As confidence in free trade appears to be waning mainly due to U.S. foreign policy and Brexit, international business leaders said Friday that stronger cross-border cooperation is needed more than ever to prevent further damage to the principles of globalization.
“Our message is very clear. We need a rules-based, free, fair and open international economical order,” said Hiroaki Nakanishi, the head of Keidanren, Japan’s biggest business lobby, at the B20 meeting in Tokyo. “We the business communities of G20 countries must stand united and deliver voices to our political leaders.”
The B20 is the business version of the Group of 20 summit. The two-day meeting, which began Thursday, was hosted by Keidanren, also known as the Japan Business Federation, ahead of the G20 leaders’ summit in June.
At the meeting, the B20 issued a series of policy recommendations to achieve sustainable and inclusive growth, such as promoting digitalization so more people can benefit from cutting-edge technologies, and realizing a low-carbon emissions society.
The event also featured panel discussions where businesspeople discussed topics ranging from economics and trade to sustainable development.
Participants expressed concerns about the economic risks of ongoing political events, including Brexit and the trade war between the United States and China.
“I would say the general observation of course is that global growth is weakening,” said Masamichi Kono, deputy secretary-general of the Organisation for Economic Cooperation and Development.
Earlier this month, the OECD once again downgraded its global economic growth forecast for this year to 3.3 percent from 3.5 percent, following a cut last November.
Policies to enhance productivity and facilitate fair competition and free trade need to be thrust forward by the G20 leaders, he said.
“G20 can really play a leadership role and I think this is more necessary than ever,” Kono said.
Carolyn Fairbairn, director-general of the Confederation of British Industry, said the political turmoil over London’s split with Brussels has worried many about the future business environment in the U.K.
But there are “reasons to be cheerful” because economic and business conditions in the U.K. are actually healthy, Fairbairn said, noting that exports and employment are solid and the U.K. is the center of the financial technology industry.
Peter Robinson, who heads the United States Council for International Business, also stressed that the U.S. business community is against the protectionism trend.
“It is true we do have economic challenges ahead of us,” such as trade conflict with China, he said.
“I just want to assure everybody here that the American business community still believes in open trade, globalization and multilateralism,” Robinson added.
He also said the G20 communities need to do everything possible to prevent global recession. A primary short-term focus is reforming the World Trade Organization to help ease the intensifying trade war, saying he hopes that the G20 leaders will cooperate closely on this issue.
Business leaders also said it is critical for the private sector to take further steps to facilitate sustainable growth, as the global governing organizations are having a tough time getting the international community to move in the same direction.
“We have a challenge that no businessperson has ever had to deal with before. We have to decarbonize the global economy. We have to move to a circular economy … we have to (create) more inclusive growth,” said Paul Polman, who chairs the Paris-based International Chamber of Commerce.
To do so, Polman said financial markets and investors need to value longer-term benefit rather than pursuing short-term profit.