International Chamber of Commerce (ICC) | Trade Samaritan

International Chamber of Commerce (ICC)

ICC is headquartered in Paris and Harold McGraw III is the Chairman of ICC. Today ICC has thousands of member companies and associations from over 130 countries.

ICC was founded in 1919 by a bunch of industrialists, financiers and traders to bring in business prosperity post the damage caused by World War I. These pioneers at that time did not even gauge that they were building an organization which will become absolutely essential to the global economy. ICC is the only representative body that speaks about Trade, Commerce and Business on behalf of enterprises from all sectors in every part of the world.

Here are the three primary goals of ICC:

Goals of ICC

Whenever decisions relating to global issues in business have to made, ICC is the preferred partner of international and regional organizations.  In order to achieve its primary goals and influence the business globally, ICC conducts several trans-national conferences and has also set up an advisory group known as the G20 advisory group. The resources and the regulations set by ICC are followed by financial institutions, banks and business corporations around the world for their trans-national transactions and investment.

ICC codes and rules spans across various facets of business such as banking, commercial law, competition, customs and trade, anti-corruption, intellectual property, economic policy, marketing, taxation and investment policy. These rules help business corporations not only to transact internationally with uniform rules but also adopt voluntary codes of conduct and best practices. Given the nature of international transactions which are subject to risks and volatility, business corporations are keen to observe even the voluntary codes and practices.

Here is the outlook of ICC on the near future of Trade Finance (ICC Global Survey 2013) which will guide the readers to plan and strategize:

  1. Regulations become more burdensome, reducing profit margins of financial institutions and constraining bank intermediates.

  2. A two-speed economic and financial system emerges, with developed markets in slow gear and developing markets in higher gear. However trade and commerce between nations is always forecasted to grow. Only the rate of growth varies from year to year.

  3. De-leveraging and US dollar liquidity issues continue disrupting the traditional trade finance model. The economy remains more volatile and unpredictable than before the financial crisis.

  4. Trade facilitation programs of multilateral development banks (MDBs) provide much needed liquidity, but are not sufficient alone in scope to bridge the trade finance gap. ICC wants banks and financial institution to increase the focus on short-term finance.

  5. New SME entrants are starved of trade finance in many countries due to the prevailing trade finance gap. SMEs make up 80-90% of businesses in most regions and most are de facto in the informal sector. Lending to SMEs is limited by their lack of collateral, credit history, and technical expertise in trade finance.

When it comes to international trade, economic patterns are scattered and difficult to analyze. Supply Chain and tariffs play a very important role in hindering or promoting trans-border trade. Currency movements and economic crisis also are the two macro-economic factors affecting the market forces of demand and supply, for example Euro sovereign debt crisis was a gain for ASEAN (Association of South East Asian Nations) as the slow production and business movement in Europe led to a rise in demand for the ASEAN output. Year on year ICC banking commission continues to collaborate with business corporations, institutions and international organizations such as World Trade Organization (WTO), World Bank and the International Monetary Fund (IMF) to expand the trade finance register and tap the unexplored trade capacity of the developing and the poorer economies.

 

Reference

International Chamber of Commerce

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