G-7 leaders
G-7 leaders agree on vaccines, China and taxing corporations
Leaders of the Group of Seven wealthy nations staked their claim Sunday to leading the world out of the coronavirus pandemic and crisis, pledging more than 1 billion coronavirus vaccine doses to poorer nations, vowing to help developing countries grow while fighting climate change and backing a minimum tax on multinational firms.
At the group’s first face-to-face meeting in two years, the leaders dangled promises of support for global health, green energy, infrastructure and education — all to demonstrate that international cooperation is back after the upheavals caused by the pandemic and the unpredictability of former U.S. President Donald Trump.
During their three-day summit in southwest England, the G-7 leaders wanted to convey that the club of wealthy democracies — Canada, France, Germany, Italy, Japan, the United Kingdom and the United States — is a better friend to poorer nations than authoritarian rivals such as China.
“This isn’t about imposing our values on the rest of the world,” British Prime Minister Boris Johnson told reporters at the end of the seaside summit on the rugged Cornwall coast. “What we as the G-7 need to do is demonstrate the benefits of democracy and freedom and human rights to the rest of the world.”
U.S. President Joe Biden, who was making his first foreign trip as leader, said it was an “extraordinary, collaborative and productive meeting” that showed “America’s back in the business of leading the world alongside nations who share our most deeply held values.”
But health and environmental campaigners were distinctly unimpressed by the details in the leaders’ final communique.
“This G-7 summit will live on in infamy,” said Max Lawson, the head of inequality policy at the international aid group Oxfam. “Faced with the biggest health emergency in a century and a climate catastrophe that is destroying our planet, they have completely failed to meet the challenges of our times.”
Also read: Biden urges G-7 leaders to call out and compete with China
Despite Johnson’s call to “vaccinate the world” by the end of 2022, the promise of 1 billion doses for vaccine-hungry countries — coming both directly and through donations to the international COVAX program — falls far short of the 11 billion doses the World Health Organization said is needed to vaccinate at least 70% of the world’s population and truly end the pandemic.
Half of the billion-dose pledge is coming from the United States and 100 million from Britain. Canada said it also would give 100 million doses, and France pledged 60 million. Altogether, the leaders said they pledged 870 million doses “directly over the next year,” with further contributions taking the total to the “equivalent of over 1 billion doses.”
Former British Prime Minister Gordon Brown said the lack of a more ambitious vaccination plan was “an unforgivable moral failure.”
But Biden said the leaders were clear that the commitments they made to donate doses wouldn’t be the end. The U.S. president said getting shots into arms around the world was a “gigantic, logistical effort” and the goal might not be accomplished until 2023.
The G-7 also backed a minimum tax of at least 15% on large multinational companies to stop corporations from using tax havens to avoid taxes, a move championed by the United States.
Biden also wanted to persuade fellow democratic leaders to present a more unified front to compete economically with Beijing and strongly call out China’s “nonmarket policies and human rights abuses.”
The language on China in the G-7 leaders’ communique from the meeting was more muted than the United States has used, but Biden said he was satisfied. On China’s economic behavior, the group said it would “consult on collective approaches to challenging non-market policies and practices which undermine the fair and transparent operation of the global economy.”
Also read: G-7 nations expected to pledge 1B vaccine doses for world
The leaders also said they would promote their values by calling on China to respect human rights and fundamental freedoms in Xinjiang, where Beijing is accused of committing serious human rights abuses against the Uyghur minority, and in the semi-autonomous city of Hong Kong.
Not every European power has viewed China in as harsh a light as Biden, who has painted the rivalry with the techno-security state as the defining competition of the 21st century.
“The G-7 is not a club hostile to China,” French President Emmanuel Macron said. “It’s an ensemble of democracies that (would) work with China on all world topics that China is ready to work on with us.”
Johnson, the summit’s host, wanted the three-day meeting to fly the flag for a “Global Britain,” his government’s push to give the midsized country, newly detached from the European Union, outsized global influence.
Yet Brexit cast a shadow over that goal during the summit on the coast of southwest England. European Union leaders and Biden voiced concerns about problems with new U.K.-EU trade rules that have heightened tensions in Northern Ireland.
But overall, the mood was positive: The leaders smiled for the cameras on the beach at cliff-fringed Carbis Bay, a village and resort that became a traffic-clogged fortress for the meeting.
The prime ministers and presidents also mingled with Queen Elizabeth II at a royal reception, ate steak and lobster at a beach barbecue and watched an aeronautic display by the Royal Air Force Red Arrows during their stay by the sea.
America’s allies were visibly relieved to have the U.S. back as an engaged international player after the “America First” policy of the Trump administration.
Johnson called Biden “a breath of fresh air.” Italian Premier Mario Draghi said the president “wanted to rebuild what were the traditional alliances of the United States after the period of Trump, during which these alliances were seriously cracked.”
