G7 USA: The Virtual Year by Global Governance Project

2020 | globalgovernanceproject.org

Equity in health

Quality healthcare for all demands a one world approach

New realities

Nations join forces to build back better post–COVID-19

Shared security

Key elements for transparency, trust, democracy and peace

USA

The Virtual Year

It may be a big world, but the solutions to its biggest problems will come on the molecular level. And that’s where Eastman is truly in its element.

Eastman is driven by a purpose to enhance the quality of life in a material way and a vision to be the world’s leading material innovation company. Our history of technical expertise in chemical processes and polymer science positions us to provide innovative solutions to some of the world’s most complex problems. With the introduction of two new recycling technologies, we are innovating and collaborating to address the global plastic waste problem and accelerate the circular economy.

Learn more about our advanced recycling technologies at eastman.com/circulareconomy.

Published by GT Media Group Ltd.

Publisher: Khaled Algaay Director: Tom Kennedy Co-Editor: John Kirton Co-Editor: Madeline Koch Managing Editor: Emily Eastman Art Director: Steven Castelluccia Contact: 20-22 Wenlock Road, London N1 7GU, United Kingdom Tel: +44 207 6085137 Email: Connect@globalgovernanceproject.org @GloGovProj www.globalgovernanceproject.org

USA

G7 Research Group Contributors: Stéphanie Bussière Meagan Byrd Hélène Emorine Hiromitsu Higashi Ella Kokotsis Julia Kulik Maria Marchyshyn Chiara Oldani Jessica Rapson Bogdan Stovba Alissa Wang Brittaney Warren Meredith Williams Maria Zelenova

Produced and distributed by The Global Governance Project, a joint initiative between GT Media Group Ltd, a publishing company based in London, UK, and the G7 Research Group based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. www.g7.utoronto.ca

G7 Research Group

The Virtual Year The Global Governance Project provides a vital function for private- and public-sector organisations in support of their governance responsibilities. To carry out executive duties effectively, we must have access to unbiased, objective and independent opinion, based on actual policy set at and influenced by the G7 summits and their leadership.

© 2020. The entire contents of this publication are protected by copyright. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means: electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher. The views and opinions expressed by independent authors and contributors in this publication are provided in the writers’ personal capacities and are their sole responsibility.

Their publication does not imply that they represent the views or opinions of the G7 Research Group, Munk School of Global Affairs and Public Policy, Trinity College, University of Toronto or GT Media Group Ltd and must neither be regarded as constituting advice on any matter whatsoever, nor be interpreted as such. The reproduction of advertisements in this publication does not in any way imply endorsement by the G7 Research Group or GT Media Group Ltd of products or services referred to therein.

Contents

FOREWORD & LEADERS’ VIEWS

A HISTORIC YEAR FOR G7 SUMMITRY John Kirton, director of the G7 Research Group, on the G7 in this unique year

DEFEATING THE VIRUS United States’ president Donald Trump looks to the future of health care, peace and security and innovation

STOPPING DISEASE BEFORE IT STARTS Boris Johnson, prime minister of the United Kingdom, on the importance of harnessing our shared scientific expertise

THE MANY GOOD REASONS FOR NATIONS TO WORK TOGETHER IN ALL AREAS Angela Merkel, chancellor of Germany, explores the work and reward of creating greater cohesion in Europe

18 globalgovernanceproject.org

HOW TO OVERCOME HUMAN SECURITY CRISES AND REALISE A BETTER WORLD Prime Minister Yoshihide Suga of Japan and former prime minister Shinzo Abe share how the country is pioneering coordinated action on critical issues

DETERMINATION, COURAGE AND VISION FOR THE FUTURE Italian prime minister Giuseppe Conte advocates for focused action in building a future built on the respect of human rights

COORDINATION DURING CRISES: A WAKEUP CALL FOR A NEW WAY OF THINKING Canadian prime minister Justin Trudeau says the COVID-19 pandemic has shown that the status quo isn’t working well enough

STANDING SHOULDER TO SHOULDER AS WE FACE SHARED CHALLENGES France’s president Emmanuel Macron calls for effective global governance to respond to globalisation

A COMMITMENT TO BETTER ENFORCE THE LEVEL PLAYING FIELD Charles Michel, president of the European Council, considers our collective responsibility to the planet and its people

A NEW NARRATIVE: COLLECTIVE ACTION FOR POSITIVE CHANGE President of the European Commission Ursula von der Leyen on how the European Union has taken the lead in convening a global response to COVID-19

2020 — G7 USA: THE VIRTUAL YEAR

Contents

EDITORS’ INTRODUCTIONS

world approach in developing and delivering a COVID-19 vaccine

CONFRONTING THE CRISES John Kirton, director of the G7 Research Group, covers the agenda and outcomes of the G7’s virtual summits

HIGH STAKES ON BIPARTISAN CONSENSUS Christopher Sands, director, Canada Institute, Wilson Center, shares the high stakes of inaction

SPOTLIGHT ON HEALTH

G7 PERFORMANCE ON HEALTH Meagan Byrd, chair, summit studies, G7 Research Group, on how the G7 can improve compliance with its health commitments

THE MEASURE OF HUMANITY Tedros Adhanom Ghebreyesus, director general, World Health Organization, says investing in health now will saves lives later

EIGHT REASONS TO BE FEARFUL, AND HOPEFUL, FOR THE NEXT GENERATION Henrietta H Fore, executive director, UNICEF, says world leaders can open doors of opportunity for every child

HEALTH: A VITAL SHARED INVESTMENT Winnie Byanyima, executive director, UNAIDS, says the G7 is well positioned to keep countries on track to achieve the Sustainable Development Goals

THREATS TO THE FOUNDATIONS OF GLOBAL HEALTH Ilona Kickbusch, co-chair, UHC2030, on why it’s critical that institutions do not fall prey to geopolitical posturing and conflicts

CRISIS OF A CENTURY Jeffrey L Sturchio, CEO, Rabin Martin, looks at how the private sector is contributing to controlling COVID-19 and offers three recommendations to ensure equitable distribution of future treatments

A COMMON FIGHT, A SHARED FUTURE Elizabeth Cousens, president and CEO, UN Foundation, explains what COVID-19 and the Solidarity Response Fund teach us about collective action in the 21st century

2 48

G7 PERFORMANCE ON DIGITALISATION Meredith Williams, lead researcher on digital innovation, G7 Research Group, calls for a clear agenda to secure digital transformation worldwide

INEQUALITIES EXPOSED Guy Ryder, director general, International Labour Organisation, calls for long-term change to build an economic and social system with humans at its heart

G7 USA: THE VIRTUAL YEAR — 2020

INCLUSIVE ECONOMIC GROWTH

TAX AND DIGITALISATION: THE NEED FOR A MULTILATERAL RESPONSE Pascal Saint-Amans, director, Centre for Tax Policy and Administration, Organisation for Economic Co-operation and Development, says a multilateral response is essential in dealing with the tax challenges of digitalisation

G7 PERFORMANCE ON MACROECONOMIC POLICY Alissa Wang, researcher, G7 Research Group, details the measures that can boost compliance on this central issue

ECONOMIC RESILIENCE IN UNCERTAIN TIMES Chiara Oldani, professor of economics, University of Viterbo ‘La Tuscia’, calls for fiscal pragmatism amid circumstances that demand an extraordinary response

G7 PERFORMANCE ON ENTREPRENEURSHIP AND SMES Stéphanie Bussière, researcher, G7 Research Group, explores the G7’s below-average compliance in this area and the measures proven to increase it

STRENGTH IN NUMBERS Angel Gurría, secretarygeneral, Organisation for Economic Co-operation and Development, shares how the G7 can help set the parameters of the global recovery from COVID-19

TOWARDS A TRADE DEAL TO LIMIT TRADE FRICTIONS TO CORPORATE TAXATION Simon J Evenett, professor of international trade and economic development, University of St Gallen, offers guiding principles to govern commercial policymaking

OPPORTUNITIES FOR INNOVATION

A VACCINE FOR HUMANITY Seth Berkley, CEO, Gavi, the Vaccine Alliance, calls for a one

THE RIPPLE EFFECT Robert Fauver, former US G7 sherpa, explores the impact of COVID-19 as it ripples through our economies

G7 PERFORMANCE ON FINANCIAL REGULATION Hélène Emorine, director, Paris office, G7 Research Group, finds the G7 has given inconsistent attention to financial regulation

COOPERATION ON TRADE

G7 PERFORMANCE ON TRADE Maria Marchyshyn, lead researcher on trade, G7 Research Group, details the proven, low-cost accountability measures available to improve compliance in this area

INVESTMENT FLOWS FOR BETTER RECOVERY Mukhisa Kituyi, secretary-general, United Nations Conference on Trade and Development, calls for a reboot to global investment to get countries back on track

THE WORLD IS WAITING Zurab Pololikashvili, secretarygeneral, United Nations World Tourism Organization, says the industry uniquely contributes to the Sustainable Development Goals, which are now under threat from COVID-19

globalgovernanceproject.org

Contents 82

CLARITY ON INTERNATIONAL TRADE Christopher Sands, director, Canada Institute, Wilson Center, looks at the G7’s approach to international trade at a time when economies need it most

A FORCED RESTART ON INTERNATIONAL TRADE Lyric Hughes Hale, editor-in-chief, EconVue, says resource coordination and restoring public trust should be front and centre for long-term healthy trade

ENERGY SECURITY

IN THE FACE OF DUAL CRISES Guy Caruso, senior adviser, Energy Security and Climate Change Program, Center for Strategic and International Studies, details measures the G7 should take to secure energy supplies during multiple crises

OUTLOOK ON THE ENVIRONMENT

G7 PERFORMANCE ON THE ENVIRONMENT Brittaney Warren, lead researcher on climate change, G7 Research Group, finds a weak correlation between environmental commitments made and compliance

G7 PERFORMANCE ON ENERGY Ella Kokotsis, director of accountability, G7 Research Group, calls for concrete, actionable measures that ensure a reliable and sustainable energy supply

BIODIVERSITY FOR A BETTER FUTURE Elizabeth Maruma Mrema, executive secretary, Convention on Biological Diversity shares how population health and the environment are inextricably linked

WHEN DEMAND DRIES UP HE Mohammad Sanusi Barkindo, secretary general, Organization of Petroleum Exporting Countries, on how leaders can protect future energy security

CATALYSING THE ENERGY TRANSITION WITH GREEN HYDROGEN Francesco La Camera, director general, International Renewable Energy Agency, says renewable energy represents a deep, untapped pool of job and wealth creation

100

globalgovernanceproject.org

ECOSYSTEM RESTORATION DONE RIGHT Thomas Crowther, professor of global ecosystem ecology at ETH Zürich, where he formed the Crowther Lab, offers four principles that could bring environmental, societal and economic benefits

TOWARDS GENDER PARITY

100

G7 PERFORMANCE ON GENDER EQUALITY Julia Kulik, director of research, G7 Research Group, explores how COVID-19 disproportionately threatens women

102

WOMEN WORKING ON THE FRONT LINE Phumzile Mlambo-Ngcuka, under-secretary-general, United Nations, and executive director, UN Women, says taking a gender-focused response to the pandemic affords the opportunity to build back better

114

GLOBALISATION REIMAGINED Jane Harman, director, president and CEO, Wilson Center, names three ways in which re-globalisation could work

116

PROMOTING PEACE AND SECURITY

THE MAKINGS OF STABILITY Mara Karlin, director of strategic studies, Johns Hopkins School of Advanced International Studies, on the lessons to be learned from recent conflicts – and how the G7 can act to prevent future wars

104

118

G7 PERFORMANCE ON REGIONAL SECURITY IN THE MIDDLE EAST Maria Zelenova, senior researcher, G7 Research Group, highlights four ways in which the G7 can improve its performance on its Middle East security commitments

THE WHOLE STORY Carl Gershman, president, National Endowment for Democracy, says there is an ongoing and sinister battle for narratives that is engandering our democratic stuctures

104

106

G7 PERFORMANCE ON EUROPEAN SECURITY Bogdan Stovba, lead analyst, G7 Research Group, identifies precedent for the G7 to focus on regional security in Europe

110

G7 PERFORMANCE ON GOVERNING ARMS CONTROL Hiromitsu Higashi, research analyst, G7 Research Group, spotlights the main objectives for arms control for the G7, including bringing North Korea back to the negotiating table

112

NOW IS THE TIME FOR REAL RESULTS Marcus Pleyer, president of the Financial Action Task Force, warns that large-scale money laundering can only be tackled if countries focus on tangible results

120

FOOD FOR THOUGHT David Beasley, executive director, World Food Programme, explains the crucial role the organisation plays in ensuring people worldwide have access to food – and the life-threatening challenges brought to supply chains by COVID-19

A STRONGER G7 SYSTEM

124

RETURN OF THE CRISIS GROUP Karoline Postel-Vinay, research professor, Sciences Po, Paris, says in the face of a global pandemic the G7 will hark back to its erstwhile status as a crisis group

126

124

INCREASING THE IMPACT OF THE G7 Jessica Rapson, senior researcher, G7 Research Group, looks at the data behind G7 commitment success and highlights the measures that can increase the impact of the group on global policymaking

2020 — G7 USA: THE VIRTUAL YEAR

Setting new standards Sustainability is at the heart of everything we do at AkzoNobel. It’s vital for the future of our company, our society and our planet. We have a passion for paint which drives our innovation and helps people to overcome the challenges they face every day. Whether we’re developing paint that keeps buildings cooler or coatings that make the shipping industry more efficient, we’re always striving to embrace a more sustainable way of working. That’s why we’ve been top of the Dow Jones Sustainability Index for five out of the last six years. And we’ll continue to use our ambition and imagination to deal more efficiently with the world’s limited resources. Because sustainability is clearly good for business.

akzonobel.com

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

Foreword

A historic year for G7 summitry John Kirton Director, G7 Research Group

he year 2020 was a truly historic one for G7 summitry in several ways. It was the seventh time the annual G7 summit was hosted by the US president since its start in 1975, following those hosted by Gerald Ford in 1976, Ronald Reagan in 1983, George H W Bush in 1990, Bill Clinton in 1997, George W Bush in 2004 and Barack Obama in 2012. It was the first time Donald Trump, in his fourth year as president, would chair. His priority agenda, announced before his year began, was quickly overwhelmed by the unprecedented COVID-19–catalysed crises. He responded right away by hosting the G7’s first emergency summit on 16 March 2020, followed by a second summit one month later, both in virtual rather than physical form. As the crises continued, he repeatedly changed the location and the time of the standard, scheduled full-strength summit, and suggested he would add India, Australia and Korea, and even Russia too. As he became increasingly preoccupied with seeking a second presidential term in the US election on 3 November, there was no sign that this summit would take place as his year as G7 host drew to a close. President Trump, in his fourth year of G7 summitry, was joined at his March virtual summit by Germany’s Chancellor Angela Merkel at her 15th, Japan’s Prime Minister Shinzo Abe at his ninth before being replaced soon after by Yoshihide Suga, Canada’s Prime Minister Justin Trudeau in his fourth, France’s Emmanuel Macron at his fourth, Italy’s Prime Minister Giuseppe Conte at his third, and the United Kingdom’s Prime Minister Boris Johnson at his second. Ursula von der Leyen, president globalgovernanceproject.org

of the European Commission, and Charles Michel, president of the European Council, were at their first.

Further momentum came from the many meetings that G7 ministers mounted throughout the year. Those meetings started with health on 3 February and continued with eight meetings of finance ministers and central bank governors by 13 October. Foreign ministers met on 25 March, and ministers responsible for science and technology met on 28 May. The finance ministers issued statements on the G20’s Debt Service Suspension Initiative on 25 September and on digital payments and ransomware on 13 October. The foreign ministers issued statements on Hong Kong on 17 June and on the poisoning of Russian civil society leader Alexei Navalny on 8 September. Civil society engagement groups were also active. The Think 7 submitted its 25 recommendations on 10 June. The University 7, created in 2019, continued its work. As the US year as G7 host approached its end, it had helped accomplish several key things. By November G7 governments, companies and universities, led by the US ones, had invented and tested safe, effective vaccines against the hitherto unknown virus of COVID-19 and done so in record time. By then the unprecedented fiscal and monetary policy stimulus had stopped the severe economic plunge in the first two quarters of 2020 and produced a strong recovery in the third. But as COVID-19 started to surge again in its second and third waves, and further economic shutdowns followed, there remains much for the G7 to do after the United States passes the chair to the United Kingdom on 1 January 2021.

THE US PRIORITIES Initially, these leaders were to focus on the four US priorities announced in October 2019: strengthening growth and prosperity, reducing regulations, eliminating trade barriers and opening energy markets. But those topics were soon crowded out by the proliferating pandemic and its deepening economic damage as 2020 got underway. With the emergency virtual summit in March, President Trump and his colleagues made the G7 the fast, first rapid responder to the crisis among global summit institutions. There they made 26 commitments: 11 on health, 10 on the economy, three on trade and two on international cooperation. They promised to do “whatever is necessary to ensure a strong JOHN KIRTON global response through closer John Kirton is the founder and director of the G7 cooperation and enhanced Research Group, G20 Research Group and the Global coordination of our efforts”. Health Diplomacy Program and co-director of the They followed up with a second BRICS Research Group, all based at Trinity College at emergency virtual summit on the Munk School of Global 16 April. Affairs and Public Policy in Momentum for and from the University of Toronto, these summits came from the where he is a professor of substantial compliance of G7 political science. He is author members with the priority of many articles and books, commitments they had made in including, with Ella Kokotsis, August 2019 in Biarritz, France. The Global Governance of As 2020 opened, compliance Climate Change: G7, G20 and was at only 62%. But under UN Leadership. the US presidency, by 3 June 2020, it had risen to 75%. By Twitter @jjkirton November it had increased  www.g7.utoronto.ca again to 79%.

2020 — G7 USA: THE VIRTUAL YEAR

LEADERS’ VIEWS

Donald Trump President, United States

We will distribute a vaccine, we will defeat the virus … Seventy-five years after the end of World War II and the founding of the United Nations, we are once again engaged in a great global struggle. We have waged a fierce battle against the invisible enemy … which has claimed countless lives in 188 countries. In the United States, we launched the most aggressive mobilisation since the Second World War. We rapidly produced a record supply of ventilators, creating a surplus that allowed us to share them with friends and partners all around the globe. We pioneered life-saving treatments, reducing our fatality rate 85% since April. Thanks to our efforts, three vaccines are in the final stage of clinical trials. We are mass-producing them in advance so they can be delivered immediately upon arrival. We will distribute a vaccine, we will defeat the virus, we will end the pandemic, and we will enter a new era of unprecedented prosperity, cooperation, and peace. … 10

China’s carbon emissions are nearly twice what the U.S. has, and it’s rising fast. By contrast, after I withdrew from the one-sided Paris Climate Accord, last year America reduced its carbon emissions by more than any country in the agreement. …If the United Nations is to be an effective organization, it must focus on the real problems of the world. This includes terrorism, the oppression of women, forced labor, drug trafficking, human and sex trafficking, religious persecution, and the ethnic cleansing of religious minorities. America will always be a leader in human rights. My administration is advancing religious liberty, opportunity for women, the decriminalization of homosexuality, combatting human trafficking, and protecting unborn children. We also know that American prosperity is the bedrock of freedom and security all over the world. In three short years, we built the greatest economy in history, and we are quickly doing it again. Our military has increased substantially in size. We spent $2.5 trillion over the last four years on our military. We have the most powerful military anywhere in the world, and it’s not even close. We stood up to decades of China’s trade abuses. We revitalised the NATO Alliance, where other countries are now paying a much more fair share. We forged historic partnerships with Mexico, Guatemala, Honduras, and El Salvador to stop human smuggling. We are standing with the people of Cuba, Nicaragua, and Venezuela in their righteous struggle for freedom. We withdrew from the terrible Iran Nuclear Deal and imposed crippling sanctions on the world’s leading state sponsor of terror. We obliterated the ISIS caliphate 100%; killed its founder and leader, al-Baghdadi; and eliminated the world’s top terrorist, Qasem Soleimani. This month, we achieved a peace deal between Serbia and Kosovo. We reached a landmark breakthrough with two peace deals in the Middle East, after decades of no progress. Israel, the United Arab Emirates, and Bahrain all signed a historic peace agreement in the White House, with many other Middle Eastern countries

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

to come. They are coming fast, and they know it’s great for them and it’s great for the world. These groundbreaking peace deals are the dawn of the new Middle East. … The United States is also working to end the war in Afghanistan, and we are bringing our troops home. America is fulfilling our destiny as peacemaker, but it is peace through strength. We are stronger now than ever before. Our weapons are at an advanced level like we’ve never had before – like, frankly, we’ve never even thought of having before. And I only pray to God that we never have to use them. For decades, the same tired voices proposed the same failed solutions, pursuing global ambitions at the expense of their own people. But only when you take care of your own citizens will you find a true basis for cooperation. As President, I have rejected the failed approaches of the past, and I am proudly putting America first, just as you should be putting your countries first. That’s okay – that’s what you should be doing. I am supremely confident that next year, when we gather in person, we will be in the midst of one of the greatest years in our history — and frankly, hopefully, in the history of the world. … Address to the United Nations General Assembly, 22 September 2020

globalgovernanceproject.org

2020 — G7 USA: THE VIRTUAL YEAR

Dubai Chamber

Backing business As the torchbearer of open and inclusive trade and growth, the ICC – World Chambers Federation is spearheading measures to ensure business continuity as COVID-19 changes the world of work. Hamad Buamim, ICC – WCF chair, and president and CEO of Dubai Chamber of Commerce and Industry, shares how

he world is in the midst of challenging times as COVID-19 disrupts lives, societies and businesses globally. During times of uncertainty, the priority of the ICC – World Chambers Federation is to ensure the smooth continuity of work, and to mitigate any negative impact on the business sector through open dialogue with both the public and private sectors. As the representative of 45 million companies, one billion employees, in more than 100 countries, the ICC – WCF plays a critical part in mobilising efforts to support chambers globally. Our role is to assure chambers worldwide that we are here to support them in finding innovative solutions for business continuity. This involves fostering awareness of their function in ensuring businesses adhere to the guidelines set out by their respective governments. ADAPTING TO THE NEW NORMAL Hamad Buamim Chambers of commerce, like businesses

and governments, are experiencing new challenges and opportunities in the age of COVID-19. In recognition of the vital role that chambers of commerce play in their business communities, Dubai Chamber, with the support of ICC-WCF, has published the Chambers New Norm: Adapting Business Needs report, which sheds light on how chambers are responding to COVID-19. Through our research, we have found that chambers of commerce handled unprecedented challenges very well when it came to responding to the changing needs of their members and ensuring the continuity of value-added services. Bringing together chamber leaders from around the world, the newly launched Chamber Connect Series aims to address global challenges – such as digital preparedness, risk assessment and resilience planning – and develop innovative solutions that can help chambers become more agile and competitive as they plan for the post-COVID–19 recovery.

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

INDUSTRY PERSPECTIVE

AHEAD OF THE CURVE The United Arab Emirates has employed a successful strategy in gradually reopening its economy, while implementing strict health and safety measures to curb the spread of COVID-19. Analysis of global pandemic data conducted by the Deep Knowledge Group, a consortium of commercial and non-profit organisations, placed the UAE among the top five countries for testing and within the top 10 for treatment efficiency, which is judged on a country’s ability to monitor the spread of the virus, treat patients, and develop, test and deploy potential vaccines and treatments. Beyond its borders, the UAE has launched an international ‘air bridge’ in partnership with the UN World Food Programme, designed to deliver essential health and humanitarian supplies to nations in need. The partnership will supply items to more than 100 countries in the months ahead. Closer to home, the UAE responded swiftly to unprecedented changes in the world of work. Dubai Chamber succeeded in turning new challenges created by the pandemic into opportunities as it shifted 98% of its core services to smart channels. The Chamber’s investment in digital transformation in recent years enabled it to serve the business community under unprecedented circumstances and meet the changing needs of Dubai businesses. Currently, 50 e-services are provided through the Chambers website and smart applications, covering certificates of origin, membership, attestation, ATA Carnets, legal inquiries, smart mediation, credit rating and CSR Label, among many others. Our role as the voice of business is to encourage companies to take responsibility in supporting the government in fighting this virus. This involves implementing preventive and precautionary measures to counter the spread of COVID-19 domestically and around the world. In the UAE, our advanced technological infrastructure has enabled business to get back on track within a relatively short timeframe. IN SUPPORT OF PPPS

Internationally, Dubai Chamber is working closely with the authorities in the 10 countries in which it has a presence to implement global best practice, minimise the risk of transmission and ensure business continuity with stakeholders. Dubai Chamber remains committed to activating public-private-sector globalgovernanceproject.org

In the UAE, our advanced technological infrastructure means that, for the most part, business can continue as usual”

HE HAMAD BUAMIM Chair, ICC – World Chambers Federation, and president and CEO, Dubai Chamber of Commerce and Industry Holding his current position since 2006, HE Hamad Buamim is the president and CEO of Dubai Chamber of Commerce and Industry. He is also the chair of the Paris-based ICC World Chambers Federation. Buamim serves as a board member of Dubai World, Dubai International Financial Center and acts as chair of National General Insurance PJSC.

partnerships during this time to respond to global challenges. In the early stages of the outbreak, the Chamber’s swift response in fostering constructive dialogue and cooperation among public- and private-sector stakeholders was crucial as it paved the way for new economic stimulus packages and additional measures that have improved ease of doing business in Dubai. Throughout this transitional period, the Chamber has kept our members and the wider business community informed of the latest government issued guidelines and important economic developments, while it has launched new initiatives to help businesses deal with the impact of the pandemic. As the voice of the business community, the Chamber continues to advocate on behalf of companies in various sectors, communicate their concerns to relevant government entities with the aim of ensuring business continuity and enhancing economic competitiveness. Combined, these measures communicate a strong message to the private sector: we stand by the interests of investors – and will work to grow their investments, provide a secure environment conducive to growth, and remain alongside them in the face of global challenges. Let us be optimistic about the future. Let us take this opportunity to thank our courageous and dedicated health professionals. Let us look out for one another. By pulling together and proceeding with unity, we will emerge stronger. 2020 — G7 USA: THE VIRTUAL YEAR

LEADERS’ VIEWS

Boris Johnson Prime Minister, United Kingdom

Our first aim should be to stop a new disease before it starts … After nine months of fighting COVID-19, the very notion of the international community looks, frankly, pretty tattered. And we know that we simply can’t continue in this way. Unless we get our act together. Unless we unite and turn our fire against our common foe, we know that everyone will lose. The inevitable outcome would be to prolong this calamity and increase the risk of another. … It would be futile to treat the quest for a vaccine as a contest for narrow national advantage and immoral to seek a head start through obtaining research by underhand means. The health of every country depends on the whole world having access to a safe and effective vaccine, wherever a breakthrough might occur; and, the UK, we will do everything in our power to bring this about. We are already the biggest single donor to the efforts of the Coalition for Epidemic Preparedness to find a vaccine. And it is precisely because we know that no-one is safe until everyone is safe, that I can announce that the UK will contribute up to £571 million to COVAX, a new initiative designed to distribute a COVID-19 vaccine across the world. Of this sum, £500 14

million will be for developing countries to protect themselves. The UK is already the biggest donor to Gavi, the Global Vaccine Alliance. In June we helped to raise almost $9 billion to immunise another 300 million children against killer diseases, and Gavi also stands ready to help distribute a COVID-19 vaccine. But even as we strive for a vaccine, we must never cut corners, slim down the trials or sacrifice safety to speed. Because it would be an absolute tragedy if in our eagerness, we were to boost the nutjobs – the anti vaxxers, dangerous obsessives who campaign against the whole concept of vaccination and who would risk further millions of lives. … So we in the UK we’re going to work with our friends, we’re going to use our G7 presidency next year to create a new global approach to health security based on a five point plan to protect humanity against another pandemic. Our first aim should be to stop a new disease before it starts. About 60% of the pathogens circulating in the human population originated in animals and leapt from one species to the other in a “zoonotic” transmission. The world could seek to minimise the danger by forging a global network of zoonotic research hubs, charged with spotting dangerous animal pathogens that may cross the species barrier and infect human beings. The UK is ready to harness its scientific expertise and cooperate to the fullest extent with our global partners to this end. Of the billions of pathogens, the great mass are thankfully incapable of vaulting the species barrier. Once we discover the dangerous ones, our scientists could get to work on identifying their weaknesses and refining anti-viral treatments before they strike. We could open the research to every country and as we learn more, our scientists might begin to assemble an armoury of therapies – a global pharmacopoeia – ready to make the treatment for the next COVID-19.

