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The final chap­ter of the cur­rent man­u­script, “Future Chal­lenges”, will like­ly be out of date by then.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.  ↩

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