Biden flew from the summit in Carbis Bay to have tea with the queen at Windsor Castle. He is scheduled to attend a NATO summit in Brussels on Monday and to hold talks with Russian leader Vladimir Putin in Geneva on Wednesday.
Also read: G-7 to put off agreement on when to end coal-fired power generation
The G-7 also made ambitious declarations during their meetings about girls’ education, preventing future pandemics and financing greener infrastructure globally
On climate change, the “Build Back Better for the World” plan promises to offer financing for infrastructure — “from railways in Africa to wind farms in Asia” — to help speed up the global shift to renewable energy. The plan is a response to China’s “belt and road” initiative, which has increased Beijing’s worldwide influence.
All G-7 countries have pledged to reach net-zero carbon emissions by 2050, but many environmentalists say that will be too little, too late.
Naturalist David Attenborough addressed the leaders by video Sunday, warning that humanity is “on the verge of destabilizing the entire planet.”
“If that is so, then the decisions we make this decade — in particular the decisions made by the most economically advanced nations — are the most important in human history,” the veteran documentary filmmaker said.
As the leaders met behind fences and barbed wire, thousands of environmental protesters gathered throughout the weekend outside the ring of steel to accuse the G-7 of missing a chance to prevent climate catastrophe.
Members of the Extinction Rebellion climate activism group blocked the main road of the town of St. Ives on Sunday, banging drums and sitting on the road. Elsewhere, hundreds of surfers and kayakers paddled out to sea to urge better protection for the world’s oceans.
“G-7 is all greenwashing,” protesters sang during one march. “We’re drowning in promises, now’s the time to act.”
3 years ago
G-7 finance ministers agree on 15% int'l minimum corporate tax rate
The Group of Seven wealthy democracies agreed Saturday to support a global minimum corporate tax of at least 15% in order to deter multinational companies from avoiding taxes by stashing profits in low-rate countries.
G-7 finance ministers meeting in London also endorsed proposals to make the world's biggest companies - including U.S.-based tech giants - pay taxes in countries where they have lots of sales but no physical headquarters.
Britain’s Treasury chief Rishi Sunak, the meeting's host, said the deal would “reform the global tax system to make it fit for the global digital age and crucially to make sure that it’s fair, so that the right companies pay the right tax in the right places.”
U.S. Treasury Secretary Janet Yellen, who attended the London meetings, said the agreement “provides tremendous momentum” towards reaching a global deal that “would end the race-to-the-bottom in corporate taxation, and ensure fairness for the middle class and working people in the U.S. and around the world.”
France cheered Saturday’s agreement and claimed credit for acting as its catalyst.
Also read: G-7 vows ‘equitable’ world vaccine access, but details scant
“We made it! After 4 years of battle, a historic accord was reached with G7 member states,” French Finance Minister Bruno Le Maire tweeted. “France can be proud!”
The meeting of finance ministers came ahead of an annual summit of G-7 leaders scheduled for June 11-13 in Cornwall, England. The U.K. is hosting both sets of meetings because it holds the group’s rotating presidency.
The endorsement from the G-7 could help build momentum for a deal in wider talks among more than 140 countries being held in Paris as well as a Group of 20 finance ministers meeting in Venice in July.
The G-7 has also been facing pressure to provide vaccines for low-income countries facing new surges of COVID-19 infections and to finance projects to combat climate change. A statement Saturday from the two-day finance ministers' meeting said only that they welcomed increased funding commitments by member countries and looked forward to more.
International discussions on the tax issue gained momentum after U.S. President Joe Biden backed the idea of a global minimum of at least 15% — and possibly higher — on corporate profits.
The tax proposals endorsed Saturday have two main parts. The first part lets countries tax a share of the profits earned by companies that have no physical presence but have substantial sales, for instance through selling digital advertising.
Also read: G-7 major economies pledge cooperation to deal with virus
The G-7 statement echoes a U.S. proposal to simply let countries tax part of the earnings of the largest and most profitable companies — digital or not — if they are doing business within their borders. It also supported awarding countries the right to tax 20% or more of profit exceeding a 10% profit margin.
Part of the agreement is that countries such as France that have imposed digital services taxes would remove them in favor of the global agreement. The U.S. considers those unilateral digital taxes to be unfair trade measures that single out big U.S. tech companies such as Google, Amazon and Facebook.
The other main part of the proposal is for countries to tax their home companies' overseas profits at a rate of at least 15%. That would deter the practice of using accounting schemes to shift profits to a few very low-tax countries.
Nations have been grappling with the question of how to deter companies from legally avoiding paying taxes by resorting to tax havens — typically small countries that entice companies with low or zero taxes, even though the firms do little actual business there.
3 years ago
G-7 vows ‘equitable’ world vaccine access, but details scant
Leaders of the Group of Seven economic powers promised Friday to immunize the world’s neediest people against the coronavirus by giving money, and precious vaccine doses, to a U.N.-backed vaccine distribution effort.
3 years ago