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

Our second step should be to develop the manufacturing capacity for treatments and vaccines so that the whole of humanity can hold them like missiles in silos ready to zap the alien organisms before they can attack. But if that fails and a new disease jumps from animals to human beings and overcomes our armoury of therapies and begins to spread, then we need to know what’s going on as fast as possible. So the third objective should be to design

a global pandemic early warning system, based on a vast expansion of our ability to collect and analyse samples and distribute the findings, using health data-sharing agreements covering every country. As far as possible, we should aim to predict a pandemic almost as we forecast the weather to see the thunderstorm in the cloud no bigger than a man’s hand. And if all our defences are breached, and we face another crisis, we should at least be able to rely on our fourth step, and have all the protocols ready for an emergency response, covering every relevant issue, along with the ability to devise new ones swiftly. Never again must we wage 193 different

campaigns against the same enemy. As with all crises, it is crucial not to learn the wrong lessons. After the harrowing struggle to equip ourselves with enough ventilators – with countries scrabbling to improvise like the marooned astronauts of Apollo 13 – there is a global movement to onshore manufacturing. That is understandable. Here in the UK we found ourselves unable to make gloves, aprons, enzymes which [was] an extraordinary position for a country that was once the workshop of the world. We need to rediscover that latent gift and instinct, but it would be insane to ignore the insights of Adam Smith and David Ricardo. We need secure supply chains – but we should still rely on the laws of comparative advantage and the invisible hand of the market. Many countries imposed export controls at the outset of the pandemic, about two thirds of which remain in force. Governments still target their trade barriers on exactly what we most need to combat the virus, with tariffs on disinfectant often exceeding 10%, and for soap tariffs for 30%. So I would urge every country to take a fifth step and lift the export controls wherever possible – and agree not to revive them – and cancel any tariffs on the vital tools of our struggle: gloves, protective equipment, thermometers and other COVID-critical products. The UK will do this as soon as our new independent tariff regime comes into effect on 1st January and I hope others will do the same. Though the world is still in the throes of this pandemic, all these steps are possible if we have the will. They are the right way forward for the world, and Britain is the right country to give that lead. And we will do so in 2021, as we celebrate the 75th anniversary of the founding of this great United Nations in London in January, and through our G7 Presidency, and as we host the world’s climate change summit … in Glasgow next November. Address to the United Nations General Assembly, 26 September 2020

globalgovernanceproject.org

2020 — G7 USA: THE VIRTUAL YEAR

LEADERS’ VIEWS

Angela Merkel Chancellor, Germany

The many good reasons for nations to work together in all areas … We are currently facing particular challenges both internationally and nationally. At the heart of these are our common efforts to overcome the COVID‑19 pandemic and its wide‑ranging impacts. In Europe, COVID‑19 has already claimed more than 200,000 lives. Our economy finds itself in an extremely difficult situation. A large number of jobs have been lost, and the pandemic will continue to make itself felt in our lives and work for the foreseeable future. We are witnessing this again in almost all of Europe’s countries at the moment. However, we must not lose sight of other important issues. With this in mind, sustainability in general and climate and environmental protection in particular are and remain the major tasks of our age. The Heads of State and Government met for a sustainable development summit in New York in September of last year. The stock‑taking that we did four years after the adoption of the 2030 Agenda yielded sobering results. Unfortunately, these findings, which were for the most part negative, albeit not entirely across the board, haven’t changed today. Instead, the situation in terms of climate protection, biodiversity and social inequality has even become more serious since the adoption of the 2030 Agenda. In order to speed up its implementation, the United Nations has declared a Decade of Action, which I expressly support. The pressure to act has intensified in the face of the COVID‑19 pandemic – be it in the eradication of poverty and the promotion of food security or education, or, it goes without saying, with respect to healthcare. It will only be 16

possible to make progress on all of these issues if we think of this as a joint project. … How can we make progress in Europe on the path towards a climate‑neutral and sustainable continent? – The Green Deal offers us an answer to this question. It shows us how to achieve climate neutrality and greater sustainability, without – and this is very important to me – reducing our capacity for innovation or our competitiveness. On the contrary, the European Green Deal brings together environmental necessity and a robust economy. After all, protecting the natural resources is an essential prerequisite for economic success. While this may sound like a statement of the obvious, we must become much more aware of this and then actually apply this insight in our daily lives. We Europeans therefore have a leading role to play in this regard. We must prove that economic growth can be decoupled from emissions and the consumption of resources. We must learn from the mistakes of the past. This means that European industrialised countries have to step up to the plate also in the transfer of innovations and technologies. They must play a pioneering role here. This is a form of development cooperation that reflects our responsibility for less industrialised countries. These are the countries that are suffering as a result of climate change, which can be laid at the door of industrialised countries in particular. It goes without saying that we Europeans are not solely responsible for climate protection. But close attention is being paid in many parts of the world as to how we

approach our responsibility. Our example is therefore crucial to whether other countries join us in advancing solutions for carbon‑neutral growth. Speech to the European Sustainable Development Network on 13 October 2020

Germany’s support for the World Health Organization It can … be seen in the conference calls we have in the G7, which is currently under US presidency, or in the G20, that we know this is a disease that affects us all, a pandemic that no one can evade or escape. It affects us all. That’s why there are many good reasons to work together, for example on developing a vaccine, on supplies of ventilators and on medicines. We need each other here. Views differ on how effective WHO is. The United States of America has been highly critical. I said again this morning that we need the World Health Organization and that where there are weaknesses, we naturally need to analyse them. Like many other people, I have left no doubt about my support for the World Health Organization

Excerpt from the chancellor’s press conference after a European Council video conference, 23 April 2020

Science goes beyond borders in service of humanity

Science is never national, however, but is in the service of humanity. It thus goes without saying that, when medicines or a vaccine are discovered, tested, released and ready to be deployed, they must be available throughout the world and also be affordable throughout the world. A virus that is spreading in almost all countries can only be pushed back and curbed when all countries work together. The Federal Government attaches overarching importance to international cooperation to tackle the virus. We are coordinating our efforts in the EU, and also within the framework of the G7 and the G20. With the decision to suspend all interest and debt payments for the world’s poorest 77 countries this year, we have been able to relieve some of the pressure on these poverty-stricken groups of countries. We cannot content ourselves with providing this support, of course. Cooperating with the countries of Africa has always been a priority of the Federal Government, and we must strengthen this still further in the coronavirus crisis. … Excerpt from a statement in the German Bundestag, 23 April 2020

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

LEADERS’ VIEWS

Yoshihide Suga Prime Minister, Japan

How to overcome human security crises … The novel coronavirus disease has pulled us into an unprecedented crisis, which in turn has brought the international community back to cooperation from its tendencies towards division and isolation. For the last 75 years, multilateralism has become stronger and made progress in the face of multiple challenges. I call on all of you to unite in solidarity so we can turn the current crisis into an opportunity to reinforce our cooperation. … The spread of the coronavirus is a human security crisis, posing a threat to the lives, livelihoods and dignity of people across the globe. The guiding principle for us to overcome this crisis must be “leave no one behind.” The concept of human security, which focuses on individuals, has been debated for many years at this very forum of the United Nations General Assembly. … As we face the current crisis, and guided by the principle of human security, I think

it is essential to set the goal of “leaving no one’s health behind” as we work towards achieving universal health coverage. I expect this to be our shared goal. … It is critically important to take steps towards revitalising the economies hit hard by the crisis. To bolster economic activities in developing countries, Japan is implementing the COVID-19 Crisis Response Emergency Support Loan of up to 500 billion Japanese Yen or 4.5 billion USD over the course of two years. Reviving the economy rests on the safe movement of people. We will make our utmost efforts to ensure universal distribution of vaccines and therapeutics. Free trade should not stop even with the restrictions caused by the crisis. We continue to promote [World Trade Organization] reform and economic partnership

agreements with other countries. Times of difficulty are in fact times of innovation. Japan, for its part, will work on digitalisation as a matter of urgency. Now we must look to the human security concept of the new era in responding to various challenges, accelerating efforts to achieve [the Sustainable Development Goals] and to tackle global issues. … Looking forward, we need to “build back better” from the COVID-19 pandemic and create a flexible yet resilient society where the SDGs have been achieved and a virtuous cycle of environment and growth is generated. The ongoing crisis is heavily impacting the education of children and the youth who shape the future. It is also affecting women among others … In the summer of next year, Japan is determined to host the Tokyo Olympic and Paralympic Games as proof that humanity has defeated the pandemic. I will continue to spare no effort in order to welcome you to Games that are safe and secure. Remarks to the United Nations General Assembly, 25 September 2020

Shinzo Abe Former Prime Minister, Japan

Realising a better world … Over the past seven years I have visited 80 countries and regions and had a total of more than 800 summit meetings. I am determined that Japan will play a leading role in the world towards addressing common issues faced by the international community, grounded in my relationships with leaders of relevant countries. As a standard bearer for free trade, we globalgovernanceproject.org

will spread the economic order of the 21st century to the world. We will swiftly launch trade negotiations with the UK … We will lead the further expansion of the [Transpacific Partnership] Agreement as well as negotiations on the Regional Comprehensive Economic Partnership that include India. We will lead the creation of new international rules on data flow through the Osaka Track. … Japan has achieved reductions in its greenhouse gas emissions for five consecutive years. Our reduction of 11.8% compared to fiscal 2013 is second only to the UK within the G7. In order to achieve at an early time

a carbon-free society as set out in our long-term strategy, Japan will inaugurate the International Joint Research Center for Zero Emission Technologies. We will aggregate knowledge from G20 research institutes in the US, the EU and elsewhere, driving revolutionary innovation, such as artificial photosynthesis, aiming at ‘Beyond Zero’, whereby we transition to reducing the carbon dioxide that has continuously increased since the Industrial Revolution. … Let us together carve out the horizon for Japan’s diplomacy in the new era as we work to realise a better world. Speech to the Diet, 20 January 2020

2020 — G7 USA: THE VIRTUAL YEAR

LEADERS’ VIEWS

Giuseppe Conte Prime Minister, Italy

Determination, courage and vision for the future … We are well aware of the responsibility that, with the G20 Presidency, our Country will be vested with to lead global efforts. We especially cannot ignore the particular moment in history our global community is living, to which our work in this august Assembly will be added. We firmly believe that the upcoming G20 in Italy can be an opportunity for a collective renewal, a time to solidify that sense of community that every nation nourished in the darkest hours of the pandemic. We can leverage the synergy and brother- and sisterhood necessary to transform the tragedy of what happened into an opportunity for rebirth and regeneration. We can imagine, together, a New Humanism that puts people front and center. Italy’s agenda will focus on: People, Planet and Prosperity. We call them the three Ps. We wish to seize opportunities for change by fighting injustice and inequity, because a more equitable and inclusive society is not only more just; it is also more prosperous and, globally, more democratic. Particular attention will be given to the “empowerment” of women, on small and medium enterprises, on precarious workers. Access to digital technology, which for too long has been a source of inequity, should become a driver for inclusive growth, offering opportunities to all. These efforts fall within the two pillars of Agenda 2030 and the Paris Agreement. We will be promoting sustainable, inclusive and resilient growth. The pandemic has opened new horizons for strategies to fight climate change and for environmental protection. We will need to work together so that our renewed ambitions regarding climate change are not disconnected from the promotion of investments and policies for socio-economic recovery. The 18

European “Green Deal” is now more than ever necessary to win this challenge of the green transition. … Our partnership with the United Kingdom in organizing the 26th Conference of the Parties to the UN Framework Convention on Climate Change will reaffirm Italy’s role in this sphere. We will be particularly focused on increasing youth involvement in the debate on fighting climate change: the building of their world, the world of tomorrow, begins today. For this reason, we will be organising – in the framework of the CoP26 – next year’s “Youth4 Climate” in Italy. … However, we will not be able to pursue the goal of a society founded on the respect of human rights if we do not prioritize the rights of women. The health crisis has shed an even brighter light on the vulnerability, discrimination, abuse and violence, which women still today endure throughout the world. By the same token, however, the crisis and emergency have also shined a light on their strength and their invaluable, irreplaceable role. This year we are celebrating an important anniversary: 25 years have passed since the fourth Beijing World Conference. This should be an opportunity to take stock of the successes, but also to forge ahead with more work that must be done to hold true to our shared commitments to realising full, effective gender equality. … Among the negative effects the pandemic has caused in crisis areas is the worsening of the already dire vulnerabilities of migrants. Irregular migration flows are a global challenge, and as such, can be overcome only through a multilateral response of the international community. What is needed is action structured around the principles of solidarity and accountability, and founded on partnerships with the Countries of origin, transit and destination of flows. We thus need collective action against the networks of traffickers of human beings. At the same time, we must nurture a long-term vision that starts with tracing back to the root causes of these movements. Italy, as a Country of entry into the European Union, is once again on the front line to support a change in perspective leading to a multilevel European governance based on genuine solidarity, and the development of secure channels for legal migration. … The invisible enemy of today has yet to be defeated and is still causing victims and uncertainties. The pandemic has cast a light on our weaknesses, but also on our strength as an international community. It has taught us that only together can we turn this dark page. It is, once again, time to embark on a new journey. … Address to the United Nations General Assembly, 25 September 2020

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

ADVOCACY

Eni

Keeping sight of a just transition towards a more sustainable economy

CLAUDIO DESCALZI CEO, Eni Claudio Descalzi has been the CEO of Eni, an integrated energy company operating in 66 countries, since May 2014. Twitter @eni  www.eni.com

globalgovernanceproject.org

he historical moment we are witnessing poses challenges to individuals, businesses and society as a whole, but it also offers a chance to strengthen our values and focus on priorities. We need to keep sight of the long-term direction, working for a just transition towards a more sustainable economy, fighting poverty and fostering development, opening access to resources to those who lack it (around 600 million people still don’t have access to electricity in Africa alone). We have to focus on and invest in our people and their competencies to create shared value and innovate, with integrity, commitment and determination. Now more than ever, we should support the education and the professional development of the new generations. Solid values are the pillars of such a transformation: inclusiveness and the respect of one another, the valorisation of diversity, altruism and generosity are key to deliver on a shared long-term vision. The United Nations’ Sustainable Development Goals perfectly codify these elements and offer a clear roadmap for the next 10 years. Eni has embraced them in its corporate mission, convinced that a company will overcome the current difficulties and will be successful in the long run only if it is able to help provide solutions to these challenges. That is why over the past six years we have

adopted a new business model, launched a new mission, announced a long-term business strategy and a new organisation of our businesses that will lead us to drastically cut our emissions by 2050. Our investments worldwide promote projects in education and health, improve access to energy and drinking water and support the development of more sustainable energy sources. Our supercomputer, HPC5 – one of the world’s most powerful – is speeding up research in new energies, and is now helping to model the effectiveness of drugs on COVID-19 as part of a European project. Our efforts, just as those of any actor in today’s complex scenario, will be much more valuable if we are able to work together – business, governments, international organisations, research centres and civil society. Now more than ever, we need to adopt a shared, long-term perspective, confident that by joining forces and embracing shared values we can build a brighter future. We have the opportunity to build a new world, improving people’s quality of life by fostering inclusiveness, education and social integration.

2020 — G7 USA: THE VIRTUAL YEAR

LEADERS’ VIEWS

Justin Trudeau Prime Minister, Canada

Coordination during crises: a wake-up call for a new way of thinking … The world is in crisis. And not just because of the last few months. Not just because of COVID-19. But because of the last few decades. And because of us. This is our wake-up call, and we cannot ignore it. … Today, all those institutions no longer serve us well enough on what they were designed for – defending multilateralism and international law. Protecting human rights and open markets. That is what the crisis of COVID-19 has shown, beyond a shadow of a doubt. That things have to change. And not just on the world stage – but at home, too. … Right now, our world is facing a climate reckoning. We are at this point because of our collective inability, over the past decades, to make the tough decisions and sacrifices needed to fight climate change and save future generations. The pandemic has not changed that. Our shared failures have continued. And our citizens are paying the price. We need a new way of thinking. On climate, on inequality, on health. Because the way we’re doing things just isn’t working well enough. 20

Too often, concerted action is blocked – the needs of our citizens are denied – as a result of gridlock at decision-making bodies. And why? Because there are few consequences for countries that ignore international rules. For regimes that think might makes right. Few consequences for places where opposition figures are being poisoned while cyber tools and disinformation are being used to destabilize democracies. Few consequences when innocent citizens are arbitrarily detained and fundamental freedoms are repressed. When a plane of civilians is shot from the sky. When women’s rights are not treated as human rights. When no one has any rights at all. We are in deadlock. The international approach we’ve relied on since the second half of the 20th century was built on an understanding that countries would work together. But now those same countries are looking inward, and are divided. We need to recognize where we are. The system is broken. The world is in crisis. And things are about to get much worse unless we change. Right now, we have a chance – not a big chance, but a chance – to shift course. To realize that the only way through this is together. Putting some people ahead of others does not work. A healthier, cleaner, more equal future cannot be the privilege of a lucky few. It must be the right of us all. … As Canadians – a trading nation where we trace our origins to every corner of the planet – we know that we are in this together. And I know other countries – your countries – see this too. Instead of hunkering down and hoping that we come out the other side ok, let’s remember that we’re all in this together. Instead of crossing our fingers and hoping that the big powers will figure this out, let’s look at what we can do to make a difference together. Let’s use our shared power not just to get a vaccine, but to get it out to everyone. Let us be inspired by our citizens’ call to restore the global economy while we tackle climate change. In other words, let’s not wait for someone else to act. Let’s do it ourselves. ... Canada has a long history in peacekeeping and we will continue to step up, and continue to move the dial on lasting peace by empowering women. Canada has always supported the work of agencies like UNICEF, the World Food Programme, and the [United Nations High Commission on Refugees]. Not only will we keep supporting these efforts, we’ll

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

keep increasing our international assistance budget every year. There’s so much more still to be done. … Everywhere around the world, people are becoming mindful of this reality. They’re refusing to accept inequality. They’re refusing to close their eyes to the peril we’re facing. Our citizens will no longer shrug off as someone else’s problem a failing status quo. And that’s a good thing. Because there is the path forward. After a wildfire rips through a forest, life adjusts and begins anew. After an earthquake hits a city, people work together and rebuild. As we face these layers of crises, this is what we must do. We must understand our opportunities and our responsibilities to take real action, together. To protect each other, to support each other. If we meet this moment, if we rise to this challenge, I know that, like our grandparents did 70 years ago, we will lay the foundations of a better world. Address to the United Nations General Assembly, 25 September 2020

Instead of hunkering down and hoping that we come out the other side ok, let’s remember that we’re all in this together. Instead of crossing our fingers and hoping that the big powers will figure this out, let’s look at what we can do to make a difference together.” globalgovernanceproject.org

2020 — G7 USA: THE VIRTUAL YEAR

LEADERS’ VIEWS

Emmanuel Macron President, France

Standing shoulder to shoulder as we face shared challenges … The five priorities that will be the basis on which France will build – with its European partners first and foremost, but also with all willing powers, which means all of those who are ready to commit – the foundations of a new contemporary consensus which will enable us to take solid action in the world as it is today. The first principle, or goal, is the fight against the proliferation of weapons of mass destruction and against the terrorism that threatens our collective security, first and foremost. … The second priority is the demanding construction of peace and stability while ensuring equal sovereignty for peoples. … Thirdly, we must protect our common goods … The health of one in the face of an epidemic is the health of all and we have a unique opportunity to make the means for fighting the pandemic into global public goods to which everyone should have access. That is the meaning behind the action we are conducting to achieve ACT-A [Access to COVID-19 Tools Accelerator] and that we will consolidate in the coming months with respect to all the pillars, particularly the strengthening of health systems. Health, a global public good, is a fight that we have been waging throughout this past year, that we have also been waging in Lyon, mobilizing the international community once again to finance the fight against historic epidemics. That is 22

what we will continue to do and we need to step up our efforts in the months ahead. Now more than ever, the climate and biodiversity must be central to our collective agenda. Not in words, but in actions. In December, the Paris Agreement will be five years old, and we already know that the goals that we set together will not be achieved. ON A NEW COURSE The response to the pandemic can help us change course. The massive recovery plans adopted in all countries provide a historic opportunity for change in our economic and development models. This must be a core element of the European Union’s ambition, and I would like to thank the President of the European Commission, who has strongly committed to it. It must be a core element of the work undertaken by the G7 and the G20. It is vital. That is also why, to mark the five-year anniversary of the Paris Agreement, I would like France to mobilize the international community once more, so that each and every one of us can take stock of our commitments – without changing the measure and without muddying the waters – but by reviving the commitment of all of our countries and regions in total transparency, with a determination that needs refreshing. … The oceans, the poles and rainforests are part of the common heritage of humankind.

It is our duty to protect them, and we will do so ahead of the key events for the United Nations including [the Conferences of the Parties] on climate, biodiversity and the fight against desertification. To show our commitment, I propose that we organize a summit next year in New York, ahead of the three COPs, to give decisive impetus and produce tangible results. The digital space is also a common good, a unique common good, open and trustworthy, which requires a new type of governance so that it is not picked up, hacked into, and exploited by some to their own ends. That is the meaning behind the initiatives that we are championing as part of the International Partnership on Information and Democracy of the Christchurch Call and the Global Partnership on Artificial Intelligence. … The fourth priority is the construction of a new era of globalization. … We have created a globalization of consciences that is now a globalization, in a way, not of the knowledge that underpinned the Internet, but one of emotion and resentment. To each of these crisis, we have to find a response. It is essential for our international rules to take into account these new realities, for us to acquire means for more balanced international cooperation, in keeping with the sovereignty of each and to the benefit of all. In this respect, the fight against inequalities will very clearly have to be central to this rethought globalization. France has launched initiatives that have produced results on women’s entrepreneurship, on the Global Partnership for Education, on healthcare for all, and to fight against inequalities of opportunity, but we must go further. … Lastly, the fifth objective that I would like here to propose to our assembly, is respect for international law and the fundamental rights of all. … human rights are not a Western idea that can be treated as interference by those who refer to them. These are the principles of our organization, enshrined in the texts that the United Nations Member States freely consented to sign and respect. … Address to the United Nations General Assembly, 22 September 2020

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

Come for the sunshine, stay for the unforgettable experiences. Whether you want to hike to the lush fern canyon in Redwoods national park, splurge at a high-end exclusive resort on the coast, ride your bike along the Golden Gate Bridge, or shop till you drop on Rodeo Drive, California has you covered. The endless array of experiences in the Golden State will leave you California dreaming long after you’ve returned home. Tia Hoang

Travel Trade Manager thoang@visitcalifornia.com

LEADERS’ VIEWS

Charles Michel President, European Council

“From now on, we will better enforce the level playing field” … The crisis caused by the pandemic is unprecedented. It has exacerbated the weaknesses of fragile countries, regions and populations… The European Union, for its part, has been at the forefront of international cooperation which has raised nearly 16 billion euros to finance the research and the deployment of vaccines, tests and treatments. And we are mobilized, alongside all the players involved, to ensure that these vaccines and treatments are universally accessible and affordable. … Before the crisis, Europe had already embarked on a path of fundamental transformation. For example, by deciding to become the first carbon-neutral continent by 2050. Or by adopting an ambitious digital agenda, in line with our fundamental values. This pandemic has increased our determination to transform our economies and societies tenfold. 540 billion euros have been mobilized for urgent measures from the outset. Then, in July, the European Council decided to mobilize 24

ambitious and unprecedented financial resources … The European Union wants to be stronger, more autonomous, and firmer, to defend a fairer world. And it is in this spirit that we lead the implementation of the Paris Agreements. And that we have already integrated the objectives of the 2030 Agenda into our system of economic governance. … We have faith in the virtues of free and open economies, never in protectionism. But access to our large market – the second largest economic zone in the world, and the first in terms of international trade – will no longer be sold off. From now on, we will better enforce the level playing field, in a market open to those who respect its standards. Whether they leave our Union or want to move closer to it. The European Union is also committed to advancing overall tax fairness, in particular in the digital sector. Large-scale activities carried out in this area can no longer escape fair taxation. The European Union is committed, alongside the [Organisation for Economic Co-operation and Development] and the G20, to international cooperation to correct this injustice. … We are deeply connected with the United States. We share ideals, values and a mutual affection that have been strengthened through the trials of history … We do not share the values on which the political and economic system in China is based. And we will not stop promoting respect for universal human rights. Including those of minorities such as the Uighurs. Or in Hong Kong, where international commitments guaranteeing the rule of law and democracy are being questioned. … There can be no progress without progress in women’s empowerment. Discrimination against women remains one of the major obstacles to development. We must fight this relentlessly. Equality between men and women, as well as

the protection of diversity, particularly sexual diversity, remains one of the major challenges of our time. … Address to the United Nations General Assembly, 25 September 2020

COLLECTIVE RESPONSIBILITY AS THE WORLD FIGHTS THE COVID-19 PANDEMIC … We had the occasion … to have a videoconference with the G7 countries, under the leadership of the United States. It was the occasion to express a strong political will to address this crisis together, to coordinate, to cooperate in different fields. For us, the priority is the health of our citizens. And that is why we have last week encouraged the member states to work together in order to take some measures to contain the spread of the virus. This is the first priority. … We announced [in March] that we were working very hard in order to guarantee more support for the researchers, in order to make more progress and to be able to develop a vaccine. It was also the occasion during this G7 videoconference to decide to work more together in order to be able as soon as possible to make concrete progress, which is also very important. … The message which we want to convey is one of political mobilization so that we can resolve to use all the tools available to us – and there are many – to support our citizens, to support the families affected now and in the future by the economic fallout, to support businesses of all sizes, small, medium and large. This is also the aim of our mobilization within the G7 framework. We also hope to be able to extend that mobilization to other countries through the G20 and other forms of multilateral cooperation. … This crisis is serious. It is going to be long and difficult. That is why we firmly believe that we must be united, we must join forces, we must pull together more than ever before, and we must call on citizens to show discipline. … We all have a role to play. Every one of us can help ensure that we can win this fight and come through the difficult crisis that is facing us if we take the decision at an individual level, at a personal level, to play our part in taking collective responsibility. That is another strong message that we want to send out today. Remarks after the G7 leaders’ videoconference on COVID-19, 16 March 2020

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

LEADERS’ VIEWS

Ursula von der Leyen President, European Commission

A new narrative: collective action for positive change … I am a medical doctor by training, and I have always been proud of Europe’s health systems. They are among the best in the world. Yet the challenge of this pandemic is unprecedented in modern times. We now know that defeating this virus is possible. But no country and no government can defeat the virus alone. This is true, first of all, at the global level. Secondly, inside Europe. And thirdly, between the public and the private sectors. Let me focus first on our response to the pandemic. The EU has taken the lead to convene a global response to COVID-19 and not only a national one. For this purpose we not only work with [the World Health Organization] and the G20, but also with civil society and foundations. Our common goal is to finance the development of vaccines, tests and treatments for the whole world. We so far raised €16 billion. We also joined and contributed to the COVAX Facility to ensure that newly developed vaccines are also available for low and middle-income countries. Team Europe alone – has provided €800 million. This is the largest donation to COVAX worldwide. Because we’re convinced that we will only defeat the virus, if we defeat it all around the world. Secondly, we have established an unprecedented cooperation inside Europe on health issues. In November we have taken the first steps to establish a European Health Union. We will now have an EU-wide preparedness and response plan. … As one expert at Johns Hopkins put it: “Vaccines don’t save lives, vaccinations do.” The development of vaccines has been a remarkable team effort. We will need an even greater effort to deliver them to every village of this world. And we have to globalgovernanceproject.org

prove the safety and the efficacy of those vaccines. Especially in the face of growing vaccine scepticism and disinformation campaigns. … Speech at the EU Health Summit, 1 December 2020

… We need to pool our expertise, share our resources and coordinate our approach to tests and treatment, vaccines and vaccinations. This will be one of the priority areas for next year’s Global Health Summit which Prime Minister Conte and I will convene as part of the Italian G20 Presidency. The second obvious and crucial area is protecting our climate and nature. Europe is a pioneer in the fight against climate change. You know that we want to become the first climate-neutral continent in the world by 2050. … In the months ahead, we must all work to raise the climate ambitions of other countries, too. We must first of all engage with the economies of the G20. They are responsible for 80% of global greenhouse gas emissions. Next year, the world will come together in Glasgow for [the 26th Conference of the Parties meeting] on climate – as well as in Kunming for COP15 on biodiversity. These will be landmark moments in the world’s ability to push back against climate change and biodiversity destruction. Europe will be at the forefront of

brokering ambitious commitments. And I believe, the U.S. is also well placed to support us, given the remarkable work going on in different American states, cities, companies and in civil society. These events will also be important moments for our multilateral rules-based system and the institutions that underpin them. We want to work with our partners to strengthen them, be it the UN, the WHO or the [World Trade Organization]. … One such coalition is needed on the digital world. This is an area, where I believe Europe can take the initiative and partner up with the US and others. We need to define a rulebook for the digital economy and society covering everything, from big tech to data use and privacy, from infrastructure to security. … It cannot be, that commercial giants benefit enormously from our Single Market, but fail to pay taxes where they should. This undermines the acceptance of the social market economy and we will no longer tolerate this. This creates an even greater urgency to find an international agreement on the taxation of digital business and on global minimum taxation. Our goal remains a consensus-based solution at the [Organisation for Economic Co-operation and Development] and G20 level on both pillars of the global discussions. But let there be no doubt: should an agreement fall short of a fair tax system, Europe will act. The new deadline of mid-2021 must be the final one. Should an agreement fall short of a fair tax system that provides long-term sustainable revenues, we will come forward with our own proposal. … Health, climate, digital, reform of the multilateral rules-based system. These are some of the key areas where I see Europe can take the initiative and offer a positive new agenda with the United States. … Speech at the EU Ambassadors’ Conference 2020, 10 November 2020

2020 — G7 USA: THE VIRTUAL YEAR

EDITORS' INTRODUCTIONS

n its 46th year, the G7, under the stewardship of US president Donald Trump, worked energetically to counter the deadly COVID-19 pandemic and the ensuing crises it has brought. These crises came as growing populism, protectionism and provincialism assaulted democracies, the established multilateral liberal order and the globalisation that had spread connectivity and prosperity throughout the world. Additional uncertainty arose from the US election on 3 November, where President Trump sought, but did not secure, a second term. President Trump set four priorities for his G7 summit: strengthening growth and prosperity, reducing regulations, eliminating trade barriers and opening energy markets. But as 2020 progressed, the proliferating COVID-19 pandemic and its economic damage soon put health and economic recovery at centre stage. These health and economic shocks inspired G7 leaders to mount the first emergency summit in their history, which took place virtually on 16 March. The summit generated 11 commitments on health and 10 on the economy, plus three on trade and two on international cooperation. Leaders promised to do “whatever is necessary to ensure a strong global response through closer cooperation and enhanced coordination of our efforts”. They declared that they “fully support the World Health Organization in its global mandate to lead on disease outbreaks and emergencies with health consequences”. They also proclaimed they would “support the launch of joint research projects funded by both public and private resources, and the sharing of facilities, towards rapid development, manufacture and distribution of treatments and a vaccine”. A second emergency virtual summit followed on 16 April. In concluding their 16 March communiqué, G7 leaders called “upon the G20 to support and amplify these efforts”. The G20 did as asked, by mounting its first emergency summit 10 days later, on 26 March. That summit produced 47 commitments, also focused on health and the economy. Its priority commitments were complied with a mere two months later at a level of 72%. Momentum for and from these summits came from the substantial compliance of G7 members with the priority commitments they had made in Biarritz, France, in August 2019. As 2020 opened, their compliance was only 62%. But under the US presidency it rose to 75% by 3 June and to 79% by November. More momentum and achievements came throughout the year from the many

meetings and statements of G7 ministers for finance, foreign affairs, health (with their weekly conference calls), and science and technology. Civil society engagement groups from youth, think tanks, universities and other communities contributed too. The COVID-19 crises produced successive changes for the regularly scheduled G7 summit. It was delayed from 10–12 June into the summer and then the fall, with President Trump finally saying he might hold it after the US election. He also said he would invite the leaders of democratic India, Australia and Korea, and bring Russia’s Vladimir Putin back after his suspension from the G8 for Russia’s invasion and annexation of Ukrainian territory in 2014. As all G7 leaders participated in the broader G20 Riyadh Summit on 21–22

public and private resources to rapidly develop treatments and vaccines was fully kept within eight months. Yet their March promise to manufacture and distribute the vaccine and to ensure its accessibility remained to be met. The economy came second. On 16 March, G7 leaders pledged “to restore the level of growth anticipated before the COVID-19 pandemic”. Seven months later they were well on their way, as the severe economic plunge of the first two quarters of 2020 was followed by a strong recovery in the third. Yet they still had to unleash a second round of fiscal stimulus to counter COVID-19’s new surge and build back better, together, for the longer term. This included helping people suffering from the loss of jobs, education and safety and providing deep, sustainable debt relief for the many developing countries now plunging into poverty. The environment came third. The COVID-19 crisis completely crowded out attention to climate change at the 16 March summit and caused the UN climate summit in Glasgow to be delayed for a full year. There was thus an urgent need for the G7 to act effectively against the escalating, existential threat of climate change. Political security came fourth. It too was crowded out by COVID-19 in March, despite the G7’s continuing core distinctive foundational mission to protect and promote open democracy and individual rights around the world. As 2020 unfolded, there was a growing need to act on Russia, Hong Kong, China and threats elsewhere, and to counter the proliferation of weapons of mass destructions and dampen regional conflicts around the world In all, the United States’ G7 summits in 2020 swiftly countered the COVID-19– created crises with some success. They laid a firm foundation to fuel a fast lift-off for the United Kingdom’s G7 summit in 2021. But they also left much for the UK’s summit to do, with no time to lose.

