G20 The Voice of UK Business by The Group of Nations

ICC United Kingdom’s Official G20 Publication

The Voice of UK Business

G20: Challenging times

INSIDE ICC UK

› Reclaiming the global trade narrative › Top 3 geo-economic challenges facing G20 › Trade and investment: A G20 Opportunity › UK business priorities iccwbo.uk

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ICC United Kingdom’s Official G20 Publication

September 2016

Contents

Features 08 / 10 / 12 / 14 / 16 / 18 / 22 / 24 / 27 / 29 / 30 / 32 / 34 / 36 / 39 / 40 / 42 / 44 / 46/ 48 / 52 / 54 / 56 / 58 / 60 / 62 / 64 / 66 /

In my view: Sustainable development challenges are business challenges By Louise Kantrow

Interview: James Bacchus By Chris Southworth

The future of global manufacturing By Jan Ward

UK Business Priorities By Carolyn Fairbairn

Reclaiming the global trade narrative By John Carroll

Top 3 geo-economic challenges facing G20: A spotlight on the US By Marianne Schneider-Petsinger

Trade and Investment: A G20 Opportunity

Publisher: Chris Atkins ICC Editorial Advisor: Sophie Dembinski

By Cherie Nursalim and David Nellor

A shifting agenda for emerging markets

Creative Director: Christian Gilliham christian@cgcreate.co.uk T: (+44) 7951 722265

By Julian Kassum

What businesses need: A view from the regions By Phil Smith

The future of the UK as an arbitration hub post-Brexit By Peter Hirst

Resolving company tax disputes: Evaluating MAP

WELCOME NOTES:

By Ian Hyde

Interview: Fred Osborn Digitisation of trade is rising in the East and must encompass the globe By Ian Kerr

Empowering Cybersecurity providers

Page 06 Sir Michael Rake Chairman, ICC United Kingdom Page 07

By Allen Dixon

Chris Southworth ICC Secretary General

Interview: Terry McGraw India: The UK’S Big post-Brexit opportunity By Kevin McCole

Publishing Firm: The CAT Company, Inc.

Energy in harmony By Agneta Rising

CEO & Founder: Chris Atkins

Setting the agenda on supply chain transparency By Justine Currell

Moving the Global Climate and Sustainability Agenda forward through G20 By Peder Holk Nielsen

Sales Executives: Stephen James

Interview: Cindy Braddon Importance of engagement in Future Learning By Thomas Paris

The content within this publication is made available on the terms and conditions that the publisher, editors, contributors and related parties:

Ensuring water, sanitation and hygiene for all in an uncertain world By Tim Clark

Talkin’ ‘bout my generation By Clare Montgomery

Five myths about going global By Luis Arriaga

World Chambers Congress: Fostering opportunities, cultivating innovation Meet your global business network By Andy Snell

Financing Global Trade: The most important branch of finance you’ve never heard of By Alexander R. Malaket

Unlocking SME Potential for Inclusive Economic Growth By Dr. Tunc Uyanik

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Partnerships & Development: Tyrone Eastman

Advertisers Index 02 Waters 05 ICC 20 Indiana: A State that Works 26 ICC 38 ICC 45 ICC 50 Eneco Holdings 67 ICC 70 Eden Roc 74 WCC

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ARBITRATION IN A CHANGING WORLD

ICC UNITED KINGDOM’S ANNUAL ARBITRATION CONFERENCE TOPICS WILL INCLUDE: ●

Brexit: implications for London as a seat for English law

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Future of dispute settlements on trade agreements

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The role of transparency and corporate governance in arbitration

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Arbitration selection, transparency and diversity

WEDNESDAY 30 NOVEMBER 2016 Allen & Overy LLP One Bishops Square, London, E1 6AD BOOK NOW for up to 45% off early bird discounts: events@iccwbo.uk

ICC United Kingdom’s Annual Arbitration Conference is one of ICC’s fastest growing EU events located in London, the world’s leading centre for arbitration and English Law. Home to 200 foreign law firms, the UK resolves 24,000 disputes annually and English common law is the most widely used legal system in the world.

ICC United Kingdom’s Official G20 Publication

Forword

Sir Michael Rake Chairman, ICC United Kingdom

Sir Michael Rake FCA, FCGI was knighted in 2007, and is Chairman of BT Group plc (2007), Worldpay Group plc (2015) and ICC United Kingdom (2015). He is also a Director of McGraw Hill Financial (2008), and Chairman of Majid AL Futtaim Holdings LLC (2010). Mike is also Chairman of Governors and Vice President of Wellington College, Chairman of the Henley Festival and is a Trustee of the Prince of Wales Charitable Foundations and a Vice President of the RNIB. Mike’s business advisory roles include his membership of the Advisory Council for Business for New Europe, and Board of the TransAtlantic Business Council. He is also a Senior Adviser for Chatham House and a member of the Oxford University Centre for Corporate Reputation Global Advisory Board. Mike is a William Pitt Fellow at Pembroke College, Cambridge. Mike is a former President of the Confederation of British Industry (CBI), Deputy Chairman of Barclays PLC (2012) and served two terms on the Prime Minister’s Business Advisory Council.

Since 1919, ICC has been a rallying point for business leaders who believe that improved living standards and prosperity are best achieved by strengthening trade between nations. Since 1990, the global economy has grown by $51.86 trillion at the same time poverty rates have fallen from 37.1% to 12.7%, according to data from the World Bank. Despite these impressive facts, protectionist barriers rose 40% across the G20 countries in 2015 at the same time as the value of global growth fell 13% and the two largest mega-regional trade deals fell foul of anti-trade rhetoric from NGOs and politicians (Transpacific Partnership, Transatlantic Trade and Investment Partnership). Closer to home, the benefits of the EU single market did not adequately register in the UK’s decision to leave the EU despite over £328 billion of imports, exports and foreign investment flowing between the UK and EU all of which help to create jobs, investment and growth at both a national and regional level across the UK. Indeed, the EU-UK relationship is one of the most important economic interfaces in the global economy. As middle classes grow and technology develops, more communities across the world are being lifted out of poverty, becoming better educated and businesses are becoming more internationalised. From a global point of view, these are

positives, particularly for the world’s poorest nations and are largely a result of increasing trade between nations. In Africa, there are 900 million small scale farmers yet only 10% of African trade is cross-border compared to over 60% in the EU. Small improvements to the trading environment can have a transformative effect on communities and countries alike, far more than aid and development funds could ever match. It is a natural response to want to close down and protect in times of crisis or in the face of challenge, but it is the wrong response in the context of the global economy if we want to promote job creation and investment. It is a myth that technological change and immigration are threats to communities and lead to job losses. It is true that technology and immigration can impact local communities but both can be mitigated perfectly well with the right policy solutions to ensure communities and businesses can adapt and respond positively. Multilateralism and opening up trade between nations is by far the best way to respond to hardened economic challenges at the same time as promoting prosperity and peace. Fewer barriers free people’s ability to innovate and create new solutions to the challenges we face. There is significant momentum behind the rise of protectionist barriers but this trend is not unstoppable. G20 leaders have a window of opportunity between G20 China

and G20 Germany to counter the direction of travel with initiatives to boost SME growth, increase access to finance, invest in infrastructure and encourage job creation. Completing the ratification of the WTO Trade Facilitation Agreement would be giant step in this direction and give the global economy a welcome injection of confidence. Stabilising the UK-EU interface to ensure the flow of business is maintained is in everyone’s interests. The last thing the rest of the world needs right now is an economy as large as the UK floating in a long period of uncertainty. For B20, strong business leadership is required to keep a steady hand on the trade and investment tiller whilst the UK and the rest of the world navigate some unchartered waters ahead. There has never been a more important time for international organisations like the ICC working with the CBI and other UK business groups. UK businesses need expert advice and guidance in an area of business that has been largely delegated to the EU for decades. Although the UK’s future trading relationships with the rest of the world may be entering unchartered waters, the ICC has been proudly supporting international businesses since 1919. Sir Michael Rake Chairman, ICC United Kingdom

THERE IS SIGNIFICANT MOMENTUM BEHIND THE RISE OF PROTECTIONIST BARRIERS BUT THIS TREND IS NOT UNSTOPPABLE. 06 ❙ iccwbo.uk

Welcome

Chris Southworth Secretary General, ICC United Kingdom

Chris Southworth is Secretary General at the International Chamber of Commerce UK. Prior to joining ICC he was Executive Director for Global Partnerships, at the British Chambers of Commerce (BCC), Head of the International Chambers of Commerce Unit at UK Trade and Investment and a Senior Policy Advisor to Lord Heseltine for his independent review of UK competitiveness. In 2011 he helped set up the mid-size business export programme at UKTI and was a Senior Policy Advisor for the 2011 Government Review of Mid-Size Businesses. Former roles have encompassed deregulatory policy at Better Regulation Executive, social enterprise policy at the Department for Business and stints in a local strategic partnership and the charity sector. He is also co-owner of a start-up company building homes in Cartagena, Colombia.

A stronger, more coherent voice for UK business It has been a challenging year for trade. As G20 leaders prepare for the final summit of China’s presidency before all eyes turn to Germany, they will be acutely aware that global trade performance is weak and protectionist rhetoric is on the rise. As the UK enters a period of heightened uncertainty and complexity in its international political and trading relations, it has never been more important to make the G20 more relevant to UK business and provide a stronger, more coherent voice. The G20 is a unique political and business forum bringing together the world’s largest trading nations to agree global governance priorities. Combined, G20 members account for 80% of global trade. As the fifth largest economy with businesses operating in every corner of the globe it is right that the voice of UK business be better heard. In 2016, ICC United Kingdom has been scoping out the possibilities to do more to help businesses engage and participate including supporting China at the B20 Launch, hosting a roundtable with UK business leaders, launching a new UK G20 publication (a first for ICC),

returning to attend the B20 Summit in Hangzhou and ending the year with discussions with German business leaders in the lead up to the G20 German cycle in 2017. We have also been supporting the fantastic work ICC has been doing throughout the year to promote global growth as the G20 business partner and across other leading international platforms such as the UN, OECD and WTO. Trade matters, reclaim the narrative The EU referendum was a wake-up call and exposed a clear misunderstanding of the benefits of trade to local communities and economies and a mistrust of expert advice. There is a very real disconnect between business, government and society that has the potential to undermine the gains made by global trade if the negative rhetoric continues. The referendum is a stark lesson for the G20 - which can feel a very long way away from reality for a business leader running an SME. The risk from rising populism and protectionism is significant. Business leaders must play a role in reclaiming and promoting a pro trade narrative. G20 leaders also must grab the opportunity during the Chinese and German G20 cycles to re-focus messaging and implement policies that resonate better with local realities or

businesses will increasingly find themselves operating in a hostile international business environment for many years to come. If they don’t, the consequences, as is usually the case, will impact SMEs, emerging markets and poorer communities the hardest. Looking forward Most of all, G20 leaders must start delivering on trade. Despite its current weak performance it has helped to raise over a billion people out of poverty since 1990, and remains a key part of the solution to some of the G20’s most pressing economic, political and security challenges. The G20 addresses global, big picture issues in annual cycles. To understand how to influence its agenda, UK business must work closely with governments with the longer term in mind. Businesses must also work together across global issues to hold governments to account and help them remain focused on what matters, particularly in regards to removing barriers to trade. ICC is uniquely placed to help facilitate this dialogue and act as a convener and conduit to channel the voice of business at the G20 level. Chris Southworth Secretary General, ICC United Kingdom

TRADE IS A PROVEN SOLUTION TO SOME OF THE G20’S MOST PRESSING ECONOMIC, POLITICAL AND SECURITY CHALLENGES. ❙ 07

ICC United Kingdom’s Official G20 Publication

G20 Business and UN priorities Authored by: Louise Kantrow

In my view: Sustainable development challenges are business challenges

015 was a turning point for the whole world. The decisions governments made will affect many generations to come. The ambitious, transformative United Nations (UN) 2030 Agenda for Sustainable Development, launched in September 2015, offers a roadmap for all stakeholders – governments, the private sector and civil society – to address the social, environmental and economic challenges facing our world. With the Sustainable Development Goals (SDGs), the global community now has the framework for expanding upon the achievements of the Millennium Development Goals (MDGs), and also for addressing the areas where they fell short. It was time for a new approach. The global landscape has changed. Poverty now resides

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mostly in middle-income countries. Official development assistance (ODA), while still relevant, is clearly not enough to address the complex global challenges we face. Advances in technology have made the world smaller, but this convergence has also revealed glaring gaps among and within countries that can no longer be ignored. We have entered a new era whose hallmark is competition for land, water, food and energy. The impacts of climate change are enormous. This is why the challenges in the design of the 2030 Agenda were significantly different from the experience of the MDGs – and why their implementation makes it critical for stakeholders to work together, complementing each other’s roles. Business has much to contribute. More than ever, it is recognised that economic

growth, trade, investment, entrepreneurship, innovation and sustainable job creation are fundamental for sustainable development. On average, business now provides 60% of GDP, 80% of capital flows and 90% of jobs in developing countries (OECD, 2015). In a historic development, the 2030 Agenda and the 17 SDGs place heavy emphasis on the important role of business. They recognise that for the 2030 Agenda to succeed in all countries at all stages of development, it will be essential for businesses of all sizes to grow and flourish in a responsible and sustainable manner. These businesses will be essential to create decent jobs and livelihoods, and to provide technical resources for the design and deployment of new solutions to the sustainable development challenges facing the international community.

BUSINESS HAS MUCH TO CONTRIBUTE. MORE THAN EVER, IT IS RECOGNISED THAT ECONOMIC GROWTH, TRADE, INVESTMENT, ENTREPRENEURSHIP, INNOVATION AND SUSTAINABLE JOB CREATION ARE FUNDAMENTAL FOR SUSTAINABLE DEVELOPMENT.

But one may ask: why do the SDGs resonate with business? In my view, there are many reasons why business must take them seriously: ■ The SDGs are action oriented, and they are SMART: specific, measurable, achievable, relevant and time-bound. ■ Universality underpins the SDGs. They provide an overarching vision to eradicate poverty and an integrated approach reflecting all three dimensions of sustainable development: social inclusion; economic empowerment and environmental stewardship. ■ The SDGs recognise that the earth is finite. Resources must be respected and managed efficiently to ensure a net positive contribution over the long term while striving to significantly reduce the negative environmental impacts, including climate change.

■ The SDGs emphasise good governance focused on smart regulation, rule of law and well-functioning national institutions – most notably to reduce corruption and informality. ■ The SDGs support institutions that protect and promote human rights, gender equality and the empowerment of women. ■ The SDGs provide a roadmap through their “Means of implementation”. Yet delivery of the SDGs will be adapted at the global, regional, national and local levels. Multi-stakeholder partnerships – and the recognition that business is part of the solution – will be crucial to their achievement at every level. ■ The key ingredient for all this to work is building trust among all actors in society. This includes honest and transparent

dialogue about accountability, and to find solutions where perspectives or interests differ among all stakeholders. The International Chamber of Commerce co-ordinated business inputs during the two years of negotiations around the SDGs. It applauds the leadership of the UN on the 2030 Agenda for Sustainable Development and the launch of the SDGs. The UN has delivered to the global community a development agenda that will truly be universal and transformative, and will pave the way for new partnerships among governments, the private sector, civil society and all other actors in development. Business welcomes these new partnerships and stands ready to provide the full depth of resources, expertise and technological innovation needed for them to succeed. ■

Louise Kantrow was appointed ICC Permanent Representative to the United Nations in 2007. Since her appointment, Kantrow has been involved in multiple major UN conferences as ICC and private sector representative. She co-chaired the Private Sector Steering Committee for the Fourth UN Conference on Least Developed Countries, coorganised the Business and Industry Major Group for the 2012 Conference on Sustainable Development, and chaired the Business Sector Steering Committee for the Third International Conference on Financing for Development. Louise also leads the Global Business Alliance for 2030, a robust and inclusive business alliance that provides positive private sector contributions to the formulation and implementation of the 2030 Development Agenda.

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ICC United Kingdom’s Official G20 Publication

WTO and Free Trade Agreements Interview by: Chris Southworth

Interview: James Bacchus

Outlining a post - Brexit landscape On 23 June 2016, the UK electorate opened a Pandora’s Box by voting to leave the European Union (EU). Since then, we have seen the value of the pound sterling plummet, the global growth forecast downgraded, share prices drop, a new Prime Minister, and over 60 politicians lose their jobs amidst the largest re-organisation of government in over a decade. And all before Article 50 is even invoked. In fact, there is still some uncertainty over whether or not the UK will eventually leave the EU, regardless of the referendum result. One positive has occurred, however: the UK has been reminded of the role of trade – with much debate focusing on the UK’s access to the EU single market, the merits of trade with the rest of the world and the different types of trade relationships that are available to the UK. As the largest world business organisation, the International Chamber of Commerce (ICC) sought answers to some of the most pressing questions with a roundtable and interview with James Bacchus, chairman of the ICC Trade and Investment Policy Commission, Chair of the Global Practice Group at Greenberg Traurig, former member of the U.S. House of Representatives, and former chairman of the Appellate Body of the World Trade Organization (WTO). There are few people in the world better positioned than James to offer insights into what lies ahead for the UK. The interview was conducted by Chris Southworth, Secretary General of ICC United Kingdom, and the following comments are James Bacchus’ personal views.

Chris Southworth: Following the “leave” vote in the EU referendum, what should the UK’s trade and investment priorities be? James Bacchus: The UK needs to focus on ensuring trade is able to flow in and out of the country. Doing so isn’t only a case of creating some new trade arrangements, but also working to re-establish the trade arrangements that already exist. ICC is committed to doing all it can to assist the UK and especially its UK member companies in this transition. CS: 50% of the UK’s exports go to the EU – it is, by far, our largest trading partner. If the UK does leave the EU, what trade relationships and options are available with the 27 other member states? JB: First, the UK must recognise that there is a trade-off between restricting the movement of people, and being able to get free and undeterred access to the single market. It is possible that a special deal might be cut for the UK, but this cannot be assumed. One approach available to the UK is what is known as the “Norway approach”, which includes paying a fee to the EU for the privilege of participating in the single market. However, it does also include the free

movement of people. In fact, the only real difference between EU membership and the “Norway agreement” is that the UK would still need to internally adopt and abide by many EU regulations, but would have no say in what those regulations are. Another option is the so-called “Swiss option”, which doesn’t have full participation in the European Economic Area, but patches together something that approaches full participation in the single market – on a sector by sector, and issue by issue basis. In exchange for its 120 trade deals with the EU, Switzerland has also been required to accept the free movement of people. Lastly, Turkey is part of a “customs union” with the EU – it does not have any trade agreements with the EU but, as part of the customs union, it is bound to comply with any concessions made by the EU. If the EU finalises the Transatlantic Trade and Investment Partnership (TTIP) with the US, for instance, Turkey would be bound by the deal, but wouldn’t be able to receive any of the benefits. There are several pros and cons with each option. While the Norway option is the most likely model for the UK to adopt, the best deal is the one the UK already has as an EU

ONE APPROACH AVAILABLE TO THE UK IS WHAT IS KNOWN AS THE “NORWAY APPROACH”, WHICH INCLUDES PAYING A FEE TO THE EU FOR THE PRIVILEGE OF PARTICIPATING IN THE SINGLE MARKET. 10 ❙ iccwbo.uk

member. All the other options will offer something less. It is important to remember that it isn’t just a case of the UK picking and choosing what it wants – the EU is on the other side of the table. CS: There is a view that the WTO can act as a back-up for the UK’s trade relations if we leave the EU. Is that true? JB: The WTO is not a free trade agreement. It is a framework enabling members to make mutual concessions to each other in different areas of trade. While the UK is a member of the WTO in its own right, its existing arrangements have largely been made as part of the EU. It is a mistake to assume that the concessions other countries have agreed upon with the UK as part of the EU, can automatically be cut-and-pasted into a post-Brexit WTO arrangement. Standing alone, the UK might not be able to win the same concessions. You have to remember that trade agreements are a two-way process. There is no such thing as favoured treatment – it is give and take. 40-50 countries have joined the WTO in the time the UK has been a member of the EU. All have had to make concessions with the UK as one of the EU’s leading free trade advocates. The UK will now have to face those same countries alone, without the cover of the EU. CS: There is a belief that, post-Brexit, the UK can be free to agree free trade arrangements of its choosing, that it was unable to make as an EU member. How realistic is this as an international trade strategy? JB: It is true that there are trade agreements that are only possible for the UK to make once it has left the EU. However, none will be easy to negotiate, and it is likely that many countries will ask for significant concessions from the UK. It is also worth remembering that this is all unfamiliar ground for the UK. Not many people conceived that Brexit was a real possibility, and there are actually very few people in the country who logistically know how to proceed. The UK hasn’t negotiated a trade deal in a generation, and you need people with experience to do so – particularly when negotiating with markets such as China. It would not be a wise idea to approach the big trading nations without a team of seasoned negotiators who know how the process works.

