The top trade officials of the Group of Seven (G7) countries issued a joint statement Wednesday targeting China’s Communist Party, pledging to take collective action to address “harmful industrial subsidies” and other market-distorting practices.
Flags of the G7 countries
Officials from the G7 countries’ trade ministries held their first “G7 Trade Track” ministerial meeting via online video on Wednesday, an official statement said. The video conference was attended by Ngozi Okonjo-Iweala, the new director general of the World Trade Organization.
The statement said G7 trade ministers reaffirmed the importance of a rules-based multilateral trading system; they are confident that “when the world’s leading democratic trading participants unite to develop an agenda to make the global trading system fairer, more sustainable and responsive to the needs of citizens,” other trading partners will be willing to join this agenda.
Although the joint statement does not directly name China, in the text of the “Free and Fair Trade” section, it says: “Trade ministers will discuss the impact of market-distorting practices on our economies, such as harmful industrial subsidies, including those that lead to overcapacity in certain sectors, and develop a collective solution to these problems.”
China’s large subsidies to domestic companies have long led to resentment in the West, but there are also disputes between the U.S. and Europe in certain areas of trade. The statement made no mention of tariffs imposed by former U.S. President Donald Trump on steel and aluminum imports from certain G7 members. These two areas remain major points of friction between the U.S. and the EU, but China’s subsidies in these two sectors have also exacerbated the global overcapacity problem. Whether the U.S. and Europe can take joint action in this area is of concern to the outside world.
Not all people in the G7 countries feel the benefits of trade, the statement said, and distortions of markets and competition can lead to lower economic efficiency and a lower sense of fairness and trust in the system.
The G7 includes the United States, Germany, the United Kingdom, France, Canada, Italy and Japan. This statement on international trade echoes President Biden‘s “build back better” economic recovery plan.
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