The leaders of the Group of Seven (G7) met last week during a balmy three-day Summit in Cornwall, England to discuss the world’s most pressing issues. The G7, an alliance of advanced economies and the world’s seven most powerful democracies, is comprised of the United Kingdom, the United States, Canada, Japan, France, Italy, Germany and the European Union. This year, Australia, India, South Korea and South Africa were also in attendance.
The United Kingdom approached the event as a way to project to the world that despite Brexit, the country is open for business and is keen to work cooperatively as a trusted international partner. Prime Minister Boris Johnson particularly saw the Summit as a chance to further his government’s “Global Britain” agenda, which involves looking beyond the European Union in order to cultivate ties with allies further afield. The event was also a trial run for the COP26 event which will be hosted in Glasgow, Scotland in November this year.
To this end, the final communiqué of the Summit emphasises the free, open and democratic values that bind the attendees and their commitment to multilateralism—a value that has been challenged in recent years. Members of the G7 agreed on shared global action to:
- End the COVID-19 pandemic and prepare for the future;
- Reinvigorate their economies by advancing post-COVID-19 recovery support;
- Securing the G7’s future prosperity by championing freer, fairer trade with a reformed trading system;
- Protecting the planet by supporting a green revolution;
- Strengthening the G7’s partnerships with partners around the world. For example, deepening the group’s current partnership to a new deal with Africa; and
- Embracing the values of democracy, freedom, equality, the rule of law and human rights.
Pandemic recovery and vaccine distribution
Despite the ambitious commitments that were made, questions remain about the details of world leaders’ promises. In particular, the Summit has been criticised for falling short of expectations when it comes to vaccines. The World Health Organisation stated that it would need 11 billion doses of COVID-19 vaccines to inoculate the global population, not one billion doses that the G7 pledged. However, G7 leaders did release the “Carbis Bay Declaration” to help prevent future pandemics.
Similarly, on climate change, the outcomes agreed during the Summit were less ambitious. Securing G7 support was an important part of the United Kingdom’s role as an international climate leader. In order to tackle climate change, the G7 committed to accelerating efforts to cut greenhouse gas emissions and keep the 1.5°C global warming threshold within reach, as well as ending international financing for coal power stations by 2021. Other commitments including phasing out petrol and diesel cars by 2030 were outlined, but no specific timeline was provided. Despite a pledge of $100bn a year for developing nations to help tackle the climate crisis, environmental campaigners have said this is not enough to tackle both environmental issues and the pandemic.
The G7 signified the return to a previous world order, with President Biden at its helm. Arguably, the meeting has reinvigorated the alliance after the initial chaos of the pandemic. The G7 agreed on how to best navigate their relationship with China. The Summit’s communiqué urged China to “respect human rights and fundamental freedoms”. However, one of the most significant commitments agreed upon by the G7 nations was the proposed “step change in our approach to investment for infrastructure,” resulting in an agreement to the “Build Back Better World” (B3W), a rival to China’s Belt and Road Initiative. The plan proposed by President Biden would allow for raising hundreds of billions of dollars to help close a $40tn infrastructure funding gap in developing countries, in an attempt to undermine China’s attempts to utilise infrastructure funding to build alliances in the developing world.
Trade and taxation
The alliance agreed to a global minimum tax rate of at least 15%. The Summit focused on setting out common policies and economic commitments that would support nations to build sustainable economies through an international taxation system. Following the rise in global protectionism, the United Kingdom sought to use the Summit to encourage a return to a more open and connected global trading system. In doing so, they ensured the reform of the World Trade Organization so that there is a multilateral trading system that is free and fair for all.
In addition, the Summit presented an opportunity for the United Kingdom to cement its “special relationship” with the United States through the revitalised Atlantic Charter. This builds on the commitments towards European regional security and the governance of a liberal world order. As the United Kingdom is focused on building new trade relationships following its departure from the European Union, Prime Minister Johnson also used the Summit as an opportunity to further negotiations of the UK-Australia free trade agreement, which subsequently lead to a free trade deal between the two countries being announced shortly after the Summit ended. It is the first major post-Brexit free trade agreement with a country that the United Kingdom did not have an existing trade deal with as a European Union member state.
However, despite a significant amount of agreement between parties, tensions between the United Kingdom and the European Union over Northern Ireland persisted. The Northern Ireland Protocol, which prevents checks on trade across the Irish border, was agreed as part of the Brexit deal, but has been robustly criticised by a number of Unionist voices in Northern Ireland and London. This comes as the European Union said that its’ patience with the United Kingdom was “wearing thin” and French President Emmanuel Macron claimed that Northern Ireland is not a part of the United Kingdom, which angered the British delegation.
Domestically, rising cases of the virus in the United Kingdom meant that a lot of national press was focused on Boris Johnson’s announcement to push back the final easing of COVID-19 restrictions in England on 21 June. Unfortunately for the government, much attention therefore still remained on the UK’s domestic situation and handling of the virus—after all, the best persuasive foreign policy is a well-functioning national economy and society.
Looking ahead, this Summit signals a future for successful cooperation between the alliance. It was a test of the stability of the G7 concept and highlighted the resilience of the G7 forum. It was also a renewed commitment by democratic nations to recover together from the pandemic and reinvigorate a liberal world order. Beyond the photo ops in Carbis Bay, and some feeling underwhelmed by their commitments on the pandemic and the environment, the G7 showed some steps towards consensus on significant, global challenges. The leaders of the West’s largest economies showed to the world that they can collaborate and do business together. The G7’s commitments during the Summit mean that companies, specifically multinational corporations, can expect governments to take a multilateral, cooperative approach to policy implementation. Ultimately, this will do-away with protectionism and embrace cross-border agreements on issues such as taxation, trade and the environment. Agreement to reform the global tax system in particular demonstrates that multinational corporations must take a global approach to government affairs and policy.