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G7 Takeaways & EU-US Summit / Myron Brilliant Comments

17 June 2021 Thursday

Dear colleagues:
President Biden has declared throughout his trip to Europe that “America is back.” In some ways we agree: The weekend’s events and ongoing engagement with the Europeans and other leaders including the Japanese has effectively signaled U.S. leadership on the pandemic, climate, cyber, and other issues.
The biggest announcements landed this morning with an agreement between the United States and the European Union on the long-running large civil aircraft disputes, accompanied by a pledge to suspend application of $11.5 billion in tariffs. We expect that removal of these damaging tariffs will provide significant relief for businesses on both sides of the Atlantic. It will also pave the way for the U.S. and EU to tackle non-market practices in global markets, uphold fair competition, and help our workers and companies compete on a level playing field. The U.S. and EU also launched a bilateral Trade & Technology Council, a strategic dialogue the Chamber has consistently encouraged. Lots of positive news, though we’ll continue to push for progress towards lifting Section 232 tariffs and finalizing a new Privacy Shield agreement.
Deliverables were more limited coming out of last weekend’s G7 Summit, which went off without a hitch but as expected, yielded few surprises. That said, we did see some progress on areas of importance to the Chamber’s members, including in health policy and the need to support environmental protection without introducing burdensome regulations.
Here’s what we heard this weekend -
The G7 pledged an additional 1 billion vaccines for poor nations — half of which would come from the United States — while assuaging concerns about compulsory licensing of vaccine-related IP. The group also recognized the looming failure of antibiotics due to antimicrobial resistance – an area of significant Chamber advocacy over the past several years.
The COVID-driven economic crisis is far from over, but conversations at the summit reflected growing concern around inflation. A much-hyped discussion around a 15% global minimum tax proved less robust than expected, and leaders tossed the ball to the G20 and OECD, where we expect a lengthy battle.
On China, there was plenty of discussion about stronger trade rules to address China’s unfair practices, but it remains to be seen how much punch these pledges pack. Leaders pledged to enhance cooperation on investment screening and called for a task force on infrastructure finance in third countries – a clear nod to interest in offering alternatives to Chinese financing. In addition, trade ministers will pick up discussions on policies to eradicate forced labor in global supply chains, a serious concern but potentially a source of costly new compliance requirements as well as sanctions.
The G7 Joint Communique used notably harsher and more extensive language on China (and Russia) than past statements. While U.S. officials described a “spectrum” of willingness by G7 members to push Beijing, the statement was harsh enough to prompt an almost immediate rebuke from the Chinese government. The outcome reflects growing concern among participants about China’s behavior but fell short of expectations of some in the U.S. government.
Participants launched the G7 Industrial Decarbonization Agenda as a platform to harmonize standards. Leaders also agreed to move to an “overwhelmingly decarbonized power system in 2030,” but with no definition as to what this means and adopted B7 recommendations for a nuanced approach to coal regulation. Leaders also agreed “to move forward towards” mandatory climate-related financial disclosures that provide “decision-useful” information. Despite our expectations going into the weekend, we saw little discussion of sustainable agriculture, which will become more of a flashpoint moving forward.
G7 leaders adopted a 2030 Nature Compact, reflecting a commitment to consider the environmental impact of economic policy. The group pledged to dramatically increase public and private investment in biodiversity and the “nature positive economy,” and threw their support behind the new Taskforce on Nature-Related Financial Disclosures. The G7 also signaled a potential new UN – or other multilateral institution – agreement on plastics litter, which is likely to incorporate feedback from the Chamber.
On COVID, as borders begin to reopen, leaders called for mutual recognition of digital applications, testing requirements and vaccination status, with further discussions to follow. While not the level of action the Chamber and B7 have been advocating for, we consider this a partial win.
The G7 agreed to champion “data free flow with trust." The endorsement underscores the continued salience of cross-border data flows, and the inability of the major economies to arrive at common frameworks that enable digital trade and privacy. The ongoing crisis in transatlantic data transfers and the recent embrace of data localization by many in Europe should give us pause as to whether this endorsement will yield meaningful results for the private sector.
If you have any questions about individual issues raised during the G7 Summit or EU-U.S. Leaders’ Summit and the Chamber’s positioning and advocacy, please don’t hesitate to reach out.
Warmest regards,
Myron Brilliant

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