The United States is banking on top of the G7 to revitalize transatlantic ties | Business and economic news

On the south-west coast of England, top leaders representing Western democracies meet from Friday to the weekend to discuss a daunting list of important issues.

In addition to the United Kingdom, which will host the meeting, there will be heads of government from the United States, Canada, France, Germany, Italy and Japan. Leaders from South Africa, Australia and South Korea are also participating, with India’s expected assistance due to COVID-19.

The Foreign Ministers of Group Seven (G7) began their consultations in early May to discuss the Western return against Russia and China, the coronavirus, economic recovery and climate change .

Geopolitical compliance is the first trip abroad by U.S. President Joe Biden since he took office in January.

At the Carbis Bay Hotel in Cornwall, Biden is expected to turn the page on the policies made by his predecessor, Donald Trump, who opposed certain major American allies.

The resurgence of transatlantic relations is crucial for US President Joe Biden, who kicked off the record by holding bilateral talks with British Prime Minister Boris Johnson [File: Kevin Lamarque/Reuters]

Other presidents and prime ministers are helping to try to revive traditional diplomatic alliances in the post-Trump era between rich economies amounting to $ 40 trillion, about half of the world’s gross domestic product.

The resurgence of transatlantic relations is crucial for Biden, who reached the sphere Thursday by holding bilateral talks with British Prime Minister Boris Johnson. The U.S. government hopes to show that democracy – and especially soybeans – can meet the momentum.

The world’s richest and most powerful democratic nations are facing a myriad of challenges, from defending autocratic governments and global warming to the persistent COVID-19 pandemic and unbalanced trade relations. These, specifically, are the four summit priorities identified by the British government.

Global minimum corporate tax

“This is exciting because it is the G7’s first major venture with a new administration, with new energy and new momentum,” said Christine McDaniel, a senior researcher at George Mason University’s Mercatus Center.

“The United States and many of our European partners realize that only with deep cooperation can we solve these problems,” he told Al Jazeera.

The business community is anxious to see what emerges from the sea meeting in response to accelerating ransomware attacks on critical infrastructure.

On the economic front, a huge success for the pre-leadership summit was announced last time when G7 finance ministers in London reached a historic agreement on a unified minimum tax rate for all multinational corporations.

The victory for multilateralism is awaiting further work at an upcoming meeting for 135 nations in the Organization for Economic Co-operation and Development over the summer in Paris.

The two pillars of the current pact are a minimum global tax rate of at least 15 percent and a requirement that multinationals pay taxes to the country where they actually sell their products and services, rather than booking those profits to a country at lower taxes. .

The United States hopes the agreement will eliminate the tax on digital services that Washington fears for large technology and social media companies. But tax havens could also oppose it.

Last year the G7 finance ministers in London reached a historic agreement on a unified minimum tax rate for all multinational corporations. [File: Henry Nicholls/Pool/Reuters]

G7 leaders on Cornwall’s sunny coast are set to approve the ambitious U.S. proposal announced for the first time since May by U.S. Treasury Secretary Janet Yellen.

The meeting of the finance ministers of Group 20 (G20) in July in Italy is scheduled to resolve the finer points of a solution designed to end the race to the bottom that has encouraged companies to avoid paying the their fair share by accounting for profits in jurisdictions with minimum taxes.

“Digital flows are a growing part of the flows of ideas and people in world trade and a driver of productivity growth,” McDaniel added, warning against any kind of tariff on digital trade.

“Countries want companies to pay their fair share,” he added. “Germany cannot charge Google, but they can tax any order that crosses its border.”

The UK’s finance minister, Rishi Sunak, said on Twitter that “under the principles of major reforms, the world’s largest companies with profit margins of at least 10% will be in reach.”

Proponents of a minimum global tax rate say a sealed deal will give many nations more money to fund their economic recoveries following the unfortunate pandemic of budgets on both sides of the Atlantic.

