­ing changes in mem­bers’ inter­ests and activ­i­ties. It con­tin­ues to expand its par­tic­i­pa­tion through the addi­tion of national com­mit­tees, the growth of the Court and the con­sol­i­da­tion of WCF[2]. It con­tin­ues, also, to extend its scope through its busi­ness rules and stan­dards, its alliance with the WEF, the intel­lec­tual lead­er­ship of the Foun­da­tion, and its CEO-led ini­tia­tive with the G20.

Through the cen­tury, the Cham­ber faced many of the same polit­i­cal, finan­cial and gov­er­nance chal­lenges that have tripped up — and sub­merged — both pri­vate and pub­lic insti­tu­tions in the “Bret­ton Woods” group or in the League of Nations or the UN or on their mar­gins. For most of these, the 20th cen­tury has been an unhappy expe­ri­ence. It was a time of unequalled eco­nomic growth. It brought over­turn­ing change in the tech­nol­ogy, vol­ume and veloc­ity of inter­na­tional exchange. It also saw unprece­dented con­flict and mar­ket dis­rup­tion. Under these pres­sures, the col­lab­o­ra­tive efforts of gov­ern­ments after the Great War barely got off the ground. Even build­ing on that expe­ri­ence after the World War, col­lab­o­ra­tive insti­tu­tions either quickly col­lapsed (Bret­ton Woods pay­ment sys­tem) or slowly dete­ri­o­rated (GATT). And still, after the turn of the 21st cen­tury, gov­ern­ments’ col­lab­o­ra­tion in the remain­ing key insti­tu­tions (IMF, WTO, BIS) has been patchy and even dis­cour­ag­ing. Other inter­na­tional insti­tu­tions — such as ILO or ICAO or the patents and trade­marks con­ven­tions — endure because of an essen­tial spe­cial­iza­tion or a nar­row tech­ni­cal func­tion. But, over the decades ICC has car­ried a broad man­date, a rep­re­sen­ta­tive struc­ture and con­sen­sus decision-making that other insti­tu­tions have been unable to sus­tain for more than a few decades.

ICC has been suc­cess­ful rather than ‘for­tu­nate’. It was not by luck or some spe­cial endow­ment that ICC pros­pered. Rather, it was by good man­age­ment when it was called for, and by the sup­port of its mem­bers when it mat­tered. These two assets allowed ICC to change the world when it could, and to be changed by it when it needed to be. Its endurance allowed ICC put its stamp on the cen­tury through the inter­na­tional agree­ments it fos­tered. They include the 1947 GATT, the 1958 New York Con­ven­tion on For­eign Arbi­tral Awards, the 2013 WTO Agree­ment on Trade Facilitation.

Of course, its high pro­file busi­ness lead­er­ship has been an asset to ICCs rep­u­ta­tion. But the fac­tor that has won and retained for ICC the con­fi­dence of inter-governmental organ­i­sa­tions has been its out­stand­ing record of timely, evidence-based pub­lic pol­icy rec­om­men­da­tions. That record began with the exten­sive com­pi­la­tion by the ICC Pro­duc­tion Com­mit­tee of dev­as­ta­tion and recov­ery in the Euro­pean indus­trial land­scape (1920). It con­tin­ued through­out the Great Depres­sion with analy­sis and pol­icy pub­li­ca­tions in con­junc­tion with the Carnegie Endow­ment. Then, shortly after the World War the detailed rec­om­men­da­tions in Brochure 106 (1946) cut through the heavy-handed Pro­pos­als for a new mul­ti­lat­eral trade orga­ni­za­tion. Recently, the Bank­ing Commission’s analy­sis of col­laps­ing trade finance (2009) and the Open Mar­kets Index and G20 “Score­card” stand out as exam­ples of ICCs unmatched capac­ity to apply the test of mar­ket real­ity to inter­na­tional governance.

The Cham­ber has had many rever­sals through the cen­tury. There have been peri­ods of rapid growth and geo­graph­i­cal expan­sion and of declin­ing rel­e­vance, gov­er­nance prob­lems and weak finances. In the sec­ond half of the cen­tury, ICC suf­fered both from emerg­ing economies’ mis­trust of pri­vate enter­prise and from the anti-growth enthu­si­asms of NGOs in wealthy economies. But the Cham­ber has adapted. It has con­tin­u­ally renewed its Coun­cil and its con­sti­tu­tion. It has restruc­tured and expanded its national com­mit­tees. It has redesigned its offer, respond­ing to the “mar­ket” for its ser­vices among inter­na­tional busi­nesses. All these helped with its endurance.

