ICC Secretary General John Denton, sharing his perspective on Global Economy

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News • London

Incoming Secretary General of the International Chamber of Commerce John W.H. Denton AO has warned against inward policies and other distractions that could threaten global growth in 2018.

Speaking in an interview broadcast on Sky News Mr Denton told presenter Ian King that while “the sun is shining on the global economy” the challenge would now be to maintain momentum.

During the interview, which aired on the Ian King Show on Tuesday, Mr Denton also underscored the importance of digital technologies for sustained economic growth, and pointed to the World Trade Organization as the only organization that can “deliver up global norms to continue growth of digital platforms and access to e-commerce” which Mr Denton said was of particular importance to small- and medium-sized enterprises.

Responding to a question on current anti-globalisation sentiment, seen several Western economies, Mr Denton recognized some shortcomings in the system but stressed that the tone of the times need not be permanent.

 

Below the transcript that taken from the interview:

Presenter:

Now the International Monetary Fund says global growth will be the strongest. Since 2011 at three point nine 3,9%,  both this year and next. But there are concerns not least potential barriers to trade from the United States to China and elsewhere. There was a slight upgrade for UK growth to 1.6 percent this year.

Meanwhile, China's announced its growth during the last quarter was 6.8 percent which is of course above its six-and-a-half percent target with earlier I spoke to the incoming secretary-general of the world's biggest business organization the International Chambers of Commerce. I asked John Denton for his view on the outlook for the global economy.  

John Denton:

When I look at the state of the world economy and I almost repeat what Christine Lagarde is saying I  mean the sun is shining there's a there's an upswing going on and it's very very positive. The challenges we see how do we maintain that momentum and what we don't want to see as distractions to that and we don't see inward policy formation which will actually undermine the prospects for growth. And obviously for sustained economic growth it's not just capital, it's not just productivity but it's also about technological transformation and we want to see economies focus much more on that aspect ensuring that that's the source of their economic growth and that's there's some issues that need to be fleshed out through the WTO which actually the only organization that can live-deliver up global norms that will enable the continued growth of digital platform and also the continued growth of access to ecommerce and things like that, which is very important for SMEs and micro SMEs

Presenter:

But how worried are you about this apparent kickback against globalization the fats that in some Western nations including the UK the United States people seem now to be positively against free movement of capital and labour

John Denton:

Yeah well I think the word very uncertain times and I but I don't think this issue this issue or this this tone of the times must be permanent. I think we have to recognize a couple of things, but firstly probably the two critical assumptions upon which this unbounded global growth that we saw in the 2000s were based probably over-promised. And the first was that global trade would actually on the aggregate create greater wealth for all, but the reality is that's not how it played out.  And the second that by letting a number of developing countries participate in the kind of global trading system that they would continue to open up the borders reduce tariffs and move away from non-tariff barriers uh behind the border restrictions. Both of these assumptions proved a little over optimistic. But I think some of these systemically important and not quite open economies need to do some reform and I include China in there and I include India in there. And now these are systemically important economies that are benefitting from the open trading system but they actually do need to do more in terms of reform particularly in terms of opening up the economy economies and this is not necessarily only in tariffs but in non-tech non-tariff barriers as well. So enabling investment be much clearer about those sorts of issues.

Presenter:

But it sounds from what you're saying the need for some of these big systemically important countries to open up that you have some sympathy with Donald Trump in terms of some of the things that he's saying about China.

John Denton:

The reality is not everything that Donald Trump says is wrong. It's easier for a Chinese to invest in Australia than for Australians to invest in China and ditto with America. So it's not just about the trade deficit there is no doubt and China recognizes itself that it needs to open up more parts of its economy. There is no doubt in China noses itself that some of the points that America has made are not misplaced the challenge for them is how they actually make that working their own domestic economy.

Presenter:

What do you make of the sanctions at America and some of its allies have just introduced against Russia is that not going to push Russia back into a more isolationist position.

John Denton:

We need to have people abide by the rules we need to have people know that if they break the rules there are consequences and in the global security of global political arena, the kind of consequences must be more than just shaming. There actually needs to be some form of security sanction and actually denial of access to the US financial services system that your financial system seems to be one of the most powerful tools that's available at the moment. It should however only be used very sparingly. And it is a real problem and unfortunately, the capacity of global leaders to engage in constructive discussions to lessen tension seems to be sad sadly missing at the moment what we're seeing is exacerbated tension is not just with Russia but also with China

 

 

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