CS: What are the implications of the EU referendum on TTIP? JB: Independent of the Brexit vote, there have been a number of hurdles to successfully concluding TTIP. For one, there have been challenges within the US around concluding the Trans-Pacific Partnership (TPP), which acts as a pre-requisite for TTIP. Back on this side of the pond, there have been difficulties in securing support for TTIP among European participants. The EU referendum vote presents another challenge in that the UK would be absent from the negotiations – altering the balance of potential mutual trade concessions. CS: What should ICC’s global trade and investment priorities be following the EU referendum? JB: ICC’s priorities continue to be lowering barriers to trade and investment worldwide in ways that enhance global prosperity and sustainability. ICC has long-supported a global framework that enables rules to support trade and

investment. In particular, ICC has always supported the efforts of trading countries to further the flow of world trade under WTO trade rules. ICC supports regional and pluralateral trade arrangements that reduce costs and red tape for business and enhance the flow of trade and investment. CS: Now that there is a renewed focus on trade, what – aside from trade relationships – should be a key priority? JB: There are two key areas that require our focus. First, is the ratification of the WTO’s Trade Facilitation Agreement. Simply put, the WTO’s trade facilitation agreement is designed to cut the red tape in world trade. The seemingly mundane agreement will ultimately significantly speed-up the flow of trade, cut transactional cost in trade by about 10%, and add as much as US$1 trillion into the global economy, annually. While the agreement was concluded by WTO members in Bali in December 2013 – with the strong support and engagement of ICC – it will only enter into force once it is

ratified by two-thirds of the 165 members of the WTO. So far it has been ratified by about half. Second is a focus on combatting protectionism. Protectionism denies opportunities to everyone. Worst of all, it is a hidden tax on the poor. It denies businesses competitive opportunities in the market-place. It distorts what should be market decisions, adds to prices, inhibits productivity, frustrates competition, and rather than enhancing prosperity, immiserates the world. Businesses all over the world must do all they can to resist the temptation to pursue protectionism wherever and however it occurs. The G20 – when they meet in China in September – must prioritise a real roll-back in protectionism. There has been a ritual recitation by the G20 of the need to do so, but there has been much less in the way of actual follow-through. The business community seeks real action by the G20 against protectionism – not just in rollingback protectionist measures, but also through improving the global framework of rules against protectionism. While WTO rules already prohibit all kinds of trade actions that are attainable to protectionism, there are other kinds of protectionist activity that fall outside of the WTO framework. There is no way to know what the future holds for the UK if it chooses to leave the EU. However, what we do know is that trade – understanding our trade relationships, recognising the importance of trade, and taking an active role in shaping the global trade landscape – is once again a top concern. ■

James Bacchus has been Chairman of the International Chamber of Commerce’s (ICC) Trade and Investment Policy Commission since 2012, providing leadership on multilateral trade and investment policy issues. He is also Chair of the Global Practice Group at Greenberg Traurig, a former member of the U.S. House of Representatives, and former Chairman of the Appellate Body of the World Trade Organization, the global court of final appeal in international trade in Geneva, Switzerland.

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ICC United Kingdomâ&#x20AC;&#x2122;s Official G20 Publication

Global Manufacturing Authored by: Jan Ward

The future of global manufacturing

second industrial revolution is underway. For manufacturers, harnessing the potential of the dramatic shifts and technological advances in global manufacturing presents both challenges and opportunities. Leading the charge have been the giant economies of China and India followed closely by the countries of South America and developing nations in the Far East such as Vietnam, Indonesia, Malaysia, Korea and Taiwan. More recently Chinese and Indian producers have moved further up the value chain, displacing the products traditionally exported from those early industrial developed nations, whose business models were based on importing high volume low value commodities from the likes of China and India and exporting manufactured goods back to them.

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Those countries that were previously export customers for the industrial west are now manufacturing their own products for internal consumption and aggressively exporting them too. This has pushed manufacturers in western developed industrial nations into producing low volume high value, highly technical innovative products. Continuous spending on R+D and improved productivity has become the norm. Some of course do it better and faster than others. However, three of the top five global players are still the same countries that were at the forefront of industrialisation. The US still holds the number one spot followed by China, Japan, Germany and the UK. To remain competitive and retain market share, large manufacturers have expanded their presence globally. In the last 20 years, the rise of giant global multinational

companies, with incomes on par with small countries, has been enabled by the continuous improvement in communications technology and ubiquitous international travel. The globalisation of manufacturing in this way has also lead to a globalised standardisation of products. As anyone knows you can get pretty much the same Big Mac anywhere you are in the world with only a few exceptions. And this applies to a whole range of goods. On the competitive scale the top manufacturing performers mirror the top five exporters fairly closely, but with China at number one, though from recent predictions the US looks set to overtake China in competitiveness within the next five years. Malaysia, India, Thailand, Indonesia, and Vietnam are also expected to pierce the top 15 nations on manufacturing competitiveness over the next five years.

So where is the future of manufacturing going to be? As the top five run hard to keep ahead of their developing competitors, developed economies will continue to manufacture in low cost countries whilst keeping their IP and R+D at home. The trend for re-shoring manufacturing and the factoring of carbon costs in the transport of goods across the globe is also likely to continue. The use of the Internet of things, subsequent development of ‘factory 4.0’ and the rapid development of robotic equipment, will see completely automated factories producing goods in unmanned facilities controlled from the other side of the globe. Additive Manufacturing or 3D printing is already revolutionising the way products are designed, allowing rapid prototyping and the commercialisation of ideas that previously

took years to bring to market. Production parts are already being produced for medical, aerospace and oil and gas applications allowing small batch, customised components to be printed in a matter of hours, which in the past would have taken weeks. 3D printing machines will be used to reproduce themselves, along with design and performance improvements as they happen. An order can be placed and an e-file sent from one country to a printer on the other side of the world, and in the process cutting the carbon miles, whilst delivering what the customer needs instantly. All of these advances are in the near future. With the ever increasing pace of improvements in technology it’s an exciting and challenging time to be a manufacturer. We are seeing the second industrial revolution and this time it’s global. ■

Jan Ward founded Corrotherm in 1992 and started supplying high grade metals to the oil gas and desalination markets. Since then, the company has gone from strength to strength, expanding significantly and building up a strong global presence and blue-chip customer base. In 2009, Jan was named the UK’s most inspirational female entrepreneur, winning the coveted NatWest Everywoman Award which champions female entrepreneurs. A keen international traveller, Jan has used her experience to build overseas markets and develop long-term customer relationships, especially in the Middle East. Highly passionate about manufacturing industry, Jan is a Non-Executive Director at Hampshire Chamber of Commerce and a past president of the Southampton and Fareham Chamber of Commerce. Jan holds a CBE for services to business , and the honorary Doctorate of Engineering in 2015. She is also nonexecutive Chair of 4 manufacturing businesses.

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ICC United Kingdom’s Official G20 Publication

UK Innovation Authored by: Carolyn Fairbairn

UK Business Priorities

he events of the past month have been truly momentous. As I write this the UK has a new Prime Minister, a new Government and we are on the verge of a long and complex renegotiation of our relationship with our biggest trading partner. Events have moved so fast that the news cycle has lasted hours not days, and the country is now hoping for time to draw breath. Despite this upheaval, businesses have largely spoken with one voice. While there are challenges ahead – and these challenges may be significant – businesses are practical and realistic, and used to managing disruption. They are looking for the opportunities as well as the hurdles in the changing landscape of their markets. The first priority for the new UK Government will of course be the Brexit negotiations. The biggest problem for business is the uncertainty they create. A first critical step is a clear plan and

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strong leadership to remove as much of this uncertainty as possible. Red lines have to be worked out quickly – where aspects of the UK’s relationship with the EU are critical to business success - and it is increasingly clear there will be some form of trade-off between full access to the Single Market and free movement of people. We will need a new identity as a nation – how do we want to be perceived in terms of our openness and attractiveness as a place to live, work and invest? These are big questions that we must ask ourselves as a society. The period ahead will also, importantly, involve a restatement of our commitment to our non-European trading partners – after all this is a fundamental repositioning of the UK in the world, not just in Europe. In parallel to Brexit negotiations we must press ahead quickly with trade agreements with our largest trading partners. It is critical to remove as many barriers to trade (both tariff

and non-tariff) as possible, and get these agreements in place sooner rather than later. Business will have a vital role in making the case for trade and its benefits for society as a whole – something which perhaps was lost in the noise of the referendum campaign. Serious consideration will then need to be given to sectoral issues – how different sectors like financial services, aviation, manufacturing, creative industries, services and tech are affected. Fragmentation of the business voice is a risk and must be avoided through collaboration. Firms stand ready to work within the framework set up by the new Government and provide constructive support and ideas – and a recognition that trade-offs may need to be made. It is critical, however, that Brexit does not consume policy-making in the months to come. Now more than ever the UK needs to focus on its domestic agenda and signal to our international trade partners that it is open for business. Decisions we make

about our infrastructure, skills system, regulation, and tax competitiveness will all influence the decisions international companies, investors, institutions, governments and individuals make about the sort of country the UK is becoming and whether it’s for them. Key infrastructure decisions need to be taken, such as HS2 and on aviation capacity. Ensuring ongoing access to skills and talent will be crucial, and the UK still has a large productivity gap to tackle. Innovation will be critical, and in the uncertain times ahead we need to encourage investment in innovative technologies. Businesses need to find new ways of working with our educational institutions and vice versa, and work in partnership with Government to revolutionise the role of apprentices in our economy. New infrastructure funding models will also be required as Government grapples with fiscal challenges in a post-Brexit world.

The contribution and role of business has never been more important. But at the same time it must explore why its voice was not heard as clearly and with as much resonance as it could have been during the referendum campaign. There is much to do to address how different regions are sharing in the UK’s prosperity, and we must ensure the path struck over the coming weeks and months is the right one for society as a whole, not just a small part of it. This is not just a regional divide - we must also examine income inequality across different groups in our society. Business has a great deal to offer in terms of driving change and an economy that works for everyone. We face uncertain and challenging times ahead – but there are opportunities as well. The UK remains a vibrant, open, trading nation, and one of the best countries in the world to do business. Now is the time to build an even stronger future. ■

THE FIRST PRIORITY FOR THE NEW UK GOVERNMENT WILL OF COURSE BE THE BREXIT NEGOTIATIONS. THE BIGGEST PROBLEM FOR BUSINESS IS THE UNCERTAINTY THEY CREATE.

Carolyn Fairbairn has been Director-General of the CBI since November 2015. Previously, she was a Board Director at Lloyds Banking Group, Capita, the CMA and The Vitec Group. She has also held a range of senior executive positions in the media sector. Carolyn was a Partner at McKinsey & Company, and has worked in the Number 10 Policy Unit and as a journalist for The Economist.

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ICC United Kingdom’s Official G20 Publication

Trade & Investment Authored by: John Carroll

Reclaiming the global trade narrative

The past few years have observed a growing revolt against global trade. John Carroll, Head of the International Chamber of Commerce (ICC) United Kingdom’s Trade and Investment Policy programme, explains why the narrative around free trade should be reclaimed, and the opportunities it provides defended.

t a time of significant economic and geopolitical uncertainty, it is important to consider the role of trade and cross-border investment in creating jobs, investment, and growth. In uncertain times, trade matters now more than ever before. It plays a significant role in driving up living standards – bringing in capital, technology and skills, and even maintaining peace. Unfortunately, however, many of the headlines focus on the negative side of trade, stating that trade can have a damaging effect

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on global and national communities. Clearly, we need to refocus attention to the positive aspects of international trade. An anti-trade sentiment In recent years we have witnessed a backlash against trade, with the emergence of an anti-trade rhetoric across the world. During the US Presidential election campaign we have seen Chinese imports, the TransPacific Partnership (TPP) and NAFTA criticised. Over 130,000 complaints were lodged to the EU in the wake of the European Commission’s consultation on the Transatlantic Trade and Investment Partnership (TTIP). Such rhetoric and developments give rise to populism and protectionism. According to the Global Trade Alert Initiative, last year saw the biggest rise in protectionism since the onset of the financial crisis – with an estimated 40% increase in

trade barriers. At the same time, the value of global trade has fallen 13%. The impact on trade is serious: world trade is expected to grow by only 2.8% in volume this year – the fifth consecutive year of growth below 3%. Exposing myths Trade is an easy target for those seeking to explain uneven prosperity, stagnant wages and job losses. But much of this is a myth. It is more likely that jobs are affected as a result of the transformation of business models driven by new technologies, rather than due to trade. However, as some jobs can be impacted by trade, it is even more important that we provide proactive and holistic support to those regions whose economies may be affected and encourage policy solutions designed to mitigate such impact. We must also focus on proactively supporting those businesses who are best

placed to grow local economies through their links with international trade. Another misconception is that trade agreements only serve big business. This is simply untrue. The reality is that most trade benefits small to medium-sized enterprises (SMEs). In fact, out of approximately 200,000 internationally-trading companies in the UK, 90% of UK trade with the EU is from SMEs – not large corporates. Clearly, SMEs feel the benefits of removing trade barriers – such as red tape and costs – far more than any other type of company. Removing these barriers is a key objective of the WTO’s Trade Facilitation Agreement, which will come into force if, as expected, it is ratified by two-thirds of its members. Finally, trade is not just exports. It is imports, exports and investment – much of which comes from overseas, either directly, or from taxes paid by foreign companies. In fact, there will be few shops in the UK that are not reliant on importing, in some shape or form, from overseas. What’s more, foreign direct investment (FDI) also creates jobs. In 2015, the UK was the largest recipient of FDI in Europe, creating an estimated 42,000 jobs. SMEs are the backbone of the global economy, comprising 95% of enterprises and representing 60% of private sector jobs. They drive global growth, create jobs, and play a fundamental role in global value chains. Indeed, fast-growth SMEs account for a disproportionately large share of job creation. It is therefore key that we identify the businesses that are likely to see the highest levels of growth through overseas expansion, and that we provide them with support across all stages of international trade; through creating, executing and managing trade. Why trade matters Business leaders must reclaim the narrative on the benefits of trade: it is time to set out the case for why trade matters. We must ensure that trade plays a significant role in policy decision-making processes, as it is trade and investment that drive the economy and pay for the infrastructure and public services that communities need. Open markets and increased trade flows are good for global communities and sustainable development – studies have shown a strong link between trade, economic growth and poverty reduction. Trade openness brings an array of benefits to communities and households across the world, including lower prices, increased

ACCORDING TO THE GLOBAL TRADE ALERT INITIATIVE, LAST YEAR SAW THE BIGGEST RISE IN PROTECTIONISM SINCE THE ONSET OF THE FINANCIAL CRISIS – WITH AN ESTIMATED 40% INCREASE IN TRADE BARRIERS. AT THE SAME TIME, THE VALUE OF GLOBAL TRADE HAS FALLEN 13%.

productivity, higher living standards, and stronger institutions and infrastructure. International trade also makes businesses more resilient, as they are not solely reliant on the economy of one country. In a time of fragile global security, promoting peace and stability should be at the top of every government’s agenda. Trade plays a critical role in foreign policy – fostering peaceful relations between nations. Furthermore, trade agreements have played a key role in establishing peaceful international relations following the Second World War, particularly in Europe. Governments must focus on policies that enhance trade and investment worldwide. The right policy environment will allow businesses to invest, grow, and create jobs – all of which enable communities to be prosperous and secure. The International Chamber of Commerce’s (ICC) ‘Trade Matters’ campaign is designed to start reclaiming the narrative and remind everyone that trade is important. In an era of slow growth and global uncertainty, open trade will help communities break down barriers and generate opportunities. This should be why trade matters to us all. ■

This article first appeared in the September 2016 issue of Financier Worldwide magazine. ©2016 Financier Worldwide. All rights reserved. Reproduced here with permission from the Publisher. www.financierworldwide.com

John Carroll is Head of Product Management and International Business and acts as Chair of ICC’s UK Trade and Investment Committee. Throughout his 17 years with the Group, John has held a diverse range of senior roles for Santander across the Markets, International Payments and Trade space, and has extensive experience in the Asian, Latin American, European and the Middle Eastern markets. Since May 2015, John is leading Santander Corporate & Commercial Solutions & Insight teams, responsible for strategy, customer insights, solutions and specialists sales such as transactional banking, international and working capital solutions. Prior to that he has successfully led the International division within Santander Corporate & Commercial Bank since September 2013, delivering a unique proposition in the UK market, which was recently named the ‘Best International Solutions Provider’ at the Business Moneyfacts awards 2015. This key differentiator has proven to be a successful way to attract new clients to the bank, which not only delivers growth records for International but also allows the bank to capture their domestic business too. John was previously the Head of the Financial Institutions Group (FIG) in Santander UK where he significantly grew the FIG franchise in the three years prior to his move to International.

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ICC United Kingdom’s Official G20 Publication

G20 Challenges Authored by: Marianne Schneider-Petsinger

Top 3 geo-economic challenges facing G20: A spotlight on the US

hen the first G20 Leaders Summit took place in Washington in 2008, the agenda was dominated by managing the global financial crisis. At the Pittsburgh Summit in 2009, the G20 was established as the ‘premier forum for international economic cooperation’, giving the group a mandate to continue beyond dousing the flames of the economic and financial crisis. This year the G20 leaders will gather in China at a time when the world economy is facing significant challenges. What are the three major geo-economic trends and developments reshaping the world, which can only be addressed through international economic cooperation? And what role does the United States play in facing these critical economic concerns of our time? 1. SLOWING GROWTH The global economy has struggled to get back on its feet after the 2007-08 crisis. The world economy grew by just 3.1 percent in 2015 according to the IMF – the slowest rate since the depths of the crisis in 2009. Growth remains sluggish in the advanced economies, with the American economy expected to grow at only 2.2% in 2016. Many emerging markets and developing economies will continue to experience slower rates of growth (the most important example being China), while some (such as Russia and Brazil) are in recession. It remains to be seen whether the G20 will achieve its stated objective of lifting its collective GDP by 2% by 2018. While China was the engine for global economic growth in the years immediately following the 2007-08 crisis, today the US is once again a major driver of global growth. America contributes roughly 21% to global economic growth in 2016 according to World Bank data. However, political uncertainty related to the outcome of the US presidential election could slow down America’s economic growth and cause the engine to stutter. Low growth for an extended period could raise questions about the continued appeal of US-style free-market capitalism and state-led economic development models as a viable alternative.

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2. CREATION OF REGIONAL TRADE BLOCS Since the global economic crisis, trade has increased at a slower rate than economic growth. As efforts for further liberalizing trade under the auspices of the WTO are currently stalled, there is a move towards regionalism. The most prominent manifestations are being driven by the US: the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) are two US trade deals with countries along the Pacific Rim and the EU, respectively. Whether the rise of regional trade blocs could be a stepping stone or a stumbling block to multilateral trade liberalization is subject to debate. What is clear, however, is that the US is spearheading efforts for trade liberalization and aims to write the rules of the road for global trade. 3. RETURN OF VOLATILITY IN OIL PRICES Volatility is reappearing and will most likely be the hallmark of the global oil market for the foreseeable future. Oil prices fell sharply in the second half of 2014 – from 115 USD per barrel to around 60 USD – ending a four-year period of unusual stability. In the first half of 2016, the price of oil has fluctuated between approximately 30 USD and 50 USD per barrel. The changing oil price has led to significant shifts in the fortunes of

WHILE CHINA WAS THE ENGINE FOR GLOBAL ECONOMIC GROWTH IN THE YEARS IMMEDIATELY FOLLOWING THE 2007-08 CRISIS, TODAY THE US IS ONCE AGAIN A MAJOR DRIVER OF GLOBAL GROWTH.

many G20 countries. The US is an important player in global oil markets: Not only is it the world’s largest oil consumer, but due to the shale boom, the US is also the world’s biggest oil and gas producer. Meanwhile, the fall in the oil price, combined with the global climate change deal agreed in Paris last year, has renewed the policy debate around fossil fuel subsidies. Though the G20 agreed to ‘rationalize and phase out over the medium term inefficient fossil fuel subsidies’ at the 2009 Summit in Pittsburgh, there has been little progress so far. Time to Act By playing a central role in the establishment of the G20 as the world’s main economic council, the US acknowledged that solving global economic problems could no longer be done in a boardroom of Western states. Eight years after its launch, the G20 faces important challenges: Anemic growth is a central feature of the post-recession world. Trade regimes are becoming regional rather than global. Oil prices are more volatile. The G20 Leaders Summit in China is the ideal opportunity for the group – and in particular the US – to address the major geo-economic trends of our time and ensure that the G20 lives up to its name as the premier forum for international economic cooperation. ■

Marianne SchneiderPetsinger is geo-economics fellow in the US and Americas Programme at Chatham House, where she is responsible for analysis at the nexus of political and economic issues. Previously, she managed the Transatlantic Consumer Dialogue – an international membership body representing consumer organizations in the EU and US. She has also worked on transatlantic issues at the American Institute for Contemporary German Studies and at the Ministry of Economic Affairs in the German State of Thuringia. Marianne completed her graduate studies focusing on international trade and finance at the Fletcher School of Law and Diplomacy (Tufts University) and the John F Kennedy School (Harvard University).