Still, ICC’s great­est strength may be its deter­mi­na­tion in pur­suit of its orig­i­nal goals: the pub­lic — rather than the pri­vate — inter­ests of its busi­ness mem­bers in more open and more effi­cient world mar­kets. There is no stronger demon­stra­tion of this than the event that con­cludes this his­tory. After a cen­tury of untir­ing efforts, ICC has secured mul­ti­lat­eral com­mit­ment to cut trade red tape in the name of greater global growth and employ­ment. It remains focussed on this agenda because the things that mat­tered to inter­na­tional busi­ness in the first era of global mar­kets still mat­ter: only more so. The net­works of global sup­ply are still more trade and invest­ment inten­sive. But ICC has not kept its focus at the expense of a breadth of vision. ICC’s engage­ment with gov­ern­ments in the pur­suit of global pub­lic goods is still as broad in the sec­ond decade of the 21st cen­tury as it was in the sec­ond decade of the 20th. What John Fahey said, brief­ing the press at the Con­sti­tu­tive Con­gress in June 1920, about the com­pass of ICC activ­i­ties is as true today as it was then:

The chief func­tions of the Inter­na­tional Cham­ber of Com­merce … will be to con­sider laws affect­ing com­merce, to sug­gest changes and the enact­ment of new mea­sures which will improve con­di­tions; to effect reforms on their own ini­tia­tive in busi­ness cus­toms and prac­tices which will bring bet­ter results; to gather and dis­trib­ute infor­ma­tion nec­es­sary to the bet­ter con­duct of com­merce and sug­gest to gov­ern­ments improve­ments of exist­ing systems.”

ICC has also sought, from the out­set, not to be merely a voice for inter­na­tional busi­ness but also to answer the demand for inter­na­tional busi­ness ser­vices. It set out to be, and has remained, an essen­tial source of busi­ness infra­struc­ture. It began with an ambi­tion to restore trans-Atlantic trade and pro­duc­tion infra­struc­ture after the Great War. It suc­ceeded beyond the lim­its that fee­ble inter­gov­ern­men­tal coop­er­a­tion imposed. Today, sim­ply, inter­na­tional mar­kets would not work as well with­out ICC stan­dards and codes such as INCOTERMS, UCP, Uni­form Rules for Bank Pay­ment Oblig­a­tions (URBPO), Arbi­tra­tion of inter­na­tional busi­ness dis­putes, and its DOCDEX rules and model con­tracts. ICC’s self-regulatory stan­dards like the ICC’s Rules on Com­bat­ing Cor­rup­tion and the Code of Adver­tis­ing and Mar­ket­ing Com­mu­ni­ca­tion Prac­tice (intro­duced in 1937) help secure the trust and trans­parency on which all mar­kets depend. Its Com­mer­cial Crime Ser­vices safe­guard inter­na­tional ocean trans­port against piracy and fraud and help to main­tain secure cur­rency and rep­u­ta­tion marks.

Chap­ter 69: Future challenges

How will these char­ac­ter­is­tics stand up in future? Of course the future is an empty page in any his­tory. Still there are some uncom­fort­able signs at present about the gov­er­nance of the world economy.

Global mar­kets under float­ing exchange rates have cycled sev­eral times though sim­i­lar crises over the past half cen­tury. After the oil shocks of the mid–1970s and the early 1980s, inte­grated finan­cial mar­kets recy­cled funds from sur­plus to deficit coun­tries. Loosed from the never-quite-credible bonds of Bret­ton Woods cap­i­tal con­trols, the mar­kets helped deliver the funds needed for spec­tac­u­lar 20th cen­tury eco­nomic devel­op­ment. But lib­er­al­i­sa­tion of cap­i­tal con­trols and float­ing exchange rates often needed more sophis­ti­cated reg­u­la­tion than gov­ern­ments could man­age. Finan­cial volatil­ity caught out mis-governed national mar­kets dur­ing the regional debt crises of the 1980s and the late 1990s. Still, the mar­kets recov­ered to recy­cle the huge cur­rent account imbal­ances that appeared in the late 1990s, in part a legacy of the ear­lier crises. The first years of the 21st cen­tury saw an equi­ties bust — the dot.com reces­sion — that cooled finan­cial mar­kets briefly and led to relaxed mon­e­tary con­trols. But the recy­cled sur­pluses helped to re-inflate an asset bub­ble floated by easy money, reg­u­la­tory insou­ciance and social lend­ing. A big­ger, deeper, more pro­longed crash fol­lowed. The mar­ket had gamed itself as well as cus­tomers and regulators.