Clean Green Initiative

Dealing with a pandemic once in a century may also have helped highlight common ground on how to handle the climate emergency.

In the run-up to the summit, U.S. National Security Adviser Jake Sullivan said leaders should work to “provide funding for the physical, digital and health infrastructure in the developing world. “.

At a White House press conference earlier this week, Sullivan suggested that the Clean Green Initiative provides “a high standard [and a] transparent alternative, based on rules to what China has to offer ”with the Belt and Road Initiative (BIS).

This project aims to demonstrate the effectiveness and cohesion of the West in opposition to the Beijing BIS, which seeks to expand and deepen China’s economic and political power around the globe by financing major infrastructure projects.

“We have an opportunity to provide ambitious progress that curbs the climate crisis and creates jobs by leading a global clean energy transition,” Biden wrote in an Washington Post op-ed over the weekend.

G7 leaders still need to decide whether substantial new funding will be allocated to the Green Clean initiative, or whether they will settle for just establishing a loose framework to compete with China’s trillion-dollar BRI dollars.

Officers are also tasked with deciding on the geographic scope of the plan. European nations want to focus on Africa, while Japan prefers an Asian focus and the United States places a higher priority on Latin America – its backyard.

G7 leaders required to unveil Pure Green Initiative to rival China’s Belt and Road Initiative [File: Tom Nicholson/Reuters]

But some analysts believe that any G7 move that further deepens the growing global bifurcation between the spheres of American and Sinus influence could be counterproductive when it comes to tackling the planet’s challenges.

“The Biden administration is doing the right thing by working closely with its democratic allies to address some of the world’s pressing issues, but I don’t think it’s a good idea to use G7 to open up another ideological battlefield with Beijing, ”said Yanzhong Huang, a former member of the Foreign Relations Council.

“Global challenges such as the COVID-19 pandemic or the climate crisis do not recognize territorial boundaries,” he told Al Jazeera. “You can’t expect a small group of democracies to take care of everyone without the cooperation or cooperation from China.”

G7 finance ministers last week began cracking down on how to deliver the promised $ 100 billion in climate finance. They have also reached a consensus to have banks and other companies regularly disclose information on climate risks.

A new study published Thursday by the Science-Based Target initiative said none of the G7 scholarships are in line with the objectives of the 2015 Paris Agreement on climate. Only 19 percent of the companies listed on those major indices have targets aligned to that pact.

However, climate investments may be hampered by continued efforts to accelerate the end of the world’s coronavirus crisis.

Find a way to defeat the deadly coronavirus pandemic at the top of the G7 summit agenda [File: Elaine Thompson/AP]

Vaccine distribution plan

It paves the way for defeating the pandemic firmly at the top of the G7 summit agenda, and finance ministers have begun discussing a $ 50 billion vaccine distribution plan for poor nations with the International Monetary Fund, the World Health Organization and the World Trade Organization.

British Prime Minister Boris Johnson has said he is looking for a commitment to vaccinate the world by the end of 2022, and UK Foreign Minister Dominic Raab says equitable access to vaccines stroke through the COVID-19 Vaccines Global Access Facility (COVAX) is essential.

The UK has responded to the call from the US president to waive vaccine patents temporarily, instead supporting technology transfers from pharmaceutical companies at unprofitable prices.

A new international approach to preventing future pandemics was also launched last week with G7 health ministers meeting in Oxford.

On another pressing global issue, lawmakers in the United States and the United Kingdom have urged their leaders to establish – at the G7 – an international fund for Israeli-Palestinian peace.

Queen Elizabeth II of the United Kingdom will meet with Biden and First American Lady Jill Biden at her home in Windsor Castle at the conclusion of the summit. He will become the 13th president to sit with the 95-year-old monarch.

Biden will continue to Brussels for NATO and US-EU summits, before traveling to Geneva to meet with Russian President Vladimir Putin in a major test for Western democratic values.

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