The ICC’s Century

The Inter­na­tion­al Cham­ber of Com­merce (ICC) has been the most promi­nent voice of inter­na­tion­al busi­ness for just over a cen­tu­ry. This year is the cen­te­nary of their foun­da­tion in 1919, in the after­math of the Great War.

The Cham­ber is notable as the only insti­tu­tion of world trade that remains from the first era of Glob­al­i­sa­tion. And it’s still in much the same busi­ness it was in then. As a plat­form for multi­na­tion­als, that account for almost all world goods and ser­vices trade, ICC’s sto­ry is inter­wo­ven with the his­to­ry of twen­ti­eth cen­tu­ry trade and the glob­al econ­o­my.

Over the next few months I’ll be post­ing here a detailed his­to­ry  ICC — “A Cen­tu­ry of Com­merce — in (prob­a­bly) three parts. They’ll be PDF files you can down­load and edit using soft­ware as sodapdf online.

My account focus­es espe­cial­ly on ICC’s inter­ac­tion with gov­ern­ments over trade, debt and mon­e­tary poli­cies. But ICC is also the most impor­tant provider of pri­vate infra­struc­ture for glob­al trade. I also cov­er some of that.

OK. So, this is a his­to­ry you nev­er planned to read, “free” or not. Under­stood. Still… Let me give you a cou­ple of rea­sons to take a peek:

1. Policies unprecedented in living memory

The US has hiked tax­es on man­u­fac­tured imports from Chi­na, Cana­da, Japan, Korea and the Euro­pean Union.

Pres­i­dent Trump, who unlike any of his pre­de­ces­sors since WWII, advo­cates trade war, threat­ens still high­er tar­iffs on vehi­cle imports from those and oth­er sources. The USA is also cock­ing a snoot at the glob­al sys­tem of trade rules that it cre­at­ed after WWII by breach­es of agreed duty lev­els and a cam­paign to break some parts of the WTO dis­putes set­tle­ment sys­tem.

It’s hard to say what the out­come of this con­found­ing pol­i­cy rever­sal will be. It is are like­ly to be expen­sive for the USA and the World because high­er pro­tec­tion is like­ly to ’stick’ even after Pres­i­dent Trump leaves the White House.

Then, the con­text of trade poli­cies in the USA and Europe has also become less pre­dictable because of the BREXIT vote in the UK. For the first time in liv­ing mem­o­ry, the USA and the UK may be about to start bilat­er­al nego­ti­a­tions on a trade treaty.

Also, it looks like the USA and Chi­na might soon have a bilat­er­al trade agree­ment nego­ti­at­ed under duress (some any­way).

Where these deci­sions and agree­ments might lead and what the “sec­ond-round” impact will be over a broad range of prod­ucts and trad­ing part­ners is anyone’s guess, right now. We seem to be enter­ing on new ter­ri­to­ry for the “glob­al” mar­ket that first appeared just over a cen­tu­ry ago. For the first time in almost 80 years, it’s impos­si­ble to be sure what the “rules” are.

2. Are there historical clues?

Some econ­o­mists and his­to­ri­ans are look­ing back to the trade tur­moil of the decades before and after the Great War of 1915–18 — before there was a glob­al sys­tem of trade rules — to look for clues on how to project future trends.

That first era of glob­al­i­sa­tion was a peri­od when world trade was con­cen­trat­ed across the Atlantic. So were the squab­bles over debts, war-repa­ra­tions, cur­ren­cy con­trols, invest­ment, dis­crim­i­na­to­ry duties and mil­i­tary alliances that smashed glob­al mar­kets in the 1920s. By the start of the 1930s, deep-root­ed nation­al­ism and ‘every man for him­self’ was the rule in inter­na­tion­al rela­tions between the major pow­ers.

The fruits of the fric­tion were slug­gish growth and stag­nant trade.

Mea­sured in 1913 dol­lars, the sum of world exports and imports was just 4 per cent high­er in 1939 than it had been in 1913. West­ern Europe’s exports were small­er on the eve of World War in 1939 than they had been on the eve of the Great War in 1914.The aver­age con­tri­bu­tion of world trade to world out­put shrank from 22 per cent in 1913 to just 9 per cent in 1939. [A Cen­tu­ry of Com­merce: Two Ter­ri­ble Decades ]

It’s not as though there was no bet­ter advice to gov­ern­ments. Two insti­tu­tions, espe­cial­ly, were active oppo­nents of the mad com­pet­i­tive tar­iff hikes of the late ‘20s and the com­pet­i­tive deval­u­a­tions of the ear­ly and lat­er ’30s. They were the Eco­nom­ic and Finan­cial Organ­i­sa­tion (EFO) of the League of Nations and the Inter­na­tion­al Cham­ber of Com­merce (ICCrep­re­sent­ing inter­na­tion­al busi­ness.

The for­mer was the largest agency of the League of Nations, but ham­strung by the flawed pro­vi­sions of the League char­ter embed­ded in the Ver­sailles Treaty, and by the absence of the Unit­ed States, already the world’s great­est indus­tri­al pow­er, from its list of mem­bers. You can guess what it achieved.

The lat­ter — the voice of inter­na­tion­al busi­ness from the start — had no man­date, only influ­ence at a high lev­el on both sides of the Atlantic. What it was able to achieve is the sub­ject of this first vol­ume in the His­to­ry.

More details, and a copy of the Syn­op­sis of the first part in my next post.

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