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ICC United Kingdom’s Official G20 Publication

G20 Business Authored by: Cherie Nursalim and David Nellor

Trade and Investment: A G20 Opportunity Getting trade and investment right matters for global growth – the G20 is best placed to accomplish that outcome. Merchandise trade alone still accounts for about 30 percent of global GDP even if the pace of growth has slowed.

lobal macroeconomic issues, international systemic financial issues, as well as trade and investment are the core of the G20’s business. Yet, trade and investment is the G20’s Cinderella in the company of economic and financial policy even though it is just as critical for global growth prospects. Let’s not have the G20 repeat history. At Bretton Woods in 1944 it was agreed to establish the IMF, the World Bank, and an International Trade Organization. But as Bretton Woods was the precinct of finance ministers, only the IMF and World Bank were finalized. The International Trade Organization was left to subsequent talks that failed to deliver the envisaged global system. Today we have a patchwork of multilateral and bilateral trade and investment agreements. These agreements benefit from compliance with WTO rules but they also venture well beyond available global guidance. Certainly the current patchwork falls far short of potential for trade and investment in spite of the best people and efforts. The multilateral system rests heavily on the early Doha Development Round and together with the gado-gado of regional agreements defines the global system. Regional agreements while offering potential for a constructive path forward do not always take account of multilateral considerations. Outdated premises shape this system. Doha saw development from a lens of North-South trade; in the meantime southsouth trade has flourished. It viewed trade as involving separate interests of importers and exporters; in the meantime production networks mean that exporters are importers as well. These development have yet to shift the agenda to areas such as the “doing business” issues that shape global value chains. A fit-for-purpose 21st century trade and investment system will look different. The system needs to address the inevitable “known unknowns.” We need a framework that evolves in a timely manner to new and emerging issues. In a world of self-driven vehicles and 3D

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printers, the multilateral system must come to terms with digital trade. Moreover, in this age of the fourth industrial revolution even the more recent emergence of production networks will be less important, certainly production will be less labor intensive and more local. Trade and investment framework needs to be at the core of sustainable development goals. The ambitious 2030 agenda rests on pillars of innovation, investment and collaboration engaging business, government and civil society. They are linked directly to the goal on jobs and growth but its criticality extends to the other sustainable development goals. Trade and investment through the transfer of technology, for example, shapes goals from education and healthcare to renewable energy and climate action. A broad public engagement remains a missing link. Indonesian Trade Minister said at the G20 workshop in Boao Forum co-chaired by the CCPIT and International Chamber of Commerce that the public must be closely engaged in this process. There is a growing distrust of policy makers particularly in some markets on the constructive role of trade in growth and development. What can leaders at the G20 do? Leaders must elevate trade and investment to be a core G20 challenge. The G20’s role is defining the “rules of the game.” It needs to define the framework and institutions that will deliver the outcomes not to negotiate the agreements. Moreover, leaders must recognize that it is their responsibility because modern trade agreements show that trade is a “whole of government” activity. For finance ministers, trade and investment is core to their goal of strong, sustainable and balanced growth. Trade and investment opportunities must feature centrally in individual country plans. The G20’s job is thus to create the framework for win-win trade and investment opportunities. It must avoid perpetuating a system that is stuck in a zero sum world. Only the G20 can give the trade and investment Cinderella the happy ending it deserves and that the world desperately needs. Thus, however challenging, G20 Leaders and Finance Ministers need to take on the task of support a global trade and investment framework that is fit for the 21st century. If not the G20 who? If not now, when? ■

A BROAD PUBLIC ENGAGEMENT REMAINS A MISSING LINK. INDONESIAN TRADE MINISTER SAID AT THE G20 WORKSHOP IN BOAO FORUM COCHAIRED BY THE CCPIT AND INTERNATIONAL CHAMBER OF COMMERCE THAT THE PUBLIC MUST BE CLOSELY ENGAGED IN THIS PROCESS. THERE IS A GROWING DISTRUST OF POLICY MAKERS PARTICULARLY IN SOME MARKETS ON THE CONSTRUCTIVE ROLE OF TRADE IN GROWTH AND DEVELOPMENT.

Cherie Nursalim is Chairman of Three on the Bund and Vice Chairman of GITI Group, a diversified group with real estate development, manufacturing and consumer lifestyle presence in Asia Pacific. She is an executive board member of International Chamber of Commerce and serves on the Academy and Research boards. She sits on International and Asia Advisory Boards for Columbia University and MIT Sloan, and Chairman of the United Nations Global Initiative SDSNSoutheast Asia. She serves on the University of Indonesia Research Center for Climate Change, Singapore Science Center boards and is Chairman of Tsinghua University Southeast Asia Alumni. Dr. David Nellor is an adviser to the GITI Group. Concurrently, he is Adjunct Professor at the Lee Kuan Yew School for Public Policy, National University of Singapore and an economic policy consultant. Dr. Nellor had a 24-year career with the IMF focusing on emerging markets especially in Asia. He also has experience in the institutional funds management business. Since 2010, Dr. Nellor has worked as an independent business and policy consultant in Jakarta, Indonesia. He has advised Indonesian government officials as well as worked with Indonesian and multinational companies in South East Asia and China.

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ICC United Kingdom’s Official G20 Publication

Emerging Markets Authored by: Julian Kassum

A shifting agenda for emerging markets

ifteen years ago – before Facebook even existed – an economist from Goldman Sachs created the term BRIC to draw attention to the irresistible rise of Brazil, Russia, India and China. Along with the surge of social networks, the spectacular shift of global economic power from developed nations towards emerging markets is one of the deepest transformations at play in the early 21st century. In the period between 2008 and 2013, emerging economies accounted for over 60% of world GDP growth. The Chinese G20 summit, to be held in Hangzhou in September 2016, should have been yet another symbol of the growing clout of emerging markets. Instead, things have begun to go south for much of the Global South in recent months. The end of the commodity super-cycle, China’s deceleration, currency volatility as well as episodes of political instability have placed emerging economies in a new state of vulnerability. Brazil’s GDP shrunk by 3.8% in 2015 and is expected to suffer a similar fall in 2016. China’s slowdown is affecting growth prospects for the rest of Asia, and even for global trade as a whole. In Turkey, political turmoil is adding to economic uncertainty. Only India is thought to be an exception. In fact, the current setback of emerging markets is relative – as of last April, the International Monetary Fund expected them to grow by 4.1% in 2016, compared with 1.9% for advanced economies. Still, the new state of play is widely scrutinized by the financial community, which increasingly look at emerging markets as risky investment. What has been less discussed, however, is what the downturn means for the real

economy and the businesses operating in these markets. Here, it is worth examining the case of Brazil, a shining star only a decade ago and now the epitome of the fall from grace of emerging economies. Unemployment nearly doubled in less than two years, while GDP per capita fell by 10% and inequalities have started to rise again. The Brazilian crisis has made evident that its past golden decade of growth, fueled by a winning mix of commodity exports and domestic consumption, did not solve some of the country’s underlying ills. A certain degree of complacency may have delayed some important reforms that could have made the current recession less painful. The need for reform is now back on the Brazilian agenda, with a renewed sense of urgency. One broad objective is to get public finances back under control and raise overall productivity. From a private sector perspective, a priority should be to reduce “Brazil cost”, an expression used to describe the high cost of doing business in Brazil, which results from excessive bureaucracy, a complex tax system, and high interest rates. Long-term productivity gains will also require greater investment in education and physical infrastructure. Another set of reforms is aimed at improving the capacity for the private sector to harness sources of growth abroad. Brazil is the world’s 9th largest economy in nominal terms, but ranks 25th as global exporter and accounts for less than 1% of world trade. Only a handful of Brazilian companies can be considered as multinational enterprises. To improve its global standing, Brazil has started to sign new trade and investment

THE CHINESE G20 SUMMIT, TO BE HELD IN HANGZHOU IN SEPTEMBER 2016, SHOULD HAVE BEEN YET ANOTHER SYMBOL OF THE GROWING CLOUT OF EMERGING MARKETS. INSTEAD, THINGS HAVE BEGUN TO GO SOUTH FOR MUCH OF THE GLOBAL SOUTH IN RECENT MONTHS. 24 ❙ iccwbo.uk

agreements, and the private sector is pushing for a new innovation agenda as well as greater access to long-term financing. The challenge for Brazilian society is that all these reforms need to happen against a backdrop of negative growth and public spending cuts. A practical solution is to focus first on measures that have a rapid effect on companies’ day-to-day lives and a limited fiscal impact, such as de-bureaucratization measures, since the government cannot afford to raise taxes or lower them at this point in time. Another cost-effective effort involves the importing of international best practices, with the aim of improving the overall business environment. Beyond the traditional indicators found on the Doing Business index of the World Bank, in which Brazil ranked 116th out of 189 in 2016, a new upgrade is needed in areas such as anticorruption, intellectual property and environmental sustainability. This will have two positive impacts. First, it will make the Brazilian market less risky and more attractive to international investors. Second, it will make domestic companies more competitive on global markets, as they start to incorporate world-class standards, which are increasingly becoming the norm in advanced economies. The agenda has shifted for many emerging economies. The challenge is no longer to manage abundance - of demand, capital and global attention – but to demonstrate inventiveness and reactivity in the face of shifting conditions. What is at stake is not only the capacity for emerging economies to grow at faster rates, but their ability to do so in a sustainable way, and for the benefit of all their citizens. ■

Julian Kassum is executive director of ICC Brazil, the Brazilian national committee of the International Chamber of Commerce, based in São Paulo. Formerly, he held the positions of executive director of ICC Argentina, consultant for the World Economic Forum, compliance officer for Total S.A, and policy manager at ICC’s International Secretariat in Paris. He graduated from Sciences Po in Paris.

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TRADE FINANCE IN A CHANGING WORLD

ICC UNITED KINGDOM’S ANNUAL TRADE FINANCE CONFERENCE TOPICS WILL INCLUDE: ●

Global banking and finance priorities

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Global trends and practical insights

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Policy, regulations and implications for growth

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Implications of Brexit on international trade finance

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Technology, innovation and the future

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Technical challenges and new developments

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ICC priorities for 2017

THURSDAY 8 DECEMBER 2016 LONDON BOOK NOW for up to 45% off early bird discounts: events@iccwbo.uk

There is nowhere better than London to host an ICC trade finance conference. The UK is the number one exporter of financial services with 250 foreign banks, £6.2 trillion of assets under management and the largest volume of financial trade transactions whilst ICC is a leading source of trade finance data, and UCP rules govern $2trillion of world trade across 63 countries. You can expect a line-up of world-class experts, VIP speakers, practical and interactive sessions, client and industry insights, networking and client opportunities.

ICC United Kingdom’s Official G20 Publication

UK Businesses Authored by: Phil Smith

What businesses need: A view from the regions

or too long, I believe the regions of the UK have been somewhat forgotten as London became too dominant, both politically and economically. Thankfully, and not before time, the political autonomy pendulum is swinging towards devolution-increasing power for regional communities like here in the South West- and away from London and Whitehall. The engine of the UK has seemed to me to be running on a single cylinder with a disproportionate amount of the power, influence and economic growth coming from London and the South East. We hope this shift in political control to the regions of the UK will be followed by a strengthening of the economies of the great regional cities of Britain such as Bristol, Manchester and Birmingham to the benefit of UK plc. This is why the Chancellor of the Exchequer has been extolling the virtues of the so-called “Northern Powerhouse”. The North of England, of course, has important sectors of manufacturing and large centres of population. If you judge from the number of people in many of these areas who voted to leave the EU recently, it is clear that many believed they had previously been ignored by government policy and messages emanating from London. Here in the South West, I am pleased to say we too are seeing local government following the devolution path and looking to appoint elected Metro Mayors. At the same time, as part of those mayoral packages, councils are receiving major financial assistance from central government towards costly infrastructure developments, which will be the springboard for regional business and economic growth. ›

WE ARE NOW SEEING PEOPLE, PARTICULARLY IN THE CREATIVE SECTOR, MOVING OUT OF LONDON TO LIVE BY THE BEAUTIFUL COASTS OF DEVON AND CORNWALL DUE TO RAPIDLY IMPROVING BROADBAND COMMUNICATIONS AND MORE AFFORDABLE ACCOMMODATION. ❙ 27

ICC United Kingdom’s Official G20 Publication

UK Businesses

› Though it gets on with its business quietly, I would say that the South West of England is already a powerhouse in its own right. As a case in point, the South West is home to 25% of the UK’s aerospace industry and can claim world class producers of engines, wings, undercarriages and helicopters in Rolls Royce, Airbus and Agusta Westland amongst others. Indeed Bristol is the only large English city, outside of London, which actually makes a positive financial contribution to the UK budget. The South West benefits from marvellous creativity which is being encouraged by the fact that the region increasingly attracts talented people due to work opportunities and high quality of life. That creativity is exemplified by the BBC in Bristol, the home of the corporation’s world class Natural History Unit. We are now seeing people, particularly in the creative sector, moving out of London to live by the beautiful coasts of Devon and Cornwall due to rapidly improving broadband communications and more affordable accommodation. Travel is also a factor with Bristol, for instance, soon to be just over an hour from central London via a new electric train service. The city also boasts a vibrant regional airport and, sitting at the confluence of the M4 and M5 motorways, it is within an hour of Heathrow. Bristol Port promotes this strategic positioning with its ability to reach 50 million of the UK’s population within a two and a half hour’s drive. I think that Brexit gives the South West region, with more than its fair share of ‘Britishness’ in its quality product range, a great opportunity to take advantage of a new global trade order. We have fantastic food and drink brands with Thatchers cider now 28 ❙ iccwbo.uk

selling in the United States and our world famous cheddar cheeses being exported to Korea and France! Internationally recognisable brands such as Superdry, Dyson and Mulberry also have their headquarters here. We are eagerly anticipating the final investment decision by EDF so that construction can start on Europe’s biggest construction project, the nuclear energy plant at Hinkley Point in Somerset. The benefits of this project to the region are potentially enormous with an estimated 25,000 jobs and the opportunity for local companies to become involved in the supply chain of this £18 billion development. In the medium term, I hope that Hinkley will give the South West and the United Kingdom huge opportunities to develop a world class and exportable nuclear industry through the expertise developed in the design, construction and operating of this plant. And as we seek to develop more sustainable energy sources, the wind, wave and tidal power in the South West can also be the platform for a leading global industry. The River Severn flowing into the sea at Bristol has one of the most powerful tides in the world, and work has already started to explore how that huge and consistent water power could be harnessed. For all these reasons, I think that the South West is well positioned to build on its powerhouse capabilities. We need the ambition and confidence to trade throughout the world and shout about it. We also need the control afforded by local devolution to drive change for the better in our economy and communities. ■

Phil Smith was educated in Caerphilly and the University of Exeter and began his career with Halliburton Inc as an offshore engineer in the oil industry. After graduating with an MBA from London Business School and the University of California in the mid 1980s, he moved on to mergers and acquisitions in the corporate finance department of an investment bank based in the City of London. In 1995 Phil moved to Bristol to become the CEO of the West of England Business Link Provider. In 2003 Phil took on his current position as MD of Business West, which operates Bristol, Bath & Glos Chambers of Commerce, and holds various public sector contracts, including UKTI for the whole SW. His other roles are: Chair Business Advisory Group of the West of England LEP Chair South West Regional Venture Capital Fund Director Gloucestershire Enterprise Ltd Chair Advisory Council of the School of Business & Entrepreneurship, Royal Agricultural University Member West of England ESIF Committee. Chair Nuclear South West Industry Network Member International Chamber of Commerce UK Membership Council Member UWE Faculty of Business and Law Advisory Board Member National ERDF Evaluation Board

ICC UK

UK Brexit Authored by: Peter Hirst

The future of the UK as an arbitration hub post-Brexit

rbitration has a key role to play in the development of a global business community, it enables commercial, neutral, reliable and enforceable dispute resolution between global trading parties. While certain arbitral bodies and rules are preferred by certain sectors, and disregarding investment treaty arbitration for now which is a separate issue, it is fair to say that the leading global institutions notably the ICC, LCIA, HKIAC and SIAC, all serve the global business community well. While arbitral institutions have a role to play, arbitration still relies on the courts of the ‘seat’ and enforcing jurisdictions to support the arbitration and to act in circumstances where the tribunal is unable to (for example in compelling attendance of witnesses and crucially in enforcing awards). As global business digests the potential fallout from the UK’s historic vote to leave the EU, thoughts inevitably turn to the impact for our own jurisdictions and sectors and for London’s future role in the global arbitration community. First, let’s note that we do not know what the UK’s relationship with the EU will be in terms of free movement of goods, services etc. going forwards, it may well take some time for it to become clear what the UK wants, let alone what it can negotiate. Let’s then move on to remind ourselves of some key drivers behind London’s long-standing success as an arbitral hub: 1. London is a global, not a European arbitration hub International contracting parties do not choose London as an arbitral seat because of the UK’s ties with Europe. They choose London for a variety of reasons not least being the pro-arbitration stance of the English & Welsh judiciary (Scotland and Northern Ireland not having been tested to the same extent). The judiciary have shown again and again their support for arbitration and its value as a dispute resolution mechanism of choice. The Arbitration Act 1996, though not perfect, provides a solid basis for both ad-hoc arbitration and as the curial law supporting institutional arbitration in London. The choice of London as an arbitral seat is often coupled with the choice of English substantive law. This was the case prior to the UK joining what is now the EU and there is no reason why it should change post-EU. English contract law is a recognised, global standard and that remains the same.

2. Arbitration community While there are globally a bevy of highly intelligent, trained and qualified lawyers, experts, arbitrators and all those who participate in the arbitral process, it cannot be doubted that London has more than its fair share. Where globally English law remains prevalent as a choice of law between both English and non-English parties, the availability of English-qualified (and many dual qualified) practitioners and others with expertise in key areas within this jurisdiction makes the UK attractive for the resolution of important disputes. 3. The New York Convention The success of arbitration globally is in large part down to the impact of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards which enables arbitral awards to be recognised and enforced in contracting states globally on a consistent basis (with some exceptions of course). The UK’s participation in this regime was never dependent on its membership of the EU and will not be impacted when it ‘leaves’ (whatever form that takes). 4. Leading by example Not all arbitral centres are members of the EU – Switzerland, Singapore, New York to name but a few – they have the above characteristics and are either long-standing, flourishing (or both) arbitration hubs. The one area where it is fair to say that the EU has impacted London’s arbitration practice has been the restriction on the courts’ ability to order anti-suit injunctions stopping litigation brought in contravention of an arbitration clause in another member state court (following the European Court of Justice’s West Tankers decision). The premise of this was respect to the right of a member state court to make its own decision on jurisdiction where it was first seized (with the underlying thread that it would make the right decision and defer to arbitration where appropriate). Even where the various ways in which the UK could exit the EU are still being discussed (and will be for some time it seems), it seems clear that the EU will no longer ‘control’ the UK’s laws and, as such, this deference to other member state courts will fall away thus re-invigorating the anti-suit injunction. This may, for many, be seen as a positive step for the

development of arbitration in the UK and indeed make London an even more attractive arbitral seat as the courts will have an extra power to protect the parties’ interests and enforce their arbitration agreements. Looking at the broader impact of the UK’s decision, it is as yet unclear whether it will lead to the implosion of the EU as we know it, or to quite the opposite, a closer ‘state of Europe’ legally and politically. The fallout from either heaps more uncertainty on top of that already in existence but it may offer further opportunities for London as an arbitral centre – where previously countries may have seen other European jurisdictions as a neutral place to arbitration, the closer their ties the less neutrality there will be, both real and perceived. That is not to impugn the impartiality of any judge or national court, but it is fair to say that some questions of impartiality have always been about perception. By way of example, say, US and Italian parties may currently opt to arbitrate in France as a neutral jurisdiction, but where France and Italy are effectively in one European state, perhaps London being ‘on the outside’ may be a more attractive proposition. In a market where we need to focus on ‘What’s the best that can happen’ we must remember that London’s strength in arbitration was never based on its membership of the EU, there is no reason for the UK’s ‘leave’ vote to impact it and, in fact, it may present new opportunities for London to forge ahead. ■

Peter Hirst is the Co-Chair of Clyde & Co’s Global Arbitration Group. Peter has arbitrated and litigated in more than 50 international jurisdictions, from the Far East, Middle East, Central Asia, North Africa, US and South America where he has wide a variety of experience in all arbitral institutions and areas of commercial law. As well as being Co-Chair of the Global Arbitration Group, Peter also leads the Clyde & Co Latin America team in London and is a registered foreign lawyer of the Brazilian Bar (OAB). Peter sits as an arbitrator and mediator and, as well as being an accredited CEDR mediator, he is a Fellow of the Chartered Institute of Arbitrators.

