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.
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 (ICC) representing 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.