The price we have paid for oth­er­wise valu­able mar­ket inte­gra­tion, when cou­pled with poor reg­u­la­tory con­trol, has been repeated sequences of bub­ble and bust. It has begun to seem this is the nat­ural rhythm of global cap­i­tal­ism. Yet gov­ern­ments have done lit­tle to build a bet­ter sys­tem. Every cri­sis gives them a polit­i­cal oppor­tu­nity to rem­edy struc­tural and sys­temic faults. Often there have been some domes­tic mar­ket reg­u­la­tory reforms. But col­lab­o­ra­tion on inter­na­tional sys­tem reform in the IMF and WTO’s trade regime, and in domains such as invest­ment and com­pe­ti­tion pol­icy remains weak. The G20 began with deter­mined action, up to its Lon­don Sum­mit in 2010. Since then, its bland res­o­lu­tions, like those of the G8, salute the oppor­tu­ni­ties with a nod, but often pass by with­out effec­tive action as the ICC’s mixed-to-poor ‘score­card’ reveals. Still, the changes needed for stronger trade growth and bet­ter IMF per­for­mance, or to ensure major banks do not need a pub­lic bailout every few years are no mys­tery. In some cases (the IMF, the BIS) the gov­er­nance changes needed have been nearly com­plete for some time.

The 21st cen­tury could see a reprise of past mis­takes. Accord­ing to WTO, trade pro­tec­tion­ism is ris­ing, although prob­a­bly not as fast as it has dur­ing other peri­ods of reces­sion. But WTO mem­ber gov­ern­ments have not taken arms against pro­tec­tion. WTO’s ‘big round’ nego­ti­at­ing strat­egy now looks unwork­able. The mod­est agree­ments on ‘imped­i­ments’, extracted with dif­fi­culty at Bali 2013, were the first in almost twenty years. WTO mem­bers must follow-up — with agree­ments on trade in ser­vices, agri­cul­ture and man­u­fac­tures — or WTO and its essen­tial dis­pute set­tle­ment mech­a­nisms will loose cred­i­bil­ity. But the largest economies (USA, EU, Japan, China) are pay­ing lip-service to mul­ti­lat­eral agree­ment. They are direct­ing their efforts, instead, to cre­at­ing mega-regional agree­ments (TPP, TPIP, RCEP). To the extent that these agree­ments build on the foun­da­tions of exist­ing WTO com­mit­ments, the degree of trade dis­crim­i­na­tion they imply — the mar­gins of tar­iff pref­er­ence, say — may seem small. But, even if the dis­crim­i­na­tion is small, trade-blocs are inim­i­cal to the global busi­ness net­works oper­ated by ICC’s mem­bers. They frag­ment mar­kets and add to the costs of global sup­ply net­works, espe­cially for SMEs that com­prise the major­ity of mem­bers of ICC-associated Chambers.

It is almost impos­si­ble for ICC, as a pri­vate orga­ni­za­tion, to bring its resources to bear on the solu­tion to inter­na­tional prob­lems unless there is effec­tive inter­gov­ern­men­tal col­lab­o­ra­tion. This was the les­son of the 1930s, espe­cially, for ICC. It is still true a cen­tury later. The G20 is at present the highest-profile global gov­er­nance body. But as an instru­ment of mul­ti­lat­eral col­lab­o­ra­tion, it has some potentially-fatal draw­backs. It has a small, self-selected, mem­ber­ship. It is a tran­sient orga­ni­za­tion that lacks any pow­ers del­e­gated by its mem­bers. ICC has estab­lished an effec­tive — even inno­v­a­tive — rela­tion­ship with the G20. It con­tributes ideas through its CEO-led advi­sory group and pro­vides pub­lic sup­port for mar­ket lib­er­al­iz­ing deci­sions. It sup­plies G20 gov­ern­ments with objec­tive feed­back on their pro­grams. Still, there is lit­tle sense that G20 will be a long-term part­ner for ICC.