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ICC United Kingdom’s Official G20 Publication

Company Tax Authored by: Ian Hyde

Resolving company tax disputes: Evaluating MAP

Resolving international tax disputes is a core aspect of business – ensuring strong counterparty relationships are maintained. Following the recommendations of Action 14 of the OECD’s Base Erosion and Profit Shifting (BEPS) Project, which deals with dispute resolution, the International Chamber of Commerce (ICC) United Kingdom and Pinsent Masons investigated the practical aspects of using the mutual agreement procedure (MAP) and arbitration processes when resolving international tax disputes, through a survey (the “Survey”) of large UK corporates. Ian Hyde, Partner at Pinsent Masons, explains

he OECD’s BEPS initiative will re-shape many well-established practices in international tax. As these new practices gradually develop, an increase in disputes between tax authorities over taxing rights and the quantification of profits, is predicted. Two provisions of the BEPS action plan under Action 14 should help multinationals that regularly find themselves in dispute over international transactions with one, two or more tax authorities. Firstly, twenty countries – including major players in international business – have committed to work together to establish mandatory binding arbitration (MBA) provisions in their treaties. Secondly,

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there is a commitment to minimum standards and best practices for dispute resolution. However, in order to be effective at resolving international corporate tax disputes, it is crucial to understand what companies need. As such, ICC United Kingdom sought to investigate the practical experiences and barriers companies face around resolving international tax disputes, specifically through the use of MAP or Arbitration processes. It did so through a survey conducted by Pinsent Masons. The Survey The Survey, which collected data based on large UK-based international corporates was

conducted between April and June 2016 in order to understand the experiences of UK corporates when attempting to resolve international tax disputes. The data – which was based on 58 international tax disputes – focused on the practical experiences of the current MAP and arbitration processes based on the OECD Model Tax Convention and the EU Arbitration Convention (EUAC). It did so in relation to disputes between the 20 countries that have agreed to commit to mandatory arbitration. Conducted both online and through telephone conversations with Pinsent Masons, the Survey topics included issues engaging double tax agreements and experience of the MAP. The Survey also sought respondents’ views on the OECD’s proposals under BEPS Action 14 to introduce an optional provision for a MBA procedure as part of the MAP and for minimum standards (Minimum Standards) to be introduced for disputes resolved through the MAP. The Minimum Standards largely focus on the commitment by contracting

states to behavioural changes when dealing with MAP disputes (e.g. commitment to timely resolution, ensuring competent authorities have requisite authority and sufficient resources etc.). The OECD intends to introduce a peer to peer review procedure to act as a deterrent to prevent contracting states failing to comply with the Minimum Standards. Flagging concerns Not surprisingly for UK corporates, corporation tax was by far the most commonly disputed tax, while transfer pricing was overwhelmingly the most frequent issue in dispute. Disputes about liability for tax (residence/permanent establishment issues) also regularly arose. However, the Survey highlighted a series of practical problems that are encountered, particularly when trying to use the MAP. Not only did the Survey highlight that current compliance with MAP obligations – and application of the Manual on Effective Mutual Agreement Procedures (MEMAP) – is variable, it also identified several practices that discourage resolution of international tax disputes through the MAP, by imposing barriers that prevent or delay its effective use. For instance, several corporates cited issues invoking the MAP or the EUAC in Italy. Corporates mentioned complex interactions between Italian domestic processes and the MAP, whereby it was not possible to invoke the MAP while domestic processes for dispute resolution were in progress. However, once domestic processes had completed, the MAP could not be invoked on the basis that a decision made in the Italian courts was considered final, with the result being that the MAP could no longer be pursued. By contrast, experiences in Spain have shown that domestic processes are paused when the MAP is invoked and are not resumed until the MAP has been completed. It was also reported that in Italy MAP/ EUAC settlements would attract significantly higher penalties than would apply to a resolution through administrative processes. In practice this meant that resolution through the MAP was likely to be uneconomic compared to accepting a level of double taxation arising from a domestic administrative settlement. What’s more, instances were cited of German tax authorities informing taxpayers that the adjustment being sought would be considerably greater if a claim to the MAP

were made, and of proposing contractual waivers under which those rights were then foregone. This type of behaviour discourages the use of the MAP and is, quite rightly, contrary to the EUAC Code of Conduct. Lengthy processes Crucially, the Survey underlined that UK corporates are concerned that the current process to resolve international tax disputes is too lengthy. Given many UK corporates encountered unreasonable delays in attempting to resolve international tax disputes, there was a broad consensus that the time taken to resolve disputes needs to be addressed in the Minimum Standards. Indeed, many respondents suggested that an actual deadline for resolving tax disputes should be introduced. The Survey produced a number of examples where contracting states had been slow to resolve a dispute through the MAP. Belgium, Ireland and Italy were mentioned. In one case it was reported that a similar tax dispute arising between the UK and each of Belgium and the Netherlands took two years longer to resolve in Belgium than the Netherlands. Some companies even suggested tax authorities seemed to be using deliberate tactics to hamper progress, such as unreasonably denying qualification to enter the MAP or arbitration processes. There is no doubt that variable experiences across countries are a reality, however, it is unknown whether the causes are matters of deliberate tax authority practices or other matters such as resourcing levels and training. Room for improvement The Survey did highlight positive feedback on some of the OECD’s proposals, as well as areas for improvement. There was very strong support for a MBA procedure with 100% of respondents considering that the introduction of a MBA procedure is either “necessary” or “desirable”. Ultimately, UK corporates consider that a MBA procedure is an essential safeguard and that either one of the contracting states, or the taxpayer should be able to call for a dispute to be resolved through arbitration. Furthermore, given the obstacles that UK corporates encounter when trying to resolve international tax disputes – coupled with being entirely at the mercy of how

THE SURVEY PRODUCED A NUMBER OF EXAMPLES WHERE CONTRACTING STATES HAD BEEN SLOW TO RESOLVE A DISPUTE THROUGH THE MAP. contracting states choose to conduct themselves – it is unsurprising that there was clear support for taxpayers having greater involvement in the dispute resolution process. Indeed, over 90% of respondents considered that taxpayers should have an independent right to participate formally in the arbitration process, including the hearing before the arbitrator. In general, corporates welcome the introduction of the Minimum Standards but remain concerned that the effect of new robust Minimum Standards will be limited without effective enforcement mechanisms to ensure compliance by all contracting states. Overall, the Survey generated some interesting and informative results, and provided a clear indication of the current problems in the international dispute resolution process, as well as how these weaknesses might be addressed. Clearly, with more robust minimum standards and an effective MBA procedure, we can hope that when disputes arise, contracting states will be encouraged to actively engage with taxpayers to reach a satisfactory and timely solution. ■

Ian Hyde specialises in tax litigation, representing clients in all aspects of tax risk and tax disputes, including alternative dispute resolution, appealing to the Tax Tribunal and the higher courts, tax investigations and in tax related commercial disputes including tax related professional indemnity matters. Ian acts for a wide range of clients and on a range of direct and indirect taxes including tax avoidance structures, VAT, customs duties, aggregates levy and pensions tax issues. Ian is a CEDR accredited mediator.

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ICC United Kingdom’s Official G20 Publication

G20 Roundtable

Interview: Fred Osborn Following the International Chamber of Commerce (ICC) United Kingdom’s roundtable held in March, debating how business and government can best collaborate to deliver global growth, Fred Osborn – National Chairman of the British International Freight Association (BIFA) – talks to GTR about the nuts and bolts of trade, and why it is important to invest in an environment that is conducive to trade.

Q: What are some of the issues impacting the global freight industry? Fred Osborn: Many countries – for instance those around South East Asia, or Africa – see their customs authorities as a trade barrier instead of a trade facilitator. Certainly, current border approaches are very fragmented, with multiple bodies exercising different controls and with little coordination – slowing down the movement of goods across the world. Even in the UK – where the government does at least seem to understand and recognise the problem – we have the HMRC, Border Force, Defra and Trading Standards, as well as other bodies, which leads to incoherent approaches to trade. Of course, exacerbating the problem is the fact that many border authorities – particularly those in the emerging markets – use manual and paper systems, which not only means a greater chance of human error, but also makes it harder to harmonise systems. Q: What more could be done to remove such obstacles and facilitate trade? FO: There is no doubt that the harmonisation of systems and procedures should be one of the top global priorities. We need to re-introduce a body like the Simple Trade Procedures Board (SITPRO), which was a UK non-departmental public body. It focused on the removal of barriers to international trade through the simplification and harmonisation of trade procedures. SITPRO worked well because there was one central focus point to go to – and exporters, importers, and agents could access information easily. Unfortunately, SITPRO was closed during 2010 and there is no longer such a body to go to. Creating a similar body – or at the very least boosting the information flows between existing authorities – could ease the delays and challenges facing importers and exporters. Of course, the harmonisation of procedures requires a greater focus on the maximization of technology globally. In particular, this would help with customs information. Technology would streamline processes surrounding tariffs and local legislation – and, in turn, this would avoid delays. 32 ❙ iccwbo.uk

Q: The freight logistics sector is the cornerstone to global trade. Besides the introduction of a single body to harmonise processes, is there anything government could do to help the freight industry in particular to facilitate trade? FO: It would help if governments and authorities could support firms who demonstrate their compliance with the Authorised Economic Operator (AEO) – an internationally recognised mark indicating that your role in the international supply chain is secure, and that your customs controls and procedures are compliant. This would create more trust and eliminate the need to go through arduous controls at borders – meaning that trade could flow more smoothly for many companies worldwide. Q: The Trade Facilitation Agreement has the potential to transform the global trade landscape, yet needs support. What could we do to help get it ratified? FO: The British International Freight Association (BIFA) is here to facilitate the movement of goods between manufacturers and exporters, and to streamline processes. However, UK exporters often take the easy option and trade either with the EU (where there are no trade barriers) or they trade on an “ex works basis” – where the seller is only required to make goods ready for pickup at their own place of business. The Trade Facilitation Agreement, by helping to make international trade seamless, could encourage UK exporters to set more ambitious trade and expansion goals. Which, of course, boosts business for us in the freight industry, but also provides UK companies with new partners, new markets, and many opportunities to grow their companies. We need to engage UK companies in an industry dialogue, which will raise awareness of the Trade Facilitation Agreement and its benefits. Q: Of course, helping corporates become aware of the benefits of global initiatives, such as the Trade Facilitation Agreement, is part of the role of ICC. What role can ICC play for the freight industry? The communication between business and

government – whereby business can voice its concerns to government and government can, in turn, galvanise and gain the support of business – requires an interpreter. And ICC is able to act as that interpreter. We, at BIFA, are able to sit down with ICC and outline the priorities of the freight industry – whether it be the harmonisation of fragmented processes, or any other concern – and know that it will be relayed to stakeholders and policy-makers. And we are able to learn of the key issues and decisions that are being made at a global level, and provide our perspective. Q: Finally, in your opinion, how could a Brexit impact the freight industry? While BIFA takes a very neutral position on Brexit, there are those within the freight industry who would argue that leaving the

EU could actually generate additional income for the UK’s freight industry – primarily because of the additional charges on borders and trade barriers that would be introduced. However, working in the freight industry does provide you with a view into international trade, and it is important to consider the potential impact of a Brexit on other countries. If we look at Ireland, for example, a large percentage of Irelands’ exports go to Europe, and I would estimate that 80-90% of that trade transits through the UK. The impact on manufacturers in Ireland could therefore be quite significant in terms of the potential additional costs or regulations. In time, I think it could be quite damaging for UK trade, and we also need to consider the knock on effects for places like Ireland. ■

WE NEED TO ENGAGE UK COMPANIES IN AN INDUSTRY DIALOGUE, WHICH WILL RAISE AWARENESS OF THE TRADE FACILITATION AGREEMENT AND ITS BENEFITS.

Fred Osborn is the current National Chairman of the British International Freight Association (BIFA) – the trade association for UK-registered companies engaged in international movement of freight by all modes of transport. In his role, Osborn represents the views of over 1500 UK companies in the logistics and supply chain management sector at the national and intergovernmental level. He was also previously BIFA’s Vice Chairman for two years, and prior to that was Chair of BIFA’s Air Policy Group. In addition, Osborn has been the Co-Owner of X-Pand International Freight Ltd. since 2000.

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ICC United Kingdom’s Official G20 Publication

Digital & Trade Authored by: Ian Kerr

Digitisation of trade is rising in the East and must encompass the globe

lobal trade never stands still – of that we can be certain. Yet despite its dynamism, one of its most frustrating aspects is the conservatism that means most transactions still rely on a medium that has been in use for centuries – paper. While the world it deals with has moved into the digital era, global trade remains stuck with paper and manual processes, failing to garner all the benefits of digitisation in terms of speed, reduced cost and vastlyimproved revenue visibility along with hugely more efficient use of working capital. The result of using paper documents is inevitably that processes are slow, fragmentary, error-prone, labour-intensive, and vulnerable to fraud. And of course, they remain very costly. This seems unbelievable in volatile times when commodity markets are struggling with the slowdown in Chinese growth and

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everyone is looking to pare back costs. Remarkably, many organisations still fail to see all the immediate advantages of moving to digital trade processes, remaining mired in traditional practices that generate complex trails of documents for each of the thousands of transactions a bank must handle. Bills of lading and letters of credit are two extremely important documents, but in a paper system they have to be couriered, manually checked, updated and stored. When banks and trading partners are handling thousands of transactions, keeping track of this stack of paperwork is notoriously difficult. Not only will paper documents go astray, for most of the time they remain inaccessible to those who need to see them and are costly to amend, keep and administer. Establishing where they are and authenticating them, for instance, often proves frustratingly difficult,

quite apart from the constant concerns about security. However, there are signs that practices are changing – particularly in the commodities sector in China and South East Asia where conditions are encouraging a more openminded and innovative approach that is already yielding big dividends. A recent iron ore transaction between BHP Billiton and Angang Steel, for example, was settled through a Letter of Credit (LC) issued by a local Bank of China branch, serving as an example of how transactions can be facilitated through growing digitised trade ecosystem of a company such as Bolero. This was a branch close to the Angang steel mill and the LC was issued in US dollars and concluded electronically. BHP Billiton, such a huge force in this market, is committed to establishing a broad trade community using electronic

transactions and a platform such as Bolero’s can now interface back into Billiton’s ERP environment so that transactions are entirely electronic, right back to reconciliation. Indeed the Bank of China is rolling out its adoption of the Bolero solution to 400 of its domestic and international branches. Furthermore, Bank of China’s Hong Kong subsidiary is adopting the digital trade finance platform – a significant move since the Hong Kong branch is a high volume issuer of Letters of Credit for transactions into China. The wind is certainly blowing in the right direction in the region. Last year, the Hong Kong Financial Secretary, the Hon John C Tsang, when moving the Second Reading of the Appropriation Bill 2015, said the Hong Kong government would explore the use of electronic letters of credit in cross-border trade, with a view to reducing costs. This bodes well. The electronic presentation of digitised trade documents and the adoption of multi-banking trade finance platforms will supercharge Hong Kong’s development as a major base for regional treasury centres, which is its government’s aim. In Europe too, moves are afoot with the Brussels-based World Customs Organisation examining how it can move to digital solutions to facilitate trade around the globe. Indeed, the ICC itself is working on a framework to enhance cross-jurisdictional legitimacy for electronic transactions, thereby boosting confidence in their use. Such a forward-thinking posture needs to be more widely adopted because although the signs are promising for the digitisation of trade, particularly in the East, we are still just scratching the surface. The world we need to move into is one where every business and institution engaged in trade has its outward-facing digital niche, interfacing at the press of a few buttons with all its customers, partners, counterparties and service providers. This will encompass every organisation from carrier booking networks, cargo release solutions, document preparation environments, “Know Your Customer” applications, sanctions-checking databases and customs gateways, along with systems using the Internet of Things to track cargo. The vision is an efficient world of straightthrough processing that is capable of fully-embracing all the advances and the as-yet unproven applications such as

blockchain and other technologies. Achieving this will require a combination of education and awareness, plus the support of banks. In addition, customs authorities and governments need to follow the approach showing promise in Hong Kong, Singapore and elsewhere. Nor can solutions vendors just sit back and bemoan the lack of adoption. Their solutions, like Bolero’s must focus on co-operation and inter-operability. The great Grace Hopper, pioneer computer scientist, is often quoted as saying that the most dangerous phrase in the English language is “We’ve always done it this way”. It is hard to disagree with the sentiment, but also difficult to avoid the feeling that her warning should be up on the wall of all the banks and organisations involved in trade transactions who stick with paper and manual processes when the rest of the world forges ahead into the digital era. ■

WHILE THE WORLD IT DEALS WITH HAS MOVED INTO THE DIGITAL ERA, GLOBAL TRADE REMAINS STUCK WITH PAPER AND MANUAL PROCESSES, FAILING TO GARNER ALL THE BENEFITS OF DIGITISATION IN TERMS OF SPEED, REDUCED COST AND VASTLY-IMPROVED REVENUE VISIBILITY ALONG WITH HUGELY MORE EFFICIENT USE OF WORKING CAPITAL.

Ian Kerr was appointed CEO of Bolero in May 2014. He has over 25 years’ experience in financial technology in a range of organisations including NCR and IBM and has been based in the US and Singapore during his career. More recently Ian was the CEO of Level Four Software who were acquired by Clear2Pay in 2011 with Ian leading the integration with two other companies to form a specialist payments testing business unit. Ian joined Bolero from Creditcall, a growing PSP gateway and payment technology company, where he was COO. Ian has the responsibility to lead Bolero through the next phases of global growth through the development of the company’s digitised trade solutions. Ian holds a BSc from the University of Manchester Institute of Science and Technology and is a member of the Chartered Institute of Marketing.

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ICC United Kingdom’s Official G20 Publication

Cybersecurity Authored by: Allen Dixon

Empowering Cybersecurity providers Cybercrime is a truly global issue – having no respect for either sector or geographic boundaries. In response, cybersecurity has become a fast-growth industry, although it’s one that needs to stay ahead of the game. Collaboration is key, says Chris Southworth, Director at the International Chamber of Commerce (ICC) in the UK, and Allen Dixon, International Intellectual Property & Technology Consulting.

he UK’s growing number of cybersecurity companies have certainly not opted for the quiet life. While enjoying increasing demand for their services, they must keep pace with rapidly-changing global threats, as well as the demands of a fast-evolving industry. They also occupy a world of screaming headlines, as cybersecurity takes its place alongside terrorism and pandemics as one of society’s great threats. This is especially the case in the corporate world, where the threat of data security breaches is very real and very worrying. Cyberattacks are costing businesses between US$400 billion and US$500 billion a year, and this doesn’t even include the large number of attacks that go unreported. Given this, demand for cybersecurity professionals grew by almost 70% between 2012 and 2015, and cybersecurity companies will continue to flourish as cybercrime persists. Remarkably, the cybersecurity market reached US$75 billion in 2015 and is expected to reach US$170 billion by 2020. That said, such rapid growth also points to a volatile environment where new firms may not necessarily have long-term security or certainty—which points to the importance of cybersecurity companies looking for ways of empowering themselves at a global level. Indeed, in an unpredictable security environment, these companies clearly need to be represented at the decision-making table and be engaged in international business issues.