Confronting the crises

John Kirton Director, G7 Research Group November, and as G7 member Italy became the G20’s 2021 chair on 1 December, G7 leaders and their ministers had already accomplished much on their own and by leading and supporting the G20’s work. Yet there was still much more for the G7 to do. Health came first. As daily new cases, hospitalisations and deaths from COVID-19 in early November soared to historic highs in second and third waves, in record-breaking time governments, private sector firms and universities in G7 members succeeded in producing a safe, effective vaccine against a previously unknown virus. The G7 summit promise in March of supporting the launch of joint research projects funded by both

JOHN KIRTON Director, G7 Research Group John Kirton is the founder and director of the G7 Research Group, G20 Research Group and the Global Health Diplomacy Program, and co-director of the BRICS Research Group, all based at Trinity College at the Munk School of Global Affairs and Public Policy in the University of Toronto, where he is a professor of political science. He is author of many articles and books, including, with Ella Kokotsis, The Global Governance of Climate Change: G7, G20 and UN Leadership. Twitter @jjkirton  www.g7.utoronto.ca

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

EDITORS' INTRODUCTIONS

High stakes on bipartisan consensus Christopher Sands Director, Canada Institute, Wilson Center

excuse to cancel a summit he wanted to hold at a Florida resort he owns and then agreed to host at the federal retreat at Camp David, would he continue with plans to host the 2020 G7 summit? FOR PEACE AND PROSPERITY Inside the Washington Beltway the argument is often made that President Trump is a populist pandering to voters sceptical of internationalism, globalism and the “entangling alliances” that George Washington warned his young country about. This caricature of Trump voters is even more unfair than the cartoon image many have sketched for the president himself. It denigrates people who, time and again, have shown generosity and a willingness to sacrifice for peace and prosperity for strangers they will never meet, in lands they will never visit. This is the best of the American spirit that G7 leaders find when they visit the United States. In the US, 2020 is an election year, and G7 leaders naturally seek to avoid interference in domestic affairs. The lack of a bipartisan consensus in the US on foreign policy (and domestic policies as well) has made it difficult for Yoshihide Suga, Giuseppe Conte, Boris Johnson, Emmanuel Macron, Angela Merkel, Justin Trudeau, Ursula von der Leyen and Charles Michel to engage Donald Trump's US. The Woodrow Wilson International Center for Scholars, thrice named the world’s top think tank for regional programmes by the University of Pennsylvania, nonetheless wrestled with the same problem as we were asked to host the Think 7, a gathering of think tank scholars from the G7 members to deliberate on the agenda set by the G7 host and offer constructive advice grounded in the best research on how to achieve progress on this agenda. Like President Trump, for us the COVID-19 pandemic gave us an easy excuse to disengage. Yet we persisted because we understood the stakes. Not just for the G7, but for the world. Our contributions to this edition of the G7 summit publication are the result of that choice. You will see here many essays and contributions that call on the G7 to live up to its principles and do what it can as a gathering to coordinate the pandemic response and the economic recovery. The stakes are too high to do otherwise.

s the G7 leaders prepared to gather for their annual summit at a time of global crisis, the COVID-19 pandemic had prompted governments to undertake public health measures on a scale never before seen. The economic consequences of this response have roiled stock markets, dislocated global trade and set back growth. Rebounding from the pandemic will be a challenge for all the G7 members. If these leaders can work together, their odds of success will improve. The 2020 G7 gathering would have been US president Donald Trump’s fourth regular summit, and the only one he would host. What does he think about the G7? From outside the circle of the US government it is impossible to be sure. But much of the media coverage of President Trump at past summits has asserted that he is hostile to multilateralism, an isolationist, someone who wishes to tear down the alliances and institutions that were established as a result of American leadership after the Second World War. If that was true, why would he bother? In his speech at the 2017 General Assembly of the United Nations, Trump called on the organisation to address its organisational lethargy and corruption and live up to the principles of its founding. Each fall, he returned with a similar message. At his first summit of the North Atlantic Treaty Organization in 2017, President Trump called out the allies who underspent on defence in order to splash out on social programmes, confident that the Director, Canada Institute, Wilson Center United States would defend them. Message delivered. Why then Christopher Sands is director of the Canada Institute at the Woodrow did he return to deliver similar messages in 2018 and 2019? Wilson International Center for Scholars and a senior research professor The G7 and the G20 present at the Johns Hopkins University Nitze School of Advanced International a similar puzzle. Why would Studies in Washington DC. From 2012 until 2017 he was a visiting professor someone who wanted to end the at Western Washington University, and taught in the School of Public Affairs old order persist in attending and the School of International Service at American University from 2005 to and each time call on these 2012. He was also a senior fellow at the Hudson Institute from 2007 to 2016. gatherings to live up to their principles? And why, when Twitter @sandsatwilson  www.wilsoncenter.org COVID-19 provided the perfect

CHRISTOPHER SANDS

globalgovernanceproject.org

2020 — G7 USA: THE VIRTUAL YEAR

EMPOWERING WOMEN

SPOTLIGHT ON HEALTH

G7 performance on

The G7’s performance on health falls below the average across all issue areas, but, says Meagan Byrd, chair, summit studies, G7 Research Group, leaders can improve compliance by holding health ministers’ meetings, reaffirming support for international organisations and making binding commitments on global health systems

health F

rom the Rambouillet Summit in 1975 to the Biarritz Summit in 2019, the G7 leaders dedicated 49,816 words (8%) to health in their summit documents, averaging 1,107 words per summit. However, they paid little attention to health prior to 1996. Their focus increased considerably between 2000 and 2007. The highest number of words dedicated to health at a single summit was in 2006, where the

G7 performance on health, 1975–2019 100

197

197 5 Ra

mb ouil let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve nice 198 1 Ot taw 198 a 2 Ve 198 rsai 3W lles illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve nice 198 8 To ron to 198 9 Pa 199 r is 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina w a 200 1 Ge 200 noa 2 Ka 200 n ana 3 Ev skis ianlesBai 200 ns 4 Se a Is 200 land 5G len 200 eag 6 St les Pet 200 ersb 7H urg eilig 200 end 8H am okk m aido -Toy ako 200 9 L’A qui 201 la 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S him 201 a 7 Ta orm 201 ina 8C har levo ix 201 9B iarr itz

Compliance (%)

Conclusions (% words)

Commitments (%)

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

EMPOWERING WOMEN G7 produced 7,072 words on health. The lowest was in 1984, with only 12 words (0.4%) on health. The G7 produced a total of 76 dedicated documents on health, starting as early as the 1979 summit. COMMITMENTS The G7 made 415 collective, precise, future-oriented, politically binding commitments on health as identified by the G7 Research Group, averaging nine commitments per summit. Health ranked third highest among the 32 subjects on which the G7 leaders made commitments. The first health commitment was made in 1979, with a steady increase from 1996 onwards. From 2000 to 2008, the G7 showed consistent and sustained attention on health, but this focus declined from 2009 to 2012. Focus increased again in 2014 with 12 health commitments, rising to 61 in 2015 and peaking at 86 at the Ise-Shima Summit in 2016. This decreased to seven health commitments in 2017 and fell again to only four at Biarritz in 2019. COMPLIANCE The G7 Research Group has assessed 70 health commitments for compliance by G7 members. Average compliance was 70%, lower than the average of 76% with all assessed commitments across all subjects. The earliest commitment assessed, with 100% compliance, was made at the 1983 summit. Perfect compliance was only seen once more, with a commitment made at the 2012 summit. From 2000 to 2003, the G7 members had strong compliance, with 91% for 2000, 94% for 2001, 72% for 2002 and 90% for 2003. This strong streak followed a low of 50% for 1999. From 2012 to 2015, the G7 had another streak of high compliance. After 100% for 2012, compliance was 95% for 2013, 92% for 2014 and 86% for 2015. This second streak followed the second lowest score of 45% for 2011. Compliance after 2015 was inconsistent, starting with a high of 86% for 2015, 75% for 2016 and 25% for 2017 – the lowest score in the past five years. Compliance soared once again for 2018, reaching 75%. The interim compliance report for the 2019 summit, covering implementation up to 10 December 2019, showed reduced compliance of 50% across the three priority health commitments assessed. From the start, Canada had the highest compliance with 92%, followed by the United States and the United Kingdom with 88% and 85%, respectively. Italy had the lowest compliance, with 58%. CORRECTIONS G7 summit health compliance can be improved by holding meetings of health ministers. The three years with such meetings for which compliance data is available (2006, 2015 and 2016) had average summit health compliance of 80%, well above the overall health compliance average of 70% since 1983. Moreover, making connections between health and closely related issues such as climate change, environment, gender equality, employment and development could also increase compliance. globalgovernanceproject.org

MEAGAN BYRD Chair, summit studies, G7 Research Group Meagan Byrd is the chair of summit studies for the G7 Research Group and an analyst with the G20 Research Group based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She was a member of the field teams for the G20’s summit in Buenos Aires in 2018 and the G7’s summit in Biarritz in 2019. Her research interests include international journalism, political communications and diplomacy. Meagan holds an honours bachelor of arts in political science from the University of Toronto. Twitter @MeaganKByrd  www.g7.utoronto.ca

70%

Average compliance on assessed health commitments

commitments made in March 2020 in response to COVID-19

At their next summit, G7 leaders should make more health commitments that specifically reaffirm support for other international organisations, notably the World Health Organization. The G7 Research Group assessed compliance with six commitments that specifically note the WHO and found average compliance of 87%, much higher than the 70% health average. The G7 should also make binding commitments on global health systems, such as development finance for emergency responses, especially for fighting pandemics, universal health coverage, and primary and emergency healthcare. 2020 — G7 USA: THE VIRTUAL YEAR

SPOTLIGHT ON HEALTH

The measure of humanity We are only as healthy as the most vulnerable in our societies. As countries respond to COVID-19 and work to protect against future pandemics, Tedros Adhanom Ghebreyesus, director general, World Health Organization, says investing in health now will save lives later

he COVID-19 pandemic is the defining health crisis of our time. This previously unknown pathogen – the first coronavirus to cause a pandemic – is fast and fatal, spreading with alarming speed and shaking the foundations of health systems, economies and societies around the world. It has exposed the fault lines, inequalities, injustices and contradictions of our world. Nations have come together as never before, and geopolitical divisions have been thrown into sharp relief. From the beginning, the World Health Organization has worked to sound the alarm and support countries to engage and empower communities, suppress transmission and save lives by:

•

Working with countries to implement a comprehensive package of public health measures;

•

Bringing countries together to share experiences and lessons learned;

•

Convening thousands of experts to analyse the evolving evidence and distil it into guidance;

•

Launching a large international trial to find answers fast about which drugs are the most effective;

•

Leading a consortium of countries

and partners to accelerate the development and equitable distribution of vaccines, diagnostics and therapeutics; •

Shipping millions of test kits and tons of protective gear all around the world, focusing on those countries that most need our support;

•

Training millions of health workers; and

•

Working with tech companies to fight the infodemic.

The pandemic has reminded us of some simple truths: we are one humanity. We share the same planet, the same hopes and dreams, and the same fears. INEQUALITIES MAGNIFIED The pandemic exploits the gaps and magnifies the inequalities in health systems, underscoring the importance of investing in health workers, health infrastructure and systems to prevent, detect and respond to disease outbreaks. Strong health systems are the best defence not only against outbreaks and pandemics, but also against the multiple health threats that people around the world face every day. And yet, on current trends, more than five billion people will lack access to essential health services by 2030 –

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

We are one humanity. We share the same planet, the same hopes and dreams, and the same fears”

globalgovernanceproject.org

2020 — G7 USA: THE VIRTUAL YEAR

SPOTLIGHT ON HEALTH including the ability to see a health worker, or access to essential medicines and running water in hospitals. Consider that hand hygiene is one of the primary recommendations for preventing infection with COVID-19, yet much of the world’s population lacks access to clean water. Gaps like these do not just undermine the health of individuals, families and communities; they also put global security and economic development at risk. As in so many crises, the most vulnerable suffer the most, and they must be our focus. The world spends around $7.5 trillion on health each year – almost 10% of global gross domestic product. But too many countries spend too much of their health budget on managing diseases in hospitals – where the costs are higher and the outcomes are often worse – instead of promoting health, preventing disease and investing in pandemic preparedness. Over the past 20 years, countries have spent vast sums on preventing and preparing for terrorist attacks, but relatively little preparing for the attack of a virus, which as COVID-19 has shown, can

TEDROS ADHANOM GHEBREYESUS

Director general, World Health Organization Tedros Adhanom Ghebreyesus was elected director general of the World Health Organization in 2017. He was the first person from the WHO African Region to serve as WHO’s chief technical and administrative officer. He served as Ethiopia’s minister of foreign affairs from 2012 to 2016 and minister of health from 2005 to 2012. He was elected chair of the Global Fund to Fight AIDS, Tuberculosis and Malaria Board in 2009, and previously chaired the Roll Back Malaria Partnership Board, and co-chaired the Partnership for Maternal, Newborn and Child Health Board.

2.5m 5bn 10%

health workers trained since the outbreak of COVID-19

people will lack access to essential health services by 2030

of annual global GDP is spent on health, but more should go on prevention

be far more deadly and far more damaging economically, politically and socially. The COVID-19 pandemic will eventually recede, but there can be no going back to business as usual. We cannot continue to rush to fund panic but let preparedness go by the wayside. Even as we respond to this pandemic, we must prepare for the next one. Now is an opportunity to lay the foundations for resilient health systems around the world. If we learn anything from COVID-19, it must be that investing in health now will save lives later. History will judge us not only on how we responded to the pandemic, but on the lessons we learned and the actions we took once it is over. COVID-19 has reaffirmed that when it comes to health, our destinies are intertwined. We are fighting an invisible enemy that knows no borders and does not discriminate. As long as it threatens some of us, none of us is safe. Global solidarity, based on national unity, has never been more important. The G7 members are uniquely placed not only to support the global response, but to lay the foundations for the healthier, safer, fairer world we all want.

Twitter @DrTedros  www.who.int

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

Photo: Neeraz Chaturvedi/Shutterstock.com

Photo: Nowaczyk/Shutterstock.com

Financing the private sector to empower rural women in Bangladesh.

Creating MSME opportunities for women and young graduates in Egypt.

Photo: Carrastock/Shutterstock.com

Photo: Marjolein Hameleers/Shutterstock.com

Supporting agricultural production in Senegal’s rural communities.

Improving access to finance for women-owned MSMEs in Colombia.

SPOTLIGHT ONWOMEN HEALTH EMPOWERING

Eight reasons to be fearful, and hopeful, for the next generation Today’s children face unprecedented and complex challenges, from climate threats to online misinformation. But by working together with organisations, world leaders have the tools to open doors of opportunity for every child, writes Henrietta H Fore, executive director, UNICEF

s the leader of the world’s largest children’s agency, I frequently sit down with children and young people from around the world. The issues they raise – such as education, poverty, inequality and discrimination – should surprise no one, as those have been multigenerational challenges UNICEF has fought for decades. But I have also been struck by the new challenges they mention: Prolonged conflicts. Climate change. Online safety. Misinformation. The Convention on the Rights of the Child – the most widely ratified human rights instrument in history – turned 30 last year. To mark the occasion, I wrote my first ever ‘open letter to the world’s children’. In it, I sound the alarm about eight global shifts that were unimaginable 30 years ago, and that we will continue to endure this year and beyond.

EMPOWERING WOMEN HERE IS WHAT IS AT STAKE: • Our planet: Children need clean water, clean air and a safe climate. The climate crisis has the potential to undermine every one of children’s basic rights to life, health, safety and security. This current crisis can undo most of the gains made in child survival and development over the past 30 years. • Children’s lives: One in four children is likely to live, and learn, in conflict and disaster zones. Children have always been the first victims of war. Today, the number of countries experiencing conflict is the highest it has ever been since the adoption of the Convention in 1989. • Children’s mental health: Self-harm is now the third leading cause of death for adolescents aged 15 to 19. Teens today smoke less, drink less and generally take fewer risks than previous generations, yet child and adolescent mental illness and self-harm are on the rise. • The safety and well-being of millions of migrant children: More than 30 million children have migrated from their place of birth. For many, migration is propelled by a drive for a better life. But for too many children, migration is not a positive choice but an urgent necessity that takes them on perilous journeys across deserts, oceans and armed borders, encountering violence, abuse and exploitation along the way. • Online misinformation: The next generation is growing up in a digital environment saturated with misinformation online, making it difficult to know who and what to trust. Parents around the world have been misled by lies about vaccines on social media and messaging apps, prompting a worrisome resurgence of measles in countries such as France, India, the Philippines and Samoa.

photos: shutterstock.com

• Children’s status before their governments: A quarter of children may never have an official birth certificate or qualify for a passport. If their parents are stateless, or from a persecuted or marginalised community, or simply if they live in a poor remote region, they may never be given an identity or birth certificate. They may even be denied citizenship or have their citizenship stripped from them.

HENRIETTA H FORE Executive director, UNICEF Henrietta H Fore has been UNICEF’s seventh executive director since 1 January 2018. From 2007 to 2009, she was the administrator of the US Agency for International Development, having earlier served as assistant administrator for Asia and assistant administrator for private enterprise. Fore also served as under secretary of state for management and director of the United States Mint in the US Department of Treasury. Immediately prior to her appointment with UNICEF, Fore was chair of the board and chief executive officer of Holsman International. Twitter @unicefchief  www.unicef.org

1.8bn+ people aged 10 to 24 in the world

1in4 children are likely to live in conflict and disaster zones

¹⁄₄

of children may never have an official birth certificate or qualify for a passport

As leaders, there is no greater fundamental responsibility than leaving the world a better place than you found it” globalgovernanceproject.org

• Future jobs: There are more than 1.8 billion young people aged 10 to 24 in the world, one of the largest cohorts in human history. Failing to equip youth with the tools for success in today’s global economy would be a grave injustice to them and a short-sighted waste of human capital. • Children’s online privacy: Today, more than one in three children globally are regular internet users. Whether they know it or not, as those children go about their daily online lives, browsing social media, using search engines, e-commerce and government platforms, playing games, downloading apps and using mobile geolocation services, a digital footprint composed of thousands of pieces of data about them is accumulating. Every child’s digital footprint must be protected. These are complex challenges and UNICEF is working around the world to advocate for and protect children’s rights. But we cannot do it alone. As world leaders discuss and deliberate specific policies and interventions – at home in their national capitals, together at their virtual summits and on the world stage – they need to ask themselves: how will these actions affect children? Will they make their futures brighter or darker? Will they open doors of opportunity for them – or close these doors forever? Will they foster peace – or deepen global divisions and mistrust? As leaders, there is no greater fundamental responsibility than leaving the world a better place than you found it. UNICEF is here to help carry out this vital task and shape a brighter future for every child, everywhere. 2020 — G7 USA: THE VIRTUAL YEAR

Health: a vital shared investment

n the 45-year history of its summits, the G7 has provided decisive leadership on economic prosperity, global health and development and addressed threats to global security and stability. COVID-19 combines all these issues at the same time, everywhere. COVID-19 threatens the health and economic growth of G7 members, threatens the investments the G7 has made towards the Sustainable Development Goals and threatens the global economy. At UNAIDS, we have highlighted that a disruption to HIV treatment related to COVID-19 could cause 500,000 additional AIDS-related deaths, including from tuberculosis, in Africa. We could see the reversal of gains made in preventing mother-to-child HIV transmission since 2010. Support for the response to COVID-19 must not divert investments and reverse the momentum on the health-related SDGs.

The G7 is well positioned to tackle the issues that deprive developing countries of the resources needed to beat COVID-19, ensure economic recovery and remain on track to meet the Sustainable Development Goals. Winnie Byanyima, executive director, UNAIDS, explains how

While COVID-19 highlights our interdependence, it also magnifies inequalities between and within countries. The most stark inequality is gender, with an alarming increase in violence against women and girls; the elevated risk shouldered by the world’s nurses, who are predominately women; the loss of employment for women engaged in insecure, lower-paying jobs; and the unpaid work that women provide in caring for families – even more difficult under lockdown. The G7 can send a powerful signal that a gender-sensitive approach must guide the response to COVID-19 within and beyond the health sector. UNAIDS has brought to the COVID-19 response the precious lessons of the AIDS pandemic: the need to address gender and socio-economic impacts, the importance of empowering communities; the reality that fulfilling human rights does not hinder but rather enables pandemic response;

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

SPOTLIGHT ON HEALTH

$4.32bn+ invested annually by the President’s Emergency Plan For AIDS Relief

$159bn The approximate cost to double the health spending of the world’s 85 poorest countries

500,000 additional AIDS-related deaths could result from disruption to HIV treatment related to COVID-19

Aid is vital, but will not be enough to enable the world to defeat COVID-19. Bold leadership is also needed on debt cancellation, tax reform” and patent pooling and the notion that the response must go beyond health interventions, and harness economic and social capital and the vital role of global solidarity. From the launch of the Global Fund to Fight AIDS, Tuberculosis and Malaria to the Gleneagles commitment to double aid to Africa, to the Muskoka Initiative on Maternal, Newborn and Child Health, the G7 has played a critical role in advancing global health. Today, the COVID-19 response requires strengthening the future architecture for global health and development, which needs the coordinated political leadership and financial support of the G7. The United States can build on the exceptional leadership it has brought to the global AIDS response through the President’s Emergency Plan For AIDS Relief, which invests more than $4.32 billion annually, including $900 million to support health systems in partner countries. PEPFAR is now leveraging this capacity for COVID-19. This is the kind of practical, urgent support that should be extended between the G7 and the international community.

WINNIE BYANYIMA Executive director, UNAIDS Winnie Byanyima assumed the role of executive director of UNAIDS in November 2019. She had been executive director of Oxfam International since 2013. Prior to that, she served for seven years as the director of gender and development at the United Nations Development Programme. Ms Byanyima began her career as a champion of marginalised communities and women 30 years ago as a member of parliament in the National Assembly of Uganda. In 2004, she became the director of women and development at the African Union Commission. Twitter @Winnie_Byanyima  www.unaids.org

globalgovernanceproject.org

ACCESSIBLE SUPPORT The leadership needed from the G7 includes development assistance. It would cost approximately $159 billion to double the health spending of the world’s 85 poorest countries, home to 3.7 billion people. This is less than 8% of the major US fiscal stimulus package. It is inspiring to see partner countries using the bold language of “a new Marshall Plan” – but currently pledged contributions remain insufficient to achieve such an audacious goal. Aid is vital, but will not be enough to enable the world to defeat COVID-19. Bold leadership is also needed on debt cancellation, tax reform and patent pooling. Debt cancellation would enable developing countries to beat COVID-19. Even before the outbreak, many developing countries were facing debt stress, leading to cuts in domestic health spending. The G7 governments and the international financial institutions must go beyond the temporary debt suspensions recently announced. COVID-19 has highlighted that health is a vital shared investment. Now is the time for the G7 to advance corporate tax reform, nationally and globally, to tackle the exemptions, havens and loopholes that deprive developing countries of the resources needed to ensure public health and economic recovery. An open letter for a People’s Vaccine was signed by more than 150 global leaders, including the leaders of South Africa, Ghana, Senegal and Pakistan, as well as more than 50 former leaders from Africa, Europe, Latin America, Asia and the Pacific. They urged that all COVID-19 vaccines, treatments and tests be patent-free, mass produced and distributed fairly. Now more than ever, COVID-19 calls for the G7 to step up to make another historic commitment to global health – by joining the call for a People’s Vaccine. COVID-19 is the ultimate global challenge – impossible for any one country, or even group of countries such as the G7, to overcome alone. We can only beat this together. It can at times seem overwhelming – but at one time, so too did the AIDS pandemic. Today, millions of people around the world are alive and thriving because of the G7’s, and in particular the US government’s, transformational leadership. With the support of the G7, the international community must simultaneously rise to the occasion to end the COVID-19 pandemic and maintain progress towards ending AIDS and the other health-related SDGs. 2020 — G7 USA: THE VIRTUAL YEAR

SPOTLIGHT ON HEALTH

Seth Berkley, CEO, Gavi, the Vaccine Alliance, calls for a one world approach – collective resources, political support and action – in delivering the COVID-19 vaccines, and ensuring everyone is protected

ever before has the development of a vaccine been so widely anticipated or needed. It is clear that to end this pandemic, minimise loss of life and return to some semblance of normality, we need COVID-19 vaccines, and we need people in all countries to have access to them. Thanks to an unprecedented response from the scientific community and industry, the first vaccines are now being rolled out, with more on the horizon. But we now also need a similar global response, with leadership from the G7, the G20 and the G77, to support COVAX to ensure that access is rapid, fair and equitable and to prepare the single largest and most rapid global vaccine deployment in history. With a disease that spreads as fast as COVID-19, vaccines will only be effective if everyone is protected. If large reservoirs of the coronavirus are allowed to persist, it will continue to circulate, and we will risk regular

resurgences for years to come. This will not only put millions of lives unnecessarily at risk, but will also stall efforts to resume commerce, trade and travel – all hopes of rebooting the global economy. COVAX is the only way to avoid this. With 189 governments and economies now involved, representing around 90% of the global population, its initial aim is to make two billion doses of COVID-19 vaccine available to people all across the world, regardless of their ability to pay. Coordinated by Gavi, the Coalition for Epidemic Preparedness Innovations and the World Health Organization, COVAX is the largest multilateral collaboration since the Paris climate agreement. It is the only global solution. But now that we have it, we must ensure that it succeeds. FIVE CRITICAL CHALLENGES To make that happen we now face five critical challenges. The first is to ensure that as and when further COVID-19 vaccines are licensed, or receive emergency-use authorisation, there are enough doses for everyone and everyone gets them. It is critical that manufacturers do not lose sight of this and prioritise

A vaccine for humanity 38

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

600m

vaccine doses a year supplied by Gavi and nearly 500 vaccines delivered to countries over the past two decades

189

governments and economies involved in COVAX – around 90% of the global population

doses to the highest bidder. While COVAX has already secured hundreds of millions of doses, we now need all vaccine manufacturers to make their COVID vaccines affordable, appropriate for global roll-out and available to COVAX for timely delivery as early as possible in 2021. The second challenge is to guarantee equitable access, particularly for low- and middle-income countries. COVAX was designed to benefit everyone, but it was created with the world’s poorest people in mind. Although it provides all participating countries with access to the world’s largest and most diverse portfolio of COVID-19 vaccines, and ensures that manufacturers are ready to produce doses at scale as vaccines are ready, the Gavi COVAX Advance Market Commitment is there for the 92 low- and middle-income countries that cannot afford them. That is why we need the AMC to succeed. Thanks to a massive show of multilateralism, we have already secured more than the $2 billion needed to jumpstart it in 2020. But if COVAX is to achieve its initial goal of making two billion doses of COVID-19 vaccines available by the end of 2021 – with nearly a billion of these doses going to AMC countries – then we need to secure at least an additional $5 billion to finish the job. That means ensuring that the AMC is a priority for official development assistance. The third challenge is deployment. Getting billions of doses of vaccine out to the entire world efficiently is complex and could be undermined by transport and supply chain issues, regulatory regimes, lack of sufficient training and infrastructure or other emergencies. Here, the Gavi Alliance has tremendous experience: it supplies 600 million vaccine doses per year and has supported more than 500 vaccine introductions in countries over the past two decades. It is now critical that we work with countries to ensure that all the pieces – the supply chains, cold storage facilities, trained healthcare workers, data systems and, of course, trust in vaccines – are in place to make sure people get these vaccines as quickly as possible. Gavi has boosted this with an initial $150 million to get this work started. We also need to continue to do everything in our power to protect healthcare workers and bolster health systems. This fourth challenge is already an issue in many countries. Gavi has supported countries by making an initial $200 million available to globalgovernanceproject.org

SETH BERKLEY CEO, Gavi, the Vaccine Alliance A medical doctor and infectious disease epidemiologist, Seth Berkley joined Gavi, the Vaccine Alliance, as CEO in 2011. Previously, he founded the International AIDS Vaccine Initiative in 1996 and served as president and CEO for 15 years. He was an officer of the Health Sciences Division at the Rockefeller Foundation, and has worked for the Center for Infectious Diseases of the US Centers for Disease Control and Prevention, the Massachusetts Department of Public Health and the Carter Center, where he was assigned as an epidemiologist at the Ministry of Health in Uganda. Twitter @GaviSeth  www.gavi.org

protect healthcare workers with personal protective equipment, perform vital surveillance and training, and fund diagnostic tests quickly and before other funders are able to provide more substantial resources. The fifth challenge is to ensure that routine immunisation continues during the pandemic, to avoid simultaneous outbreaks of multiple infectious diseases, such as measles, polio and yellow fever. Disruptions have already led to tens of millions of people in Gavi-supported countries missing out on routine vaccines. It is estimated that every COVID-19 death averted by stopping routine immunisation could tragically lead to at least 84 deaths from other vaccine-preventable diseases. Moreover, the supply chains, cold chain equipment, trained healthcare workers, data systems and disease surveillance that support these existing programmes ultimately form the backbone of the delivery network we will need to get the COVID-19 vaccines out. The beginning of the end of this crisis is tantalisingly within our grasp, but we must overcome these challenges to get there. To do that COVAX needs resources and political support so we can act now and work together towards that common goal: one world, protected. Ultimately no one is safe until everyone is safe, and it is only by making sure that everyone has equitable access to COVID-19 vaccines that we can end the acute phase of this pandemic. 2020 — G7 USA: THE VIRTUAL YEAR

SPOTLIGHT ON HEALTH

Threats to the foundations of

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

Amid calls for reform and actions that restrict the World Health Organization, Ilona Kickbusch, co-chair, UHC2030, and founding director, Global Health Centre, Graduate Institute of International and Development Studies in Geneva, says it is critical that institutions do not fall prey to geopolitical posturing and conflicts

here was initially great delight in the global health world when global health became part of the deliberations of the G7 and the G20. Not only were meetings of ministers of health held regularly by all hosts, but health issues also made their way into the leaders’ declarations. Countries used their presidency to boost global health – most recently in 2019 when France’s Emmanuel Macron, the host of the G7 summit that year, pushed for replenishing the Global Fund to Fight AIDS, Tuberculosis and Malaria. Health security issues including anti-microbial resistance were always on the agenda. Indeed, during Germany’s 2017 G20 presidency health ministers held a pandemic preparedness and response simulation to increase awareness of the potential pandemic threat. A new important dimension was added to global health governance. POLITICISATION OF THE PANDEMIC Initially, it seemed promising that the G7 and the G20 had developed a higher awareness of health issues and took them beyond the health sector. Health was high on the political agenda. But the G7 and G20 always referred back to the World Health Organization and the United Nations for implementation. Japan’s G20 presidency in 2019 even organised a joint meeting of health and finance ministers to highlight the need to invest in health and universal health coverage, and later took the results to the High Level Meeting on UHC at the United Nations. In 2020, the extraordinary politicisation of the COVID-19 pandemic is creating a backlash. It has been used by some members to attack the United Nations and its specialised organisations. In the first instance, the United States

globalgovernanceproject.org

is no longer willing to sign communiqués that express explicit support for the WHO, as President Donald Trump decided to blame it for the COVID-19 pandemic. The United States has also not joined the Access to COVID-19 Tools Accelerator, a global collaboration to accelerate development, production and equitable access to diagnostics, therapeutics and vaccines that includes all the other G7 members including the European Commission. They have all aligned with the WHO’s call for solidarity. REFORMS AND RESTRICTIONS Although the WHO and its many partners are working flat out to fight the pandemic and raise funds at the same time, in the spring the United States presented its G7 partners with a list of WHO reforms to be carried out following on from the pandemic. The proposals focus mainly on the organisation’s independence and on transparency, exactly those issues that a key group of WHO member states have been keen to restrict. One long-standing criticism of the International Health Regulations – which the WHO must follow – has been that it has “no teeth”. Anyone working at the WHO would be thrilled if member states strengthened the independence of the WHO and its work. It is an unproven assumption, however, that the WHO director-general and the emergency committee, which advises when or whether to declare a public health emergency of international concern, were not independent in their decision-making. It does show the weaknesses of the concept of a public health emergency of international concern – which does not allow for intermediary warnings. Compared to the constant noise about the WHO coming from the White House, 2020 — G7 USA: THE VIRTUAL YEAR

SPOTLIGHT ON HEALTH COVID-19. One key lesson, of course, is that no matter how well prepared a country is for a pandemic, the final outcome will depend on the political decisions taken. And no matter how an international organisation like WHO responds, if it becomes a proxy for a geopolitical conflict its work is significantly impaired. The G7 and the G20 must address these political issues – because countries depend on one another and the WHO in a pandemic.

