Home » G7 trade leaders gather in London amid global supply chain chaos
G7 trade leaders gather in London amid global supply chain chaos
posted on Oct. 21, 2021 at 11:35 pm
Trade ministers from the G7 group of wealthy nations will meet in London on Friday as they wrestle with global supply chain disruptions that threaten to derail the recovery from the pandemic.
In their first in-person gathering, to be held at Mansion House, the national trade chiefs will discuss how to pool resources in order to unblock bottlenecks in the world's trading system.
It follows an ugly race to gather critical resources for the Covid-19 response, which saw countries, including G7 members, hoard personal protective equipment, vaccines and medicines.
Campaigners, including former UK prime minister Gordon Brown, argue that the pandemic has revealed fundamental flaws in mechanisms for international collaboration, with developing nations starved of vaccines while rich countries roll out booster programmes.
Still, this trade summit is aimed at trying to increase the sharing of critical data in order to unsnarl supply chains across the world and ease a transition towards net-zero carbon emissions. The problems of disruption, from shipping to haulage, are so acute that they have driven up prices in a host of G7 economies, even as economic growth has slackened.
Trade secretary Anne-Marie Trevelyan said: "Global challenges require global solutions. We have seen from the Covid-19 pandemic how fragile our global supply chains can be. The UK will work with our G7 and trade partners to build stronger, greener supply chains and a more resilient economy."
To frame the talks, members will be given a presentation by Lord Mark Sedwill, chair of the Economic Resilience Panel created by the UK in its role as G7 host. Mr Sedwill, formerly the UKs most senior civil servant, also shared findings on critical supply chains with the G7 in June at the leaders' summit in Cornwall. In that session he raised significant concerns about some of the world's wealthiest democracies being over-reliant on critical supplies from China.
Talks will also cover digital trade. Efforts to avoid fewer trade barriers for digital services have grown increasingly sensitive as the threat of cyberwarfare builds, and as the UK expands its offensive cyberattack capabilities.
The meeting comes as the UK, France, Italy, Spain and Austria reached an agreement with the US to phase out their digital services tax arrangements once a new system agreed by the OECD (Organisation for Economic Cooperation and Development) is in place. The step avoids UK exports being slapped with fresh US tariffs. The world's largest economy had regarded the early digital tax efforts of the UK, among others, as discriminatory against its Silicon Valley giants such as Google and Facebook, and had threatened retaliation.
More broadly on digital trade, the UK will seek to build a G7 consensus on how to "oppose digital protectionism and authoritarianism" and allow "data to flow freely across borders". It will also seek to pin down support for negotiations on digital trade rules at the World Trade Organisation. Digitising customs processes will also be on the agenda.
Trade ties with India will be in the spotlight on Friday. Foreign secretary Liz Truss is visiting the nation in order to build economic and security ties. She is also set to try and garner India's support for the UN Cop26 climate summit in just over a week. It was announced on Thursday that India's prime minister, Narendra Modi, will be attending the conference in Glasgow.
Ms Truss visited India during her tenure as trade secretary before a controversial trip planned by prime minister Boris Johnson was cancelled earlier this year. The UK and India have agreed to work towards a free trade agreement with the aim of securing a deal within a decade.
Trade experts are sceptical of what can be achieved in terms of easing challenges in bilateral trade, particularly after the country blocked exports of Covid-19 vaccines to a host of countries earlier this year, including the UK.
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