The 25-page communiqué was verbose, declaring the G-7 partnership “revitalised” and ready to “build back better” with “freer, fairer trade” within a reformed trading system. It promised the well-being of “all people” in one of the more grandiloquent statements. In terms of concrete announcements, the G-7 promised one billion vaccine doses to the world’s poorest countries over the next year. It’s literally a drop in the bucket, if the aim is to vaccinate at least 40 percent of the population in all countries by the end of 2021, as the International Monetary Fund (IMF) recommended in a paper last month. The WHO has said 11 billion doses are needed to vaccinate 70 percent. The IMF paper, written by Ruchir Agarwal and Gita Gopinath, puts it simply: “Pandemic policy is also economic policy”, because without containing the pandemic, economies can’t recover. The cost of vaccinating 40 percent of the world is estimated around US $50 billion but there is funding gap of around US $22 billion. The G-7 commitment to the “WHO COVID-19 effort under the Act-Accelerator” partnership is US $10 billion. This leaves a big hole, which the G-7 didn’t try filling in between their beach runs and dunks in the ocean. On climate change, the G-7 reaffirmed their goal to keep the global warming threshold at 1.5 Celsius and cut their emissions by half by 2030 but failed to commit on resources for developing countries. This doesn’t set a strong stage for COP26, the UN climate talks to be held in Glasgow in November. The climate financing goal of US $100 billion a year by 2020 is far from being met while mistrust is growing between those who create the climate crisis and those who must undertake the clean-up.
Apart from welcoming Biden, the Europeans weren’t ready to adopt his agenda on China besides condemning Beijing for human rights abuses—the easiest box to check on the Asian giant. Even that was vague and ended up kicking the ball down the road to a task force to find ways to ban products made by forced labour.
So some leaders announced funds they had previously made public as Johnson did while others were happy simply to sign the communiqué and “welcome the commitments already made by some of the G-7 to increase climate finance.” Poor countries buried under rising debt burdens from coping with the pandemic are expected to find their own resources for clean technology. The one important achievement, which should have got more applause than it did, was the agreement on a 15 percent global minimum tax on multinational corporations that have managed to game the system for years by hiding their profits in offshore havens. The new tax could be the beginning of the end of at least the most brazen abuses, especially by big tech companies. But a lot of rules have to be made and loopholes closed before Amazon and Google will pay a fair share of taxes. This seismic shift in perspective in the Western mind is partly due to the ferment in Democratic Party politics in the United States (US) and the rise of the progressives. As the ultimate pragmatist, Biden recognised the moment and initially put a proposal to tax the corporations at 21 percent. But on China, the Europeans shied away from Biden’s hardline, choosing to debate “the depth of the challenge” instead of formulating a joint approach. German Chancellor, Angela Merkel, was all about cooperation, recognising that China and G-7 have different “social systems”. In the end, the only thing they agreed on was to mention human rights abuses in Xinjiang, something Beijing can easily ignore because there is no price to pay. China is betting on a US-Europe divide and, thus far, that’s proving to be the case. Those looking for a united front, a clear direction and definitive policies will have to wait longer.
On climate change, the G-7 reaffirmed their goal to keep the global warming threshold at 1.5 Celsius and cut their emissions by half by 2030 but failed to commit on resources for developing countries. This doesn’t set a strong stage for COP26, the UN climate talks to be held in Glasgow in November
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Seema Sirohi is a columnist based in Washington DC. She writes on US foreign policy in relation to South Asia. Seema has worked with several ...Read More +