G7 and G20 members must make clear that they fully respect the constitution, governance and decision-making processes of the WHO” these proposals sound sensible. They reflect ideas put forward by academics, member states and many commentators for years. Yes, they should be debated, but several points need to be considered first: the most important thing now is to work together to beat the virus; any evaluation at a moment when the pandemic response is so highly politicised would be counterproductive; and the WHO’s members already have review and oversight processes – the Independent Oversight and Advisory Committee for the WHO Health Emergencies Programme, the Review Committee on the Role of the International Health Regulations and the Global Preparedness Monitoring Board.

The most important issue, however, is that the proposals the United States presented to the G7 and that have now been revised based on the G7 discussion should be taken to the WHO’s governing bodies of member states: the Executive Board and the World Health Assembly. As the document to the G7 said, “the US is still a member state of the WHO and an active member of the WHO’s executive board”. The G7 and the G20 need to take positions on their support of multilateralism and the WHO – as they did in initial statements at the beginning of the crisis. They can play a key role in productive, forward-looking reforms based on lessons learned during

THE CRITICAL WARNING This is the critical warning: it is essential that major health challenges are taken to the G7 and G20, but those institutions must not fall prey to geopolitical posturing and conflicts – G7 and G20 members should be adamant that they will not accept this. They must also make clear that G7 and G20 members fully respect the constitution, governance and decision-making processes of the WHO. This means that decisions are taken by 194 sovereign member states after negotiations and consensus-finding processes. UN-based health diplomacy, which includes most of the world’s countries, cannot be replaced by highly politicised club diplomacy. If we go down that road, it would significantly weaken global health governance and endanger global health.

CMY

ILONA KICKBUSCH Co-chair, UHC2030 and founding director, Global Health Centre, Graduate Institute of International and Development Studies in Geneva, Switzerland Ilona Kickbusch is the co-chair of UHC2030 and founding director of the Global Health Centre at the Graduate Institute of International and Development Studies in Geneva, Switzerland. She served on a panel of independent experts to assess the World Health Organization’s response in the Ebola outbreak and is a member of the Global Preparedness Monitoring Board. She previously had a distinguished career with WHO and Yale University, and has published widely on global health governance and global health diplomacy. Twitter @IlonaKickbusch  www.ilonakickbusch.com

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

Borobudur Temple Central Java

FOR YOUR CLEANLINESS #InDOnesiaCARE

www.indonesia.travel

FOR YOUR HYGIENE Traditional Food Jakarta

#InDOnesiaCARE

www.indonesia.travel

FOR YOUR WELLBEING #InDOnesiaCARE

www.indonesia.travel

Kamandalu Ubud Bali

EMPOWERING SPOTLIGHT ONWOMEN HEALTH

Jeffrey Sturchio, CEO, Rabin Martin, looks at how the private sector is contributing to controlling COVID-19 – and offers three recommendations for cooperation with https://eyq.ey.com/eyq/ home/ other actors to ensure equitable distribution of future treatments

Crisis of a century

s British science journalist Laura Spinney wrote, a pandemic is “a social phenomenon as much as it is a biological one; it cannot be separated from its historical, geographical and cultural context”. In a world so globally interdependent, COVID-19 has exposed inequalities along the gradient of socio-economic status all over the world, and weakened economies and the body politic. No one can escape its impact, with millions infected and hundreds of thousands dead in just a few months. Yet the pandemic is also sparking scientific and medical innovations that show hopeful signs of a way out of the crisis. During a crisis, all partners must rely on one another, including the private sector. Collaboration is key to ensuring that vulnerable populations – especially those in low- and middle-income countries – are not left behind. The global response should leverage the private sector’s expertise, capabilities and resources, particularly in procurement and supply chain management, manufacturing, and

healthcare research and development. The private sector can also help prepare for the next pandemic, as the work of the Private Sector Roundtable of the Global Health Security Agenda shows. Companies are increasingly including emergency preparedness as a critical component of their sustainability plans and strategies. WORK REORIENTED In responding to the COVID-19 crisis, biopharmaceutical companies immediately reoriented their efforts to find new therapeutics and a safe, effective vaccine. The Bill and Melinda Gates Foundation, the Wellcome Trust, Mastercard and some 15 biopharmaceutical companies are working in the COVID-19 Therapeutics Accelerator to identify potential treatments, accelerate their development and prepare for the manufacture of billions of doses for use worldwide. Companies have also joined other collaborations, such as those sponsored by the US National Institutes of Health (the Accelerating COVID-19 Therapeutic Interventions and Vaccines

partnership) and the European Union’s Innovative Medicines Initiative, along with the World Health Organization’s global collaboration through the Access to COVID-19 Tools Accelerator to develop, produce and ensure equitable access to new COVID-19 diagnostics, therapeutics and vaccines. Its COVAX facility, led by Gavi, the Vaccine Alliance, the Centre for Epidemic Preparedness Innovations and the WHO, has more than 165 countries working together to scale up manufacturing and provide equitable access to billions of doses of COVID-19 vaccines. Each initiative brings together leading biopharmaceutical research companies with the public sector to prioritise diagnostic, vaccine and drug candidates, streamline clinical trials, coordinate regulatory processes, expand manufacturing and distribution of new interventions globally and respond in a rapid, coordinated manner to both COVID-19 and future pandemics. The pace of innovation to find safe and effective COVID-19 vaccines and

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

therapeutics has been unprecedented. By early April, nearly 300 clinical trials were testing therapeutics against COVID-19 infection, with Gilead’s remdesivir the first treatment granted an Emergency Use Authorization by the US Food and Drug Administration on 1 May. On 30 July, the National Institutes of Health noted that dexamethasone, used for decades, provided a mortality benefit in treating hospitalised patients who required supplemental oxygen. By mid-August, more than 1,000 trials involving 401 drugs were registered on clinicaltrials.gov. By then, 29 vaccine candidates were in clinical trials and another 138 in preclinical evaluation. By 30 March, the Food and Drug Administration had authorised more than 20 new diagnostics for COVID-19; by August, this number had increased to 217. And by the end of the year, vaccines were beginning to be approved for distribution. The private sector is also ensuring the health and safety of employees, their families and communities; contributing to global and local solidarity funds to support community efforts and healthcare workers; donating personal protective equipment and enabling doctors and nurses in its employ to volunteer in hospitals and clinics; maintaining the supply of their medicines, vaccines and other essential products so health systems can maintain continuity in caring for non-COVID-19 patients; and supporting patient and caregiver groups to ensure their safety nets are not disrupted. However, as with any ‘problem without a passport’, the private sector cannot do this alone. Once new technologies to combat COVID-19 are developed, companies need the cooperation of the public sector and other actors to ensure that the appropriate regulatory, health systems and distribution infrastructures can deliver these medicines and vaccines to those in need. Low- and middle-income countries will be at particular risk with fragile health systems, limited resources and hard-to-reach populations. I thus offer G7 leaders three recommendations:

Collaboration is key to ensuring that vulnerable populations – especially those in low- and middle-income countries – are not left behind”

300

clinical trials were testing therapeutics against COVID-19 infection by early April

217

diagnostics for treating COVID-19 by August

biopharmaceutical companies are working in the COVID-19 Therapeutics Accelerator

countries. Development assistance must be allocated effectively to support the health priorities of partner countries. Steps should be taken to build the resilience of these health systems – to ensure long-term sustainability and the capacity to withstand future crises without threat of collapse. •Preparedness: G7 leaders must ensure these lessons are not lost after the crisis passes by investing in global health security and pandemic preparedness around the world. The Global Health Security Agenda provides an appropriate forum to share lessons learned. Leaders should focus now, as economies slowly reopen, on planning for potential new waves of coronavirus outbreaks and possible worst-case scenarios. G7 leaders have a historic opportunity to break out of the cycle of panic and neglect that has characterised pandemic response for centuries. A coordinated, well-resourced global plan for pandemic preparedness – including partnerships with the private sector at global, regional and national levels – would be a positive legacy of the COVID-19 pandemic. Such a plan would make it possible for humans to get ahead of the bugs and avoid the global chaos that the next pandemic could cause.

JEFFREY STURCHIO

•Solidarity: We are learning about healthcare resources being diverted from basic health needs, such as maternal health or immunisations, in favour of COVID-19, and necessary supplies being commandeered by wealthier purchasers in the global market. G7 leaders must ensure these primary health services and essential medical supplies and devices continue to be delivered equitably so that vulnerable populations do not get left behind. This will be even more important as new treatments and vaccines to fight COVID-19 become available. Responses framed in terms of vaccine nationalism are not helpful – given the nature of the coronavirus pandemic, we will not be safe anywhere until we are safe everywhere.

President and CEO, Rabin Martin

•Resilience: Particular attention should be directed to the needs of low- and middle-income

Twitter @JeffSturchio  www.rabinmartin.com

globalgovernanceproject.org

Jeffrey Sturchio is CEO at Rabin Martin and former president and CEO of the Global Health Council. Previously he was vice president of corporate responsibility at Merck & Co. Inc. and president of The Merck Company Foundation. He chairs the US Corporate Council on Africa, Friends of the Global Fight Against AIDS, TB and Malaria, and the BroadReach Institute for Training and Education. Dr Sturchio is also a visiting scholar at the Institute for Applied Economics, Global Health and the Study of Business Enterprise at Johns Hopkins University, a senior associate at the Center for Strategic and International Studies, and a member of the Council on Foreign Relations.

2020 — G7 USA: THE VIRTUAL YEAR

EMPOWERING SPOTLIGHT ONWOMEN HEALTH

A common fight, a shared future This pandemic has taught us a powerful lesson about what’s possible when we join forces. Elizabeth Cousens, president and CEO, UN Foundation, explains what COVID-19 and the Solidarity Response Fund teach us about 21st-century collective action

orty years ago, governments and scientists came together at the United Nations to announce the successful eradication of smallpox, the first disease that humans have been able to wipe off the face of our planet. Today, we face a similar test in how we come together to respond to and

recover from COVID-19. United Nations secretary-general António Guterres described the pandemic as the biggest threat the world has faced since the Second World War. The COVID-19 crisis shows exactly why the UN and agencies like the World Health Organization exist – and what it takes to make them work.

At the end of February, the WHO asked the UN Foundation to help rally support for its urgent efforts to respond to the fast-moving virus. We saw immediately that any successful effort would mean mobilising ideas, people and resources in a way not seen before – harking back to our origins when visionary philanthropist Ted Turner

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

EMPOWERING WOMEN created the foundation to give the UN an agile and responsive partner to help it drive global progress and tackle pressing threats. Two weeks later, we launched the COVID-19 Solidarity Response Fund, the first and only way for every individual or organisation to contribute to the global front of the COVID-19 fight. Individuals, companies, philanthropies and employees, all uniquely affected by the global pandemic, now have a way to be part of the solution and support the WHO’s critical work: tracking and understanding the spread of the virus, ensuring front-line health workers get vital protective equipment and patients get the right care, and accelerating global research and development into vital treatments and vaccines.

Today it is the pandemic, but the climate crisis looms, as do persistent and widening inequalities that foment distrust, insecurity and instability. Cooperation is essential”

WHAT SOLIDARITY LOOKS LIKE President and CEO, UN Foundation Within six weeks, more than 350,000 people from over 100 countries Elizabeth Cousens became the UN and over 140 leading Foundation’s third president and chief companies helped raise executive officer in 2020. She previously more than $200 million. served as US ambassador to the United From the woman in Nations Economic and Social Council, Ireland who did 8,000 alternate representative to the UN General squats to raise money for Assembly, and principal policy adviser and the fund, to companies counsellor to the Permanent Representative creating matching of the United States to the United Nations. She challenges in the has written widely on conflict management, millions of dollars, to so peace processes, state building and the many people donating United Nations. whatever they could – Twitter @e_cousens  www.unfoundation.org sometimes just a single dollar – we see what solidarity looks like. These early contributions had irreplaceable value. They helped the WHO make early first-bulk purchases of essential commodities. They seeded early work on global Solidarity Trials, where dozens of countries share real-time learning about people from potential therapeutics. They underwrote a first international serological study to improve diagnostics. They helped launch early Solidarity Flights to carry essential equipment to hard-hit areas and support the countries raised most vulnerable countries. more than Our experience with the Solidarity Fund also highlighted a few critical ingredients of what it takes for international institutions to work in the modern era. They need diverse constituencies to support and champion their work across within six weeks for the Solidarity every geography, every sector, every Response Fund demographic. That is what powers our fund,

ELIZABETH COUSENS

350,000 100+ $200m

globalgovernanceproject.org

and it is what will be needed to power sustained cooperation. They need speed and agility to respond to fast-moving events and pivot in the face of turbulence. What has made this fund valuable is not just scale but speed and having ‘just in time’ resources to put to the greatest need. They need clear roles and responsibilities to deliver unique value to countries, communities and citizens in a complex world. People support the fund because they understand that the WHO uniquely provides essential global public goods in the midst of a pandemic. They need a holistic approach because issues connect – from our economies to our food systems to our health – and our solutions must too. Fund supporters understand the need to support the critical global public health measures that are essential to so many other things people care about in their lives and communities. They also need stamina because problems like COVID-19 are not solved overnight. STRENGTHENING GLOBAL BONDS Beyond the health emergency, COVID-19 will have sustained impacts on every dimension of our lives. Success in this longer game will require redoubled effort to strengthen bonds of international cooperation that have frayed to the breaking point. Today it is the pandemic, but the climate crisis looms, as do persistent and widening inequalities that foment distrust, insecurity and instability, which need urgent redress. Cooperation is not an extra. It is essential. We are proud of those who have stepped up around the Solidarity Fund. In their demonstration of what people can achieve when they coalesce around common cause and common interests, we glimpse a more united future. We hope world leaders take from this a powerful lesson about the possible and recommit to join forces in tackling the global challenges that connect us all. 2020 — G7 USA: THE VIRTUAL YEAR

2 OPPORTUNITIES

FOR INNOVATION

G7 performance on

digitalisation T Focused commitments on digitalisation lead to better outcomes, finds Meredith Williams, lead researcher on digital innovation, G7 Research Group, as she calls for a clear agenda to achieve secure digital transformation worldwide

he G7 summit has addressed the digital divide and global digital opportunities regularly since 1978. It has addressed digitalisation more consistently since 2011, when French president Nicolas Sarkozy hosted a ‘Digital 20’. This resulted in a dedicated section in the G7 communiqué that year. The focus grew to include digitalisation and artificial intelligence in 2018 and regulation of the digital economy in 2019. As 2020 host, the United States can

G7 performance on digitalisation, 1975–2019 100

197

197 5 Ra

Compliance (%)

Conclusions (% words)

Commitments (%)

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

build on those discussions to include the taxation of digital companies. CONCLUSIONS From 1975 to 2019, the annual G7 summit dedicated 17,587 words to information and communications technologies and digitalisation, averaging 6% of its communiqués per summit. The first reference came in 1978 on stimulating technology transfer. Between 1978 and 1999, the percentage ranged from zero to 13% in 1985. In 2000, the G7 dedicated a record 22% of its words to this area. Attention to digitalisation subsequently ranged from zero to 3% in 2011. In 2013, the G7 acknowledged that the digital economy was a growing concern, dedicating 19% of its communiqué words to open data and access to data. The 2014 summit dedicated 10% to digitalisation, followed by 22% in 2015, 9% in 2016, 6% in 2017 and 10% in 2018. The 2019 summit produced a stand-alone document on digitalisation, which raised the G7’s digital governance to 2,046 words, or 28% of the total. COMMITMENTS From 1975 to 2019, the G7 made 133 collective, politically binding, future-oriented commitments on ICT and digitalisation, or 0.2% of the total 5,525 commitments, as identified by the G7 Research Group. The first commitment was made in 1983, on trade in services and high-technology products. The next appeared in 1991, on the diffusion of advances in science and technology. The 1992 and 1994 summits each had one commitment. G7 leaders then produced between one and six digitalisation commitments in 1996, from 1998 to 2003, and in 2006, 2008, 2009 and 2011. In 2013, they made 18 commitments on open data and access to data. At the 2016 and 2018 summits, the number rose to 23 each, the highest to date. They focused on the digital divide, cybersecurity and the role of women in science, technology, engineering and mathematics. The focus shifted in 2018 to the gender digital divide and artificial intelligence. In 2019, there were 22 digitalisation commitments. COMPLIANCE The G7 Research Group has assessed 16 of the 111 ICT and digitalisation commitments for compliance by G7 members. Compliance averaged 71%, a little lower than the G7’s all-subject average of 76%. The highest compliance, globalgovernanceproject.org

MEREDITH WILLIAMS Lead researcher on digital innovation, G7 Research Group Meredith Williams is the lead researcher on digital innovation and the digital economy for the G7 and G20 Research Groups. She has a Masters of Law in innovation technology from the University of Edinburgh Law School, with a specialisation in data protection and ePrivacy regulation. Meredith has a full-time career in advertising at a large global technology company. Twitter @g7_rg  www.g7.utoronto.ca

of 100%, came from two commitments from 2000. Commitments made in 1996 had 67% compliance. Commitments made in 2006, 2007 and 2009 had the lowest compliance at 33% each. One commitment in 2008 and one in 2011 had 78% each. Another in 2009 had the second lowest score at 63%. The 2013 commitment had 67%. Commitments made in 2016 and 2017 each had 88%. Overall, compliance fluctuated, but recently rose. CORRECTIONS Although the G7 complied substantially with its digitalisation commitments, there is room for significant and rapid improvement, given global changes regarding digital health, the internet, cybersecurity, AI, data protection, media and even the democratic process. The G7 struggles to focus on core digitalisation issues or to produce a clear agenda for enforcing the ‘secure digital transformation’. When G7 leaders made narrow, specific digitalisation commitments, compliance scores were much higher, as in 2000 and 2016.

71%

Average compliance on assessed ICT and digitalisation commitments

To improve compliance, G7 leaders should consider the following actions: First, leaders should make very focused commitments on digitalisation. The highest complying summits produced commitments with specific targets, compared with the lowest complying summits with broad commitments. Second, there should be a pre-summit meeting of ministers responsible for the digital economy to focus on issues including AI, data protection and data governance, and digital taxation. When such meetings took place, the G7 leaders produced more digitalisation conclusions and commitments. Third, the G7 should address innovation, digital capabilities, and research and development resources relating to digital health, in light of the COVID-19 pandemic. The G7 should work with innovative technology companies to leverage resources and data processing in the collective fight against the virus. Fourth, G7 leaders should invite the heads of Google, Amazon, Facebook and Apple to their summit to help address open data policies and data sharing, and to create transparency on emerging issues. The G7 leaders’ discussions on data privacy produced poor compliance results, likely due to their lack of understanding of the effects that releasing data has on innovation. G7 leaders should bridge the digital divide by continuing the dialogue on the 2015 International Open Data Charter. 2020 — G7 USA: THE VIRTUAL YEAR

OPPORTUNITIES FOR INNOVATION

Inequalities exposed Optimistic growth figures have long obscured the deep disparities that exist within our societies – and which have been laid bare by the COVID-19 crisis. Guy Ryder, director general, International Labour Organization, calls for long-term change to build an economic and social system with humans at its heart 50

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

he deep social and economic crisis resulting from the measures taken to fight the COVID-19 pandemic is exacerbating pre-existing decent-work deficits and inequalities. It exposes the deep-rooted, structural inequalities that have been growing, often obscured by optimistic economic growth figures, over the past decades. Young people, gig workers, the self-employed, migrants, micro and small enterprises, and all those in the informal economy or in non-standard forms of employment, many of whom are women, are deeply affected by the economic crisis. In Italy, for example, 59% of employed women work in the four sectors that have seen the sharpest economic contractions during the pandemic, including retail trade, business and other services, manufacturing, and accommodation and food services. In many countries, affected workers may not be covered by unemployment insurance or other critical protections, such as paid sick leave or sickness benefits.

60%

people. Measures to protect and stimulate the economy, from cash transfers to credits and loans, must be targeted at women.

THE NEED FOR STIMULUS MEASURES All G7 members have launched historically unprecedented fiscal stimulus measures and invested of women in health, social protection and support to enterprises worldwide for business continuity. These have so far played an work in the important role in keeping workers on payrolls through informal various employment retention schemes, preventing economy bankruptcies of millions of small and medium-sized enterprises, helping deal with unforeseen care needs, and providing income support to sick workers and their families, to people losing their jobs or self-employment income, and to quarantined workers who cannot work from home. The damage inflicted by the crisis on labour markets and the difficult global economic conditions that continue to prevail, indicate that such supportive policies will need PLIGHT OF THE YOUNG to be maintained to sustain Young people are particularly recovery. Premature fiscal hard hit by the economic consolidation, as followed the fallout of the crisis. Making financial crisis of 2008–09, Director general, the transition into decent would risk destabilising already International Labour employment was already a weak labour markets. Organization tough challenge for young Furthermore, without people in the best economic long-term changes, the Guy Ryder has been director times. In 2019, before the virus deep-rooted layers of social general of the International Labour outbreak, 9.4 million of those injustice and inequality will Organization since 2012, having held aged under 25 in G7 countries remain. We need to rebuild our various senior positions in the ILO were not in employment, social and economic systems from 1999 to 2002 and again since education or training. Now it is in a way that will leave us 2010. Ryder leads the organisation’s worse. In Canada, for example, better prepared for future action to promote job-rich growth employment among youth aged crises, but also bring us closer and to make decent work for all a 15 to 24 decreased by more to the vision of social justice, keystone of strategies for sustainable than 17% between February equality and sustainability development. He has a background and July 2020 and brought the that the International Labour in the trade union movement and is the former general secretary of employment rate for youth to Organization stands for. The the International Trade Union Confederation. 47%, the lowest on record since ILO Centenary Declaration for comparable data has been the Future of Work provides a Twitter @GuyRyder  www.ilo.org available. Attempting to enter the roadmap to build back better. It labour market in a recession can focuses on increasing investment lead to significant and persistent in people’s capabilities, in the scarring effects for young people that can last their entire institutions of work, and in decent and sustainable work career, meaning that the legacy of the COVID-19 outbreak to foster a human-centred economic and social system. could last for decades. G7 leaders have shown their determination in addressing The pandemic is also having devastating social and the short-term effects of the COVID-19 pandemic on economic consequences for women and girls. Nearly 60% our societies and economies. They now must show the of women in the world work in the informal economy, same level of determination and solidarity, and mobilise drop in where they earn less, save less and are at greater risk collectively for lasting, transformative and sustainable employment of falling into poverty. As enterprises close, millions of development, at the same time as they tackle the planet’s among youth women’s jobs have disappeared. In the United States, climate emergency. Strong social dialogue, collective aged 15–24 in young female workers accounted for the strongest action, respect for human rights and fundamental March 2020 increase in unemployment in the first half of 2020. At the principles and rights at work, provision of universal social same time as they are losing paid employment, women’s protection, and renewed commitment to international unpaid care work has increased exponentially as a result solidarity and multilateralism will be essential to achieve of school closures and the increased needs of older lasting social justice, equality and sustainability.

We need to rebuild our systems in a way that brings us closer to the ILO vision of social justice, equality and sustainability” GUY RYDER

15%

globalgovernanceproject.org

2020 — G7 USA: THE VIRTUAL YEAR

OPPORTUNITIES FOR INNOVATION

Towards a deal to limit trade frictions on corporate taxation The COVID-19 lockdowns provide a potent demonstration of the contribution of the digital economy to our lives. Simon J Evenett, professor of international trade and economic development, University of St Gallen, looks at the tension points when it comes to levying taxes on digital service providers

ention of digital services taxes touches a raw nerve among G7 members. For some, taxing the revenues of digital service providers constitutes a discriminatory and unreasonable burden on international commerce. For others, it is a matter of fairness – ensuring that all firms selling in a country contribute to the common weal. What adds fuel to this particular fire is that the largest, more commercially successful digital service providers are headquartered in the United States and often have little physical presence in the foreign markets they seek to serve.

Attempts to levy taxes on digital service providers have triggered trade tensions that, on the current trajectory, will likely get a lot worse. On 10 July 2020, the United States Trade Representative levied 25% additional import tariffs on a range of French products. Fortunately, the imposition of those tariffs has been suspended until 6 January 2021, allowing for a settlement to be negotiated. But what could be the basis of a deal? Taxing digital service providers is not just a matter of bilateral dispute. Other G7 members, including Italy, the United Kingdom and the European Union (which

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

implicates two other G7 members), have mooted or implemented digital services taxes. This has not gone unnoticed in Washington DC, which launched on 15 June 2020 a formal investigation into those moves and actions by eight other governments, similar to the inquiry that resulted in tariffs being levied on French goods. Before a possible way forward can be considered, note should be taken of the fact that in the past this subject could not be settled at the technocratic level. Indeed, the United States called for a pause in work at the Organisation for Economic Co-operation and Development on this subject in June 2020. To avoid a new round of trade tensions being unleashed, direction is needed from heads of state and government. The current framing of the discussion is not propitious to securing a deal. Asking one country – whose leadership is not minded to negotiate international deals at the best of time – to accept losses for its firms without getting anything in return will not work. So what else can G7 members put on the table? Another development points to a related policy that implicates the entire G7: rules on the cross-border transfer of data. Framed often as digital privacy, in fact such rules implicate the business models of many companies engaged in cross-border business. The July 2016 decision by the European Court of Justice to strike down the current EU-US Privacy Shield creates uncertainty for firms on both sides of the Atlantic. The silver lining from this recent court judgement is that data transfer rules could be added to any G7 deliberations. For sure, digital services taxes and data transfer rules are distinct topics. But trade-offs across policy domains are at the heart of much successful commercial diplomacy, as are trade-offs across sectors (although that is not relevant in this case). G7 governments would be well advised to set up a senior officials group to explore ways to increase the predictability of cross-border data transfer rules as well as the taxation of digital services. These officials should be mandated to devise a work programme within six months and submit reports to the next two G7 summits. Another reason why these matters must rise to the leaders’ level is that many powerful bureaucratic fiefdoms are involved that can veto progress. A striking feature of the European Union’s experience in this regard has been the powerful role played by the privacy regulators of its members, acting individually and globalgovernanceproject.org

Until COVID-19 is expunged worldwide, no government can relax or take refuge within its borders” (sometimes very effectively) together. The regulation of the digital economy is such a complex matter that siloed regulators do not have the mandate, or often the inclination, to develop a comprehensive approach. Such regulators should contribute to the process but any G7 initiative is destined to fail if it is outsourced to them. One canard should be set aside. Successful completion of this initiative would not only benefit the large American digital service providers. It would also benefit the many small and medium-sized businesses that want to supply customers abroad and that find the current rules on data transfer and storage confusing and costly to adhere to. The lockdowns imposed in response to the COVID-19 pandemic provide a potent demonstration of the contribution of the digital economy to our lives. The expansion of digital commerce over the past months will become a permanent feature of our lives, assert numerous experts. The successful completion of this work programme would set the key ground rules for the digital economy among G7 members and would inevitably become the point of reference for future deliberations at the World Trade Organization.

