BDI: Global Player in Economic Governance

Globalization © Fotalia/donvoctori

The share of both Germany and Europe in the global population, in global economic output and in global trade will decrease in the years to come, as will our weight in international politics. Effective global governance will thus become even more important to Germany. The Federation of German Industries (BDI) plays its part through participation in a myriad of global governance fora.

Whether in the Group of 20 (G20), the World Trade Organization (WTO), the UN organizations, or the forums of international climate policy – as a global player, the BDI participates effectively in global economic governance.

BDI and the G20

Together with the Association of German Chambers of Commerce and Industry (DIHK) and the Confederation of German Employers’ Associations (BDA), BDI showed considerable commitment in representing the interests of the business community of the 20 leading industrial countries at the G20 (Business 20, B20) in 2016-2017. The significance of the G20 in shaping the rules for the global economy has increased as globalisation has intensified. As chair of the B20, BDI advocated for open, rules-based and fair international markets, as well as a sustainable world economy. As a member of the B20 Troika, it continues to do so under the Argentine Presidency.

BDI: Strong Partner of the World Trade Organisation

The BDI regularly takes part in the work of the WTO. As the guardian of world trade, the WTO provides for rules-based and fair global trade. While the work of the WTO is partially blocked at present, due to the stalemate of the Doha Round, progress is continuing in other areas. One success story is the conclusion of the Trade Facilitation Agreement (TFA), which is currently being implemented. In mid-December 2017, the 11th WTO Ministerial Conference took place in Buenos Aires. Among other things, the discussions focused on digital trade. BDI took part in the conference, representing the interests of the German business community. In addition, BDI chaired one of the so-called Business Focus Groups of the WTO 2016-2017, focusing on market access issues. The group developed ideas regarding making international trade more open and fair, and putting a stop to the spread of protectionism. Although the Business Focus Group is now chaired by B20 Argentina, BDI is still a valued group member.

BDI Advocating for Sustainable Investment Protection

Foreign investment is the most important driver of globalization. For this reason, modernizing the regulatory framework for cross-border investments is a crucial area of global governance. Worldwide, more than 3,300 bilateral investment treaties (BITs) regulate the protection of foreign investments. However, these treaties have come under public criticism and many are in need of reform. BDI aims to achieve more effective and legitimate protection of foreign direct investments that, in the long run, would become part of a multilateral system. BDI participated in the reform discussion at the United Nations Conference on Trade and Development (UNCTAD) as well as the Organization for Economic Co-operation and Development (OECD), the WTO, and the European Commission to help develop a modern and future-oriented system of investment protection.

Advancing Climate Protection on International Stage

We can only overcome the challenges of climate change at the global level. The major goal is to achieve worldwide greenhouse gas neutrality in the second half of this century. One of the main components of the global regulatory framework for the reduction of CO2 is the Paris climate protection agreement. BDI made its position on this issue quite clear, particularly through the events it hosted during the World Climate Conference in Paris. Now, the almost 200 signatory states must pull together in order to establish how the ambitious Paris goals can be reached without the United States. The UN Climate Conference in Bonn in November 2017, where BDI played a constructive role in the debates, was an important interim step.

Implementing the Sustainable Development Goals

Through the adoption of its 17 “Sustainable Development Goals” (SDGs), the United Nations has paved the road towards a more sustainable and future-oriented global economy. Industry’s innovative strength and willingness to invest are key to reaching the SDGs. BDI participated in the deliberations on the SDGs at the United Nations in New York. Currently, new ideas for a global sustainability policy are being developed at BDI as part of a project on sustainability. In a newly founded working group, more than 40 experts collaborate on the issue of sustainability in order to develop strategies for attaining the SDGs.

Sustainable Global Supply Chains

In the context of globalization, it is all the more important to guarantee the sustainability of global supply chains. In particular, there is a need to reach consensus on and enforce worker rights at the global level. The G20 has committed itself to the global implementation of human rights and social standards. However, the responsibility for the enforcement of such regulations worldwide must not lie exclusively with the companies. The BDA has actively promoted this stance within the B20 process, in which the BDI, the BDA, and the DIHK all have played a leading role.