The recent strengthening of global economic activity and trade, driven by robust Asian exports, is a positive development despite explosion of trade restrictive measures across the world and rising inflation risks, Harsh Pati Singhania, the newly-appointed First Vice-Chair of the International Chamber of Commerce (ICC) has said.
“The good news is the global economy is moving in a positive direction. We are talking of 3.2 per cent overall growth in the calendar year 2024. This is positive despite the increased trade restrictive measures by countries,” Singhania told businessline in an interview, his first after assuming a new role at Paris-headquartered ICC recently.
ICC, known as the voice of world business, represents over 45 million businesses globally.
Singhania, former FICCI President and current Chairman and Managing Director of J K Paper, said that during his tenure, the voices of businesses from the Global South will be more prominently represented in the ICC’s activities and operations, especially in light of the recent significant contributions to global growth from Asian countries.
He also highlighted that the ongoing digitalisation of global trade is going to drive global growth tremendously and ICC has identified ‘accelerating trade digitalisation’ as one of five “strategic areas”, with priorities under each.
The other four strategic areas are ‘enable global trade’; ‘enhance reach and scope of dispute resolution service’; accelerate sustainability and climate action; and strengthening multilateral cooperation.
In the current global scenario that is increasingly characterised by geopolitical conflicts and economic fragmentation, promoting peace and prosperity and facilitating global trade, the core principles of ICC, has become all the more relevant and crucial, Singhania said.
Three pillars
“In my new role at ICC, my main focus would be to work further on this and encourage governments to engage with the business community including the Global South. This will essentially be based on the three pillars of Engagement - Of everyone at ICC (One ICC), Focus to drive effective policy reforms, by leveraging the unique assets of ICC’s network, and Impact by delivering tangible and meaningful outcomes and creating real value for ICC members.
On crucial issue of accelerating trade digitalisation, Singhania said that “We want to see from ICC that by 2025 as much as 50 per cent of global trade are governed by laws that recognise electronic trade documents. This will be part of ICC’s digital standards initiative (DSI)”.
There has to be legal reforms in various countries for digital trade documents and work will be pursued vigorously on that front, he noted.
ICC will also look to deliver successful digital trade corridors in 20 countries covering 10 sectors on a pilot basis.
TRADE PROTECTIONISM
Asked about increased instances of trade restrictive measures, Singhania said that ‘trade’, which has long been a driver of growth and poverty eradication, is facing strong headwinds from protectionism. Protectionism poses a big threat to limit the gains of globalisation, he said, adding that impact of Brexit and US-China trade war is already evident.
Singhania noted that tariffs implemented by Trump in his first term as US President has largely been continued by Biden.
“Going forward, economic nationalism and hawkish view on China is here to stay regardless of which candidate wins US Presidential elections in November. If Trump returns as President, it would likely escalate,” he added.
Singhania also said that European Commission has announced additional preliminary tariffs of up to 38 per cent on Chinese electric vehicles on growing fears of threat of a new China shock of cheap manufactured exports.
To reverse this growing trend of protectionism and ‘deglobalisation’, several free trade agreements (FTAs) between countries and regions have taken place. “We at ICC need to be persistent to advocate trade engagement which will benefit all”, Singhania added.