SIMON J EVENETT Professor of international trade and economic development, University of St Gallen Simon J Evenett is a professor of international trade and economic development at the University of St Gallen in Switzerland. He also coordinates Global Trade Alert, the independent initiative promoting transparency in the world trading system. Educated at Cambridge and Yale universities, he has taught at Oxford and has been a visiting professor at Johns Hopkins University and at the University of Michigan. Evenett has more than 200 publications, held several fellowships at the Brookings Institution and served as a World Bank official twice. Twitter @SimonEvenett ‫ ‏‬ www.globaltradealert.org

2020 — G7 USA: THE VIRTUAL YEAR

Cognizant

After the virus

Six ways life will change forever

fter COVID-19, the world will be quite different. Questions abound: will European solidarity survive? Will China be ostracised by the global community or further embraced? Will populism surge, or will deep states reassert themselves at a time when only governments have the scale to deal with the existential challenge? Will faith in capitalism be weakened or strengthened by the stress test faced by economies around the world? Will robots and artificial intelligence be more popular or less so? Their bugs seem somewhat tame in comparison … Answers may take a while to emerge. In the meantime, here are six predictions about what will happen over the next three years…

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

ADVOCACY

Cognizant ① COVID-19 will digitalise the world at light speed. Seventy years into the information technology revolution, tech is big, but it’s about to get much bigger. Everything that can move online will move online. Before the virus, many digital alternatives – to traditional healthcare, education, finance – were just that: alternatives. After the virus they will quickly become the new norm. Resisting the change (“but we’ve always done it this way”) will buy you a one-way ticket to Irrelevanceville (population: too big to count). ② Health screening will become ubiquitous. Following 9/11, security infrastructure was built to ensure something like that never happened again. Within weeks, the Transportation Security Administration was established in the US, and overnight, the flying experience was utterly changed. In the coming months, a Health Security Agency will ramp up and in time have a budget that makes the TSA’s $7.7 billion look like chicken feed. To enter any building or space (not just a plane), people will be required to have a Star Trek–like ‘tricorder’ scan and be turned away if they fail. ‘OK2GO’ airlocks will become ubiquitous on buildings around the world. ③ The war against pathogens will give rise to the ‘clean regime’. As we re-emerge from our homes, we’ll realise just how dirty everything around us is – planes, cars, offices, cafés, libraries, every ‘thing’. The fear of a pandemic happening again (and again) will create a new global consciousness in which conspicuous cleanliness becomes chic – and where there’s chic there will be (big) cash. Municipalities and governments will prioritise societal cleanliness as an element of national security. ④ Everyone’s home will be their castle. Many will use the online alternatives (alternatives no longer) to just stay put. Homes will be built or retrofitted with dedicated home office spaces: routers in the right place, soundproofing, voice-driven separate entrances, pre-built Gorilla Glass wall screens. Homes will become castles in which stone walls and armories are replaced with podcast booths and 3D printers. Many people will never go back to their former office. globalgovernanceproject.org

BEN PRING Founder and managing director, Cognizant’s Center for the Future of Work Ben Pring co-founded and leads Cognizant’s Center for the Future of Work. He is a co-author of the bestselling books What To Do When Machines Do Everything and Code Halos. Ben sits on the advisory board of the Labor and Work Life programme at Harvard Law School. In 2018, Ben was a Bilderberg Meeting participant. He joined Cognizant in 2011, from Gartner, where he spent 15 years researching and advising on areas such as Cloud Computing. Based in Boston since 2000, Ben graduated with a degree in philosophy from Manchester University in the UK, where he grew up. Twitter @Cognizant  www.cognizant.com

⑤ Flygskam will take off. In the seeming blink of an eye, business travel will go from a high-status activity (“You went to Sydney for a conference? Oh, how wonderful.”) to an embarrassment (“You went to Sydney for a conference? How could you?”). Sweden’s climate-driven flight-shaming movement, rocket-charged by the fear many will have of being in close proximity with other people, will see the four-day sea cruise from Southampton to New York become de rigueur (“All work@board!”).

Homes will be built or retrofitted with dedicated home office spaces … Many people will never go back to their former office”

⑥ Privacy will be another victim of the virus. In the desperate scramble to halt the spread of the virus, many governments around the world are starting to mandate health-monitoring technologies leveraging GPS on phones, watches and fitness bands. These are smart technologies being used in smart ways, many argue. But the road to hell is paved with good intentions. In the post-virus age, the reports of the death of privacy won’t be greatly exaggerated and we will at last be able to answer the question many people have posed over the years: How did Nineteen Eighty-Four happen? The coronavirus is literally and metaphorically a bug in our system – let’s keep our fingers crossed that the world’s medical professionals can find a way to wipe it out. In the longer term though, we will need to think more about the system, not just the bug. The virus is a scream for help from an ecosystem struggling with that acceleration and groaning under the weight of expanding from 1.8 billion to 7.8 billion people in under 100 years. After the virus, new ideas will be needed. After the virus, the world will have to be quite different.

2020 — G7 USA: THE VIRTUAL YEAR

XYXYYXYXYYXYYXYYX YXYYXYXYYXYYXYYXYYXYYXY

INCLUSIVE ECONOMIC GROWTH

Alissa Wang, researcher, G7 Research Group, shares the data on G7 compliance with its macroeconomic policy commitments and details the measures that can boost compliance on this central issue

G7 performance on

he G7 has governed macroeconomic policy since its first summit in 1975. Macroeconomic policy was at the heart of G7 governance for a long time and remains a central issue on the G7 agenda. However, there has been a general decline in several aspects of G7 performance on this subject. The G7 must now increase its attention to macroeconomic policy, while maintaining strong compliance with its macroeconomic policy commitments. CONCLUSIONS The G7 has given substantial attention to macroeconomic policy from its first summit at Rambouillet in 1975 through to its most recent regular one at Biarritz in 2019. G7 leaders devoted a total of 27,554 words to this subject in their communiqués across the summits. Although they produced no dedicated documents on the subject, they addressed macroeconomic policy in a total of 70 documents. However, there have been several spikes and dips. The first spike came in 1985 to 1,040 words, followed by a dip in 1994 to only 290 words. The second spike came in 1998 to 1,089 words, followed by dips to 111 words in 2002 and only 66 words in 2006. The third spike came

macroeconomic policy 259

commitments made in this area from 1975 to 2019

86%

Average compliance on commitments assessed in this area

27,554 words dedicated to macroeconomic policy in G7 communiqués

in 2009, to 1,436 words. The most recent and most significant spike came in 2019, to 2,240 words. As a proportion of overall words in the communiqués, macroeconomic policy passed through three phases with a declining trend. In the first phase, from 1975 to 1985, it accounted for an average of 30% of words. In the second phase, from 1986 to 2001, the average dropped to 10%. In the third phase, from 2002 to 2019, it dropped again to 5%. COMMITMENTS Between 1975 and 2019, G7 leaders made 259 public, collective, precise, future-oriented, politically binding commitments on macroeconomic policy, as identified by the G7 Research Group. Those commitments account for 4.6% of the total of 5,601 commitments across all subjects. Compared with the number of G7 commitments on other subjects, macroeconomic policy ranks ninth, after development, energy, health, terrorism, trade, climate change, weapons proliferation, and crime and corruption. It ranks higher than the other 24 subjects on which G7 leaders have made commitments. G7 decision-making on macroeconomic policy passed through two phases, with a significant drop between the first and second. From 1975 to 1987, macroeconomic commitments averaged 20% at each summit. From 1987 to 2019, the average dropped to 4%. The absolute number of commitments has risen and fallen several times. At the first peak in 1978, G7 leaders made 14 commitments, or 28% of their overall commitments. The second peak in 1983 had

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

G7 performance on macroeconomic policy, 1975–2019 100

197 5 Ra

mb ouil 197 let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve nice 198 1 Ot taw 198 a 2 Ve 198 rsai 3W lles illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve nice 198 8 To ron to 198 9 Pa 199 r is 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina wa 200 1 Ge 200 noa 2 Ka 200 nan 3 Ev ask ianis lesBai 200 ns 4 Se a Is 200 land 5G len 200 eag 6 St les Pet 200 ersb 7H urg eilig 200 end 8H am okk m aido -Toy ako 200 9 L’A qui 201 la 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S him 201 a 7 Ta orm 201 ina 8C har levo ix 201 9B iarr itz

Compliance (%)

11 commitments, for 29%. The third peak came in 1987 with 17 commitments, or 33%. The fourth peak was in 2013, with 16 commitments, or 8%. The fifth and most recent peak came in 2016 with a historic high of 18 commitments, or 5%. No macroeconomic policy commitments were made in 1990, 2006, 2010 and 2019. At their first emergency summit, held by videoconference on 16 March 2020, in response to the COVID-19 crisis, G7 leaders made 10 commitments on macroeconomic policy, or 37% of the 27 they made in total. COMPLIANCE G7 members have had high compliance with their macroeconomic policy commitments. The G7 Research Group has assessed 17 commitments for compliance, which averaged 86%. This is higher than the G7’s all-time average compliance across subjects of 76%. Over the years, G7 compliance in this area has been stable, with only two dips. The first came with commitments made in 2003 and 2004, when compliance was 63% and 61% respectively. The second dip arrived for the 2016 summit, when compliance was 63%. On average, Canada and the United States – each at 91% – had the highest compliance on macroeconomic policy. At 75%, Italy had the lowest compliance.

Conclusions (% words)

Commitments (%)

use low-cost accountability measures that are directly under their control. A reference to a private-sector partnership in a commitment on macroeconomic policy correlates with higher compliance. Indeed, the 2012 commitment mentioning support for small businesses and public-private partnerships had 100% compliance. Conversely, leaders should avoid using any other such compliance catalyst or element embedded in the commitment text that provides direction for implementation. The mere presence of a compliance catalyst does not correlate with increased compliance. Indeed, commitments with catalysts have had a 75% average compliance, compared with 88% for those with none.

ALISSA WANG Researcher, G7 Research Group Alissa Wang is a researcher with the G7 and G20 Research Groups and chair of summit studies for the BRICS Research Group, all based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She is pursuing a combined JD/PhD in political science with a focus on international relations and comparative politics. Twitter @alissawang  www.g7.utoronto.ca

CORRECTIONS To maintain or improve high compliance on the G7 macroeconomic policy commitments, G7 leaders can globalgovernanceproject.org

2020 — G7 USA: THE VIRTUAL YEAR

INCLUSIVE ECONOMIC GROWTH

G7 performance on

entrepreneurship and SMEs

Stéphanie Bussière, researcher, G7 Research Group, looks at the G7’s below-average compliance in this area and the measures proven to increase it – including specific commitments for women

he G7’s governance of entrepreneurship and small and medium-sized enterprises is part of its overall global economic governance. Its performance on entrepreneurship has been rising in recent years. G7 leaders will want to continue this trend in the wake of the current global pandemic with its significant negative economic consequences. As the G7 leaders met virtually for their emergency on 16 March 2020 under the presidency of the United States, the impact of COVID-19 on the global economy was an important priority. Expectations are high for G7 leaders to again stimulate the economy through promoting entrepreneurship and SME growth. CONCLUSIONS G7 leaders first addressed entrepreneurship at the 1977 London Summit, with a focus on youth entrepreneurship. They first addressed SMEs at the 1985 Bonn Summit. Overall, the G7 devoted an average of 216 words, or 2%, of its communiqués per summit to this issue.

These G7 communiqué conclusions were the second highest at the 1993 Tokyo Summit, with 11% of total words (366 words). They peaked at the 2019 Biarritz Summit with 13% of total words (943 words). The summits in 1978–1982, 1987–1989, 1991–1993, 2001, 2002 and 2010 made no mention of either entrepreneurship or SMEs. Since 2015, G7 conclusions on entrepreneurship have focused on gender, particularly gender inequalities and entrepreneurial opportunities for women in developing countries. They placed relatively less emphasis on youth entrepreneurship. COMMITMENTS Since G7 summits began in 1975, they have produced 75 collective, future-oriented, politically binding commitments on entrepreneurship and SMEs, as identified by the G7 Research Group. The first was one commitment made at the 1984 London Summit, and represented 3% of all the commitments made there. After 1993, the G7 consistently made commitments on entrepreneurship and SMEs except in 1997, 2000, 2001 and from 2009 to 2011. The peak came at the 1985 Bonn Summit, with 20% of the summit’s commitments made on entrepreneurship and SMEs. After 2012, the G7 made at least one commitment on entrepreneurship and SMEs at each summit. They totalled 29 between 2012 and 2019. Other peaks came at the 1993 Tokyo Summit, with 11%, and at the 2019 Biarritz Summit, with 13% of the summit’s total commitments dedicated to entrepreneurship and SMEs.

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

COMPLIANCE Compliance with the G7’s entrepreneurship and SME commitments was relatively weak. The G7 Research Group has assessed three of the 75 commitments on entrepreneurship and SMEs for compliance by G7 members. It found average compliance of only 57%. This is well below the G7’s average compliance of 76% across all issues. The two commitments on gender and women’s entrepreneurship made at the 2015 Schloss Elmau Summit had the highest compliance, with a combined average of 75%. The commitment related to SMEs in developing countries made at the 2007 Heiligendamm Summit had the lowest compliance, at 33%. Germany and the United States had the highest compliance, with 100% each. Canada had the lowest compliance, with an average of 33%. CORRECTIONS G7 members can make two low-cost changes to improve compliance with their commitments on entrepreneurship and SME commitments. First, research suggests commitments on women’s entrepreneurship and SMEs have higher compliance. G7 leaders should thus make more commitments on entrepreneurship and SMEs, especially gender-related ones. Second, research suggests that holding presummit meetings of the ministers responsible for a particular issue increases compliance.

STÉPHANIE BUSSIÈRE Researcher, G7 Research Group Stéphanie Bussière is a researcher for the G7 Research Group based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She holds a BA in political science and French studies from Queen’s University and has an MA in political science at the University of Toronto. Stéphanie is also an intern at the World Trade Centre Toronto. Twitter @g7_rg  www.g7.utoronto.ca

The G7 labour ministers’ meetings in 2015, 2018 and 2019 made specific references to entrepreneurship and SMEs. In turn, the leaders in these years made more commitments on the issue than in the previous decade. This suggests a strong correlation between ministerial meetings discussing entrepreneurship and SMEs and commitments made at the following summit. Thus, the G7 labour ministers should regularly meet prior to the summit and make many commitments on entrepreneurship and SMEs.

G7 performance on entrepreneurship and SMEs, 1975–2019 100

57%

943

commitments made on entrepreneurship and SMEs since G7 summits began

Average compliance on commitments assessed in this area

words on entrepreneurship and SMEs in 2019, the highest of any summit

197 5 Ra

mb ouil 197 let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve n ice 198 1 Ot taw 198 a 2 Ve 198 rsai 3W lles illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve n ice 198 8 To ron to 198 9 Pa 199 r is 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina wa 200 1 Ge 200 noa 2 Ka 200 n ana 3 Ev s kis ianlesBai 200 ns 4 Se a Is 200 land 5G l e 200 nea 6 St gle s Pet 200 ersb 7H urg e i 200 lige 8H nda okk mm aido -Toy ako 200 9 L’A qui 201 la 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S h ima 201 7 Ta orm 201 ina 8C har levo ix 201 9B iarr itz

Compliance (%) globalgovernanceproject.org

Conclusions (% words)

Commitments (%) 2020 — G7 USA: THE VIRTUAL YEAR

Interview with Angel Gurría

Strength in numbers Angel Gurría, secretary-general, Organisation for Economic Co-operation and Development, tells editor John Kirton how the G7 can help set the parameters of the global recovery from COVID-19, from normalising state support to ironing out divergences on critical issues, such as how to tax the digital economy

How has COVID-19 affected the work of the Organisation for Economic Co-operation and Development? Although the crisis has forced the OECD to operate in new ways, we are doing our best to continue our work, and support countries and the international community while taking into account three key challenges. The first one remains the most immediate: to save lives. That means supporting health systems to put in place all the equipment and resources, staff, doctors, nurses, paramedics and infrastructure to contain the spread, cure ill patients and prepare the distribution of vaccinations. This requires extensive national planning, which the OECD is supporting, but if COVID-19 is to cease to threaten our societies and economies, we have to beat it everywhere. This means international co-operation and financing for initiatives such as COVAX is essential. As we progressively roll out the vaccine, outbreaks of COVID-19 will likely continue. Where the incidence of infections is low enough, test-trace-isolate systems should be used to contain the virus at minimum economic cost. No resources should be spared to build the capacity to do this effectively, as well as to increase the resilience of health systems and improve pandemic preparedness to prevent future crises. Second, there’s a simultaneous need to provide economic relief and policy support to mitigate the ongoing impacts of the crisis. For the first time since the pandemic hit in early 2020, we have hope. The good news about vaccines has

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

EMPOWERING WOMEN INCLUSIVE ECONOMIC GROWTH instilled a degree of optimism and dissipated the fog of uncertainty. There is hope, but we’re not out of the woods yet. Many countries are currently fighting a resurgence of the virus, and the re-imposition of containment measures is denting the economic rebound that had begun. Even with a slower and more cautious ‘de-confinement’ this time, further waves cannot be ruled out until most of the population is vaccinated. We assume that this will not happen until the end of 2021, given the logistical challenges. On the face of it, the projection in the latest OECD Economic Outlook for global growth in gross domestic product in 2021, at 4.2%, looks sound. But this would still leave almost all OECD economies smaller at the end of 2021 than they were at the end of 2019. And we see global GDP being some $6 trillion lower by the end of 2022 than it would have been in our pre-pandemic projections. In both human and economic terms, this pandemic will have been extremely costly. There is still a strong case for large-scale support for the economy in the remaining months of the pandemic. Third, there’s the challenge and unique opportunity of the recovery, to “build back better”. Restoring growth is key, but quality matters just as much. The recovery must be strong, resilient, green and inclusive. Climate change remains a pressing global challenge and we must use this chance to deliver climate-compatible policy packages that restore growth while meeting our global commitments under the 2030 Agenda for Sustainable Development and the Paris Agreement. Also, how do we make sure the next shock does not catch us so ill prepared? What kind of world will the crisis and its economic consequences leave us? How much more debt are countries going to take on to finance these necessary yet very aggressive support packages? And how much more debt will still be sustainable for companies, knowing this is being added to a situation where there was already a lot after 10 years of very low interest rates. Recall that by the end of 2019 the volume of corporate debt reached an all-time high in real terms of $13.5 trillion. At the OECD we are reflecting on how this crisis reveals that our world’s economic and social models have not sufficiently prioritised building resilience to shocks. Building resilience will be a key priority for the OECD (and also the G7 and G20) in the months to come, as will the need to ensure a fully green and inclusive recovery and avoid locking in new difficulties for the future. The multidisciplinary nature of our work remains our main strength. We’ve created the OECD COVID-19 Hub, which we constantly update with new and fresh material from, for example, our units on small and medium enterprises, tourism and regional development, and taxes. And education – with 1.6 billion children out of school during lockdowns, mostly in developing countries, and with no tablets or teachers trained to teach at a distance, the risk of deepening inequalities remains a pressing policy challenge. And everywhere, most of the workforce in health is women, who have undertaken a double duty taking care of domestic responsibilities, while their careers have been globalgovernanceproject.org

disproportionately affected, so we urgently need to bring a gender lens to the recovery.

61% of all workers are informally employed

6trn

knocked off global GDP by the end of 2022 by the pandemic

13.5 trn

The volume of corporate debt at the end of 2019 – an all-time high

How is work progressing on the global taxation regime? This year there was important work done in the context of the G20. The implementation of the tax transparency standards continues to be one of the success stories there. With continuous G20 support since 2008, multilateral cooperation has delivered significant results, notably the end of banking secrecy marking a new era of tax transparency, with close to 100 jurisdictions automatically exchanging information on financial accounts in 2019. In 2019, this exchange of information covered more than 84 million bank accounts, totalling almost €10 trillion. The remaining issue now is how to tax the world’s increasingly digitalised economy, restore stability to the international tax framework and avoid the risk of further uncoordinated, unilateral tax measures that could trigger trade sanctions. The COVID-19 crisis has exacerbated these tax challenges even further by accelerating the digitalisation of the economy, increasing pressures on public finances and decreasing public tolerance for profitable multinational enterprises not paying their fair share of taxes. Governments’ need for revenue drove such good progress on the automatic exchange of information after the global financial crisis 10 years ago. But today the political threshold for not paying taxes is much lower, and the world’s biggest companies are paying little or none at all. We want them to pay their fair share, and to pay it where they generate their profits. These two elements of nexus and profit allocation constitute the first pillar of the G20/OECD Inclusive Framework. Then there’s a second pillar, focused on a global minimum tax intended to address remaining base erosion and profit shifting issues. To move closer to achieving a solution, in October 2020, the G20/ OECD Inclusive Framework finalised a package consisting of a Cover Statement and the Reports on the Pillar One and Pillar Two Blueprints, which were welcomed by G20 leaders in November. The G7 can champion this effort – in order to reach a global and consensus-based solution by mid-2021, as G20 leaders have committed to. Has the COVID-19 crisis led more G7 members to turn to the OECD for advice? In a way the G7 has been at the avant-garde of the multilateral response through the leaders’ resolute statement in March to do “whatever is necessary”. This paved the way for the G20’s mobilisation, and we have been informing the discussions that have been held across the various G20 work streams, at leaders’, ministerial and working levels – on everything from fiscal and macroeconomic policies to employment and labour, health, agriculture and trade, tourism and digital. For example, SMEs are vulnerable because there has been a huge shock, with supply chains 2020 — G7 USA: THE VIRTUAL YEAR

Act Now, Together

It is a necessity, a human right and the foundation of social, economic and political stability.” — Tedros Adhanom Ghebreyesus, Director-General, World Health Organization

Health: A Political Choice Twitter @g20rg @GloGovPro A free publication from the Global Governance Project, produced in association with the World Health OrganizationGlobalGovernanceProject.org

App Store®is a trademark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC

Health is not a luxury item for those who can afford it.

INCLUSIVE ECONOMIC GROWTH

dismantled in many cases, people running out of money, jobs being destroyed and demand holding back. Everybody is looking at what others have done, and what works better. We are the repository of all the questions and all the experiences. We’ve had the comparisons about health for ages. So we’re able to put together the historical and current information and the policy implications, to have an idea of what has worked well and what hasn’t. What is your main message to the G7 leaders? Coordination and cooperation are key. They always make the outcomes better than by doing it alone. You now have very well-documented gargantuan national efforts – in the trillions! To what extent are these coordinated? To what extent are they mutually reinforcing? We did a better job in 2008/09 – maybe because the issues were narrower, the impact was not so widespread, and it was mostly the finance ministers and central bank governors who had to coordinate. Now it’s every sector. Not a single country has been spared. I would therefore invite G7 leaders to consider further action on three fronts. First, push further when possible, and notably on support to developing countries, particularly considering that all G7 countries are members of the Paris Club. We’re only beginning to see the impact on developing countries, where structures and health systems are weaker and governments can’t throw money at getting people out of unemployment. Most of the world’s employed are informally employed: two billion workers, representing about 61% of all workers. And how do you confine people who need to go out every day to make a living? Just a fraction of those developed countries’ trillions can offer a lot of relief to the poorest countries – and the richer countries will be better off because the others are better off. The problem will not go away until the last case goes away. Second, lead and focus on policies for the aftermath of the crisis, now that the G20 has taken the reins in coordinating the immediate response to the crisis. Strengthening the resilience of the global economy and open markets, including through international cooperation, will be key. The G7 can help set the parameters of the recovery, addressing the underlying trends such as the digital transformation and more broadly, emerging technology, including on sensitive issues such as normalising state support and its role in the economy, levelling the playing field, reducing distortion, increasing transparency and the proper functioning of global value chains, and unwinding export restrictions. Third, incubate solutions to build back better, including by ironing out divergences on issues that will be critical: for instance, the taxation of the digital economy, the reform of the World Trade Organization and – last but not least, the most important intergenerational responsibility we have – climate change, where the G7 should try harder to find some common ground and a common narrative. 63 globalgovernanceproject.org

ANGEL GURRÍA Secretary-general, Organisation for Economic Co-operation and Development Angel Gurría has been secretary-general of the OECD since 2006, following a distinguished career in public service in Mexico, including positions as minister of foreign affairs and minister of finance and public credit in the 1990s. He has participated in various international not-for-profit bodies, including the Population Council and the Center for Global Development. He chaired the International Task Force on Financing Water for All and is a member of the United Nations Secretary-General’s Advisory Board for Water and Sanitation and of the World Economic Forum’s Global Agenda Council on Water Security. Twitter @OECD ‫ ‏‬ www.oecd.org

2020 — G7 USA: THE VIRTUAL YEAR

How tax policy is shaping global COVID-19 recovery efforts There are more than 138 jurisdictions that have moved quickly to implement some form of tax relief and economic stimulus to help blunt the devastating impact of COVID-19 on their economies, according to the EY Tax COVID-19 Stimulus Tracker. Kate Barton, global vice chair – tax, EY, says governments should follow sound principles as they manage their budgets, reframe their organisational outlook and contemplate a ‘next normal’ for tax

overnments worldwide moved quickly and decisively to treat the economic pain caused by the first viral pandemic of the modern globalised economy. According to the International Monetary Fund, governments have collectively

announced more than $27 trillion in monetary and fiscal stimulus – close to a third of global gross domestic product – via measures intended to help jobless and furloughed workers, boost consumer sentiment and encourage liquidity in capital markets.

As it did in the 2007–2008 global financial crisis, tax policy plays an important role in this effort. Governments prudently extended tax filing and payment deadlines for individuals and businesses, including in the US, which postponed payment deadlines for the first time in its history. Nearly half of the more than 138 jurisdictions EY teams are tracking – including every member of the G7 – are offering some form of employment support. Jurisdictions have made it easier to utilise losses and provide incentives for recovery-related expenses, such as Italy’s 50% tax credit towards the cost of sanitising work environments and tools. Many countries also put in place extensive programmes offering grants, loans and loan guarantees. In order to ease administrative burdens at a time when workforces are scattered, many tax administrations put

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

ADVOCACY

EY a pause on audits, litigation and other enforcement activity. These are all positive measures for taxpayers and businesses aimed at keeping economies afloat in the immediate term. Beyond the health crisis and associated containment, many governments are looking at using their tax systems to deploy substantial stimulus packages designed to encourage investment and drive economic growth. Stimulus could take the form of targeted investment incentives or broader measures, such as accelerated cost recovery and rate cuts. SOVEREIGN DEBT GROWS Of course, there will be significant costs from these tax relief and stimulus measures. Many jurisdictions are building up high levels of sovereign debt and some are already beginning to feel pressure to shift from offering fiscal stimulus to seeking tax revenue to shore up budgets. The push for revenue may include tax policy changes and heightened tax enforcement. Potential sources of future tax revenue were already under debate before the pandemic: in some places, wealth taxes, taxes on ‘super profits’ and financial transaction taxes were being debated. Carbon taxes intended to mitigate climate change were on the agenda in others. Governments reacted to the global financial crisis by relying more heavily on value-added taxes as a source of revenue. And many governments have been tempted by the lure of new and unilateral digital taxes in the shadow of the Organisation for Economic Co-operation and Development’s work on the taxation of the digitalised economy. Indeed, successive OECD studies have indicated tax revenues were already rising before the pandemic, while surveys of multinational enterprises by EY indicated tax enforcement had also increased sharply. We now face a very different set of circumstances. Just as people must adapt their lifestyles to minimise the risk of contracting COVID-19, decisions about how – and how much – businesses should be taxed should be viewed through the lens of new realities. Governments should not rush to increase tax burdens on businesses to reduce their budget deficits. Rather, they should focus on finding the right mix between tax and austerity to restore sustainable economic growth. Much has been made about the trust gap between people and institutions, globalgovernanceproject.org

Just as people must adapt their lifestyles to minimise the risk of contracting COVID-19, decisions about how – and how much – businesses should be taxed should be viewed through the lens of new realities”

KATE BARTON Global vice chair – tax, EY Kate Barton is the EY global vice chair – tax, a role she has been in since July 2018. She oversees all aspects of EY tax strategy and operations, representing more than 55,000 tax professionals around the world. Additionally, she also leads the EY Tax Executive Committee, and is a member of the EY Global Executive and EY Global Diversity & Inclusiveness Committee. Kate joined EY as an intern in 1985.

including governments and businesses, both of which have been viewed sceptically. The crisis response may change that: governments stepped in to provide testing and financial relief and keep people safe, while businesses shifted manufacturing lines to make protective equipment and embraced new ways to keep as many people as possible working during nationwide quarantines. Getting the recovery right is an opportunity to earn more trust from people; as business growth will be the engine of recovery, including them in future tax policy discussions will be critical. Governments should use a basic framework to evaluate any new revenue sources. They should embrace the ongoing work of the OECD on ways to increase the level of tax certainty for businesses. They should apply the principles of the Ottawa Convention, under which new tax policies should strive for neutrality, efficiency, certainty and simplicity, effectiveness and fairness, and flexibility. And governments should work together, because a coordinated approach can prevent the double or multiple taxation that would be a barrier to global trade and investment. Similarly, governments should extend the innovative approaches taken by some tax administrations during the crisis to the ‘next normal’. Relationships between policymakers and tax administrators who worked together to respond quickly should be reinforced, and best practices shared between governments. It is also important to build on the stronger relationships tax administrators have forged with taxpayers during the crisis. Building on this cooperation and engagement can help develop better tax administration environments for the future. The coronavirus pandemic is a global human tragedy and an enormous economic challenge. But emerging from the crisis presents an opportunity for organisations to reframe their futures. We should seize this opportunity together to build a better working world.