Not all plain-sailing Certainly, the increase in cybercrime has led to a surge in the number of organisations practising cybersecurity, as well as increased scrutiny from government and a growing number of diverging industry standards. There are a variety of certifications, standards and practices available to providers – and little consistency with respect to the best approaches. What’s more, these practices are currently splintering rather than converging. Of course, cybersecurity companies need to keep up with cybercrime and industry developments. The sophistication of cyber-attacks has evolved, and cybersecurity companies must incorporate the latest technologies to counter these threats. In our view, cybersecurity companies should collaborate more closely with private-sector companies, industry groups and government stakeholders in order to agree on more common sets of best practices and standards across the industry. An important part of this approach needs to be collaboration not only across the burgeoning cybersecurity industry, but also with the broad range of industries and companies that it is trying to protect. In order to fully understand the threats and encourage standardisation, cybersecurity industry stakeholders therefore need to be an important part of this ongoing dialogue. The benefits are manifold – for instance, providers can have a say in the decisionmaking process concerning cybersecurity regulation, and in the frameworks and standards that are developing in this area. Finding a voice While there are many challenges facing cybersecurity providers, the changes underway are, in fact, not out of their control. These companies can help facilitate and encourage standardisation of the various certifications and practices in the industry. What’s more, they can even exercise their power at a global level to influence policy-making.

CYBERSECURITY COMPANIES HAVE MUCH TO GAIN FROM ENGAGING IN DIALOGUE, AND THROUGH ICC THEY HAVE ACCESS TO A NETWORK OF INTERNATIONAL COMPANIES EXAMINING IMPORTANT ISSUES FACING THE INDUSTRY. 36 ❙ iccwbo.uk

Efforts towards collaboration among corporates will encourage greater harmonisation over different practices. Organisations such as the International Chamber of Commerce (ICC) provide cybersecurity companies with the opportunity to participate in industry dialogue, and also to have their views better represented at the key decisionmaking tables. These critical components in the war against cybercrime can not only help practitioners stay ahead of global issues affecting commerce more generally, but also to keep up to date with developments in cybersecurity regulation, standards and practices. They can also hear about them instantly, rather than after these have become common knowledge – a crucial need in an industry where staying ahead of the game is a fundamental requirement. Cybersecurity companies have much to gain from engaging in dialogue, and through ICC they have access to a network of international companies examining important issues facing the industry. In the fast-evolving world of corporate information security, cybersecurity providers can have an enormous influence – and ICC helps them engage on all kinds of policy, regulatory and industry-practice issues, as they develop. ■

Allen Dixon Allen Dixon is the Managing Director of International Intellectual Property and Technology Consulting, and has previously worked with ICC to author a report on the importance of intellectual property, entitled: ‘Intellectual Property: Powerhouse for Innovation and Economic Growth’, as well as guidelines for the use of intellectual property in business. In addition, Dixon created and manages ‘Ideas Matter’, a consortium of cross-sector enterprises, and small and medium-sized businesses and trade associations that aims to expand awareness and promote the benefits of intellectual property (IP). A privatepractice lawyer, Dixon has advised companies, trade associations and governments on IP and technology issues for thirty years.

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RISING STARS WHO’S IT FOR?

WHY JOIN?

ICC’s UK Rising Stars programme supports young, diverse professionals from a range of sectors to excel in leadership roles by providing opportunities to develop international credentials, attend world class events, build global networks and benefit from mentorship by ICC’s leading experts.

› Improve industry knowledge through

YOUNG ARBITRATION FORUM …a leading forum to network with young and experienced practitioners from around the world, exchange best practice, debate key issues of interest in international arbitration and discuss career development.

YOUNG FINANCE FORUM …is a must for the rising stars of trade finance wanting to learn from the leaders of their industry and be part of an international network.

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practical masterclasses Strengthen leadership skills Participate in world class events Forge partnerships and build global networks Share best practice Identify and develop mentor relationships

Ania Farren YAF Coordinator; Partner, Berwin Leighton Paisner (BLP) Iain Quirk Arbitration Consultant, ICC; Barrister, Essex Court Chambers

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Please contact membership@iccwbo.uk for more information

ICC United Kingdom’s Official G20 Publication

G20 Roundtable

Interview: Terry McGraw Terry McGraw, Honorary Chairman of the International Chamber of Commerce and Chairman Emeritus of S&P Global Inc., discusses the importance of collaboration between business and government.

Q: How important is it for government and business to collaborate, and what is the role of the G20 in this respect? Terry McGraw: The G20 is at the heart of global growth, job creation, and the development of small to medium-sized enterprises (SME). As a means of achieving these goals, the G20 exists to encourage business and government to engage in dialogue and work together – since it is government that sets policy, and business which executes it. In order to affect policy, particularly that concerning regulation and tax, business leaders must focus on involvement, cooperation and coordination with government. In some cases, government and businesses operate separately and are very isolated from each other – but this is to the detriment of global progress and prosperity. At the same time, governments should recognise the important role that businesses play in attracting foreign direct investment (FDI) into their respective countries, and the positive impact this has on growth, employment levels and international trade. In order to increase growth in their respective markets, governments should seek to limit regulatory and tax burdens, and create an enabling environment for business. Q: How can businesses ensure that government listens and pays attention to their concerns? TM: If you want government to pay attention, you must have a clear rationale behind any proposed plan. Business leaders need to consider how their ideas might affect the lives of everyday working people, not just the benefits for their own organisation. What’s more, business needs to have an orchestrated voice – reflecting key concerns and core issues. Not hundreds of conflicting views, but one single loud voice. This is why ICC is so beneficial – it represents the opinion of a significant proportion of the wider business community. Q: What is your main message to international business? TM: One of ICC’s key messages is that you can’t afford to be isolated in an integrated world. Gone are the days when the US, the EU and Japan comprised the bulk of the world’s GDP. Trade is now so diverse and inter-connected that it is necessary to

consider a wider range of markets and partners. We are in the midst of a huge transformational change – with emerging markets becoming increasingly prominent in business and political spheres. In today’s global environment, it is therefore important to find collective approaches to deal with problems. What’s more, innovation and creativity are critical to growth, especially in increasingly competitive markets. The value of SMEs should therefore not be ignored. From a supply chain standpoint, SMEs provide access to the local culture and business talent, and they form an essential part of the value chain. Partnerships with SMEs are mutually beneficial of course – multinationals gain from access to innovation and the diversity of players along the supply chain, while SMEs benefit from their enhanced voice at an international level. Q: What role and influence do you think the UK holds globally? TM: The UK is clearly a major player on the world stage. But the UK will inevitably suffer the consequences of inward-looking policies if it starts to take on an isolationist orientation. It therefore needs to keep up with global developments, including ever-present economic uncertainties and security threats – it cannot afford to be detached. ■

TRADE IS NOW SO DIVERSE AND INTERCONNECTED THAT IT IS NECESSARY TO CONSIDER A WIDER RANGE OF MARKETS AND PARTNERS.

Harold (Terry) McGraw III became Honorary Chairman of the International Chamber of Commerce in June 2016, after serving as Chairman since July 2013. Terry is Chairman Emeritus of S&P Global Inc., having served as non-executive Chairman of the Company from November 2013 to April 2015. Prior to his retirement in 2013, Mr McGraw was Chairman of the Board since 2000, President and CEO since 1998, and served as President and COO since 1993. Mr McGraw joined the Company in 1980 and, under his leadership, the company grew significantly and transformed to focus on credit ratings, benchmarks, and analytics for the global capital and commodity markets.

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ICC United Kingdom’s Official G20 Publication

India Post-Brexit Authored by: Kevin McCole

India: The UK’s big post-Brexit opportunity Kevin McCole, COO of the UK India Business Council, discusses what the UK’s trade priorities with India will look like post-Brexit.

he UK and India’s trade and investment relationship is only set to become ‘stronger and stronger’ following Brexit, according to former UK Business Secretary, Sajid Javid, who visited Delhi shortly after the referendum. The fact that India was chosen as the first stop on the UK’s business engagement with the rest of the world highlights the power of the current relationship between the two nations. The UK is the biggest G20 investor in India, with British businesses employing 700,000 people in India. At the same time, India is the third largest investor in the UK, and Indian companies invest more in the UK than the rest of the EU combined. More than 800 Indian companies currently operate in the UK, employing more than 110,000 people. Potential challenges Although the UK-India bilateral investment partnership is very strong, trade is underperforming. Two-way trade between India and the EU dipped from $98.5 billion in FY 2014-15 to $88.4 billion in FY 2015-16, while UKTI figures show the trade exchange between the UK and India at £16.6 billion. By comparison, since the EU signed a Free Trade Agreement (FTA) with South Korea in October 2010, trade and investments have risen dramatically. The EU is now South Korea’s ninth largest export destination for goods, while the EU is South Korea’s third largest export market. Consequently, it is fair to say, EU trade with India would be much stronger if the EU-India FTA negotiations – which began in 2007 – had been concluded. Once the UK has negotiated its exit from the EU – hopefully with tariff-free access to the Single Market – it will, to quote the Brexit campaigners, ‘regain control’ over its trading relationships. Rightly, India is high on the list of partners with which the UK wants to engage. Of course, FTAs don’t need to be in place for businesses to trade. There is a huge untapped opportunity for UK and Indian businesses to buy and sell with each other right now. Yet, it is true a UK-India FTA would help to unlock the relationship’s full potential. Such a trade deal would be a great prize for both countries, but it won’t come easy.

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The negotiators will need to navigate many of the same issues that exist in the stalled EU-India deal. These include: ■ The elimination/ reduction of tariffs for cars, wines and spirits. ■ Improved access to the Indian public procurement market. ■ Liberalisation in India of service sectors such as legal, accounts and maritime services. ■ Mode 4 – temporary access to the UK for Indian skilled professionals ■ The recognition of India as a ‘data secure’ nation. Opportunity for optimism With political leadership and will on both sides, there is a good deal to be done that will create jobs and growth in both countries. Indeed, there is much cause for optimism, for three reasons. Firstly, one reason the EU-India FTA negotiations have stalled is a lack of engagement at the Ministerial level. That has and never will be an issue between the UK and India. The flow of Ministers in both directions is wide-ranging across departments, and constant. As an example, Sajid Javid’s visit in early July was only six weeks after his last visit to India, and his counterpart, the Indian Minister for Commerce, Ms Sitharaman, was in London at the end of March 2016. The second reason for optimism is that UK and Indian businesses are already tightly entwined, evidenced by the strong investment relationship. Business leaders therefore know the opportunities to be had by a trade deal, and I believe they will show the type of leadership and flexibility needed in support of Ministers and negotiators. Thirdly, to help redraw trade relationships with world-leading countries, like India, the UK Government has set up the Department for International Trade, headed by the Rt. Hon Liam Fox MP, and supported by a team of three ministers, including Lord Price, a former businessman, who has responsibility for trade deals. This shows real intent to make things happen. Time for action At present, there are many untapped opportunities for UK and India businesses to trade and invest. Here are just four examples:

Consumer-focussed products Domestic and consumer-led consumption is a significant driver of both the UK and Indian economies. Although textiles and garments are in India’s top 5 exports to the UK and spices in their top 10, there is little trade in the food, drink, fashion, beauty products, and FMCG goods.. Much more can be done to boost these areas of trade in both directions. Looking into India, UK companies will find a fast-growing, aspirational, and value-conscious consuming class with an affiliation to British brands. Manufacturing There are several manufacturing sectors that offer substantial scope for UK-India innovation collaborations; however, defence and

aerospace are perhaps the most prominent. India has extensive modernisation plans for the defence sector, increasing its FDI in defence to 100 per cent from 26 per cent just two years ago. Occasions for collaboration exist across the spectrum, from the manufacturing of defence products and supply chain sourcing, to commercialising ‘dual-use’ innovations coming out of Indian public sector laboratories. Healthcare Areas for collaboration in this area include biotech, pharmaceutical and healthcare technologies. The UK’s expertise in telehealth and e-health could have applications for India, which suffers from a lack of qualified manpower in rural areas. Additionally, India is currently looking to

roll out universal healthcare – the UK’s NHS system is a prime example of delivery of this level of care, and it would be beneficial for Indian healthcare providers to work with their UK counterparts. It is important that companies do not wait for the Brexit dust to settle and for an FTA to be agreed to do business – the opportunity is now. The negotiation process will be difficult, but there is optimism on both sides that a deal will be agreed. Meanwhile, although an FTA will improve this relationship further, there are many instances where both countries can currently collaborate. ■ For more information about the UK India Business Council, doing business in India as well as live export opportunities for UK businesses visit: www.ukibc.com

WITH POLITICAL LEADERSHIP AND WILL ON BOTH SIDES, THERE IS A GOOD DEAL TO BE DONE THAT WILL CREATE JOBS AND GROWTH IN BOTH COUNTRIES.

Kevin McCole joined the UK India Business Council in December 2008 and leads the membership, consultancy, policy and research teams. He also coordinates the UK side of the UK-India CEO Forum and the UK-India Joint Economic and Trade Committee (JETCO). Kevin joined the UK India Business Council after 19 years in the UK’s Diplomatic Service, where he served in The Netherlands, Malta, Romania and India. In India, Kevin spent three years at the British Deputy High Commission in Kolkata helping UK businesses win contracts and find partners in Eastern India and assisting Indian companies expand into the UK. Kevin also serves on the British Chambers of Commerce’s Global Accreditation Board, and on the UK’s Overseas Business Network Partnership Board.

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ICC United Kingdom’s Official G20 Publication

Thought Leadership Authored by: Agneta Rising

Energy in harmony

roviding enough electricity for everybody to live well is a huge challenge - and one which still hasn’t been successfully met for billions of people. First and foremost, electricity must be made available where and when it is needed. Complexities such as local conditions (geography, climate, population density, infrastructure), and environmental considerations (greenhouse gas emissions, air pollution, land or water impacts) mean that no single generating technology is the best tool for the entire job. A diverse and balanced mix is best, one which works in harmony with the needs of people and the realities of our environment. Tipping the energy scales Fossil fuels still provide the vast majority of global energy requirements for electricity generation, transport and heating. These remarkably versatile and scalable forms of energy have provided the backbone of development since the industrial revolution. The fact that burning fossil fuels releases greenhouse gases which contribute to an accelerated and dangerous rate of climate change is, put simply, a tragedy. The global scientific consensus is that within a few short decades we must significantly reduce the share of fossil fuels in the energy mix, and perhaps find a way to sequester their emissions, if we are to prevent a greater than two degree rise in average global temperatures. This massive endeavour must start building momentum

TAKING THE UK AS AN EXAMPLE, THE PROPOSED NEW BUILD PROJECTS BY EDF ENERGY, NUGEN, HORIZON AND OTHERS WOULD SEE MORE THAN A THIRD OF THE UK’S ELECTRICITY GENERATED FROM NUCLEAR ENERGY BY 2030. 42 ❙ iccwbo.uk

from today, and requires the expanded use of all currently available low-carbon technologies. Nuclear energy, alongside other low carbon options, has a key role to play in meeting the UN’s Sustainable Development Goals, in particular Goal 7 on energy and Goal 13 on climate change. Its 24/7 availability and constant supply means it provides a large-scale, reliable and sustainable supply of low carbon electricity. Of all the individual electricity sources in the International Energy Agency’s (IEA’s) 2-degree scenario, nuclear energy has the largest single role to play. Expanding to supply roughly 17% of electricity by 2050 requires substantial capacity addition far beyond the rate of new build we see today, but well within the historic highs of the 1980s. Nuclear energy is a technology proven at almost any scale. This motivates the case for raising the target for future nuclear energy deployment even beyond that indicated by IEA. World Nuclear Association has developed the vision for the future of electricity Harmony. In this, nuclear energy supplies 25% of electricity by 2050 and forms part of a diverse mix of low-carbon generating technologies. Renewables and nuclear – along with a greatly reduced level of fossil fuel - work together in harmony to ensure a reliable, affordable and clean energy supply. In this optimised energy system the needs for societal development and prosperity are finely balanced alongside those of the natural environment. Global cooperation To grow from supplying 11% of global electricity today to 25% in 2050 will require roughly 1000 GWe of new nuclear capacity, running alongside 250 GWe of nuclear capacity in operation today that will still be in operation in 2050. A quarter (25%) of electricity generation easily fits within the baseload profile of most countries. Although new advanced reactor designs may emerge before 2050, the Harmony proposal could be achieved with existing technology. However, the targets should incentivise the development of new nuclear technologies that would provide increased flexibility and versatility to accommodate the evolution of supply and demand profiles in future energy systems. Rather than focusing purely on technology, it is vital that the global industry identifies

and focuses on demolishing the real barriers to growth. The World Nuclear Association has determined the following objectives as key to achieving the Harmony goal. The global nuclear industry should seek to realise: ■ A level playing field. Where countries introduce technology neutral market frameworks that permit all low-carbon technologies, valuing not only levelised costs, but also system reliability and environmental benefits. ■ Harmonised regulatory processes. Flow-on efficiencies can be achieved with global codes & standards and efficient licensing of current and new technology. ■ An effective safety paradigm. This should increase genuine public well-being by reducing emissions from polluting sources, and ensuring high nuclear safety standards are met. The rates at which new reactors must be constructed in order to meet the Harmony targets are no higher than has been achieved historically. Taking the UK as an example, the proposed new build projects by EDF Energy, NuGen, Horizon and others would see more than a third of the UK’s electricity generated from nuclear energy by 2030. This is the kind of new nuclear build commitment needed to meet the Harmony goals. Industry and government need to work together to ensure that Hinkley and the other proposed new build projects move forward. But for nuclear energy to contribute to a sustainable, reliable, low-carbon energy future will require a worldwide effort. The G20 meetings should continue to provide support for those countries choosing to include nuclear energy as part of their long-term energy strategy. The major differences are the many locations where new construction is needed and the modern landscape of social and economic issues. Every organisation in the established nuclear community - from research, government, regulation, design, operation, decommissioning and waste management - should focus their should focus their roles and efforts overcoming these. To achieve the Harmony goals the global nuclear community must work together in a highly cooperative way. Here the World Nuclear Association is keen to lead the way. ■

Agneta Rising is Director General of the World Nuclear Association, the trade association representing the global nuclear industry. The Association’s mission is to promote a wider understanding of nuclear energy among key international influencers by producing authoritative information, developing common industry positions, and contributing to the energy debate. Prior to this Ms. Rising held the position of Vice President Environment at Vattenfall AB. Ms. Rising is co-founder and former president of Women in Nuclear (WIN). Over the past two decades, Agneta Rising has been appointed by the Swedish government, the EU Commission and the International Atomic Energy Agency to several significant expert and advisory positions relevant to the safety and future development of nuclear power.

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ICC United Kingdom’s Official G20 Publication

Unseen UK Authored by: Justine Currell

Setting the agenda on supply chain transparency

t is clear that international business leaders, in some of the largest economies in the world, have a fundamental duty to root out corruption and all forms of bad business practice. Since its introduction, the UK’s transparency in supply chains provision in Section 54 of the Modern Slavery Act 2015 has generated much interest from businesses and Governments from around the globe. Seen as a world-leading piece of legislation, the provision requires any organisation carrying on a business in the UK, providing goods or services, and with a total turnover of £36m or more to publish an annual statement. The statement must set out the steps an organisation has taken, whether positive or negative, be approved by the board and signed by a director, and published on the organisation’s website with a link in a prominent place on the home page. Some have argued that the legislation is not strong enough because it doesn’t clearly prescribe what actions a business must take. For me, that’s the beauty of it. The legislation is both ambitious and innovative

THE FUTURE IS NOW IN THE HANDS OF BUSINESS. APPROACH THE TRANSPARENCY LEGISLATION IN THE SPIRIT IT WAS INTENDED AND BUSINESS WILL BE ABLE TO DRIVE THE AGENDA.

