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TWN
Info Service on WTO and Trade Issues (Jun25/15)
Trade: G7 plus EU abdicate their role in strengthening MTS,
WTO Geneva, 19 Jun (D. Ravi Kanth) — The leaders of the G7 comprising the United States, Canada, Italy, France, Germany, the United Kingdom and Japan, as well as the European Union concluded their three-day summit in Canada on 17 June, with a chair’s summary that appears to have abdicated the G7’s role on how to strengthen the beleaguered multilateral trading system (MTS), particularly on reforming the World Trade Organization, said people familiar with the development. With each country trying to resolve their trade tensions with the administration of US President Donald Trump, the G7 summit turned out to be one of pursuing their individual goals, with several best-endeavour statements, including on: strengthening partnerships for financing development and shared prosperity; AI for prosperity; wildfire resilience; critical mineral supply chains; future of quantum technologies; and countering transnational repression, among others. At the end of the summit, which took place in Kananaskis, Alberta, Canada’s Prime Minister Mark Carney issued a chair’s summary that seemingly failed to show any concern for the multilateral issues, particularly on reforming the WTO, which suggests that the industrialized countries appear to be unconcerned about the fate of the WTO’s future, nor in reforming the global trade body, said people familiar with the development. Despite being instrumental in the creation of the WTO, the G7 plus the EU seemingly ignored the multilateral trade and climate change mandates due to the continued assault by the US on global trade through its allegedly unilateral tariff and other trade measures, said people familiar with the development. In not being able to challenge the reciprocal tariffs announced by President Trump on 2 April through collective actions, Canada, Italy, France, Germany, Japan, and the United Kingdom instead sought to settle their respective trade issues with the US, said people familiar with the development. It also appears that the outcomes of the separate meetings held between Canada, Japan, and the EU with President Trump at the G7 summit were seemingly not positive either, as alluded to by President Trump after the meetings, according to a Reuters news agency report on 18 June. President Trump said on 17 June that Japan was being “tough” in the trade talks while the EU had not yet offered what he considered a “fair” deal, as a team led by Treasury Secretary Scott Bessent stayed on at the G7 summit in Canada to keep working on trade issues after President Trump’s abrupt early departure, the Reuters report suggested. President Trump left the summit on the second day on the apparent pretext of attending to urgent issues back home, according to media reports. CHAIR’S SUMMARY The chair’s summary issued by the Canadian Prime Minister, Mark Carney, focused on “the objective of building stronger economies by making communities safer and the world more secure, promoting energy security and accelerating the digital transition, as well as fostering partnerships of the future.” “Five decades after its founding in 1975,” said Carney, “the G7 continues to demonstrate its value as a platform for advanced economies to coordinate financial and economic policy, address issues of peace and security, and cooperate with international partners in response to global challenges.” Among the global challenges is how to strengthen the multilateral bodies that provide a modicum of predictability, security, and development, which are facing existential crises due to the unprecedented cuts in funding, especially by the US, said people familiar with the development. Yet, the G7 members appear to have “turned a deaf ear” to the likely collapse of the multilateral system that took root during the past 70 years, said people familiar with the development. According to the chair’s summary, the “G7 Leaders focused on economic developments” such as “rising market volatility and shocks to international trade, as well as longer-term trends toward fragmentation and global imbalances.” While it mentioned “shocks to international trade”, the chair’s summary did not comment on the nature of these shocks and how to address them, said people familiar with the development. The chair’s summary suggested that the G7 leaders “discussed the need for greater economic and financial stability, technological innovation, and an open and predictable trading regime to drive investment and growth.” “They considered ways to collaborate on global trade to boost productivity and grow their economies, emphasizing energy security and the digital transition,” the chair’s summary pointed out. The G7 leaders acknowledged that both energy security and the digital transition “are underpinned by secure and responsible critical mineral supply chains and that more collaboration is required, within and beyond the G7.” CHINA TARGETED The G7 leaders touched on issues relating to China’s role in critical mineral supply chains and allegedly “unfair non-market policies and practices”. The chair’s summary said: “Leaders undertook to safeguard their economies from unfair non-market policies and practices that distort markets and drive overcapacity in ways that are harmful to workers and businesses. This includes de-risking through diversification and reduction of critical dependencies.” “Leaders welcomed the new Canada-led G7 initiative – the Critical Minerals Production Alliance – working with trusted international partners to guarantee supply for advanced manufacturing and defence,” in an apparent caution to China that the G7 would take up group actions in embarking on critical mineral production, said people familiar with the development. In this context, the G7 also launched a $50.3 million initiative on “innovation to secure global critical mineral supply chains.” Further, the G7 announced a “Resilient and Inclusive Supply-Chain Enhancement Partnership”, with funding of $20 million to support developing countries in contributing to the critical minerals value chain. In the chair’s summary, the G7 leaders “highlighted the importance of a free, open, prosperous and secure Indo-Pacific, based on the rule of law, and discussed growing economic cooperation with the region.” “They stressed the importance of constructive and stable relations with China, while calling on China to refrain from market distortions and harmful overcapacity, tackle global challenges and promote international peace and security.” The G7 leaders expressed “serious concerns about China’s destabilizing activities in the East and South China Seas and the importance of maintaining peace and stability across the Taiwan Strait.” In an apparent outreach effort, aside from Korea and Australia, the leaders of South Africa, Brazil, Mexico, and India took part in the meeting. The United Nations Secretary-General Antonio Guterres, and Ajaypal Singh Banga, President of the World Bank, also participated in the proceedings on the last day of the summit. However, the WTO’s Director-General, Ms Ngozi Okonjo-Iweala, and the International Monetary Fund (IMF) chief, Ms Kristalina Georgieva, did not seem to have attended the summit. The chair’s summary said that “together, they identified ways to collaborate on energy security in a changing world, with a focus on advancing technology and innovation, diversifying and strengthening critical mineral supply chains, building infrastructure, and mobilizing investment.” The participants also “discussed just energy transitions as well as sustainable and innovative solutions to boost energy access and affordability, while mitigating the impact on climate and the environment. They talked about the consequences of growing conflicts for shared prosperity, including energy security, and the need to work towards a shared peace.” According to the chair’s summary, “Leaders and guests had a productive discussion on the importance of building coalitions with reliable partners – existing and new – that include the private sector, development finance institutions and multilateral development banks, to drive inclusive economic growth and advance sustainable development. The upcoming United Nations’ Fourth International Conference on Financing for Development was raised as an opportunity to continue these discussions, including on private capital mobilization.” Last but not least, the G7 leaders “agreed to collaborate with partners on concrete outcomes that deliver for everyone.” To this end, “they agreed to six joint statements”, with commitments that include: * Securing high-standard critical mineral supply chains that power the economies of the future. * Driving secure, responsible and trustworthy AI adoption across public and private sectors, powering AI now and into the future, and closing digital divides. * Boosting cooperation to unlock the full potential of quantum technology to grow economies, solve global challenges and keep communities secure. * Mounting a multilateral effort to better prevent, fight and recover from wildfires, which are on the rise around the world. * Protecting the rights of everyone in society, and the fundamental principle of state sovereignty, by continuing to combat foreign interference, with a focus on transnational repression. * Countering migrant smuggling by dismantling transnational organized crime groups. In short, the G7 summit appears to be devoid of any concerns in addressing critical issues like poverty, food security, and more importantly, rapidly widening income inequalities, said people familiar with the development.
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