 @KateBartonEY  www.ey.com Bharat Masrani

2020 — G7 USA: THE VIRTUAL YEAR

INCLUSIVE ECONOMIC GROWTH

Interview with Robert Fauver

The ripple effect Robert Fauver, former US G7 sherpa, explores with editor John Kirton the impact of COVID-19 as it began to ripple through our economies – and how the G7 should respond to reduce its effects

What were the prospects for economic growth in the United States and its partner countries before the COVID-19 outbreak? At the beginning of 2020 prospects were for solid, strong, non-inflationary growth throughout the G7 countries. The United States was expecting a modest pickup of around 2.5% growth in 2020, with continued record unemployment. It was setting historic levels for women, for Blacks, for Hispanics. Europe was beginning to strengthen. Germany was starting to look stronger.

2.5%

Pre-pandemic predicted growth in the United States

Despite some doubts about France and Italy, the European continent was looking to be at least as strong as in 2019, if not marginally stronger. Japan was hoping for a marvellous experience with the summer Olympics and the influx of multiple millions of tourists and their dollars. So the outlook for 0.5 to 1% real growth rate in Japan was quite solid. The Canadian economy was expected to be 0.5% stronger in 2020 than in 2019.

When the pandemic started, how did it affect the US financial system? In the banking system and financial flows, there was very little effect. In the stock market and equity evaluations, there was an initial 25–30% drop from the beginning of the crisis and then a recovery of some 20%. Presumably all the factors that led to a strong stock market as 2020 began drop in stock market are still in play so one and equity evaluations could expect that when the at the beginning of crisis has passed, most if the crisis, with a more not all the lost equity value recent 20% recovery will come back. Markets tend to overreact. Our banks

25–30%

G7 USA: THE G7 USA: VIRTUAL THE VIRTUAL YEAR — 2020 YEAR — 2020 globalgovernanceproject.org globalgovernanceproject.org

One lesson to be learnt from this pandemic is over-reliance on the globalisation of supply chains”

went into this crisis in a good financial state so nobody has expressed concerns about the banking system per se. Moreover, interest rates are near zero. So refinancing outstanding debt is a possibility. There’s a flight to quality, so bond refinancing should be easily done in three to six months. There is plenty of liquidity in the system. The US Federal Reserve has indicated that it would keep liquidity levels strong. The debt service problem is nowhere near what it was 10 years ago. And economic growth? The real economy has had a cascade of cancelled events – airline flights, international travel, cruise ships, conventions. The next stage was hotels and leisure world activity events, and then restaurants, restaurant supply and food distribution. This has brought significant reductions in business, revenues, employment and salaries. The saddest part is the people worst hit are workers in the service industry who are on the lower-paid end. The White House tried to get Congress to focus on increased unemployment benefits for those laid off work in sectors affected by the virus. The final legislation provided significant funds for small business loans and extended unemployment benefits. What is the impact on US trade? One lesson to be learned from this pandemic is over-reliance on the globalisation of supply chains. By June, factories in China were starting to move back towards full production. The demand side will remain weaker in the near term. How well had the G7 responded by mid March 2020? The G7 statement by finance ministers and central bank governors on 3 March was pretty empty and sorely lacking detail. This is largely a set of micro structural issues. It’s an aggregate demand issue in selected sectors. I would have added something on the fiscal side that said we’re looking to formulate specific relief on taxes and fiscal stimulus to those globalgovernanceproject.org globalgovernanceproject.org

sectors particularly hard hit by the virus. Immediately after, the Fed publicly committed to provide all the necessary liquidity and interest rate lowering that it could. President Trump announced he would postpone US income taxes, which were due on 15 April. For Japan I would like to see something more on the fiscal side. It takes them a little longer to act.

ROBERT FAUVER Former US G7 sherpa Robert Fauver is president of Fauver Associates, LLC. He spent 32 years as a career public servant in the United States working in the Treasury, State Department, White House and National Intelligence Council. He was President Bill Clinton’s sherpa for the G7 summits of 1993 and 1994 and special assistant to the president for national security. He designed trade penalties for India and Pakistan following their testing of nuclear weapons and negotiated the yen-dollar agreement that led to the beginning of liberalisation and internationalisation of Tokyo’s financial markets.

What do we need now? I would not support direct intervention in the stock market or equity markets anywhere in the world, but I would support a coordinated or solo central bank statement on the financial stability and security of financial institutions, clearly distinguishing between the financial system and equity markets. How can the G7 leaders best help? It would be useful to have a joint statement that we are all talking to one another, coordinating information on best practices, handling the sickness, sharing information from our scientists and sophisticated US firms, and distributing the vaccines to help reduce the effects.

2020 — G7 2020 USA: — THE G7 USA: VIRTUAL THE VIRTUAL YEAR YEAR

INCLUSIVE ECONOMIC GROWTH

G7 performance on

financial regulation

The G7 has given inconsistent, reactive attention to financial regulation, but faced with a global crisis the group is well positioned to respond to the shock-activated vulnerability of COVID-19 with coordinated action, writes Hélène Emorine, director, Paris office, G7 Research Group 68

he world is looking at the G7 to lead in providing a globally coordinated response to mitigate the financial and economic consequences of the COVID-19 crisis that is creating an unprecedented global economic slowdown. In an increasingly complex global financial system, financial regulation has a key role to play in the economic crisis response and recovery. Yet financial regulation will only be truly effective if it is coordinated on a global scale. The G7 leaders must thus leverage their work to support a globally coordinated COVID-19 recovery strategy, with a key component focused on financial regulation. CONCLUSIONS The G7 first addressed financial regulation specifically in 1977, by welcoming the work being done on international agreements prohibiting illicit payments in international trade, banking and commerce. However, the G7’s governance of financial regulation has been reactive, prompted by shocks and subject to peaks and dips in attention. In 1995, G7

leaders dedicated 1,000 words to financial regulation, the most since their first summit in 1975, in response to the Asian and Latin American economic crises. They addressed the key weaknesses in the international financial system that the crises brought to light. As these crises continued to be front of mind, the G7 devoted a substantial amount of words over the next five years, with 710 words in 1997, 1,092 in 1999, 926 in 2000 and 748 in 2000. In 2002, attention abruptly disappeared. The next peak occurred in 2009, as the G7 responded to the 2008–2009 Americanturned-global financial crisis and sought to repair the financial system. The inconsistent pattern continued after 2009, with no words in 2010 and 97 in 2011, and the level remaining uneven ever since. The G7 has never dedicated a separate document to financial regulation. Such inconsistent attention suggests that financial regulation was not a priority for the G7. COMMITMENTS After its start in 1975, the G7 made 120 public, collective, precise, future-oriented and politically binding commitments on financial regulation. The issue has thus ranked 15th among the 32 different subjects the G7 made commitments on, as identified by the G7 Research Group. The first commitment on financial regulation came at the Toronto Summit in 1988, when G7 leaders agreed to continue to cooperate with other countries to examine the functioning of the global financial system. The next commitment

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

HÉLÈNE EMORINE was not made until seven years later, at the Halifax Summit in 1995. The G7 continued to address the topic of financial regulation every few years thereafter. The number of commitments peaked in 2013 with 29 commitments focusing on tax, declined to none in 2017, one in 2018 and none again in 2019. COMPLIANCE Although commitments are important, they are only effective if they are complied with. The G7 Research Group has assessed eight commitments on financial regulation. It found that compliance averaged 78%, slightly above the 76% average across all subjects. The lowest compliance came from the 2001 summit at 43%. The highest score of 100% was for a commitment made in 2008 that had been set out in a previous statement by finance ministers and central bank governors and overseen by the Financial Stability Forum, and again for another commitment made in 2014. Canada had the highest compliance with 94%, closely followed by the European Union and Germany with 88% each. The United States had the lowest compliance of 63%.

Director, Paris office, G7 Research Group Hélène Emorine is the director of the Paris office of the G7 Research Group, based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She holds an MSc in global governance and diplomacy from the University of Oxford. Her research focuses on cooperation between states, non-state actors and the private sector through international and plurilateral institutions. Twitter @heleneemorine  www.g7.utoronto.ca

CORRECTIONS G7 performance on financial regulation is inconsistent and motivated by shock-activated vulnerability from financial crises. Its performance is based on reactive responses to mitigate the effects of a crisis rather than proactive actions to prevent one. Furthermore, the amount of attention paid to financial regulation indicates that it has not been a priority for the G7 relative to other subjects. Nonetheless, the use of proven, low-cost measures, such as ministerial meetings and other accountability mechanisms, could help improve the G7’s performance on financial regulation. For example, for the 2008 summit commitment with

perfect compliance, the leaders committed to implement the Financial Stability Forum’s recommendations as supported by their finance ministers and central bankers. This pre-summit ministerial meeting link with the Financial Stability Forum, an institution mandated to conduct compliance assessments, is an institutional mechanism that helped increase compliance. After mid March 2020, the G7 finance ministers and central bank governors met weekly to coordinate their economic responses to COVID-19. G7 leaders are thus well positioned to respond to the shock-activated vulnerability of COVID-19 with coordinated and effective action.

G7 performance on financial regulation, 1975–2019 100

120

78%

commitments made on financial regulation since 1975

Average compliance on commitments assessed in this area

197

197 5 Ra

mb ouil let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve nice 198 1 Ot taw 198 a 2 Ve 198 rsai 3W lles illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve nice 198 8 To ron to 198 9 Pa 199 r is 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina wa 200 1 Ge 200 noa 2 Ka 200 nan 3 Ev ask ianis lesBai 200 ns 4 Se a Is 200 land 5G len 200 eag 6 St les Pet 200 ersb 7H urg eilig 200 end 8H am okk m aido -Toy ako 200 9 L’A qui 201 la 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S him 201 a 7 Ta orm 201 ina 8C har levo ix 201 9B iarr itz

Compliance (%) globalgovernanceproject.org

Conclusions (% words)

Commitments (%) 2020 — G7 USA: THE VIRTUAL YEAR

Tax and digitalisation: the need for a multilateral response

lobalisation and digitalisation have facilitated the emergence of new business models in which multinational enterprises can create value and generate profits in countries where they are not physically present. Intangible property, which is easy to move around but hard to tax, is also playing an increasingly important role in generating profits for these businesses. Although these developments have changed how and where profits are made, international tax rules, which date back to the 1920s, have yet to adapt accordingly. As a result, the current international tax rules are increasingly perceived as unfair and outdated. Growing public pressure has led countries to consider implementing unilateral measures in an effort to tax multinational enterprises that are operating in their markets, but that cannot be taxed based on current ‘nexus’ and ‘profit allocation’ rules. This perception of unfairness is increasing, as highly digitalised companies are generally doing well during the COVID-19 crisis, while traditional businesses have, in general, greatly suffered. In addition, many companies are being bailed out with taxpayer funds. In the wake of this crisis, tolerance for tax avoidance is expected to be at a historic low. The proliferation of unilateral measures such

International tax rules have yet to adapt to modern business. Pascal Saint-Amans, director, Centre for Tax Policy and Administration, Organisation for Economic Co-operation and Development, says a multilateral response is essential if countries are to overcome the tax challenges arising from digitalisation as digital services taxes in response to growing public pressure actually decreases tax certainty while increasing the likelihood of disputes. Disputes relating to these matters have even arisen among certain G7 members, further highlighting the urgency to develop a solution soon. Despite the tensions at the time, G7 leaders at their summit in August 2019 in Biarritz committed “to reaching in 2020 an agreement to simplify regulatory barriers and modernise international taxation within the framework of the OECD”. There is now widespread agreement – and not just in the G7 – that the international tax rules must be adapted to the 21st-century economy, even if the timeframe has been pushed back to mid-2021. ON EQUAL FOOTING The OECD has brought together more than 135 countries, including all G7 members, on an equal footing in the G20/ OECD Inclusive Framework on Base Erosion and Profit Shifting. Its members have been working on the implementation of a 15-point action plan to tackle tax avoidance by multinationals,

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

EMPOWERING WOMEN INCLUSIVE ECONOMIC GROWTH developed between 2013 and 2015. The plan aims at improving the coherence and the transparency of the international tax system by, inter alia, eliminating harmful tax regimes and ensuring the exchange of country-bycountry reports that provide data on the global operations and taxes of multinationals. Progress is being made on countering BEPS risks in several areas, yet the tax challenges arising from digitalisation continue to be a vexing problem. In spite of the complexity of these challenges, the Inclusive Framework is making solid progress in this domain. Following a mandate from the G20, countries and jurisdictions are committed to reaching an agreement on a consensus-based solution by the middle of 2021, the implementation of which would improve tax certainty for both businesses and tax authorities. The ongoing work is based on a two-pillar approach, which has been informed by extensive public consultations with many stakeholders, including businesses, academia and civil society. At its plenary meeting in January 2020, the Inclusive Framework agreed on the parameters to pursue negotiations on the reallocation of some taxing rights to market jurisdictions under Pillar One, by developing new nexus and profit allocation rules. This pillar would ensure that multinational enterprises that conduct sustained and significant business in a given country would be taxed in that country on a portion of their profits, irrespective of having a physical presence. By adopting clear rules, taking a formulaic approach, and designing effective and robust dispute resolution mechanisms, Pillar One seeks to create an international tax system that is both predictable and easy to administer. Under Pillar Two, the G20/OECD Inclusive Framework on BEPS is working on addressing the remaining BEPS issues by ensuring that multinational enterprises pay a minimum level of

If multilateral efforts fail, and countries increasingly choose to adopt unilateral measures, the risks to the international economy could be grave”

1.8

$ billion

The projected increase in global corporate income tax revenues from proposed reforms

PASCAL SAINT-AMANS Director, Centre for Tax Policy and Administration, Organisation for Economic Co-operation and Development Pascal Saint-Amans has been director of the CTPA at the Organisation for Economic Co-operation and Development since 2012. He joined the OECD in 2007 as head of the International Co-operation and Tax Competition Division in the CTPA. In 2009, he was appointed head of the Global Forum Secretariat, created to service the Global Forum on Transparency and Exchange of Information for Tax Purposes. Before joining the OECD, he was an official in the French Ministry for Finance and served as financial director of the French Energy Regulation Commission. Twitter @PSaintAmans  www.oecd.org

globalgovernanceproject.org

tax. Such measures would discourage businesses from shifting their profits to low-tax countries. Reports on the blueprints for both pillars were delivered to G20 finance ministers in October 2020, in line with their July communiqué. A public consultation on the draft blueprint reports released in October 2020 is currently underway, with comments due by 14 December 2020, and a public meeting is scheduled for mid-January 2021. BOOSTED GLOBAL REVENUES The benefits of a global solution arising from this two-pillar approach are clear. An OECD analysis from October 2020 shows the proposed reforms could increase global corporate income tax revenues to $50–80 billion per year. The combined effect of the reforms and the US global intangible low taxed income could represent $60–100 billion per year (i.e., up to 4% of global corporate income tax). For businesses, simpler rules, increased tax certainty and the prevention of double taxation would create an environment that is more conducive to trade and investment. However, if multilateral efforts fail, and countries increasingly choose to adopt unilateral measures, the risks to the international economy could be grave. The world has already seen tensions aggravated among long-standing allies as a result of tax disputes turning into trade disputes. Should such disputes multiply across the globe, international growth and investment could be negatively affected. G7 members play a critical role in bridging certain differences between them before political agreement can be reached on key policy features of a consensus-based solution by mid-2021. Fragmentation of the international tax system is simply not a viable, sustainable solution. Only a robust multilateral response can truly address the tax challenges arising from digitalisation. 2020 — G7 USA: THE VIRTUAL YEAR

Economic resilience in uncertain T times Chiara Oldani, professor of economics, University of Viterbo ‘La Tuscia’ calls for fiscal pragmatism at a time when extraordinary circumstances demand an extraordinary response 72

his year started under very complex auspices, and since then major global risks have rapidly grown. Similar to the Black Plague that spread from China to Europe in the 14th century, the COVID-19 virus first hit Asian and then European countries, and its long-term economic and financial effects remain largely unknown. Suddenly, the health status of populations around the world became the first source of financial risk. Since the 2008 financial and economic crisis, most countries have been working to strengthen the monitoring and surveillance of banking and financial systems and increase their resilience. But unknown risks are still unknown. Traditional banking models

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

EMPOWERING WOMEN INCLUSIVE ECONOMIC GROWTH

CHIARA OLDANI Professor of economics, University of Viterbo ‘La Tuscia’ Chiara Oldani is a professor of economics at the University of Viterbo ‘La Tuscia’ and the director of the Rome office of the G7 and G20 Research Groups. Her research focuses on the use of over-the-counter financial derivatives by public entities, the unintended consequences of COVID-19 on the Italian economy and other welfare economics topics. Twitter @chiaraoldani  www.unitus.it

budget limits and austerity measures. Such changes would speed up the disruption in the European Union.

cannot manage the consequences of epidemiologic events of such strength. According to macroeconomic data on European and Asian countries, consumption, investment and trade had been rapidly hit by the reduction of personal mobility imposed by governments. The severe decrease in aggregate demand can present a danger to the economic stability of the euro area. Most macroeconomic forecasts expected unemployment rates to rise in the second half of 2020. The lack of coordination in the response by European countries to reduce contagion can fuel moral hazard among countries with respect to their budget limits. Countries with high levels of contagion of COVID-19 could form a coalition against countries with low levels and bargain for substantial changes to globalgovernanceproject.org

KEEP CALM, STAY HOME The mantra to ‘keep calm and stay home’ created certain conditions for panic on financial markets, which forced the US Federal Reserve to cut interest rates on 3 March 2020. Volatility in financial markets spiked and oil prices fell substantially. Losses in equity prices were the result of shrinking demand and slowing supply. In times of crisis, the banking system suffers because of reduced liquidity and increasing volatility – and it is likely that European countries will be forced to intervene to sustain the traditional banking system and, indirectly, to help the digital banking and finance systems avoid a meltdown. The European Central Bank, now guided by Christine Lagarde, has undertaken exceptional measures to sustain markets, liquidity and rates. The ‘general escape clause’ in the EU fiscal framework, approved by the European Commission, allows countries to manage exceptional healthcare spending, and the recovery fund will help finance their growing debts. The long-term impact of COVID-19 on elderly populations and small firms in Europe and in Japan and beyond remains unknown. Although the spread of the virus will push up healthcare spending, higher mortality could reduce the burden on public pension systems. The net effects on public debt are not fully apparent. The freezing of consumption and production will hit small firms more

Traditional banking models cannot manage the consequences of epidemiologic events of such strength” than medium-sized and large ones, which can ask for public aid and layoff earnings, and can survive a shutdown lasting many weeks. G7 leaders should consider implementing coordinated extraordinary policies to sustain aggregate demand, reduce market volatility and increase the resilience of ‘sick’ economies. Sick economies face increased public spending (to sustain banks, households and firms), and their resilience will depend on stable revenues to finance such expenditures. Global tax principles for digital firms are needed to create fair productive conditions and sustain aggregate demand – according to the Organisation for Economic Co-operation and Development, $240 billion in taxes is lost annually because of tax arbitrage by global digital firms. It is time for fiscal pragmatism. 2020 — G7 USA: THE VIRTUAL YEAR

COOPERATION ON TRADE

G7 performance on

trade

Maria Marchyshyn, lead researcher on trade, G7 Research Group, details the proven, low-cost accountability measures available to leaders to improve their compliance with commitments on trade

n times of crises, G7 summits can serve as an important forum for global coordination and cooperation. The current COVID-19 crisis has already sparked rising protectionism as well as frictions in US-China relations. Ensuring safety and securing sufficient essential medical and other supplies for their citizens have become overarching priorities for G7 leaders and others. The rapid slowdown in global economic growth and trade will result in re-evaluation. Keeping trade channels open and slowly restoring trade levels will be essential for the global recovery. CONCLUSIONS The G7 has historically been a strong proponent of free, open and fair trade and the multilateral trading system, with the World Trade Organization at its core. Since the first G7 summit in 1975, trade has been among the top three subjects addressed each year. From 1975 to 2019, on average 15% of the words in each G7 communiqué was on trade. The summits from 2003 to 2007 each issued a stand-alone document on trade. However, after the peak of 45% in 1979, the percentage of words declined

The highest number of commitments made on trade, in 2013

65%

Average compliance on trade commitments

13%

The boost to compliance from a one-year timeline for commitments

to the lowest in G7 history in 2018, at 1%, and in 2017 to 2%. That decline began in the early 1990s, when the Uruguay Round resulted in the creation of the WTO. Since 2000, the percentage of words devoted to trade decreased steadily as the WTO Doha Round failed. Trade-related issues addressed by the G7 included rejecting protectionism, urging members to conclude trade rounds, encouraging trade liberalisation and boosting trade for development. New topics, such as trade in environmental goods, trade and gender, and e-commerce, recently emerged. COMMITMENTS From 1975 to 2019, G7 leaders made 343 public, collective, precise and politically binding commitments on trade. They account for 6% of all commitments produced during those years. The highest number of trade commitments was 24 in 2013. The second highest of 21 was in 1977, when the percentage of trade commitments peaked at 38%. No commitments on trade were made in 1985 or 1992. The period between 2013 and 2017 produced commitments in double digits, spurring great strides in trade liberalisation. The number fell to five in 2018 and 2019 as the United States began opposing any anti-protectionist promises in the communiqués. COMPLIANCE The G7 Research Group has assessed 42 trade commitments for compliance by G7 members, finding an average of 65%. This is well below the 76% average across all subjects. Two commitments made at the 2000 summit – on launching a new round of WTO negotiations – achieved perfect compliance. There was 94% compliance with the 2001 commitment to conclude the WTO’s Doha Round. Since 2004, compliance has been consistently above 63%, except for 2009. The lowest compliance came with commitments made in 1983 on resolving current trade issues, at 0%, and in 2009 on refraining from protectionism, at 11%. Compliance has been led by the European

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

Union at 85%, followed by Canada at 75% and the United Kingdom at 73%. The lowest compliance has come from France, at 47%. CORRECTIONS To improve compliance with their trade commitments, G7 leaders could use several proven, low-cost accountability measures under their direct control. First, they should make more trade commitments. The more trade commitments made at a summit, the higher the compliance with them. The 10 summits with the highest trade compliance produced 84 commitments and averaged compliance of 85%; the bottom 10 made 60 commitments and averaged 32% compliance. Second, holding a trade ministerial meeting, although useful, does not lead to higher compliance with trade commitments. Between 1982 and 1999, the trade ministers of the United States, European Union, Canada and Japan, known as the Quad, met annually before each G7 summit. Average trade compliance for those years was 38%, lower than the 69% average for years where there were no such meetings. Third, G7 leaders should refer to the

MARIA MARCHYSHYN Lead researcher on trade, G7 Research Group Maria Marchyshyn is the lead researcher on trade with the G7 and G20 Research Groups, based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She focuses on macroeconomic issues, trade and finance, and the European Union. Maria is an adviser to and former vice president of finance of the Organization of Women in International Trade. She is also involved with the UN Association of Canada. She has worked in the financial industry and as a researcher at the European Parliament Committee on International Trade. Twitter @MariaMarch31  www.g7.utoronto.ca

relevant core international institution – the WTO, although lately there have been calls for its reform. Commitments that mentioned the WTO averaged 79% compliance, compared with 58% for those that did not. Fourth, leaders should include a one-year timeline in their trade commitments. This increases compliance

by 13%, while having a multi-year timetable decreases it. In light of the COVID-19 pandemic, in addition to the above, G7 leaders should commit to keeping supply chains open, removing all trade restrictions on medical and essential supplies, and utilising trade to save lives and support economic growth.

G7 performance on trade, 1975–2019 100

mb ouil let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve n ice 198 1 Ot taw 198 a 2 Ve 198 rsai 3W lles illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve nice 198 8 To ron to 198 9 Pa 199 r is 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly o 199 n 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina wa 200 1 Ge 200 noa 2 Ka 200 nan 3 Ev a s kis ianlesBai 200 ns 4 Se a Is 200 land 5G len 200 eag 6 St les Pet 200 ersb 7H urg eilig 200 end 8H am okk m aido -Toy ako 200 9 L’A qui 201 la 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S him 201 a 7 Ta orm 201 ina 8C har levo ix 201 9B iarr itz 197

197 5 Ra

*blank space means no data

Compliance (%) globalgovernanceproject.org

Conclusions (% words)

Commitments (%) 2020 — G7 USA: THE VIRTUAL YEAR

Since 2006, Abu Dhabi Ports has been the pulse of trade in the emirate by managing world-class service and innovative partnerships, our entities are ensuring that are always in good hands. Khalifa Port Free Trade Zone, the largest Free Zone in the Middle East covering an making it one of the most attractive destinations for foreign direct investors to grow

EXPANDING POSSIBILITIES & RAISING EXPECTATIONS

every commercial port in Abu Dhabi. By focusing on cutting-edge technology, everything is faster, safer and more cost-effective – which means that your needs area of 100sq km, is fully integrated with the 2nd fastest growing port in the world, and expand their business.

COOPERATION ON TRADE

The widespread disruption caused by the COVID-19 pandemic is challenging the ability of developing countries to meet the Sustainable Development Goals. Mukhisa Kituyi, secretary-general, United Nations Conference on Trade and Development, calls for a reboot to global investment that ensures they can get back on track

ARS-CoV-2, the virus strain that causes COVID-19, has created a global human catastrophe and triggered an economic crisis that will eclipse the scale of the global financial crisis of 2008. Workplaces have had to close, trade has suddenly contracted and investment decisions by firms have been suspended, all leading to rapid rises in unemployment and precarity, with severe strains on society. Developing countries – about 85% of the world’s population – remain the most vulnerable to the economic impacts of the virus. COVID-19 is exacerbating a larger crisis for the planet, and especially developing countries: their ability to meet the Sustainable Development Goals, including rapid action on climate change. The United Nations Conference on Trade and Development estimates that, even before COVID-19, developing countries faced an annual financing gap of at least $2.5 trillion to achieve the SDGs. The contribution of investment to the SDGs could be significantly reduced as a result of the widespread disruption and demand shock caused by the pandemic. UNCTAD’s latest findings reveal that COVID-19

will cause a dramatic drop in global foreign direct investment flows. The downward pressure on FDI could be as much as –40% during 2020 and will continue in 2021, meaning that global FDI flows will likely reach their lowest level of the past two decades. Global cross-border mergers and acquisitions are on course for a 50% decrease from last year’s levels. PROSPECTS ON HOLD With investment prospects on hold and production stoppages in most economies, the economic shocks stemming from the pandemic have been passed along global value chains to suppliers and dependent businesses in the formal and informal sectors. Given the importance of cross-border production networks for international trade, there has been a precipitous drop in trade, which the World Trade Organization forecasts could fall by 32% this year. However, as the public health dimension of the crisis has deepened, the severity of mitigation efforts and lockdowns implemented by countries is having devastating effects on all economies, independent of their links to global supply networks. If the substantial support packages to mitigate the demand shock of COVID-19 prove effective, investment recovery could be relatively quick when delayed

s y r w e o v fl o t c n e re r m t e s t t e e v b n I or f 78

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

projects are brought back on stream. However, the negative impact of the pandemic on investment linked to global production networks could be more durable. The COVID-19 outbreak risks accelerating pre-existing trends of decoupling and reshoring driven by the desire on the part of multinational corporations to make supply chains more resilient and the desire on the part of policymakers to protect critical industries and technologies.

MUKHISA KITUYI Secretary-general, UNCTAD Mukhisa Kituyi is in his second term as UNCTAD’s secretary-general, having been appointed in 2013. He has served as Kenya’s minister of trade and industry, chair of the Council of Ministers of the Common Market for Eastern and Southern Africa, the African Trade Ministers’ Council and the Council of Ministers of the African, Caribbean and Pacific Group of States. As a consultant for the African Union Commission, he helped to develop the structure for a pan-African free trade area.