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– ambitious because it has such a wide reach and innovative because it can be applied effectively across all sectors without being overly prescriptive or burdensome. The key is to enable the right behavioural change rather than creating another tick box exercise that provides room for a minimalistic response. The future is now in the hands of business. Approach the transparency legislation in the spirit it was intended and business will be able to drive the agenda. Fail to take the issue seriously and business could face the prospect of further more onerous legislation that constrains rather than enables them to do the right thing. The fact is that modern slavery has the potential to infiltrate any supply chain and any organisation, regardless of location or sector. The important factor is how business deals with that risk, by having the right policies and procedures in place, applying due diligence and assessing where the risk is greatest. There is no expectation for business to say ‘there is no slavery here’. In fact, that would be naïve and simply wrong. Taking a proportionate and iterative response will allow business to build and strengthen their approach over time. Engaging positively with the legislation and being as transparent as possible will place business in the best position possible. To maximise transparency award winning charity Unseen, in partnership with social enterprise Semantrica, has launched a central registry with business in mind. Supported by Business West, an ICC member,

and the Chartered Institute of Procurement Specialists, who have over 115,000 members, the central registry at www.tiscreport.org has been developed to provide business with a neutral platform to increase their transparency. Because ‘tiscreport’ will not tier or benchmark organisations it gives business the right environment to engage fully and openly with the transparency agenda and to strengthen their response over time. Businesses subscribing to the registry can link suppliers in their supply chain to maximise transparency and will have access to a range of tools and materials such as an intelligent statement builder and KPI tracker, and a community to share good practice. Each will be authenticated to ensure that only genuine statements are filed, providing assurance of the process. And, in filing and paying a small minimum subscription fee of £200+VAT, businesses are also supporting wider efforts to tackle modern slavery. As more countries around the world consider introducing similar transparency legislation the key will be consistency, to avoid business complying with wildly different non-financial reporting requirements across a range of jurisdictions. It’s now for business to show that the UK’s approach can work and that less prescription does not necessarily mean less action. ■

Justine Currell joined Unseen on 1 May 2016 following a 28.5 year career in the civil service. During that time she held a variety of operational and policy posts working across a number of UK Government departments. For the last five years of her civil service career, Justine was the modern slavery senior policy adviser in the Home Office and led on development of the Modern Slavery Act, including the transparency in supply chains provision and business guidance, working closely with UK colleagues. She has joined Unseen to lead the development of the enhanced modern slavery helpline and resource centre and Unseen’s work on the central registry for business transparency statements. Justine will also use her experience and knowledge of working with Ministers to influence other Governments internationally to take action to address modern slavery and, in particular, business supply chain issues.

Contact Chris Southworth, Secretary General: csouthworth@iccwbo.uk

Business is facing unprecedented uncertainty and growing protectionism. The ICC has unrivalled global experience in trade treaties and trade facilitation (as well as arbitration) which will be critical to maintaining and improving the international business environment.” Sir Michael Rake, UK Chairman

1919 Founded 6.5m Members 134 Countries UN Consultative Status G20 Lead Voice $286bn Disputes processed 30%

World trade financed under ICC rules

MEMBERSHIP BENEFITS Join the world’s largest business organisation in advocating free trade Access to international institutions, major summits, events and negotiations A say in shaping the rules and standards that affect your business Access to 3000 experts to help drive innovation and develop skills across your business Provide information, advice and guidance to support supply chains

ICC is uniquely positioned to work across borders, promoting trade and complementing the international work of CBI and other UK business organisations.” Paul Drechsler, President, Confederation of British Industry

ICC United Kingdomâ&#x20AC;&#x2122;s Official G20 Publication

Sustainability Agenda Authored by: Peder Holk Nielsen

Moving the Global Climate and Sustainability Agenda forward through G20

As China assumed the G20 Presidency at the end of 2015, it did so shortly after an unprecedented set of international agreements on Climate Change (COP21), Sustainable Development Goals (SDGs) and Financing for Development (FfD) were reached.

ooking ahead, alongside finance and trade issues, all countries will increasingly look to underpin their economies whilst considering environmental, climate and development. China has first-hand experience of this dynamic. In less than 30 years Chinese economic growth has improved the wellbeing of tens of millions of its citizens and transformed global trade and production. It is now driving economic reforms, with sustainable development key to its future success. It has already advanced a number

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of important strategies and pledged to reduce carbon emissions. Similar actions are underway across G20 members, as they seek to outline their climate change and sustainable development1 contributions through national policies and investments. Businesses are becoming ever more aware of and ever more engaged with this new reality. Companies are seeking to enhance operational efficiencies and value and supply chains; they are focusing more attention on the use of natural resources and environmental footprints and becoming ever more innovative. Strong leadership, courage and determination are all essential if G20 and Business Leaders are to move a shared agenda forward. There are several areas where efforts to enhance the relationship between global policies on the one hand and business innovation on the

other should be focused, if we are to achieve the best possible outcomes. Firstly, G20 energy policies and investments must be central to overall climate efforts. Across all types and forms of energy, combined global energy demand is expected to increase by a third by 2035, the majority from coal, oil and gas. With a global consensus on the need to address climate change, now is the time to accelerate the development and commercial-scale deployment of a range of sustainable energy and low carbon options. For Business, energy is the largest focus area for infrastructure investment. To enable forward-looking investment in reliable, affordable and sustainable energy and the development of innovative solutions by the private sector, long-term, policy frameworks and support remains essential.

This is particularly true for renewable energy, where technologies and projects can take many years to develop and implement. Secondly, with global population expected to reach 9 billion by 2050, we will need to almost double current agricultural output. Climate change impacts such as changing weather patterns will not make it easier to address this challenge, with farmers in developing and emerging economies among those most likely to be affected. We must rethink traditional value chains to help farmers increase crop yield, particularly in areas with marginal land to help enable farmers run economically viable businesses, increase food security and reduce poverty. Traditionally, agriculture and energy are often considered separately and not very well linked, yet agriculture should be seen as a prerequisite for developing new value chains that can make efficient use of agricultural waste products. Facilitating a shift from conventional agricultural patterns to a new, balanced rural development would benefit energy and climate issues; this in turn would have a positive impact on the relationship between urban and rural areas in terms of growth and jobs. Thirdly, annual consumption in emerging markets will rise significantly in the next decade. The way that products are both produced and consumed must become more sustainable – if only to cope with increased demand on natural resources. For example, producing just one pair of denim jeans requires around 11,000 liters of water. Aside from growing societal interest in product sustainability, the vast majority of consumer goods such as textiles are produced in G20 countries, leading to a clear interest both at global and at national level to support growth whilst managing resources. Lastly, combining trade and the environment can be mutually inclusive ways of driving a global sustainable development agenda. In recent years the G20 and B20 have both highlighted and supported efforts to complete the latest round of WTO negotiations and encourage forward-thinking multilateral trade agenda. A timely conclusion of the Environmental Goods Agreement would help in removing barriers to trade in “green” goods, and would include for example the elimination of tariff and non-tariff barriers

on energy and environmental goods and services. Whilst delivering on its mandate to promote global economic growth and strengthen the world’s economy, as a forum for global governance and political leadership the G20 has a unique role to play in contributing to a more sustainable future. G20 and Business leaders must seize this opportunity: Doing so will see growth and innovation support the use of the world’s resources for the benefit of humanity, the economy and the natural environment. ■ Sustainable Development is a term that generally encompasses issues related to addressing poverty reduction, environmental protection, climate change and inclusiveness whilst balancing economic growth. 1

Peder Holk Nielsen became CEO Novozymes in April 2013, and has dedicated his career to industrial biotechnology. Since 1984, Peder has worked in many different parts of Novozymes, shaping the company as it is today and solidifying the market insight and research capabilities that will foster Novozymes of tomorrow. He has led a number of the company’s Divisions, from new business development, to R&D and Sales. Peder holds a PhD and MSc in Chemical Engineering from the Technical University of Denmark and a B.Com. in International Business Management from Copenhagen Business School.

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ICC United Kingdom’s Official G20 Publication

G20 Roundtable

Interview: Cindy Braddon Cindy Braddon, Vice President, International Affairs at S&P Global Inc., discusses the G20, the role of the International Chamber of Commerce (ICC) and the benefits of business being engaged in shaping global governance

Q: How is the G20 relevant for business and why should businesses get involved? Cindy Braddon: The ramifications of not helping governments understand the business implications of their proposed policies can be significant. Government stakeholders and regulators could develop policies that, while initially making sense, are impractical in terms of implementation. Certainly, they might have unintended consequences for the business community. For example, if government doesn’t understand the impact of the anti-corruption rules – which we all believe are fundamental to fighting corruption and money laundering – it could hurt small to medium-sized enterprises [SMEs], and hinder economic growth. It is important that companies provide evidence-based case studies of developments on the ground, so that government can create informed and effective policy. At ICC we are trying to encourage business to be part of the solution – engaging in dialogue and working together with government. This is precisely why it is so important for UK businesses to be represented at the B20 – a coalition that brings together leading independent business associations from G20 countries – as well as be involved with the International Chamber of Commerce. The B20 and ICC aim to help G20 hone in on what actions government and business should take together – for instance, fostering economic growth in emerging markets, which will eventually lead to increased job creation. The B20 Coalition is one part of this, but it shows that we have already come a long way with respect to business representation with the G20. With ICC at the helm, the B20 is getting better and better at focusing its recommendations on issues that matter to the private sector. What’s more, business leaders can use G20 discussions as a foundation for policymaking in their respective countries, and these discussions can strengthen their arguments for moving forward. Q: Why is ICC’s role so important in engaging businesses in dialogue at the international level? CB: With so many industries and different areas of interest, business needs one body to listen to everyone, highlight what is really 48 ❙ iccwbo.uk

important, and then prioritise and relay that message back to government. Business needs a common and united voice and ICC is that voice. Of course, it is not just about government leaders being involved in the process, as they come and go. Discussions must also involve the people in government bureaucracies who are constantly working through these issues. ICC therefore works with government leaders and ministries across the world to help them realise the impact of their decisions. We provide them with the key tools, messages and best approaches to support the ratification and promotion of the TFA. As Roberto Azevedo, Director-General of the WTO, recently pointed out, ICC’s network continues to play a crucial role in the global adoption of the TFA which will come into action when two thirds of the WTO membership – 81 governments – have ratified the deal. We only need 27 more to ratify the deal for it to become a legal obligation on all WTO members to cut red tape at borders. Part of our efforts to do this will involve a communications campaign around “trade matters” – aimed at fighting protectionist instincts that are, unfortunately, emerging around the globe. Q: Are there any significant barriers to the adoption of the Trade Facilitation Agreement? CB: It is a matter of process and about getting the right systems in place at the moment. In some countries, the technology required for digital commerce, for example, is not as developed as it is elsewhere. Part of the ICC initiative is to put a capacity-building plan together and to also help with the implementation of the agreement. Q: Which companies and sectors should take the most interest in this? CB: Any sector that is regulated should be interested in the Trade Facilitation Agreement. Global companies face the challenge that the regulations of one country could affect another in which they operate. G20 is trying to harmonise this in the right way, so that regulation will not impact global distribution systems. It is one of the key reasons why sectors such as the banking, energy, infrastructure, and pharmaceuticals need to be very engaged in the process. ■

THE B20 AND ICC AIM TO HELP G20 HONE IN ON WHAT ACTIONS GOVERNMENT AND BUSINESS SHOULD TAKE TOGETHER – FOR INSTANCE, FOSTERING ECONOMIC GROWTH IN EMERGING MARKETS, WHICH WILL EVENTUALLY LEAD TO INCREASED JOB CREATION.

Cynthia Braddon served as Vice President of International Affairs at S&P Global Inc. – previously McGraw-Hill Financial – from December 2013 to June 2016, prior to which she was Vice President of Global Government Affairs from 2008. She was responsible for advancing the corporation’s global legislative and regulatory and business agenda, increasing brand awareness and facilitating increased federal government sales. In her role, Cynthia led engagement on key policy issues including financial services, trade and business.

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ICC United Kingdom’s Official G20 Publication

Education Authored by: Thomas Paris

Importance of engagement in Future Learning

The new meaning of bringing an Apple to class.

ducation in the past few years has undergone a tectonic shift in response to societal trends. From the early generations born with an iPhone to those accustomed to spending time with a radio the size of a coconut – it is clear that raw content is no longer enough to keep people engaged. Today, in order to create a stimulating learning environment, the role of instructor has become discretionary (at best) and the role of learner essential. You will be hard-pressed to step behind a classroom podium without staring at a fortress of laptops and tablets glaring back at you ready to disprove your history-hewn theories with live updates from fancy opinion articles attempting to break news (and status-quos). Learning on-the-go has now become the highway for digital restructuring for news/social platforms, competitive professionals, and ever-curious teenagers; further fueling the need to protect our friendly “professor” sitting warmly in your

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pocket just one unlock swipe away. However, for all intents and purposes, online learning is very much in its infancy. Success stories in countries like South Korea and Singapore have been tied to the competitive nature of these markets the freshly developed web infrastructure. But let’s look a little deeper. Rampant globalization over the last 20 years in the emerging markets has generated a regionalized need to fervently mimic their Western counterparts and breed a new culture fixated on diplomas and the incessant drive to escalate to the canopy of their respective ecosystems. What does all this mean for the future of the education sector? Engagement. The key to staying relevant will be sustaining interest on vital subjects long enough to keep them away from BBC and Angry Birds, and short enough to stay ahead of the curve to meet dynamic demand for the newest information always available online. The need to be “in the know” has seemingly overtaken the passion to probe into a single topic.

Take the relentless “headline mentality” of Twitter as an example; it is not difficult to imagine a future where the role of traditional instructors becomes replaced with an algorithmic system of automated course authoring based on your interests. We are actually surpassing our cravings and partaking in active experiences alongside our passive behaviors for layered engagement: surfing the web while watching television, scanning emails while on the phone, etc. This immersion has been a cold shower to campus education, especially those who have not adapted to their students’ pursuit of interactivity. Here is where it gets dangerous. As we are now submerged in information with varying degrees of relevancy, we have developed a frame of mind that must challenge or dismiss what we have not tested and experienced firsthand. In fact, the moment an individual finds it difficult to engage in a learning activity, they will see no intrinsic value in the material. All is not lost, online (and mobile) learning has proven itself an interesting player in this field leveraging the rise in smart animation,

gamification, and inclusive cloud-based platforms. Now this might seem contradictory. How can a culture centered on diplomas possibly adopt eLearning without cynicism? College graduation has traditionally meant a complete transition to on-the-job training. Not anymore. Unfortunately for most, academic schooling no longer ends with a fancy Ivy-League wall frame. With the spread of cheap MOOCs and regional VIP campuses virtually anyone can gain access to reputable CV filler. In short, additional certificates and credentials are what set practitioners apart with the objective of maintaining relevancy. Going forward, learning for learning’s sake will not persist sustainably – it must exist as a subset of the human resource process (performance management and human capital development) but more importantly: sit alongside the business objectives of the organization. A vigorous commitment to relevancy will go a long way optically, but inspiring engagement through learning and professional development will prove far more compelling in the long-term. ■

RAMPANT GLOBALIZATION OVER THE LAST 20 YEARS IN THE EMERGING MARKETS HAS GENERATED A REGIONALIZED NEED TO FERVENTLY MIMIC THEIR WESTERN COUNTERPARTS AND BREED A NEW CULTURE FIXATED ON DIPLOMAS AND THE INCESSANT DRIVE TO ESCALATE TO THE CANOPY OF THEIR RESPECTIVE ECOSYSTEMS.

Thomas G. Paris has worked in policy organizations for many years, starting his career at ‘The French Business Confederation’ in Paris (MEDEF) where he participated in various outreach missions including the G20/ B20 operation hosted by France during the financial crisis. Soon after, Mr. Paris moved to the International Chamber of Commerce’s (ICC) Banking Commission where he was involved in drafting global reports in collaboration with The World Bank, IMF, and WTO to leverage ICC’s vast influence in the field of market intelligence for policymakers and financial institutions. Subsequently Mr. Paris moved to the ICC Business Development department and joined the ICC Academy as its Head of Production. Mr. Paris holds a double Bachelors of Business Administration (BBA) in both International Relations and Management from the American Business School of Paris (ABS).

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ICC United Kingdom’s Official G20 Publication

Environment Authored by: Tim Clark

Ensuring water, sanitation and hygiene for all in an uncertain world

n the intense heat of Burkina Faso’s midday sun, Sorgho Bila stands over a rudimentary map created in the dusty red earth in which seed pods and leaves denote local landmarks, and a trail of gravel marks out roads. He is surrounded by representatives of the local community who in turn listen intently and burst into animated discussions. This scene is a low tech but a vital part of protecting the local population and others across the Sahel region, not just from the unforgiving nature of their location on the edges of the Sahara Desert but also from the growing threat of climate change. Sorgho, who works with WaterAid as a water monitor, is using the map to aid a discussion around the various water sources in the area - wells, pumps, rivers and springs - and who uses them, so that the community can draw up plans together for what happens in times when water is scarce. In this area of Burkina Faso, West Africa, there is no rain at all for at least six months of the year. Surface water quickly evaporates under the fierce summer sun, meaning that raging rivers run in torrents through the landscape during the rainy season and then reduce to nothing but cracked earth beds for the rest of the year. Climate change threatens to make these patterns more extreme – lengthening dry seasons and making rains fiercer and more unpredictable. So keeping as much of that rainwater as possible in the area and organising its use to last the year is vital. This is becoming more of a challenge as older villagers report that the rainy season is shorter than it used to be, which may be an effect of climate change, while a growing population puts additional pressure on this scarce resource. Burkina Faso is just one of many countries around the world coping with the threat of

more extreme weather patterns exacerbated by climate change, which is largely manifested through water: too much as in flooding, too little as in drought, at the wrong time as in extreme weather shocks, and of poor quality due to pollution or salination. In September 2015, the UN’s member states agreed a new set of Global Goals on Sustainable Development promising to eradicate extreme poverty and create a fairer, more sustainable world by 2030. Among these 17 goals is Goal 6, to deliver universal access to water and sanitation within 15 years. Access to water, sanitation and hygiene are critical to lifting people out of poverty, and as climate change threatens the health and well-being of some of the world’s poorest people, these will become even more important, helping communities recover faster and helping prevent illnesses such as cholera which often follow natural disasters. Careful management of water as a precious resource at all levels – from national governments right down to local village councils and including both public and private sector – is crucial. The private sector also has an integral role to play in water resource management and meeting the ambition of the new UN Goals. Alongside WaterAid’s work to deliver sustainable water, sanitation and hygiene services, and to advocate for governments to make these a priority, we are working with partners to encourage corporations to ensure responsible and careful water resource management and good access to water, sanitation and hygiene in their facilities, their communities and throughout their supply chains. Back in Burkina, Sorgho’s role in the community is to carry out a regular audit of the available water. He measures the rainfall

THE DATA COLLATED BY THE MONITORING HELPS TO FEED INTO LOCAL AND NATIONAL DECISION-MAKING AND ALSO ENSURES THAT ANY ISSUES, SUCH AS A PUMP BREAKING DOWN, ARE ADDRESSED QUICKLY – WHILE REDUCTION IN THE DEMAND ON BOREHOLES MEANS THAT THE RISK OF MECHANICAL FAILURE IS REDUCED. 54 ❙ iccwbo.uk

and compares it to previous years and also monitors the level of the local water table by testing the height of the water in the wells and boreholes. The equipment used ranges from the most basic – a stone tied to a piece of rope for measuring where the water reaches in wells - to high-tech. What is known as a dibber, a piece of wireless technology inserted into the boreholes, can transmit data through mobile phone signals to be collated at both local and national level. By keeping a close eye on the level of the water table, Sorgho is able to raise the alarm and help his community avoid future shortages. At the same time, WaterAid works to preserve as much water as possible, creating sand dams which help to replenish the water table. When consumption is outstripping rainfall, the mapping exercise comes into effect. The community discussions capture all the different demands on the water supply - which typically include cooking and drinking, watering animals, irrigation of crops, any industry in the area and individuals brickmaking for houses. Then together the community committee discusses which uses should be prioritised in times of shortage to ensure equity and also whether certain uses should be confined to specific water sources. WaterAid works with the committees to make sure that no one’s need is excluded from the discussions and that voices which may traditionally be quieter in debates - such as women and older or disabled people - are heard. So for example, Sorgho’s community decided that the village pump, installed a few years back by WaterAid, should only be used for household use during the dry season. This has had two benefits – first, it has reduced conflicts between women collecting water for household use and herders and, secondly, it has made it much easier to keep the water pump area hygienic. Brickmaking is, by mutual agreement, stopped during the dry months and confined to certain wells during the rest of the year. The data collated by the monitoring helps to feed into local and national decisionmaking and also ensures that any issues, such as a pump breaking down, are addressed quickly – while reduction in the demand on boreholes means that the risk of mechanical failure is reduced. It is schemes that such as this which are of vital importance across regions finding increasing problems with water scarcity as

weather patterns alter and demands increase. Yet historically, the amount of funding given to adaptation work allowing communities to cope with the impact of climate change has been way below the amount given to mitigating the amount of carbon dioxide entering the atmosphere. Much of the climate change funding to date has gone to middle income countries trying to reduce emissions rather than in helping poorer nations who will bear the brunt of climate change. Both areas of course need adequate funding and political focus - otherwise we risk seeing vast swathes of the planet becoming uninhabitable, resulting in many more poorer communities struggling to survive, and that struggle becoming more difficult. WaterAid uses what it has learned from working in communities like that of Sorgho Bila to inform its work with the United Nations, and national and local governments around the world, to advocate for work which protects the most vulnerable - who have usually made little contribution to the level of emissions yet stand to pay the highest price from the effects of climate change. ■

Tim Clark was appointed Chair of WaterAid’s Board of Trustees in 2013. He was formerly Senior Partner of Slaughter and May with overall responsibility for the firm’s external relationships and played a leading role in the development and implementation of strategy for its integrated network of independent law firms across the world. Tim is a member of the boards of various charitable organisations including the National Theatre, Paul’s Cancer Support Centre, COIF Charitable Funds and the Geoffrey de Havilland Flying Foundation and is a member of the Audit Committee of the Wellcome Trust and the Development Committee of the National Gallery. Tim is a Senior Adviser to Chatham House (The Royal Institute for International Affairs) and Chair of the trustees of the Economist Trust. Tim is Senior Independent Director of Big Yellow Group PLC and a member of the International Chamber of Commerce UK Governing Body.

