G-7 Trade Ministers Talk Trade Distortions, WTO Reform, Forced Labor
Top trade officials from Europe, Japan and North America emphasized problematic economic behavior in China, without mentioning the world's second-largest economy by name, at the end of the G-7 meeting of trade ministers.
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U.S. Trade Representative Katherine Tai and trade ministers from Canada, the European Union, Germany, Japan, the United Kingdom, France and Italy issued a joint communique May 28 that said they're concerned about increasing non-market practices that distort competition. "Of particular concern are harmful industrial subsidies, including those that lead to severe excess capacity, a lack of transparency regarding the state’s role in the economy and the role of state enterprises in unfair subsidisation, and forced technology transfer," they wrote.
They praised the Organization for Economic Cooperation and Development's research on below-market financing, which seems to be leading to excess capacity in several sectors.
The aluminum associations of the United States, Europe, Canada and Japan issued a statement responding to the G-7 communique, which said: "We certainly welcome and value the shift from bilateralism to multilateralism, which is the only way to resolve this global issue." The unilateralism they are referring to is the 10% tariff on imported aluminum, though Canada is mostly exempted from that tariff.
The trade ministers also talked about World Trade Organization reform, and agreed that the WTO needs a new approach to developing countries' commitments in trade agreements. "Such an approach should combine a more targeted focus on how to support the integration of Least Developed Countries and low-income developing countries into the trading system, as well as greater differentiation in the measures provided based on specific, identified needs. Against this background, we call on advanced WTO Members claiming developing country status to undertake full commitments in ongoing and future WTO negotiations," they wrote.
The countries did not yet agree on reviving the WTO Appellate Body, saying there were "frank and constructive discussions" on dispute settlement reform.
Also at the WTO, they called for accelerating implementation of the Trade Facilitation Agreement, including increasing the use of electronic documentation and enhancing customs cooperation.
They said their countries will work together to mitigate the risks of the presence of forced labor in global supply chains.
The trade ministers also said they will work collaboratively on how to deal with the possibility that imports from countries that are not being as aggressive on reducing greenhouse gas emissions could undercut manufacturers in more environmentally responsible countries. "As the world transitions to net zero, we acknowledge the risk of carbon leakage to decarbonisation goals, and the potential impact it could have on those countries that have adopted rigorous approaches to reduce carbon emissions, and agree that countries should work collaboratively to address this risk," the statement said.