EFFECTS ON INVESTMENT POLICY The investment policy response to COVID-19 has so far been split between supportive measures aimed at safeguarding foreign invested firms and protective measures for public health reasons, or to prevent sell-offs of companies hit by the crisis. Most of the proposed stimulus and recovery packages include investment support measures. UNCTAD’s latest investment policy monitoring, covering the period up to February 2020, reveals that 75% of policy measures taken during the review period remain favourable to investment. However, the analysis notes that COVID-19 will have wide-ranging impacts on investment policy. Global production networks are engines of economic development and inclusive growth. They are lifelines for people around the world, through the provision of goods and services as well as incomes. The global pandemic is causing severe short-term disruption and possible lasting damage. The key challenge going forward will be coordinating global efforts to resuscitate global supply chains and production networks by facilitating FDI and trade. The world came together to coordinate action on the global financial crisis a decade ago, but the reaction to COVID-19 has been largely on a country-by-country basis with little global coordination. Collaboration is beginning among private-sector actors, but similar cooperation is needed among governments. The G7 is one forum that can promote this level of coordination. We hope that UNCTAD’s own World Investment Forum, scheduled for December, will be one of the first high-level multi-stakeholder meetings promoting collaboration on investment following the crisis. These forums are essential for rekindling investment support measures. UNCTAD stands ready to support the G7 and other global groupings in their efforts to mitigate the economic crisis caused by COVID-19, reboot global investment and ensure the world gets back on track to meet the SDGs by 2030.

he to is” t n ion as o n act y b o i t Twitter @DrMukhisaKituyi‫‏‏‬ c e re ntr a  www.unctad.org te t th -cou a n di o, bu y-by r oo ag ntr c to ade cou r c the de on a e og sis a ely t e cri rg m a ial n la c rld anc bee o w l fin has e Th loba D-19 g VI $Annual financing gap trn in O C

2.5

developing countries

85%

of the world’s population live in developing countries

32%

Forecast drop in international trade

globalgovernanceproject.org

2020 — G7 USA: THE VIRTUAL YEAR

COOPERATION ON TRADE

The world is waiting T

he start of the global crisis caused by the COVID-19 pandemic coincided with the start of the Decade of Action. In 2015, the global community, including the G7 members, committed themselves to advancing the 2030 Agenda for Sustainable Development. This bold agenda, built around the 17 Sustainable Development Goals, sets out a framework to end extreme poverty, fight inequality and address climate change. There are now fewer than 10 years left to make good on the promises we made to future generations. As the United Nations specialised agency for tourism for sustainable development, the UNWTO has long championed the unique ability of our sector to contribute to several, if not all, of the SDGs. As we focus on one in particular, it is evident just how important tourism is for advancing this agenda, particularly in developing countries and particularly for the most vulnerable members of our society. SDG 5 is aimed at achieving gender equality and empowering all women and

The tourism sector uniquely contributes to the Sustainable Development Goals, but as COVID-19 threatens the industry worldwide, support from the G7 is needed. Zurab Pololikashvili, secretary-general, United Nations World Tourism Organization, shares how political action can get things moving in the right direction

girls. In this regard, tourism is showing the way. A leading sector of employment for all, tourism is especially a source of opportunity for those who are often marginalised in the workplace. It offers fast and accessible entry into the jobs market for youth, for those living in rural communities and for women. Indeed, at the end of 2019, women were 54% of the global tourism workforce, compared with 39% of the broader economy. For many, tourism is not only an economic lifeline but also a source of empowerment. ADVANCING GENDER EQUALITY Moreover, it is not only at the lowest level of the employment market where tourism is advancing gender equality: around one in four of the world’s tourism ministers are women, and the gender pay gap is decidedly less pronounced than in other sectors. Nevertheless, a gender pay gap of any size still represents a challenge to be overcome. And the progress made towards making a reality of SDG 5 – as well as the other goals to which the sector has established itself as a major

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

For many, tourism is not only an economic lifeline but also a source of empowerment”

10yrs

left to achieve the Sustainable Development Goals

contributor – must never be a reason for complacency, but instead be a catalyst for more action. The COVID-19 pandemic has brought tourism to a standstill. It has placed the sector’s ability to advance economic and social equality in jeopardy. The United Nations Development Programme’s message could not be clearer: this pandemic looks set to trigger a development crisis, exposing and deepening existing inequalities and hitting the poorest the hardest. This is why support for tourism means so much more than enabling people to holiday again or even supporting jobs and businesses. While tourism is indeed a leading employer of women, many hold casual or informal jobs, without safety nets to fall back on. These are the positions most at risk as the knock-on effects of the travel restrictions and declining consumer confidence are felt at the grassroots level. The start of the Decade of Action has been far more challenging than any of us might have ever imagined. The COVID-19 globalgovernanceproject.org

54% 1in4 of the global tourism workforce are women

of the world’s tourism ministers are women

pandemic has hit all sectors hard, and above all tourism. However, we can still get back on track towards achieving the 2030 Agenda for Sustainable Development. Firm commitments from all G7 members to support tourism, including through reviewing fiscal policies and regulations affecting the sector, will be crucial here. The G7 not only includes some of the countries that have been hardest hit by this crisis, but also includes countries where the benefits of tourism have long been felt and harnessed to create opportunities and transform lives. Where the G7 leads, the rest of the world will follow. Supporting tourism, not just through words but with firm policies, enhanced political and economic cooperation and concrete actions, will allow the sector to resume its role in driving economic growth within advanced economies. At the same time, getting tourists crossing borders again with the responsible and timely lifting of travel restrictions will allow the many benefits tourism brings to be enjoyed in developing countries, above all in those places where the sector is the main source of income and opportunity for many.

ZURAB POLOLIKASHVILI Secretary-general, United Nations World Tourism Organization Zurab Pololikashvili has been secretary-general of the World Tourism Organization since 1 January 2018. He was previously Georgia’s ambassador to Spain, Andorra, Algeria and Morocco and its permanent representative to the UNWTO up to December 2017. He has also served as Georgia’s minister of economic development and deputy foreign minister, among other posts, and has a background in the private sector in the financial and business sectors. Twitter @pololikashvili ‫ ‏‬ www.unwto.org

2020 — G7 USA: THE VIRTUAL YEAR

COOPERATION ON TRADE

Clarity on international trade T

rade agreements have been a priority for the administration of US president Donald Trump. At each G7 summit he has attended, trade has been among the most contentious topics. Two factors make this year’s G7, hosted by the United States, different from the past three years. By now, G7 leaders understand President Trump’s criticisms of the international trade system and how firmly he holds these views. And new US trade agreements with Japan and Canada provide an illustration of what he thinks a ‘better deal’ on trade looks like. At his first G7 summit in Taormina in 2017, Trump challenged Germany’s persistent trade surpluses with the United States as unfair and called for greater reciprocity in market access. He also criticised the World Trade Organization for bias and called for its reform. The communiqué included a commitment to promote fair trade, resist protectionism and pursue reform at the next WTO ministerial. In 2018 at the Charlevoix Summit, leaders challenged the United States for using tariffs on steel and aluminium at a time of production overcapacity. When Canadian prime minister Justin Trudeau said, after Trump had left, that Canada would not be “pushed around” by the United States and these tariffs, the president withdrew his support for the communiqué. At the 2019 summit in Biarritz, Trump’s critique of international trade found greater support. G7 leaders called for fair trade and the elimination of regulatory barriers. The consensus was fostered by shared concerns over China, and greater agreement that China’s trade practices were problematic and threatened the international trade system. As the leaders prepare for the next summit, China remains a concern. The COVID-19 pandemic has had a dramatic and negative effect on international trade as well as economic growth. Some leaders have been worried about the potential for a 82

This year’s US-hosted G7 marks an opportunity to address international trade directly – at a time when the global economy, and the domestic economies of the G7 members, needs trade more than ever, writes Christopher Sands, director, Canada Institute, Wilson Center confrontation between the US and China over trade to undermine the operation and potential for reform of the WTO. CALLS FOR RECIPROCAL TRADE Speaking to the United Nations General Assembly in 2018, Trump called for trade that is fair and reciprocal. He pointed out that WTO members have violated “every single principle” on which the organisation is based. Yet while the US and others “play by the rules”, some countries use “government-run industrial planning and state-owned enterprises” to their benefit, and engage in dumping, forced technology transfer and theft of intellectual property. These concerns were reflected in the US approach to the US–Japan Trade Agreement and the US–Japan Digital Trade Agreement, which took effect on 1 January 2020. The USJTA is a reciprocal agreement in which the US eliminates tariffs on various industrial

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

In a departure from past practice, the US planned negotiations with Japan on motor vehicles, services, intellectual property and state-owned enterprises, with a second phase of talks to begin this year”

CHRISTOPHER SANDS Director, Canada Institute, Wilson Center Christopher Sands is director of the Canada Institute at the Woodrow Wilson International Center for Scholars and a senior research professor at the Johns Hopkins University Nitze School of Advanced International Studies in Washington DC. From 2012 until 2017 he was a visiting professor at Western Washington University, and taught in the School of Public Affairs and the School of International Service at American University from 2005 to 2012. He was also a senior fellow at the Hudson Institute from 2007 to 2016. Twitter @sandsatwilson  www.wilsoncenter.org

globalgovernanceproject.org

goods in exchange for Japan eliminating tariffs and quotas on agricultural imports. In a departure from past practice, the US planned negotiations with Japan on motor vehicles, services, intellectual property and state-owned enterprises, with a second phase of talks to begin this year. PURSUIT OF FURTHER LIBERALISATION The US–Mexico–Canada Agreement replaces the North American Free Trade Agreement as the governing framework for North American trade and investment. Since most tariffs were lowered by NAFTA, the Trump administration pursued further liberalisation of sectors protected by Canada (such as dairy) and Mexico (reinforcing recent energy reforms). In the North American model of regional integration, rule of origins must be met for goods to qualify for tariff-free market entry, and the USMCA changed the automotive origin requirements intended to increase the regional content of motor vehicles. New commitments on digital trade, patent medicines, financial services and labour obtained important US objectives. Another hallmark of the trade agreements negotiated with G7 partners has been an engaged US Congress. The US Constitution gives Congress authority over international trade. Congressional votes on implementing legislation for the USMCA showed broad, bipartisan majorities in favour of the agreement in both the House and Senate. This year, in the G7, there was an opportunity to address international trade directly. Trump has shown leadership in reforming trade agreements rather than trying to end them, and has demonstrated that he can conclude trade deals and secure congressional approval that is bipartisan and robust. There is an opportunity for G7 action at a time when the global economy – and the domestic economies of the G7 members – need trade more than ever. 2020 — G7 USA: THE VIRTUAL YEAR

COOPERATION TRADE EMPOWERINGON WOMEN

TRADE

A forced restart on international trade Lyric Hughes Hale, editor-in-chief, EconVue, calls on leaders to place resource coordination and restoring public trust front and centre as they work to foster the necessary conditions for long-term healthy trade – particularly between China and the United States

he global response to COVID-19 has been bold, forceful and well coordinated in terms of fiscal and monetary policy. However, the ability of central banks to influence the outcomes of the current pandemic is limited. After the meeting of the G7 finance ministers and central bank governors in March, economist Barry Eichengreen wrote: “In the fight against the COVID-19 pandemic, economists, economic policymakers and bodies like the G7 should humbly acknowledge that ‘all appropriate tools’ imply, above all, those wielded by medical practitioners and epidemiologists. Coordination, autonomy and transparency must be the watchwords.”

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

The World Health Organization had not by mid April achieved those goals, which many felt was due to institutional capture by China. Biosecurity provided by strong and independent global oversight and enforcement is the absolute condition for international trade to exist and flourish. A restructured WHO, or possibly a new organisation, with investigatory and enforcement powers, is urgently required. As the curve flattens on COVID-19, China’s meteoric economic rise over the past few decades, which was already slowing due to internal constraints and US-China trade disputes, will fall in parallel. The risk of another disease outbreak will lead some firms to diversify both their customer bases and their supply chains. There will be even more resistance to companies such as Huawei and Chinese technology standards. As the G7 members assess their casualties – COVID-19 became the leading cause of death in the United States by early April and has caused off-the-chart economic damage from an unprecedented sudden stop – discussions about reparations will be unavoidable. Unless these actions are headed off by meaningful reforms in global public health, they represent an enormous risk to US-China trade over the next year. US AGREEMENT ON THE CHINA ISSUE With 2020 a presidential election year in the United States, if there is one issue that does not divide Americans it is China. Republicans and Democrats differ on what should be ‘done about China’, but their starting point is the same: they want their leadership to remain tough on China. As Josh Rogin wrote in The Washington Post: “A new poll shows that, outside the Beltway, the coronavirus crisis is actually bringing Americans together on the China issue. Republicans and Democrats now largely agree that the Chinese government bears responsibility for the spread of the pandemic, that it can’t be trusted on this or any other issue, and that the US government should maintain a tough position on China on trade and overall, especially if Beijing again falters in its commitments.” This new Washington consensus had formed before COVID-19, but has now strengthened and gained critical momentum. Although trade is driven primarily by private commercial interests and their customers, if US consumers as voters decide that they no longer trust China, no trading framework can change that perception. globalgovernanceproject.org

LYRIC HUGHES HALE Editor-in-chief, EconVue Lyric Hughes Hale is editor-in-chief of EconVue, a publisher of independent economic news based in Chicago. She was founding publisher of China Online and has served as consultant to major US technology firms in Asia. With her husband David Hale, she co-authored What’s Next? for Yale University Press and articles on China for Foreign Affairs. Twitter @lyrichues  www.EconVue.com

If US consumers as voters decide that they no longer trust China, no trading framework can change that perception”

Promising therapeutics are being tested, but experts largely agree that as with polio, the real answer to COVID-19 and an economic restart is a vaccine. By early April, science journal Nature was tracking 78 in development, with one likely to be available in early 2021. Tung Thanh Le and colleagues conclude that “strong international coordination and cooperation between vaccine developers, regulators, policymakers, funders, public health bodies and governments will be needed to ensure that promising late-stage vaccine candidates can be manufactured in sufficient quantities and equitably supplied to all affected areas, particularly low-resource regions”. This is the type of public-private cooperation that G7 members can facilitate to create a secure environment for the resumption of the free flow of goods and people. In the spring of 2020, citizens around the world were far more concerned with health and food security than trade tariffs. The entire catalogue of biosecurity issues, including the environment, is within the purview of the G7 to influence and to lead. As Sam Weiss Evans and his colleagues urged in Science Magazine, it is time to embrace experimentation in biosecurity governance: “We must rethink and test assumptions about relationships among biological research, security and society.” In a world where demand will likely remain low for some time, leaders should turn their attention from mediating disputes to creating the necessary conditions for healthy trade and life itself. The focus of the G7 should be the coordination of all available resources to end the pandemic and restore public trust in the infrastructure of global commerce. 2020 — G7 USA: THE VIRTUAL YEAR

5 ENERGY SECURITY

G7 performance on

energy In times of crisis, energy security is critical. Ella Kokotsis, director of accountability, G7 Research Group, calls for concrete, actionable measures that ensure a reliable and sustainable energy supply in the face of the COVID-19 pandemic

s G7 leaders prepared to meet for their regular summit this year under the presidency of the United States, the unprecedented global emergency to deal with COVID-19 made energy security relevant to their agenda. The G7 needed to recognise that a continued, affordable and reliable energy supply is critical in mitigating the pandemic, as is a coordinated response to ensure that energy markets and systems become resilient and adaptive in responding to future emergencies. The G7 must deliver bold commitments that highlight the centrality of energy infrastructure in responding to

the current crisis and provide assurance that clean energy technologies remain reliable as future energy systems are transformed. How has the G7 governed energy thus far? DELIBERATIONS Energy policy has been a cornerstone of the G7’s agenda since the leaders first gathered at Rambouillet in France in 1975. Noting their intent to “spare no effort in order to ensure more balanced conditions and a harmonious and steady development in the world energy market”, by 1979 the leaders recognised the energy-climate connection and called for alternative energy sources

ELLA KOKOTSIS Director of accountability, G7 Research Group An expert on summit accountability, Ella has attended most G7 summits since 1994, has written broadly on various aspects of summitry and global governance, has directed the research and publication of numerous analytical documents, and has spoken extensively at summit-related conferences worldwide. Her scholarly research methodology for assessing summit compliance continues to serve as the basis for the annual accountability reports produced by the G7, G20 and BRICS Research Groups. She is the author of Keeping International Commitments: Compliance, Credibility and the G7 and co-author of The Global Governance of Climate Change. Twitter @g7_rg  www.g7.utoronto.ca

to reduce the pollution caused by the “increases of carbon dioxide and sulphur oxides in the atmosphere”. Throughout the next decade, the G7 continued to recognise the need to halt atmospheric concentrations of carbon dioxide through conservation, energy efficiency and alternative supplies. They continued to reinforce the direct links between economic growth, energy security, environmental protection and sustainable development throughout the 2000s. The G7 increasingly supported policies aimed at diversification and improved energy efficiency through renewables as ways to directly address reducing greenhouse gas emissions. This trend was particularly evident after 2005. The G7 consistently pursued forward-reaching energy policies, including those aimed at diversifying the energy supply mix, placing limits on fossil fuel subsidies, supporting the expansion of renewable energy sources, contributing large-scale investments in the energy sector, and expanding research and development efforts in energy science and technology. COMMITMENTS The G7 leaders made 458 energy commitments from 1975 to 2019. Of all the issue areas, only development issues received more commitments. The three energy commitments made in 1975 escalated to 43 by the time of the second oil crisis in 1979. Over the following two decades, energy-related commitments

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

at each summit ranged from zero to 23, then spiked to 57 at the 2005 Gleneagles Summit. The following year, with the Russians hosting their first and only G8 summit at St Petersburg, energy security was the signature theme, with a record of 78 energy commitments. After 2006, the number fluctuated, with 41 generated in 2007, and none at either Lough Erne in 2013 or Biarritz in 2019. COMPLIANCE The G7 Research Group has assessed 22 core and related energy commitments for compliance since 2001. It finds average compliance of 81%, higher than the 76% average across all subjects assessed. The European Union, United States and United Kingdom rank as the top three compliers, followed in turn by Germany, Canada, France, Japan, Italy and Russia. Compliance varies over time, with the highest compliance following the 2001, 2006 and 2018 summits. The energy commitments with the highest compliance scores focused on ensuring that the G7’s energy systems continued to drive sustainable economic growth. Lower scores arose on commitments related to the pursuit

458

energy commitments made from 1975 to 2019

commitments made at St Petersburg in 2006, the most ever

81%

Average compliance on energy commitments

of universal access to cleaner, safer and more affordable energy supplies. CORRECTIONS Compliance with the G7’s energy commitments can be improved by employing two key accountability measures. The first is convening a meeting of energy ministers before the summit. Compliance is higher with issues preceded by a supportive energy ministerial meeting. The G7 summit itself should generate more energy commitments. The six summits with the highest compliance scores averaged 89% and generated 167 commitments, and the five summits with the lowest compliance score averaged 72% and had only 90 commitments. As the COVID-19 crisis deepens in both its breadth and depth, the G7 needs to deliver a concrete set of actionable measures that ensure both a reliable and sustainable energy supply, and also form part of a much-needed post-pandemic economic recovery plan. Such actions should focus on energy diversification, advances in renewable technologies, investments in resilient energy systems and better sustainable extraction.

G7 performance on energy commitments, 1975–2019 100

197 5 Ra

mb ouil 197 let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve nice 198 1 Ot taw 198 a 2 Ve 198 rsai 3W lles illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve nice 198 8 To ron to 198 9 Pa 199 r is 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina wa 200 1 Ge 200 noa 2 Ka 200 nan 3 Ev ask ianis lesBai 200 ns 4 Se a Is 200 land 5G len 200 eag 6 St les P ete 200 rsb 7H urg eilig 200 end 8H am okk m aido -Toy ako 200 9 L’A qui 201 la 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S him 201 a 7 Ta orm 201 ina 8C har levo ix 201 9B iarr itz

Compliance (%) globalgovernanceproject.org

Conclusions (% words)

Commitments (%) 2020 — G7 USA: THE VIRTUAL YEAR

ENERGY SECURITY

When demand dries up

The effects of COVID-19 are being felt acutely in the oil and energy sector, where cooperation is needed to protect future energy security for consumers and safeguard jobs and livelihoods, writes HE Mohammad Sanusi Barkindo, secretary general, Organization of the Petroleum Exporting Countries 88

e are living in unprecedented times. There simply has never been anything like COVID-19 in modern memory. First and foremost, it is a health and human tragedy, but the knock-on effects are being felt in many ways and have enormous consequences for the global economy. Every economic sector has been touched by this silent beast. This is evident in global oil. The mismatch in supply and demand has been jaw-dropping. Given the massive global oil demand decline due to the lockdown measures to counter the COVID-19 pandemic, the excess supply volumes on the market have been far beyond anything seen before. Every producer, many of which are developing countries, has been affected; oil companies have been haemorrhaging, with some going bankrupt and people’s livelihoods pulled from under them. No one is immune to this shock. This crisis could lead to a major investment shortfall in the coming years that could sow the seeds for future energy security issues for consumers. The oil industry is a dynamic and vital cog for state, country, regional and global economies. It is in the interests of all of us to support and take

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

HIS EXCELLENCY MOHAMMAD SANUSI BARKINDO Secretary general, Organization of the Petroleum Exporting Countries Mohammad Sanusi Barkindo has been secretary-general of the Organization of the Petroleum Exporting Countries since 2016. From 2009 to 2010, he was group managing director of the Nigerian National Petroleum Corporation, and previously he served as deputy managing director of Nigerian Liquefied Natural Gas. Among the posts he has held, he represented Nigeria in the negotiations for the United Nations Framework Convention on Climate Change and the Kyoto protocol. Twitter @OPECsecretariat  www.opec.org

Crude oil production adjusted downwards by

appropriate actions towards sustainable oil market stability. The grizzly shadow hanging over the oil industry and the global economy was behind the historic decision taken by OPEC and non-OPEC participants in the Declaration of Cooperation on 12 April 2020 to adjust crude oil production downwards by 9.7 million barrels a day in May and June 2020, which was then extended to July at ministerial meetings on 6 June. Moreover, the decisions taken in April covered a longer timeframe for production adjustments; 7.7mb/d from August to the end of December 2020, and by 5.8mb/d from January 2021 to the end of April 2022. These adjustments are the largest and for the longest duration in the history of the industry, with a focus not only on the globalgovernanceproject.org

9.7m barrels per day in May 2020

7.7m

b/pd from July to December

5.8m b/pd from January 2021 to April 2022

In global oil, the mismatch in supply and demand has been jaw-dropping” near term, but also on supporting medium-term recovery and longer-term growth. They underscored commitment and shared responsibility, with DoC partners again being proactive and proportional, responsible and agile. BROAD SUPPORT The decision also received broad support and recognition. The International Energy Agency offered its backing. The convening of a G20 Extraordinary Energy Ministers Meeting at the same time, with the Kingdom of Saudi Arabia chairing the G20 in 2020, offered further encouragement, and recognised the burgeoning need to further expand dialogue and cooperation. The G20 ministers’ statement emphasised a pledge to work together “in the spirit of solidarity”, recognised the commitment of producers in the DoC group to stabilise energy markets and acknowledged the importance of international cooperation in ensuring the resilience of energy systems. The talks and diplomacy of this period brought around the table a plethora of producers and consumers, including the United States for the first time, with President Donald Trump playing a pivotal role. It also led to many producers outside the DoC group offering adjustments themselves, and to countries offering to buy oil to fill strategic petroleum reserves. What this unparalleled crisis has shown is that complex and multifaceted challenges need comprehensive and global solutions. We can no longer work in silos. Make no mistake: nobody can shoulder this burden on their own. This was emphasised through the DoC, the involvement of other producers, the participation of the G20 and solidarity from consumers. This raises questions for G7 leaders: How can we build on what has been achieved through recent cooperative efforts, for example, through the Charter of Cooperation? What possible novel architecture can we put in place for closer engagement to ensure stability, transparency and sustainability in global oil and energy systems? This relates not only to helping mitigate the immediate and massive damage from COVID-19, but also in utilising all available energies, all clean and efficient technological solutions, and all pathways in the future energy transition to balance the needs of people in relation to their social welfare, the economy and the environment. It was US president Ronald Reagan who once said: “The future doesn’t belong to the faint-hearted. It belongs to the brave.” Although the forces unleashed by COVID-19 may seem overwhelming, we need to be brave. We need to forge a sense of deeper community, and remind ourselves that we are all intrinsically linked, with the global oil and energy markets the fulcrum that keeps the world running. It is time for all stakeholders to come together and for everyone to play their part and act in a fair, equitable and responsible manner. 2020 — G7 USA: THE VIRTUAL YEAR

ENERGY SECURITY

Catalysing the energy transition with

green hydrogen T

he transformation of the global energy system is not only under way – it is unstoppable. Annual additions of installed renewable power capacity are consistently outpacing those based on fossil fuel. Almost three quarters of total new generation capacity added in 2019 was from renewable sources. Today, renewables account for a third of global power capacity and around a quarter of generation. The electrification of energy systems based on renewables is the way to decarbonise our societies. But to effectively limit the rise in global average temperature to a level that would significantly reduce the risks and effects of climate change, we need to accelerate the energy transition. A deep decarbonisation of energy systems requires us to reach sectors such as heavy industries (chemicals, cement and so on), together with long-distance shipping and others that are not easily electrified through renewables. Hydrogen is increasingly gaining attention as a possible solution in 90

Renewable energy represents not only a tool to reduce climate heating, but also a deep, largely untapped pool of job and wealth creation, writes Francesco La Camera, director general, International Renewable Energy Agency

addressing this challenge. It is also beginning to play a more significant role in government planning. The European Green Deal, for instance, considers hydrogen a key energy carrier. Indeed, ‘green hydrogen’ produced with renewable power could be a game changer as it would provide carbon-neutral fuels for the decarbonisation of sectors that are hard to electrify directly. At the same time, green hydrogen production and storage would increase the flexibility of power systems, enhancing frequency control and providing seasonal storage for wind and solar. That would allow higher shares of variable renewables to be integrated into the grid. Green hydrogen shows promise as a clean fuel for trucks, aviation, shipping and heating. There could be prime markets for energy-intensive industries, such as ammonia production, iron and steel making, and production of liquid fuels for aviation, marine bunkers or feedstock for synthetic organic materials production

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

(the so-called electrofuels that are part of a power-to-X strategy). IRENA analysis indicates a global economic potential for 19 exajoules of hydrogen from renewable electricity in total final energy consumption by 2050, which equals 133% of total hydrogen demand today. This suggests that 16% of all power generation would be dedicated to hydrogen production, while two thirds of the total hydrogen supply would be produced using renewables. A CASE FOR CARBON-FREE HYDROGEN There is still a long way to go. Currently, more than 95% of hydrogen production is based on fossil fuels, mostly natural gas and coal. Such hydrogen production is responsible for around 830 million tonnes of carbon dioxide, which is more than 2% of total global emissions per year. For hydrogen to help in decarbonising end uses, hydrogen itself must become carbon-free. ‘Blue hydrogen’ – produced through a combination of fossil fuel combustion and carbon capture, utilisation and storage technologies – is not inherently carbon free and is still expensive. It could, however, serve as a transitional solution by supporting the incremental supply and use of green hydrogen. Fortunately, the economics of green hydrogen are steadily improving. Falling solar and wind costs are in turn reducing green hydrogen costs. Much will also depend on the cost of electrolysers. As production expands, electrolyser costs are expected to fall significantly. Policy support could further accelerate cost reductions by supporting early applications, which could gradually develop into economies of scale. In February, the US Department of Energy announced up to $64 million in funding to encourage the expansion of the country’s green hydrogen and hydrogen storage tanks. All G7 members recognise the potential of green hydrogen and are exploring its application further. IRENA’s recently established collaborative platform for green hydrogen will support these efforts. Injecting green hydrogen into existing gas grids offers one of the fastest ways to bring production to scale. Relatively small shares of hydrogen in gas grids could support expanded electrolyser manufacturing, which could bring the new fuel into a competitive cost range. To make this happen, knowledge exchange will be vital. Moreover, standards for hydrogen and gas grids may require review and updates. Standards will also be needed for the international trade of green hydrogen as a commodity, including the certification globalgovernanceproject.org

Policy support could further accelerate cost reductions by supporting early applications, which could gradually develop into economies of scale”

95%

of hydrogen production is still based on fossil fuels

16%

of all power generation could be dedicated to hydrogen production by 2050

and verification of hydrogen producers and supply routes. This could allow new trade relationships to arise between countries with optimal resources and countries needing added supplies of clean fuel. Large-scale, cost-effective green hydrogen supplies could do much to

¹⁄₃

of global power capacity is accounted for by renewables

accelerate the world’s energy transition. Decisive policy action will be crucial to unlock this potential. By taking leadership on the development of the green hydrogen value chain and fostering continual national and international coordination, the G7 could play a key role.

FRANCESCO LA CAMERA Director general, International Renewable Energy Agency Francesco La Camera assumed the role of director general of IRENA in April 2019. He formerly served as director general of sustainable development in Italy’s Ministry of Environment, Land and Sea. As the national coordinator for climate, environment, resource efficiency and the circular economy, he led the Italian delegation at several Conferences to the Parties to the United Nations Framework Convention on Climate Change. He participated in several G7 environment ministers’ meetings as host under Italy’s G7 2017 presidency. He served as co-chair of the Africa Centre for Climate and Sustainable Development and co-chaired the Financial Platform for Climate and Sustainable Development. Twitter @flacamera  www.irena.org

2020 — G7 USA: THE VIRTUAL YEAR

ENERGY INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH SECURITY

Interview with Guy Caruso

In the face of dual crises Guy Caruso, senior adviser, Energy Security and Climate Change Program, Center for Strategic and International Studies, shares with editor John Kirton measures the G7 should take to enhance energy security in the face of the COVID crisis and the Russia-Saudi oil price tensions How much of a threat was the RussiaSaudi oil price battle posing to energy security? For the United States, lower oil prices are like a tax cut. All other things being equal, they are relatively good for the US economy but bad for the oil and gas sector. But they are causing instability in the global marketplace. Importantly, the oil price battle puts pressure on countries we do not want to see destabilised – Saudi Arabia, Iraq and, probably, Russia. 92

The other G7 members except for Canada are largely oil net importers, so the cost of oil and gas imports will come down dramatically. But the great elephant in the room is the lack of demand because of the coronavirus, given that we had recessions in all G7 countries for the first two quarters of 2020. So a boost from lower energy prices is a relatively small benefit compared to the substantial negative gross domestic product for the first half of 2020. How long will the tensions between Russia and Saudi Arabia go on? On 13 April the members of the Organization of the Petroleum Exporting Countries plus Russia and several others agreed to cut production by about 10 million barrels per day, beginning in May 2020. Even with that large production cutback, the global market will remain weak. The market instability and lack of

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

revenue, and the continued downward pressure on demand, will continue. This indicates political instability in countries heavily dependent on oil revenues. The US domestic oil industry will have serious problems, which will lead to many small, independent oil companies merging or being acquired. How is the energy security of the United States and its G7 partners affected by COVID-19? The biggest impact will be a reduction in consumer purchases, and the second will be a decline in trade. There will be a fairly steep recession. So there will be enormous job losses, enormous reduction in cross-border trade certainly with the United States and Canada, and also a big reduction in demand for Chinese goods and services. One can add bankruptcy to the mergers and acquisitions. In the United States, monetary measures are probably the easiest policy response but will have the least effect. The key will be how much support there is for following through on the stimulus package, and how well it can support keeping people employed and small businesses operating. But the danger is a very deep recession and how long it takes to turn the impacts of the virus around. In the medium term will there be a supply shortage, with a subsequent shock and price spike as we’ve seen before? There is a real potential for a boom and bust again. If we bottom out around $20 per barrel in 2020 and get a U-shaped economic recovery, demand should come back by early 2021. But we will probably have a longer-term impact of two or three years, because reduced investments in big projects and some of the shale and light tight oil investments mean a delay, and will lead to

GUY CARUSO Senior adviser, Energy Security and Climate Change Program, Center for Strategic and International Studies Guy Caruso is a senior adviser in the Energy Security and Climate Change Program at the Center for Strategic and International Studies in Washington DC. He served as administrator of the Energy Information Administration in the US Department of Energy from 2002 to 2008. He also served at the Department of Energy as director of the Office of Market Analysis. He previously worked at the Central Intelligence Agency as an international energy economist, as well as the International Energy Agency, as head of the Oil Industry Division and director of the Office of Non-member Countries. Twitter @CSIS‫ ‏‬ www.csis.org

globalgovernanceproject.org

The biggest impact of COVID-19 will be a reduction in consumer purchases, and the second will be a decline in trade”

bankruptcies, mergers and acquisitions. We should see a gradual recovery in one or two years, but oil sands projects will take longer because of the longer lead time than the light tight oil, which has a relatively quick, short investment cycle. Companies that were hedged might be able to stave it off for 30 or 90 days, but most are not hedged beyond this. You will see an immediate lack of investments in drilling and US light tight oil production will fall dramatically beginning in mid 2020. Then, depending on whether it is a six-month slowdown or a quicker recovery, prices might go back up to $40 or $50 by the first quarter of 2021. The biggest problem is the next 12 to 18 months. What should the G7 do to enhance energy security in the face of the double threat of the COVID-19 crisis and the Russian-Saudi oil price war? G7 members need to do something as a group to deal with the virus both medically, which is happening, but, more importantly, given the G7’s role, to cooperate economically. We are all in this together, both medically and economically. We need to boost liquidity and reaffirm the principles of energy security, which have been discussed in many G7 meetings over the years. We have plenty of oil – the problem is lack of demand. The main way to turn that around is to improve economic growth, which would add to the demand for energy. 2020 — G7 USA: THE VIRTUAL YEAR

mb ouil let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve n ice 198 1 Ot taw 198 a 2 Ve 198 rsai 3W lles illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve n ice 198 8 To ron to 198 9 Pa 199 ris 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina wa 200 1 Ge 200 noa 2 Ka 200 n ana 3 Ev s kis ianlesBai 200 ns 4 Se a Is 200 land 5G l ene 200 agl 6 St es Pet 200 ersb 7H u e rg ilige 200 8H nda okk mm aido -Toy ako 200 9 L’A qui 201 la 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S him 201 a 7 Ta orm 201 ina 8C har levo ix 201 9B iarr itz

197

197 5 Ra

OUTLOOK ON THE ENVIRONMENT Brittaney Warren, lead researcher on climate change, G7 Research Group, finds a weak correlation between environmental commitments made and compliance, and calls for a doubling-down on efforts to halt the dual climate and biodiversity crises

environment G7 performance on the

G7 performance on climate change, 1975–2019

100

Compliance (%)

Conclusions (% words)

Commitments (%)

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

he G7’s major environmental governance began with climate change in 1979. Biodiversity was added in 1984 and oceans in 1985. Throughout its history, the G7 has made several links between these subjects, especially between climate change and deforestation. This has included recognition of the co-benefits for health, water and food security. The link was expanded at the 2018 Charlevoix Summit, where the leaders recognised that ocean health is “critical to the economic, social and environmental well-being of the planet”, and that global heating is negatively affecting the oceans. They again recognised the co-benefits, stating that protecting the oceans benefits human health, jobs, food security and biodiversity. Subsequently, at the 2019 Biarritz Summit, leaders succinctly stated that climate change, biodiversity loss and ocean degradation are “three interconnected global challenges that threaten peace, security, development, health and economic stability”. In light of this recent apparent advance, just how well has the G7 performed on the environment?