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ICC UK

Rising Stars Authored by: Clare Montgomery

Talkin’ ‘bout my generation

hose who rocked to The Who’s refrain in the ‘60s are now talking about a new generation: Generation Y. Baby boomer and Generation X managers are receiving training on “Gen Y” or “Millennials” – the terms used interchangeably here – generally considered to be those born between 1982 and 2002 (definition from the Institute of Leadership & Management (“ILM”) and Ashridge Business School’s (“Ashridge”) study Great expectations: managing Generation Y, carried out in 2011, the “Great Expectations Study”). Numerous corporates and academics have funnelled resources into the study of this generation, highlighting a perceived difference between it and its predecessors. This article will examine certain Gen Y career aspirations and motivators before briefly considering what can be done in the workplace to attract Gen Y talent. Ashridge’s 2015 study A New Generation: The Success of Generation Y in GCC Countries comments that much of the media coverage of Gen Y has focused on character traits which have shown them in a negative light, as disenfranchised, antisocial technophiles with short attention spans and poor communication skills. In addition, it is a perceived tendency for Millennials to have itchy feet. However, 75% of graduates are proud to work for their employer, 73% are personally motivated to help their organisation succeed and 80% are motivated to go the extra mile at work (The Great Expectations Study). So why the bad press? Millennial values The 2016 Deloitte Millennial Survey (the “2016 Deloitte Survey”) shows that Gen Y strive to maintain a good work/life balance, own their own homes and achieve enough financial security to save for a comfortable retirement. The generation consistently ranked salary as the most influential factor when choosing whether to work for a particular organisation, followed by work/life balance. Opportunities for career progression, professional development, leadership roles and flexible working were also highly prized. Given these fairly ambitious values, Deloitte’s findings in relation to aspiration are surprising. In their 2015 Mind the gaps survey, Deloitte found that in developed markets only 38% of Millennials aspire to becoming the “leader or most senior executive within their current organization,”

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compared to 65% in emerging markets. Meanwhile, 54% in developed markets would like to “get to a senior position, but not number one,” which again is below the figure recorded in emerging markets (65%). Deloitte state this difference may suggest complacency or a lack of ambition amongst Gen Y professionals in developed markets, or alternatively an unwillingness to conform to the qualities they currently believe to define leaders. Equally, it could mean individuals in emerging countries may perceive more opportunity for educated professionals than their counterparts in developed markets. Whatever the reason for the trend, this will present a challenge to businesses’ growth strategies in developed markets, if those moving through the ranks of the organisation do not see themselves taking on the most senior roles as they currently exist. In a further area of concern for managers, the 2016 Deloitte Survey found that 25% of Millennials surveyed expect to leave their jobs in the next year, 44% in the next two years, and two thirds in the next 5 years. This phenomenon was found to be global – in each of the 29 countries surveyed a majority believe they will have left their organisations before 2020 has passed – and is stronger in emerging rather than mature economies. This is significant as each departure represents a loss of investment in training for a firm, coupled with the substantial expense and time which is necessary to replace individuals through recruitment processes. EY consider in their 2015 Global Generations: A Global Study on work-life challenges across generations (“EY’s 2015 Study”) that by 2025, 75% of the global workforce will be comprised of Millennials. It is therefore imperative that employers implement Gen Y-targeted policies to retain staff. The 2016 Deloitte Survey suggests this lack of loyalty may be a sign of neglect. 71% of those likely to leave in the next two years are unhappy with how their leadership skills are being developed. More generally, 63% of Millennials surveyed say their “leadership skills are not being fully developed.” In some markets, such as Brazil, Malaysia, Singapore, and Thailand, the figure exceeds 70%. Unfortunately, Deloitte state that whereas in the 2013 survey, 49% of respondents thought their organisations were doing all they could to develop their leadership skills, in 2015 Deloitte observed that “regardless of gender or geography, only 28 percent of Millennials feel that their current organizations are

making ‘full use’ of the skills they currently have to offer.” A similar disconnect exists between how the different generations view the role of a Millennial’s manager. The Great Expectations Study found that whilst “75% of managers believe they are fulfilling the role of coach/ mentor”, only 26% of graduates agree. Gen Y want a manager who is more of a coach, mentor and friend than a traditional manager who directs and examines; whilst 21% of graduates view their manager as their friend, only 5% of managers view the relationship in this way. MSL Group and Ashridge’s The Millennial Compass, for which data was collated in 2014, corroborates these findings, as most Millennials surveyed

THE 2016 DELOITTE SURVEY SUGGESTS THIS LACK OF LOYALTY MAY BE A SIGN OF NEGLECT. 71% OF THOSE LIKELY TO LEAVE IN THE NEXT TWO YEARS ARE UNHAPPY WITH HOW THEIR LEADERSHIP SKILLS ARE BEING DEVELOPED.

business’ plan. As more and more of Gen Y move into management – 85% of millennial managers moved into management between 2009 and 2014 according to EY’s 2015 Study – hopefully these focal points will become more of a natural culture shift for firms. To conclude, as the members of Gen Y mature and become senior managers and, in turn, reach the cusp of retirement, it will be fascinating to see whether the characteristics currently defining the generation endure. The free spirit baby boomers are well known to have rejected their parents’ ideals and embraced new values, music, social and political standpoints. Continuing study of the generations will be imperative to determining whether recent studies have identified a static set of characteristics which members of Gen Y will carry to the grave, or whether they are observing a generation in transit through one of Shakespeare’s “The Seven Ages of Man” (As You Like It). “[O]ne man in his time plays many parts”. Were we all Millennials once? ■

stated that the role their manager currently plays is that of a friend. This answer ranked first in the USA, the UK and Brazil; second in China and third in India. However, less than a third of Millennials feel the role their manager plays fits their image of an ideal manager, highlighting the difference in perception of the role the manager plays or should play between Gen Y employees and their employers. Company action Notwithstanding the wealth of material now available on Gen Y and ‘how to manage’ Gen Y employees, the failure of organisations to be – or at least to be seen to be – harnessing Gen Y’s skills and the clear disconnect

between managerial and Gen Y employee perceptions may indicate company actions are either too few and far between, or are ineffective in satisfying Gen Y employees. The 2016 Deloitte Survey states that “open communication, inclusiveness, and attention to the ambitions of Millennials really do foster loyalty”. Therefore, in order to maximise the potential of a generation “intrinsically motivated to succeed” (The Success of Generation Y in GCC Countries, Ashridge, 2015), managers must invest in coaching and regularly appraising their juniors, improving their leadership and technical skills, and allowing them insight into strategy and career progression, in order that each employee can fully buy into their

Clare Montgomery is a Solicitor Advocate in Clyde & Co LLP’s international arbitration group. Clare focuses on international disputes, particularly energy disputes based in Latin America. A French and Spanish speaker, she has worked on cases in both languages, and has experience of arbitrations under the LCIA and ICC procedural rules. Clare has recently been nominated to the ICC UK “Rising Stars” programme. Prior to converting to law, Clare studied Modern European Languages at the University of Edinburgh, graduating with a First Class degree with Distinction in Oral French.

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ICC United Kingdom’s Official G20 Publication

Global Business Authored by: Luis Arriaga

Five myths about going global

n 2012, George Osborne, the Chancellor at that time, challenged UK businesses to hit £1 trillion in annual exports by 2020. This ambitious goal has proven harder to reach than anticipated, but there is still a lot of exporting potential in the UK that has yet to be untapped: small businesses. When small and medium-sized enterprises (SMEs) evaluate options for growth, many business owners don’t even consider going international. In fact, of the five million companies in the UK, only one in five are exporters. According to the British Chamber of Commerce, UK businesses that export grow on average 20 percent more than businesses that do not. Furthermore, many consumers around the world are willing to pay a premium for products with a “Made in Britain” label. Oftentimes, many business owners miss exciting exporting opportunities because of common misconceptions. Let’s explore some of the myths surrounding exporting.

ACCORDING TO THE BRITISH CHAMBER OF COMMERCE, UK BUSINESSES THAT EXPORT GROW ON AVERAGE 20 PERCENT MORE THAN BUSINESSES THAT DO NOT. FURTHERMORE, MANY CONSUMERS AROUND THE WORLD ARE WILLING TO PAY A PREMIUM FOR PRODUCTS WITH A “MADE IN BRITAIN” LABEL. 58 ❙ iccwbo.uk

Myth No.1: It’s Just Too Risky Let’s face it, running a business locally is hard enough, let alone in an unfamiliar country. However, according to the UPS European SME Exporting Insights Survey, approximately 80 percent of UK SMEs that export said they had increased or maintained consistent revenue over the past three years. Going global can help businesses diversify and expand their customer base, ultimately driving sales and improving profitability. Myth No.2: It’s Too Complicated Doing business internationally can appear incredibly complex. However, there are many resources available to help business owners navigate the rules and regulations. The list of agencies, companies and websites devoted to international trade is almost endless. UPS offers a wealth of information online, and a great start is our export toolkit. Plus, many cities have world trade centers that provide forums for exporters and importers. Myth No.3: Competition Is Too Tough Many business owners assume competition will be fiercer overseas. But many overseas markets are underserved, making it easier for small businesses to establish or address a niche. Growing economies can create unique opportunities. For example, Vietnam and Russia import items such as used trucks, while countries like Japan are interested in luxury items not available domestically. As the global economy continues to expand, small businesses may have significant competitive advantages. As incomes rise, people demand specialised products that are not mass produced. Consumers in China or India, for example, may be willing to pay a premium for authentic niche goods that only small businesses can provide. Customers value diversity, and demand more choices. Myth No.4: We’re Too Small International trade is not reserved for corporate giants. Small companies often have greater flexibility and may be able, therefore, to satisfy international partners better. Name recognition, extra resources and export departments do not make up for the drive, motivation and tenacity of a small business. Look at Wills London. Nearly three years ago, Will Green set out on a mission to fulfill his dream of providing fashionable, ethicallyproduced vegan shoes. After establishing himself in London, he located just the right materials and factories to make his stylish,

earth-friendly shoe designs come to life. Will’s dream quickly became a reality as his shoes gained international popularity. He now ships dozens of varieties of vegan shoes, belts and wallets to customers around the world. Myth No.5: We Can’t Reach Customers The Internet has leveled the playing field when it comes to matching buyers and sellers. Businesses no longer need to incur the expense of extensive global travel. Also, businesses can use targeted online advertising platforms to direct keyword ads to people in specific markets.

Industry trade shows are often a good place to find foreign importers eager to carry UK products. If you can find a small or mediumsized business internationally to serve as your partner overseas, you can then, in turn, find a customer base for your product. As you can see, despite these common myths, many small businesses are finding it easier and more profitable to expand their business internationally. A well-conceived strategy to go global can actually reduce risk for your business and uncover sales opportunities. ■

Luis Arriaga is U.K., Ireland and Nordics District Manager. He began his careerr with UPS in 1991 as Industrial Engineering (I.E.) Supervisor in Mexico. He has held a variety of positions including I.E. Section Manager, Mexico City Brokerage Manager, and Quality Manager. In 1997, Luis was promoted to Engineering Manager and in 2003, he was appointed as the Country Manager of UPS Mexico.

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ICC United Kingdom’s Official G20 Publication

World Chambers Congress

World Chambers Congress: Fostering opportunities, cultivating innovation The World Chambers Congress is the largest, most influential forum of its kind assembling more than 1,000 business and chamber leaders from across the globe. Now in its tenth edition, this event has become the premier venue for sharing best practices, developing networks and discovering new areas of innovation.

rganized by the International Chamber of Commerce (ICC) World Chambers Federation (WCF), the Congress is held biennially and takes place in a different region of the world each time. The next edition is set to be held in Sydney, Australia on 19-21 September 2017 and co-organized by the Sydney Business Chamber (SBC). This will be the first time the prestigious event will be hosted in Australia and will allow the island nation to showcase its vast business incentives. “This Congress will provide unparalleled access to global trade opportunities and will be a chance for all attendees to play a part in stimulating global trade progress. Sydney will provide the perfect destination for future focused discussion and is a natural partner city for the Congress,” said Stuart Ayres, Minister for Tourism, Trade and Major Events NSW. As a gateway to the Asia-Pacific region, Sydney presents an array of exciting possibilities. The harbour city holds a prime position as an international hub for business, finance, education and cultural communities. Paired with an outstanding reputation for connecting businesses with industry experts through collaboration, knowledge sharing

and commercial opportunities, it is certain that Sydney will deliver an exceptional experience. With more than 110 nations regularly attending, the event’s popularity continues to increase. From less-developed countries such as South Sudan to larger developed nations such as the United States, chambers of all sizes eagerly await their chance to secure the honour of co-organizing. In fact, WCF receives bids from chambers of commerce several years in advance. This is because the Congress brings a multitude of advantages to not only the area but the global chamber movement as well. There are currently offers to co-organize the renowned event through to 2021. “ICC is the world’s business organization and as such has a pivotal role in convening conversations that improve business, improve global sustainability and build bridges between nations,” said Steve Killelea, founder and Executive Chairman of the Institute for Economics and Peace and confirmed speaker of the 2017 Congress. 10th World Chambers Congress Next year’s Congress programme will address current global trends affecting chambers of commerce and their respective business communities: from international trade to climate change and other pressing issues that transcend national boundaries. Through plenary and workshop sessions, participants will gain insights from an exceptional list of internationally renowned business and thought leaders, governmental figures as well as chamber executives. To accompany delegations, each and

TO ACCOMPANY DELEGATIONS, EACH AND EVERY CONGRESS OFFERS AN EXTENSIVE PROGRAMME. THIS INCLUDES A BUSINESS PROGRAMME, EXCLUSIVE SIDE EVENTS AND THE CHANCE TO SET UP SPECIAL MEETINGS SO DELEGATES CAN CAPITALIZE FROM THE PRESENCE OF SPECIFIC INDUSTRY SECTORS AND COMPANIES. 60 ❙ iccwbo.uk

every Congress offers an extensive programme. This includes a business programme, exclusive side events and the chance to set up special meetings so delegates can capitalize from the presence of specific industry sectors and companies. Chambers and leading corporations will also have the chance to attend the exhibition area. This space is truly an excellent setting to promote opportunities and other relevant activities in their region or model specific products and services. The Congress provides an ideal platform to enhance a brand’s image and gain recognition with high-value contacts. Unparalleled opportunities to connect and strengthen relations with chambers of commerce and business leaders will also be indispensable for participants. In addition to creating new institutional ties, the Congress is an ideal occasion to bolster trade and investment opportunities from attending industry heads, companies and governments. World Chambers Competition A key feature of the Congress is the World Chambers Competition—the only global awards programme that acknowledges and rewards the most innovative projects undertaken by chambers of commerce and industry on an international level. This is a unique occasion for chambers to unveil current projects and display how they are making positive steps to improve communities. Applications for the 2017 Competition will open on 4 November 2016 with the final deadline on 4 April 2017. Previous winners include the Calgary Chamber of Commerce for a disaster preparedness product, which they provided to local businesses. So impressive was the project that it is currently being expanded throughout the world to aid the private sector in facing natural disasters. Categories for the upcoming Competition include: Best CSR project: Rewarding a project linking both business and their social responsibility actions to community, philanthropic, environment, workplace and marketplace activities. Best job creation and business development project: Candidates in this category have either created a project that has

boosted growth opportunities for chamber’s member companies or has contributed to job growth in its community, generating a long-term value for the business ecosystem and the society. Best SMEs financing project: This category will recognize exceptional initiatives and projects led by chambers of commerce that have helped its small to medium-sized

enterprises (SMEs) and entrepreneurs access finance to address their business operational and development needs. Best unconventional project: Go to a chamber that has developed an exceptional project in an activity not typically associated with a chamber of commerce’s mission and objectives and must be inspirational and innovative.

The ICC WCF and SBC are extremely excited to welcome you to the World Chambers Congress in Sydney in 2017. The 10th edition of this event will certainly act as the ideal stage for all businessmen and chamber representatives alike to achieve their goals, whatever they may be. Sydney is a key link in the chain to business in Asia-Pacific, and the Congress will encapsulate this sentiment. ■ ❙ 61

ICC United Kingdom’s Official G20 Publication

International Festival of Business Authored by: Andy Snell

Meet your global business network

ore than 26,000 delegates from all over the world attended the three-week International Festival for Business 2016 event in June. Over 80 events took place, and for three weeks the venue transformed into a hub for exhibitions, seminars, networking events, and inspirational speakers – the scale of which has never been seen in Liverpool, or indeed the UK, before. Her Majesty the Queen and His Royal Highness The Duke of Edinburgh officially opened the Exhibition Centre Liverpool, and then-Chancellor George Osborne gave the opening address, just like David Cameron did before him at IFB2014. ‘Meet Your Global Business Network’, the Chamber’s international trade conference and gala dinner, was one of the highlights of the International Festival for Business 2016. Organised by the Liverpool and Sefton Chamber of Commerce with support from colleagues at the British Chamber of

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Commerce and the International Chamber of Commerce, it returned by popular demand after great success the first time round in 2014. 250 delegates met with representatives from over 30 international markets for a plenary and panel discussions, and took part in over 300 pre-booked 1-2-1 meetings. The concept was driven by demand from our members, so we know that it works, as 120 of the delegates from the IFB2014 went on to access support to visit international markets and leverage the strength of the global chamber network. At IFB2016, we were joined by representatives from Latin America, Africa, Asia, and the Middle East, who assisted in developing the presence of UK businesses on the global stage. The event was brought to IFB2016 with International Strategic Partners Turkish Airlines, Santander, Warrant Group and DLA Piper and culminated in an exclusive black tie Gala dinner, welcoming overseas representatives and celebrating a taste

of the ‘best of British’ in comedy, music, food and sport. We are renowned for our IFB gala dinners and our a loyal following, attracting many companies who come for a fun evening in an environment where they can build lasting relationships with their overseas chamber representatives. By attending, our delegates know from experience that they put themselves in a better position to trade abroad and boost their bottom line. The plenary contribution from John Carroll of the ICC was well received, as he reminded delegates how businesses are fortunate to operate within a sophisticated business environment that we mustn’t take for granted. We are regulated by both business and government, with trade accounting for 59% of global GDP in 2014. In terms of jobs, growth, investment – trade matters. John was applauded in his warning against anti-trade rhetoric and protectionist policies:

2015 saw the biggest rise in protectionist activity since the onset of the financial crisis, with an estimated 40% rise in trade barriers introduced compared to 2014. The figures continue to alarm, with trade growth being hit particularly hard - 2.8% global trade in 2015 with 2016 expected to be same. Implementing the Trade Facilitation Agreement (TFA), which will cut red tape and reduce trade costs by 14% as well as boost SME exports worldwide by up to 80%, will and have a transformational impact on the ability of SMEs to access global markets, This fact resonated with the IFB audience wherever they were from. Equally, John delivered a compelling message about the Transatlantic Trade and Investment Partnership (TTIP), which will create the largest combined market in the world, adding up to £10 billion to the UK economy alone. The partnership is simply about harmonising regulations across both regions - cutting red tape and barriers to

trade. As with the TFA, the winners will be chamber members and SMEs, the backbone of the world economy - 95% of enterprises are SMEs, representing around 60% of private sector jobs. As we collected our thoughts and entered the workshops and 1 to 1 meetings, we were all still contemplating the most important trade decision in over a generation: the EU referendum, which was a week away. As the fifth-largest economy in the world and the FDI capital of Europe, the decision the UK would make had implications for businesses in every corner of the world. ICC figures show that international businesses are unanimously in favour of the UK remaining in the EU – 86% said “remain” according to ICC’s survey data. Small, mid-size and large business were all saying the same. On June 23rd, 2016, when the votes were counted, Liverpool emerged to be a city that voted to remain in the EU, but of course that

direction wasn’t replicated nationwide. Perhaps as a city that has always been at its strongest when looking outward -- two thirds of world trade passed through the Port of Liverpool at its peak -- Liverpool has a unique perspective. With the current investment in a new deep water terminal, PEEL’s ‘superport’ that can accommodate the very biggest ‘post panamax’ vessels, we focus on the importance of international trade more so than other parts of the UK. We live in interesting times, and it is apt that the next G20 meeting is in Hangzhou China, as one of the more encouraging presentations which promises the next generation of world trade is the Chinese ‘one belt, one road initiative’. By the time the ICC gathers in the autumn, we must hope that a strong, visionary, intelligent leadership emerges in Britain to aid the international trading community, allowing ourfamily of chambers to achieve our mutual objectives of economic growth. ■

Andy Snell has been Director of Commercial and International Trade Services at Liverpool Chamber of Commerce since 2013. The ICC team have worked with Andy in the UK at both the International Festival for Business of 2014 and 2016. We have also collaborated on the content and promotion of the World Chambers Congress in both Qatar and Torino, and are currently in the planning stages for Sydney 2017. Andy is a confident and passionate conference speaker on international trade, having been invited to address delegates in Europe, China and the Middle East. Here he shares his thoughts on a busy summer in the UK.