What hap­pens next in global mar­ket gov­er­nance will likely reflect the con­tin­u­ing redis­tri­b­u­tion of wealth and pro­duc­tion in the global econ­omy between the indus­tri­al­ized and the emerg­ing economies. It may also depend on the extent to which changes in the loca­tion of wealth and pro­duc­tion affect the global and regional expres­sion of eco­nomic inter­est by states. It is unclear whether the grow­ing wealth of India and China will be matched by greater con­tri­bu­tions to gov­er­nance.[3] But, for now, the prospect is a ‘flat­ter’ dis­tri­b­u­tion of wealth and eco­nomic power in a ‘multi-polar’ world marked by mega-regional trade and eco­nomic agree­ments that, at least at the mar­gin, are mutu­ally discriminatory.

ICC’s chal­lenge, then, will be to min­i­mize the costs to its mem­bers of a trad­ing econ­omy par­ti­tioned into two or three mega-regional and ‘the rest’. Its abil­ity to do so may depend on the whether the national com­mit­tees in each ‘pole’ can influ­ence gov­ern­ments to keep mar­kets open on a de facto non-discriminatory basis. Also, ICC will need to con­tinue and prob­a­bly to increase the efforts it has made in the past decade to extend and enliven its pres­ence in China.

It is pos­si­ble, too, that ICC could play a still more cen­tral role if mar­kets coa­lesce in giant trade blocs. If they emerge, the mega-regional agree­ments will not re-build the trade frame­work from scratch. All will likely rely on — and even cite — WTO’s rules and pro­vi­sions as their foun­da­tions. (So, para­dox­i­cally, the mem­bers of mega-regional agree­ments will have a large stake in main­tain­ing a cred­i­ble mul­ti­lat­eral sys­tem.) Like WTO’s rules, ICC’s codes and stan­dards will stand out as global busi­ness infra­struc­ture link­ing mar­kets across the bound­aries of mega-regional mem­ber­ship. They will be essen­tial ref­er­ence points for the pri­vate sup­ply net­works that will no doubt con­tinue to account for most global trade and a large share of global production.

  1. Only two or three pri­vate or inter­gov­ern­men­tal orga­ni­za­tions of the same vin­tage still exist…” Among pri­vate inter­na­tional orga­ni­za­tions, the most sig­nif­i­cant are the Inter­na­tional Com­mit­tee of the Red Cross (1863, but it is not a uni­ver­sal mem­ber­ship orga­ni­za­tion); the Inter­na­tional Coop­er­a­tive Alliance (1895); and the rem­nants of the Inter­na­tional Fed­er­a­tion of Trade Unions (1919, the ICFTU and the ITU are the main splin­ters). Among IGOs, the ITU and ILO, both formed as private-government part­ner­ships before the Great War but became UN spe­cial­ized agen­cies after the World War.  ↩

  2. WCF = “World Cham­bers Fed­er­a­tion”. The short ver­sion: ICC is not, as many guess, a fed­er­a­tion of cham­bers of com­merce. Instead, it is based on 90-something National Com­mit­tees each of which includes a num­ber of national busi­ness orga­ni­za­tions includ­ing cham­bers of com­merce, employ­ers, exporters and indi­vid­ual firms. WCF is an ICC-created net­work of Cham­bers of Com­merce from around the world. It’s basi­cally a big annual net­work­ing event for Cham­bers but it also oper­ates a cou­ple of ICC-owned trade-infrastructure services.

  3. Greater con­tri­bu­tions to gov­er­nance…” Espe­cially in the case of China. Well-accredited West­ern experts speak of China as a “par­tial power” whose capac­ity to project power beyond its imme­di­ate region is lim­ited. See (Sham­baugh, 2013) and whose inter­est in a greater role in global gov­er­nance is cor­re­spond­ingly smaller than that of the West­ern coun­tries.  ↩

The Wallenbergs at the ICC

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Editing Scrivener ‘Sync’ files

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The longevity of plain TeX

Microsoft Word was first released for MS DOS in Octo­ber, 1983. Some five months ear­lier, Don­ald Knuth, a pro­fes­sor of com­put­ing at Stan­ford Uni­ver­sity, pub­lished “The TeX Book.” This was a jokey man­ual for, and a deft demon­stra­tion of, his TeX pub­lish­ing pro­gram whose sta­ble ver­sion first appeared in 1982. Each of these con­tem­po­rary works was […]