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ICC United Kingdom’s Official G20 Publication

Global Trade Authored by: Alexander R. Malaket

Financing Global Trade: The most important branch of finance you’ve never heard of Trade remains, despite a challenging post-crisis environment, one of very few powerful commercial and policy levers that can influence conditions on a global scale, and it is now widely recognized outside a small group of practitioners who have known this for a very long time, that trade cannot take place without the critical enabling support of trade finance.

his esoteric branch of finance has long been the purview of international bank and is still in part enabled today by instruments and banking practices that date back hundreds of years if not longer. Trade finance by its broadest definition, which now includes fast-growing techniques in the financing of global supply chains, supports perhaps as much as 80% of global merchandise trade flows, currently worth in the range of $20 trillion annually. In addition to providing critical financing in support of cross-border commerce, trade finance (and increasingly, supply chain finance) offer a range of highly effective risk mitigation options, through financing structures, private sector, public sector and international institution sources, that are fundamentally important to enabling trade in and with the most challenging markets on the globe. The central (if until recently, underappreciated) role of trade financing to the conduct of trade, to the engagement of small business suppliers in international activity, and to economic inclusion and international development, make this perhaps the most important branch of finance that many have never heard of. Trade finance has been a core area of activity and expertise at the International Chamber of Commerce (ICC) for many decades, and is at the center of the work, thought leadership and advocacy focus of one of the ICC’s largest Policy Commissions, the ICC Banking Commission. The Banking Commission takes a broad view in its mandate, touching on core rulemaking activities, regulatory advocacy, innovation and digitization, standards-setting, market and industry engagement, market intelligence and numerous other areas of focus. The ICC is an influential strategic partner in the annual G20 process, as well as in related streams such as the business-focused

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B20, providing a unique channel and platform through which to advocate for a range of issues, with the objective of raising awareness, advancing high-level deliberations and helping to shape informed, effective public policy at the most senior levels of government. We have accordingly been successful in recent B20 efforts, notably through the Financing Growth Task Force in 2015 and the SME Development Task Force under the current Chinese Presidency, in raising the profile and visibility of trade finance and supply chain finance as a critical enabler of numerous shared commercial, economic and political objectives across the G20. These efforts, which have resulted in concrete recommendations flowing through each task Force, have been complemented and strengthened by further advocacy through the G20 CEO Advisory Group, and the annual ICC Banking Commission Consultation hosted most recently in Johannesburg, and co-chaired with Steven Beck, Head of Trade Finance at the Asian Development Bank and member of the Banking Commission Advisory Board. As critical as trade is in the context of OECD and advanced economies (witness the export-driven resilience of Germany during the global crisis), its is perhaps even more important in developing and emerging markets, where trade is, despite its acknowledged imperfections, a major contributor to development, poverty reduction and economic inclusion. Thus, in considering high-impact commercial and policy decisions, trade is a natural priority: even more so, now that trade and investment flows are tightly integrated. Additionally, the role of global supply chains as arteries of commerce and as channels for engagement by SMEs and developing economies demands effective, coordinated and informed action in assuring access to trade finance and supply chain finance across the globe. The B20 Task Forces and the G20 Consultations and CEO Advisory Group activities have provided excellent, visible and authoritative platforms from which to inform decisionmakers about the critical importance of trade finance and supply chain finance, at a time when trade needs to be reinvigorated, the multilateral system

requires support, and we know from analysis by the ADB and the World Bank, that there is currently a global shortage of trade finance. Recent data suggest that unmet demand could be as high as $1.1 to $1.4 trillion annually, with the gap heavily concentrated in export-driven developing Asia. By all accounts, developing economies and SMEs are the most adversely impacted by this global shortfall, with the exacerbating reality that financing for both constituencies tends to be significantly more expensive when it is accessible at all. Task force recommendations have covered a wide range of topics and options, ranging from technical capacity building around trade financing, to enhancing information flow such as the availability of company credit reports to assist in reducing (actual and perceived) risk during credit adjudication processes, to the application of technology in trade and trade financing. There have even been proposals aimed at establishing a capital market for SME financing. There are opportunities to shape public procurement, to take measures to enable SMEs in developing or frontier markets such as Myanmar, to successfully pursue internationalization through cross-border supply chains. The work of the various Task Forces is thoughtful, comprehensive and publicly available, and merits, whether its conclusions rise to visibility at the G20 or not, serious consideration in the development of substantive policy and commercial initiatives. It is completely understandable that each nation taking on the Presidency of the G20, and by extension, leadership across a range of G20-related streams, would wish to put its own stamp and promote its own particular priorities during its mandate. That said, the proposal for at least some level of year-on-year continuity, first put forward by Australia, is the right path to follow. As the supporting organizations and numerous Strategic Partners and Knowledge Partners adapt to this principle, the next step, at least at the level of the B20 Task Forces, could be the commitment by incoming Task Force Chairs to review the prior year’s analysis and recommendations across all Task Forces, to ensure a holistic view and to avoid unnecessary duplications of research and effort. Such a process will also help to

of importance to business community are given voice, but also, that senior business leaders consider the wider questions of interest to the communities, nations and G20 member states within which their enterprises grow, thrive, and generate value and impact. Trade financing, most broadly defined, is a discipline that touches nearly every dimension of the topics under deliberation at the B20, and that has clear linkages to public policy, multilateralism and the economic growth, development and prosperity of G20 Member States. It is therefore appropriate, even imperative, for this branch of finance to be squarely on the radar of business and political leaders across the G20 as a powerful enabler of growth an prosperity, that is, at this moment in short supply. ■

Alexander R. Malaket CITP, is President of Canadian consultancy OPUS Advisory Services International Inc., established in 2001, focusing on international business, trade and investment with a specialism in trade finance. Alexander has undertaken a range of consultancy assignments, from operational and tactical to technology, to global strategy, for clients around the world and has developed and delivered training seminars and programs in numerous markets including Toronto, New York, London, Hong Kong, Singapore, Dubai and Taipei among others.

ensure that the most compelling proposals are given a path to execution, even if the G20 may of necessity focus on other priorities. The financing of international trade, including global supply chains, has been brought sharply into focus in the post-crisis environment, as one of the more impactful branches of finance, and has garnered the most senior attention from the ICC, the WTO, the IMF, the World Economic Forum and numerous other entities and organizations in a position to shape the global architecture of

international trade and investment – a stated objective of the joint WEF/ICTSD think tank called the E15 Initiative, which as also picked up on trade finance and supply chain finance as a topic of strategic importance. Participation in the B20/G20 processes is a unique privilege and a memorable professional and personal experience. Doing so as a Task Force member, and in association with the ICC and the ICC Banking Commission, brings with it the opportunity and the responsibility to ensure that issues

Mr. Malaket is an internationally recognized expert in international business, trade, investment as well as trade finance and supply chain finance, contributing regularly to industry publications like Trade Finance Magazine, Trade & Forfaiting Review, Global Trade Review, Cash & Trade Magazine and Trade and Export Finance. Alexander speaks and chairs panels at top-tier conferences and events around the world, and is the author of “Financing Trade and International Supply Chains”, Gower/ Ashgate Publishing, UK 2014.

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ICC United Kingdom’s Official G20 Publication

SME Potential Authored by: Dr. Tunc Uyanik

Unlocking SME Potential for Inclusive Economic Growth

ince September 2015, when the G20 leaders welcomed the World SME Forum (WSF) as the international organization which amplifies the voice of SMEs globally, we have been in intense dialogue with partners around the world to identify the most pressing priorities of the SME community. The feedback we are getting is that, in 2016, traditional challenges to SME growth have been intensifying: they include constraints in accessing markets, finance, managerial and entrepreneurial skills.And, if these are not sufficient to completely debilitate the typical SME, business regulations often place them at a disadvantage. The fact of the matter is that obstacles to entry, high costs of compliance, the absence of a level playing field, and low transparency are hindering SMEs’ potential across the board. Yesterday’s issues are still today’s issues, and not because of lack of effort in the Development and the Business Community, but because it is a really tough problem to solve. We are faced with the slowest postcrisis investment recovery since the early 1970s, and SMEs – which account for the majority of employment and over half of value-added in OECD countries – are struggling to access the financing they require to participate in and across world markets, as banks have deleveraged to meet new regulatory requirements.

YESTERDAY’S ISSUES ARE STILL TODAY’S ISSUES, AND NOT BECAUSE OF LACK OF EFFORT IN THE DEVELOPMENT AND THE BUSINESS COMMUNITY, BUT BECAUSE IT IS A REALLY TOUGH PROBLEM TO SOLVE. 66 ❙ iccwbo.uk

Still, the situation is not as bleak as it may appear. There are at least two specific opportunities at hand. Globally, policymakers have indeed turned their attention to SMEs as a potential recipe for inclusive growth; and digital technologies are providing SMEs the potential to compete in international markets at levels unseen before. The first opportunity rests on reinforcing the sharper focus on SMEs that has come of late. It’s an opportunity not to be missed. SMEs have become an explicit focus for sovereigns as well as prominent international organizations such as the OECD, the World Bank Group, the International Trade Center and the WTO. This year B20 China decided to continue the work of the SME Development Taskforce, which was started for the first time by B20 Turkey, hopefully making it a mainstay for B20s and G20s to come. For our economies to have healthy inclusive growths, SMEs must remain as a key priority in the B20 / G20 process and across Presidencies. The second opportunity rests on infusing digital technologies into the DNA of SMEs. We know that technology is facilitating access to markets; e-Commerce now enables firms to link to an unprecedentedly large customer base, at significantly lower interaction costs. Digitization facilitates access to finance in unconventional ways: by improving credit information and analysis through online data sources such as sales and other performance indicators; through alternative finance such as crowdfunding and supply-chain finance; and fintech innovations targeted to help SMEs on payments. Technology is also facilitating access to skills, through Massive Open Online Courses (MOOCS), or free online learning modules, which are making learning and mentoring easier and more affordable than ever before for smaller companies. The proceedings on the China B20 SME Development Taskforce are following in the path of last year’s recommendations, with a focus on SMEs access to GVCs, finance, digital trade, and a better regulatory environment, but they took a sharp welcome turn towards accountability and implementation, focusing on both the existing opportunities and the challenges ahead. The recommendations are practical and reasonable, and they provide a concrete roadmap that G20 governments can implement to offer a tangible boost to SME Development, in turn supporting much needed job creation and inclusive economic growth in both developing and developed economies.

The recommendations have a broad reach: they include concrete considerations about the creation of an innovative Electronic World Trade Platform (eWTP) to incubate eTrade rules and foster a more effective and efficient policy and business environment for cross border electronic trade development; the development of coordinated capacity building and certification programs to facilitate the inclusion of SMEs in Global Value Chains; the facilitation of SMEs’ access to bank finance and alternative funding; and finally the improvement of SMEs regulatory environment, through a reduction of compliance costs and a significant improvement of access to public procurement markets, especially through the digitalization of Government processes. It is important that G20 leaders pay good attention to these recommendations, as it is in their best interest to lift SMEs’ growth, and with them their whole economies. More broadly, it is essential that G20 continue its support to SME growth by ensuring that countries strengthen their focus on the SME agenda, now and in the coming years, starting with 2017 Germany G20. The opportunities to better utilize the enormous potential of SMEs to help the world economy to overcome many of its current challenges are already here. We just need to ensure that policy helps SMEs to help themselves. ■

Dr. Tunc Uyanik joined World SME Forum (WSF) as its founding CEO in November 2015. He was previously the Special Envoy and Chief Adviser to the President of TOBB and B20. He was also the Chair of the Turkish B20 Steering Committee. Prior to this, Dr. Uyanik was the Director of the Financial and Private Sector Development Department in East Asia and Pacific Region at the World Bank, as well as the Director of the Financial Systems Global Practice. He was also co-chair of the Financial Sector Liaison Committee (FSLC) and chair of the World Bank’s Islamic finance working group. Dr. Uyanık has vast experience in: financial and private sector development, financial sector policy and regulation; financial sector assessment and reforms, banking sector restructuring, lines of credit and guarantees; financial inclusion, asset recovery and asset management.

Diageo’s brands are available in over 180 countries. Our business depends on a global trading system that ensures predictability, nondiscriminatory treatment, market access and protection for our brands. 80% of our global production is exported, supporting jobs and growth whilst trade is essential to enable the movement of our great brands around the world.” IVAN MENEZES CEO Diageo

There is an urgent need to reclaim and rebuild the narrative around global trade. To do this we need to tell the world the many stories that make up the rich fabric of international trade. We want to work with you to explain why #TradeMatters. Please use your own channels to promote the #TradeMatters hashtag.

It might not be popular to say it but trade matters! In fact, trade matters today more than ever. Help us show people why with a quote from your company…

GET IN TOUCH TO GET INVOLVED!

ICC UK

European Inspiration: Perfected in the Caribbean

ocated in the exclusive private community of Cap Cana at the eastern tip of the Dominican Republic, Eden Roc at Cap Cana, the only Relais & Châteaux hotel in the island, consists of 34 freestanding suites with private pools and offers amenities such as a full service spa, a Jack Nicklaus Signature Golf Course located nearby, private Beach Club, Koko Kids Club, four diverse culinary selections, 753 square feet of meeting space at Corallina Conference Room and various multi-purpose spaces ideal for destination weddings and corporate functions. Fusing the best of form, function and fantasy, the extraordinary resort is surrounded by lush greenery and aweinspiring panoramas, while each suite’s sprawling decks serve as a natural extension of the airy spaces. With views of verdant gardens and lagoon-style pools, Eden Roc at Cap Cana has already become one of the most coveted resorts in the area. Each dynamic, light-filled suite radiates a sense of calm that comes from their inimitable spatial equilibrium. With private swimming pools and massage/relaxation areas, the ambiance exudes the most exclusive experience. Additionally, each suite is equipped with cutting-edge Bose audio systems and iPads that have innovative apps to control the lighting, sound system, and TV. Envisioned by Milan based designer, Marina Nova, Eden Roc at Cap Cana is fashioned more after a luxe village than a traditional resort. Opened in December 2012, Eden Roc at Cap Cana celebrates the

EDEN ROC BEACH CLUB OFFERS A FASHIONABLE AND FUN SETTING TO ENJOY THE NATURAL PLEASURES OF SUN, SEA, SAND AS WELL AS THE MORE URBANE PURSUITS OF FINE DINING, SPA AND WELLNESS, AND SHOPPING. 68 ❙ iccwbo.uk

aesthetics of the 1960s French and Italian Rivieras through its stunning design, the resort’s stunning design celebrates the aesthetics of the 1960s French and Italian Rivieras, while also being both respective and reflective of its Caribbean setting. Blending European influence and Caribbean spirit, each suite is drenched in vibrant colors such as cerise, golden yellow, azure, plum and lime green, providing a stark contrast to the soothing cream and eggshell palate of the interior spaces. The premium coral stone and hand-painted tile flooring complement these inviting colors. Two specialty villas to note include the Three Bedroom Royale Villa and Four Bedroom Imperiale Villa. Eden Roc at Cap Cana’s four inspired dining establishments feature a variety of haute cuisine. Each restaurant comes to life with a distinctive personality through a combination of striking décor and elegant atmosphere. The most elegant venue is Mediterraneo, which menu exudes a journey of flavors and ingredients from Mediterranean cultures, and blends local elements with specialties flown in from artisanal suppliers in Europe. Located at the Eden Roc Beach Club is La Palapa by Eden Roc, featuring seafood prepared to perfection and sumptuous gnocchi, among other tantalizing plates. La Cava, featuring a charming domed roof made of bricks is a charming gathering spot that feels like a cozy cellar in a historic hacienda but has been designed for today’s wine connoisseur. Finally Riva Bar, inspired by the exquisitely crafted Riva Aquarama pleasure boat that was the symbol of glamour in 1960s Monte Carlo, is Eden Roc at Cap Cana’s vintage bar locale. During winter 2016, Eden Roc Beach Club will reveal a new dining destination highlighting a display of Nikkei and Robatayaki cooking techniques for dinner, featuring a cigar cellar, wine showcase, and a rotisserie by the pool serving grilled staples for lunch. Eden Roc Beach Club offers a fashionable and fun setting to enjoy the natural pleasures of sun, sea, sand as well as the more urbane pursuits of fine dining, spa and wellness, and shopping. Accessible only by guests of Eden Roc at Cap Cana hotel and members, the Beach Club provides an intimate setting to connect with loved ones, new friends and yourself.

The Solaya Spa is a haven of calm where native healing philosophies and contemporary technologies blend seamlessly to deliver experiences that will nurture the body, soothe the mind and energize the spirit. Capturing the rejuvenating aura of this Dominican paradise, the Spa offers a wide range of opportunities to find beauty, balance and complete well-being. With 753 square feet of meeting and event space, Eden Roc at Cap Cana also feature various multi- purpose spaces evoking an

manicures, pedicures and style their hair. There is also an inviting central area for playing and story-telling.

eclectic array of ambiances ranging from intimate decadence to modern minimalism ideal for destination weddings and corporate functions. The resort houses an expert staff of event planners and caterers offering unparalleled attention to detail and topnotch customer service. The Koko Kid’s Club is enjoyed by the young and young at heart. Located on a lagoon, it resembles a massive tree house equipped with video games and even a mini- spa where the girls can have

About Eden Roc at Cap Cana Eden Roc at Cap Cana is a five-star resort nestled in the exclusive, beachfront community of Cap Cana at the eastern tip of the Dominican Republic. The 30,000-acre community is home to pristine beaches, towering cliffs and tropical forests, as well as a Jack Nicklaus signature golf course and bustling marina. Blending the impeccable standards of the French and Italian Rivieras with the warmth and relaxed charms of the Caribbean, Eden Roc at Cap Cana lavishes guests with remarkable comforts, amenities and beachfront scenery. In addition, the resort boasts a newly-renovated Beach Club, infinity pool and Solaya Spa. Culinary experiences include fine-dining Mediterraneo Restaurant with Executive Chef Gianluca Re Fraschini at the helm; and oceanfront La Palapa by Eden Roc featuring international cuisine with traditional local influence. The resort will reveal a new restaurant and expanded spa in Winter 2016. The AAA Four-Diamond property is a proud member of the prestigious Relais and Châteaux collection, as well as Virtuoso Hotels & Resorts, Ensemble Travel Group,

Altour Hotel Collection, Fine Hotels & Resorts, Signature Travel Network, the International Association of Golf Tour Operators and Forbes Travel Guide. About Relais & Châteaux Relais & Châteaux is an exclusive collection of over 520 of the finest charming hotels and gourmet restaurants in 60 countries. The prestigious family of hoteliers and Grands Chefs from around the world shares a passion and a personal commitment to ensure that customers are aware of moments of exceptional harmony, an unforgettable celebration of the senses. ■

For more information about Eden Roc at Cap Cana Boutique Suites & Beach Club, please call (809) 469-7469 or visit www.edenroccapcana.com ❙ 69

Network, knowledge, know-how Under the theme “Where Business Connects,” the 10th World Chambers Congress invites business and chamber leaders from around the world to gather in Sydney in an effort to work together in facing the global challenges of business today.

400

YEARS OF SERVICING THE BUSINESS COMMUNITY

100+

COUNTRIES, REGIONS & TERRITORIES

1,000+

INTERNATIONAL PARTICIPANTS

DAYS

25+ SESSIONS

COMPETITION CATEGORIES

40+

EXHIBITORS