CONCLUSIONS In its agenda-setting conclusions, the G7 dedicated an average of 5% of its public communiqués to climate change at each summit, 3% to biodiversity and 2% to oceans. On all three subjects, its conclusions rose across four phases: creation from 1975 to 1988, the United Nations environment regime from 1989 to 2003, globalisation from 2004 to 2014, and the post–Paris Agreement and the Aichi biodiversity targets after 2015. On climate change, the first phase took 0.6% of the G7’s communiqués. The second phase took 3%, the third 12% and the fourth 13%. On biodiversity, the first took 1%, the second 4%, the third 3% and the fourth 9%. On oceans, the first took 1%, the second 2%, the third 1% and the fourth 9%. Although the G7’s environmental performance was comparatively low relative to other subjects, its strongest performance came in the current phase. COMMITMENTS On all three environmental subjects, the G7 made 809 collective commitments as identified by the G7 Research Group. On climate there were 369, on biodiversity 168 and on oceans 272 (with some overlap). On climate change, the first phase averaged only 0.1 commitment per summit, globalgovernanceproject.org

BRITTANEY WARREN Director of compliance and lead researcher on climate change, G7 Research Group Brittaney Warren is director of compliance and lead researcher on climate change for the G7 Research Group, the G20 Research Group and the BRICS Research Group at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She has published on accountability measures in summit commitments, the G7 and G20’s compliance and governance of climate change, and the G20’s governance of digitalisation. She holds a master’s degree in environmental studies from York University. Twitter @brittaneywarren  www.g7.utoronto.ca

the second phase five, the third 22 and the fourth eight. On biodiversity, the first phase averaged 0.1, the second six, the third three and the fourth seven. On oceans, the first phase averaged 0.2, the second three, the third two and the fourth 40. The fourth phase accounts for the majority of the G7’s commitments on oceans, with 81 made at the 2018 Charlevoix Summit alone. Thus, within their own subject silos, biodiversity and oceans had their strongest commitment-making performance in the current phase, with climate declining. This decline is partly explained by the US withdrawal from the Paris Agreement and US president Donald Trump’s consequent decision to opt out of the G7’s climate change commitments. COMPLIANCE The G7 Research Group has assessed

809

collective commitments have been made on environmental subjects

75%

Average compliance on assessed environmental commitments

69%

Average compliance on assessed biodiversity commitments

G7 members’ compliance with 112 environmental commitments and found an average of 75% across all three components. On climate change, compliance averaged 74% with the 91 assessed commitments. On biodiversity, it was 69% with the 11 assessed and on oceans it was 87% with the 10 assessed. On climate change, first-phase compliance averaged 70%. In the second phase it averaged 69%, in the third 77% and in the fourth 80%. On biodiversity, the first phase averaged 65%, the second 48%, the third 73% and the fourth 91%. On oceans, no compliance data is available for the first phase. In the second phase it averaged 78%, in the third 100% and in the fourth 84%. Thus compliance rose for climate change and for biodiversity, while oceans had consistently high compliance. CORRECTIONS There is a weak correlation between the number of environmental commitments made and members’ compliance with them. The accountability measures that have more impact are pre-summit ministerial reinforcement and surrounding UN summit support. These two mechanisms will prove especially important now, with the UN climate and biodiversity conferences both delayed due to the COVID-19 crisis. The G7 has recognised the links between the environment and health, which are evident in this pandemic. To prevent such health crises in the future, the G7 must double down on its efforts to stop the dual climate and biodiversity crises, by strengthening its internal governance mechanisms and supporting the global multilateral environmental regime, even if it must do so virtually. 2020 — G7 USA: THE VIRTUAL YEAR

OUTLOOK ON THE ENVIRONMENT

Biodiversity for a better future

Population health and the environment are inextricably linked, and improving both human and planetary health relies upon all sectors uniting in transformational change, writes Elizabeth Maruma Mrema, executive secretary, Convention on Biological Diversity

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

he G7 comes together at a crucial time for the health of people and the planet. COVID-19 is not only a health crisis; it is also an economic, social and environmental crisis. As such, it cannot be tackled in isolation. The fight against COVID-19, and the plans to build back better after we have passed the peak of the crisis, require cooperation across all domains, a whole-ofgovernment approach that also mobilises science and business – an approach that recognises the connection between human health and the health and resilience of nature. We will need an integrated approach to health and the environment, along the lines of the One Health approach. This involves designing and implementing programmes, policies, legislation and research in which multiple sectors communicate and work together to achieve better public health outcomes. It is necessary not only as we work to recover from the crisis, and to build back better, but also as we work to create an ambitious post-2020 global biodiversity framework. If we work together to take care of nature, nature takes better care of us. Biodiversity is the foundation of human health. It supports food security, dietary health and livelihoods. It plays an important role in the regulation and control of infectious diseases. The continuing loss of biodiversity on a global scale directly threatens our health and well-being. Biodiversity loss and ecosystem change, such as through land-clearing or habitat fragmentation, can increase the risk of the emergence or spread of infectious diseases in animals, plants and humans. Nature and the diversity of microorganisms, flora and fauna are the source of medicines and antibiotics for treatments. Thus, biodiversity loss may limit the discovery of potential treatments for many diseases and health problems. Furthermore, biodiversity loss can have an impact on community traditions and livelihoods centred on traditional medicinal practices that use wild animals and plants, particularly for Indigenous peoples and local communities. BIODIVERSITY BEYOND 2020 The next 10-year global framework for biodiversity protection – the post-2020 global biodiversity framework, negotiated over the remainder of 2020 and the beginning of 2021 – can play a significant role in building the resilience we need in the face of growing environmental, health and development challenges. It will serve as the overarching framework on biodiversity for not only the Convention on Biological Diversity, but also all biodiversityrelated agreements and, indeed, the entire United Nations system. The development of the post-2020 global biodiversity framework provides a critical window of opportunity to set out an ambitious plan of action to stem the loss of biodiversity and put nature on a path of recovery. globalgovernanceproject.org

ELIZABETH MARUMA MREMA Executive secretary, Secretariat of the Convention on Biological Diversity Elizabeth Maruma Mrema was director of the Law Division of the United Nations Environment Programme, where she held many positions over two decades, including deputy director of the Ecosystems Division and executive secretary of the UNEP/Secretariat of the Convention on the Conservation of Migratory Species of Wild Animals. Prior to joining UNEP, Elizabeth worked with the Ministry of Foreign Affairs and International Cooperation of the United Republic of Tanzania and was a lecturer in public international law and diplomacy. Twitter @mremae | @UNBiodiversity  www.cbd.int

This may include well-defined, ambitious and measurable targets for the post-2020 biodiversity agenda. The framework offers an unparalleled opportunity to set a shared global policy direction for the next decade, where biodiversity at all levels is conserved, restored and sustainably used, and the benefits from nature are delivered to all people. The post-2020 global biodiversity framework for biodiversity conservation will engage all stakeholders: countries, cities, subnational governments, Indigenous peoples and local communities, industry, women, youth, farmers, civil society and the private sector. A transformational change is needed in the approaches taken to safeguard, restore and invest in biodiversity. This involves changes in behaviour at the levels of producers, consumers, governments and businesses. It involves a deeper understanding, based on scientific evidence, of the factors, motivations and levers that can facilitate such transformational change. And it involves innovation in the means of implementation and accountability. A transformative, systemic change across multiple sectors and actors is needed if we are to avoid the catastrophic biodiversity losses predicted for the near future. To achieve the vision of the Sustainable Development Goals of progress for people, planet and prosperity, we must ensure the healthy functioning of the very ecosystems that underpin human life itself. There is also an unprecedented opportunity to ensure greater alignment and policy coherence within our respective countries, communities and institutions, and also across the range of global commitments, including the SDGs and the Paris Agreement on climate change. The success of each of these global commitments is ultimately contingent upon all sectors coming together to achieve the shared goals of healthy societies and a healthy planet. 2020 — G7 USA: THE VIRTUAL YEAR

OUTLOOK ON THE ENVIRONMENT

Ecosystem restoration done right Global restoration of degraded environments – if done correctly – brings environmental, societal and economic benefits. Thomas Crowther, professor of global ecosystem ecology at ETH Zürich, where he formed the Crowther Lab, offers four principles for getting it right

e need nature. It is the foundation of healthy societies and strong economies. As forests grow, they provide clean air, food and water for millions of species, including humans. Wetlands, grasslands and other ecosystems support unique wildlife and provide filtered water, rich soils and protection from floods and drought. Biodiverse ecosystems suppress diseases – a critical benefit considering the recent pandemic. They also store more carbon and help mitigate climate change. So, why aren’t we doing more to help ourselves by conserving and restoring ecosystems? One reason, perhaps, is that it was unclear how much land worldwide could naturally support restoration. That is, until now. 0.9 BILLION HECTARES OF POTENTIAL Our science shows that the potential for tree restoration is tremendous. Huge. There are up to 0.9 billion hectares of degraded land outside of existing forest, urban or agricultural land that might support added tree cover. This is an area larger than Brazil and nearly the size of the United States. Restoring these ecosystems would increase forested area by more than 25% globally and, over their lifetimes, these new trees could ultimately sequester between 133 and 276 gigatons of carbon

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

in woody biomass and soils. For context, human industrial activity has added approximately 300 gigatons of excess carbon to the atmosphere to date. Additional opportunity exists to plant trees in agricultural areas and cities, with great co-benefits. In agricultural settings, agroforestry can increase crop yields, thus incentivising native tree restoration. Planting trees in urban areas can help reduce the urban heat island effect, mitigate stormwater run-off and enhance quality of life – not to mention the significant employment opportunities. More than 20% of the 0.9 billion hectares of tree restoration potential is found in G7 countries. Globally, the top six countries represent more than 50% of the total potential: • Russia: 151 million hectares • United States: 103 million hectares • Canada: 78.4 million hectares • Australia: 58 million hectares • Brazil: 49.7 million hectares • China: 40.2 million hectares FOUR PRINCIPLES FOR GETTING IT RIGHT Countries that invest in nature-based solutions, including conservation, restoration and green infrastructure, have the potential to reap dividends. Earlier this year, a group of civil society experts and business leaders aligned on the Together with Nature principles for nature-based solutions to responsibly tackle the climate crisis, restore biodiversity, and benefit planetary health and human well-being: ① Cut emissions. Nature-based solutions are powerful tools to capture carbon from the atmosphere, but they are not a substitute for cutting greenhouse gas emissions. From a climate change perspective, we must rapidly cut fossil fuel emissions, decarbonise economies, and also maintain, sustainably manage and restore ecosystems. ② Conserve and protect existing ecosystems. Intact soils, forests, grasslands, shrublands, wetlands and aquatic ecosystems are vital repositories of carbon and biodiversity. Yet we’re losing them at an alarming rate. Protecting these last remaining strongholds of nature is critical. ③ Be socially responsible. We must fully engage Indigenous peoples and local communities, and respect and uphold their rights and leadership. We must also proactively contribute to fair and sustainable economic models that create new employment opportunities while avoiding competition with existing activities such as food production. Only when local communities benefit from the social, economic and ecological benefits that ecosystems provide can restoration be sustainable. ④ Be ecologically responsible. Nature-based solutions must be founded on rigorous ecological principles. Biodiversity is vital for healthy ecosystems that are more productive, resilient and beneficial. Diverse mixtures of native species are globalgovernanceproject.org

THOMAS CROWTHER Crowther Lab, ETH Zürich Thomas Crowther is the chief scientific adviser to the UN’s Trillion Tree Campaign and a professor of global ecosystem ecology at ETH Zürich, where he formed the Crowther Lab. Crowther received a postdoctoral fellowship from the Yale Climate and Energy Institute. In 2015, he was awarded a Marie Curie fellowship to research the impact of carbon cycle feedbacks on climate change at the Netherlands Institute of Ecology. His research is supported through a unique partnership with DOB Ecology, a private foundation focused on supporting projects that protect and restore threatened ecosystems across the globe. Twitter @TWCrowther  www.crowtherlab.com

100 gigatons

The amount of carbon restored forested areas would capture

300 gigatons

The amount of carbon human industrial activity has added to the atmosphere to date

20%

of tree restoration potential is in G7 countries

most likely to provide desired benefits such as carbon storage, food production and protection from floods, drought and disease. Monocultures of exotic species or low-diversity plantations are unlikely to provide these desired benefits. EMBRACING THE CHALLENGE, TOGETHER We live at a time when Earth’s ecosystems are more vulnerable and depleted than they have ever been. But this is also an exciting time because we now understand both the scale of the problem and the potential scale of the solution. We have unprecedented capacity, momentum and scientific information to successfully implement nature-based solutions. International initiatives such as the Trillion Tree Campaign and the Bonn Challenge incentivise global conservation and restoration. Yet nearly half the countries that signed up to the Bonn Challenge could more than double the area they are currently targeting for restoration. And, despite global outcries, forest clearing and ecosystem loss continue to rise, particularly due to poor policies and protections. The G7 members could set a leadership example. For the benefit of our local and global environments, societies and economies, it is time to embrace the challenge of moving from commitment to systemic action, together. 2020 — G7 USA: THE VIRTUAL YEAR

mb ouil 197 let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve n ice 198 1 Ot taw 198 a 2 Ve 198 rsai 3W lles illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve n ice 198 8 To ron to 198 9 Pa 199 ris 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina wa 200 1 Ge 200 noa 2 Ka 200 n ana 3 Ev s kis ianlesBai 200 ns 4 Se a Is 200 land 5G l e 200 nea 6 St gle s Pet 200 ersb 7H urg e ilige 200 8H nda okk mm aido -Toy ako 200 9 L’A qui 201 la 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S h ima 201 7 Ta orm 201 ina 8C har levo ix 201 9B iarr itz

197 5 Ra

TOWARDS GENDER PARITY

100

G7 performance on

gender equality

COVID-19 threatens women disproportionately, writes Julia Kulik, director of research, G7 Research Group, as she calls on the G7 to apply a gender lens to the globally coordinated response that this pandemic demands

G7 performance on gender equality, 1975–2019

100

Average compliance on gender equality commitments

74%

Compliance (%)

Conclusions (% words)

Commitments (%)

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

he US G7 presidency took place as the world faced one of the largest global health and ensuing economic crises in decades. For the first time in history, G7 leaders postponed their annual meeting due to the contagion of COVID-19 and its implications for international movement and travel. The case for a coordinated global response led by the G7 has never been clearer but depends on leaders’ willingness to work collectively for the common good. Once this pandemic dissipates, the world will be different, but the earlier challenges will remain, many in exacerbated form. This is true for gender inequality. COVID-19 threatens women disproportionately as they comprise the majority of front-line healthcare workers globally. The G7 must continue to mainstream gender throughout its work, including by applying a gender lens to its badly needed, globally coordinated response to COVID-19. Strengthened maternal and parental leave policies, elimination of the gender wage gap and the prevention of violence against women remain essential. CONCLUSIONS G7 leaders first publicly addressed gender equality at their 1990 Houston Summit. The issue appeared sporadically at first, but it remained continuously from the early 2000s and steadily increased after 2013. G7 communiqués averaged 683 words on gender equality at each summit, or close to 6% of the total words. The three most recent summits addressed gender equality the most. The 2017 Taormina communiqué contained 3,888 words (45%) on gender equality. In 2018 at Charlevoix this rose to 5,086 words (45%), the highest and most mainstreamed gender equality has ever been. It slightly declined at Biarritz in 2019 to 2,441 words (33%), but was still significantly higher than average. Only in 2016 at Ise-Shima did G7 leaders start releasing stand-alone documents on gender equality. The 2018 Charlevoix Summit produced two statements. The 2019 Biarritz Summit produced three statements on improving education for women and girls in developing countries, ending gender-based violence in a digital context and launching the Biarritz Partnership on Gender Equality. COMMITMENTS Because gender equality commitments were absent for many years, the G7

globalgovernanceproject.org

HIV/AIDS, improving maternal and child health, and improving educational outcomes for girls in Africa. By the 2015 Schloss Elmau Summit, gender equality became a more central goal, with 25 commitments, followed by 36 at Ise-Shima in 2016 and 69 at Taormina in 2017. In 2018 at Charlevoix, the G7 made a record 72 commitments on gender equality. This plunged to 17 at Biarritz in 2019.

JULIA KULIK

Director of research, G7 Research Group Julia Kulik is director of research for the G7 Research Group as well as for the G20 and BRICS Research Groups and the Global Health Diplomacy Program, all based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She has written on G7, G20 and BRICS performance, particularly on the issues of gender equality and regional security. Kulik leads the groups’ work on gender, women’s health, regional security and summit performance. Twitter @juliafkulik  www.g7.utoronto.ca

Research Group’s analysis includes both core and related gender equality commitments. Commitments with gender equality at the heart of their goal are considered ‘core’ and those with gender at the periphery are ‘related’. Since 1975, G7 leaders have made 305 public, collective, precise, future-oriented and politically binding commitments on gender equality, for over 5% of the total commitments. Most commitments were made in 2015 and 2018. Until 2015 they were mostly related commitments rather than core gender commitments, such as addressing

COMPLIANCE The G7 Research Group has assessed 36 core and related gender equality commitments for compliance by G7 members. G7 members averaged 74%, just below the average across all subjects of 76%. The commitments with the highest compliance focused on health, a notable finding as the G7 confronts the COVID-19 crisis now. Those assessments included improving maternal, newborn and child health outcomes for women and supporting health interventions for the most vulnerable. The commitments with the lowest scores focused on removing legal barriers to women’s economic participation, supporting refugee and internally displaced women and girls affected by conflict and disaster, and mobilising the private sector to develop strategies to prevent violence against women. The highest complying member was Canada at 89%, followed by the United Kingdom at 85% and the United States at 79%. The lowest compliers were Italy at 54% and Japan at 70%. CORRECTIONS G7 compliance with gender commitments can be improved through the use of specific, low-cost accountability measures under the leaders’ direct control. A slightly higher level of compliance coincides with summits where more gender equality commitments were made. These averaged compliance of 76%, and those summits with fewer gender equality commitments averaged 74%. The presence of compliance catalysts, which are elements embedded in the commitment text that provide direction for implementation, generally improves compliance with it. However, gender commitments with embedded catalysts average the same compliance as those with no catalysts embedded. The catalysts that caused the highest gender compliance referred to a specified actor and an international organisation through which the G7 would work. 2020 — G7 USA: THE VIRTUAL YEAR

101

TOWARDS GENDER PARITY

By taking a gender-focused response to the COVID-19 pandemic, G7 leaders have a rare opportunity not only to mitigate its impact, but to build back better, writes Phumzile Mlambo-Ngcuka, under-secretarygeneral, United Nations, and executive director, UN Women

Women working on the front line 102

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

EMPOWERING WOMEN

he COVID-19 pandemic has caused a crisis reaching far beyond health, challenging fundamental aspects of the ways we have previously arranged our social and economic structures. It has amplified existing gender inequalities across and within our societies, exposing millions of women to increased risk of infection, violence, economic devastation and poverty, and threatening to reverse hard-won progress for gender equality. Women earn less, save less, hold less secure jobs and are more likely to work in the informal sector with fewer social protections. The decline in projected poverty rates for women has reversed and now points to an increase of 9.1% due to the pandemic and its fallout. I call on the G7 leaders to explicitly recognise this and ensure that their COVID-19 response intentionally, strongly and permanently redresses these long-standing inequalities. THE ECONOMIC ISSUE By 2021, around 435 million women and girls will be living in extreme poverty on less than $1.90 a day – including 47 million pushed into poverty as a result of COVID-19. Closures and mitigation measures have stopped women from earning, especially affecting the 740 million women globally with informal and precarious jobs that largely underpin the formal economy. Overall, women’s employment is 19% more at risk than men’s, and, while the pandemic will have an impact on global poverty generally, women of reproductive age are disproportionately affected. Fiscal stimulus programmes must be targeted to women, for example, by expanding the reach and benefit levels of social assistance programmes such as cash transfers and social pensions. Women in the informal economy must be supported to access cash transfers or unemployment compensation, especially those without access to banking. Bailouts and support measures should include micro and small businesses, where women entrepreneurs are relatively more represented, with tax breaks for women-owned businesses and support for women’s businesses in supply chains.

more care work carried out by women than men

740m women globally work in the informal economy

70%

of health and social sector front-line workers are women

compound existing inequalities as government services and education move to online platforms. Almost half the world’s population is still offline, with girls, women and other marginalised groups among the least likely to have access to technology. Essential cash transfer programmes implemented in times of crisis cannot reach women with no online access when those payments come as digital transactions. Girls cannot complete their schooling if they have no internet. Affordable access to the internet must underpin digital solutions. THREATS TO HEALTH Globally, women make up 70% of front-line workers in the health and social sector. They are the doctors, nurses, midwives, cleaners and laundry workers, working in the eye of the storm to care for the sick and keep communities safe, often in the lowest-paying jobs. Poor and marginalised communities are more vulnerable to COVID-19, yet have less access to care. With health systems stretched to breaking point, all women, especially those already marginalised, risk being unable to access critical medical care, including sexual and reproductive services and mental health care. G7 leaders must take account of these differential factors, prioritise the needs and protection of female health and social workers, and protect all essential health services, including for pre- and ante-natal care and family planning. VIOLENCE AGAINST WOMEN In countries around the world, government authorities, women’s rights activists and civil society partners have indicated increasing reports of domestic violence during the crisis, and increased demand for emergency shelter. Violence in public spaces and cyberviolence targeting women and girls are also growing. Disrupted social, police and justice services are exacerbating delays and difficulties in accessing support. The prevention and redress of violence against women must be a key part of governments’ national response plans, including the immediate designation of shelters and helplines for women as essential services with increased resources, sensitisation and maintenance of police and justice services, and stepping up advocacy and awareness campaigns, including targeting men’s domestic roles, such as #HeForSheAtHome.

UNPAID CARE Already, before the pandemic added teaching and nursing to women’s home care duties, women were doing on average triple the care work of men with little time for earning. With school and work closures forcing so many families to stay home, the unpaid role of women in sustaining care and domestic work has never been so apparent. Immediate steps are needed to prevent reversal of the gender equality progress achieved in recent decades, particularly regarding women’s participation in the labour force. G7 leaders can direct childcare programmes and economic stimulus packages towards recognising unpaid care work as vital to the formal economy, and address the gross gender imbalances in its distribution.

PHUMZILE MLAMBO-NGCUKA

DIGITAL GENDER DIVIDE Care must be taken that the digital divide does not

Twitter @phumzileunwomen  www.unwomen.org

globalgovernanceproject.org

Under-secretary-general, United Nations, and executive director, UN Women Phumzile Mlambo-Ngcuka has been United Nations under-secretarygeneral and executive director of UN Women since 2013. From 2005 to 2008, she served as deputy president of South Africa. Prior to that she served as South Africa’s minister of minerals and energy and deputy minister in the Department of Trade and Industry. She is the founder of the Umlambo Foundation, which supports leadership and education.

2020 — G7 USA: THE VIRTUAL YEAR

103

regional security in the Middle East T Maria Zelenova, senior researcher, G7 Research Group, highlights four ways in which the G7 can improve its compliance with its Middle East security commitments, from making more explicit links to democracy to increasing outreach to regional partners

he unique, informal structure and democratic mandate of the G7 makes it well suited to shape cooperation on security issues in the Broader Middle East. The region includes Afghanistan to the west, the Gulf States to the south, Egypt and Libya to the east, and Turkey to the north. The G7’s first mention of security in this region appeared at the 1980 Venice Summit, where the G7 coordinated the use of force, sanctions and financial support to mitigate the ongoing conflict there. Since then, the G7 has continued to commit to comply with relevant United Nations Security Council resolutions related to the Middle East. CONCLUSIONS In their first mention of Middle East security at Venice in 1980, the leaders endorsed the United Nations General Assembly resolution condemning the Soviet military occupation of Afghanistan. They dedicated 474 words and eight paragraphs to building a more secure Afghanistan. The leaders then addressed Middle East security at almost every summit except in 1983, 1985, 1986, 1990 and 2003. The most words on the BME were produced at the 2012 Camp David Summit, where the leaders dedicated 4,803 words to the issue. Across all summits, communiqué text tended to focus on resolving the

104

G7 performance on

https://eyq.ey.com/eyq/home/

PROMOTING PEACE AND SECURITY

Arab-Israeli dispute and on promoting compliance with relevant UNSC and UNGA resolutions. COMMITMENTS From their start in 1975 until 2019, G7 summits produced 144 collective, politically binding, future-oriented commitments on BME security, as identified by the G7 Research Group. The first commitments were produced at the 1980 Venice Summit, with the leaders making four separate commitments to stabilising the situation in Afghanistan. The next year, at the 1981 Ottawa Summit, they committed to work together to stabilise the situation in Afghanistan. Thereafter, the leaders produced BME commitments at every summit except in 1982, 1983, 1985–1987, 1989, 1990, 1999–2001 and 2003. The 2016 and 2017 summits produced commitments on stabilising the ongoing war in Syria and defeating existing terrorist networks in the region. The 2019 Biarritz Summit produced two commitments to de-escalate tensions with Iran and one commitment in support of a long-term ceasefire in Libya. COMPLIANCE The G7 Research Group has assessed 12 of the 143 commitments on BME security for compliance by G7 members. It found an average of 87%, which is higher than the overall average of 76% across all subjects.

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

Commitments made at the 2005, 2006, 2010 and 2011 summits achieved the highest scores. Specifically, leaders achieved full compliance with commitments on mobilising political support for financial contributions, offering economic and humanitarian support for Lebanon, establishing an Afghan-led national reconciliation and reintegration process, and supporting the transition process of Afghanistan. The lowest compliance score, 72%, was on a commitment made at the 2008 summit on accelerating Afghan police reform and other elements of security reform. The overall trend of compliance with BME security commitments has decreased. Although some commitments made between 2005 and 2011 achieved perfect scores, more recent commitments from 2016, 2017 and 2019 scored 87%, 75% and 81% respectively. CORRECTIONS Research conducted by the G7 Research Group suggests that the G7 can improve its performance on the Middle East in four ways. First, making more commitments on security in the Middle East at a summit does not increase compliance with them.

MARIA ZELENOVA Senior researcher, G7 Research Group Maria Zelenova is a senior researcher for the G7 and G20 Research Groups based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. She is especially interested in human security, human rights and climate change. Maria holds an honours bachelor of arts in political science and history, and is pursuing a master of arts in international security at Sciences Po in Paris. Twitter @mary_zelenova  www.g7.utoronto.ca

For instance, the 2013 Lough Erne Summit produced five commitments, but the one assessed for compliance scored 83%, which is lower than the previous years’ scores. Thus, leaders should be cautious about producing more commitments on security in the Middle East. Second, leaders should make more explicit links in their commitments to their core values of democracy and individual liberty. Third, leaders should produce more commitments on issues related to BME security such as financial regulation, economic development and immigration. Commitments with references to these subjects achieved near-perfect compliance scores.

Finally, the leaders should invite more regional guests to the summits. Doing so increases outreach and transparency, which relates to higher compliance scores. Inviting regional guests such as the leaders of Egypt, Turkey or Libya also helps produce more ambitious commitments. CONCLUSION The G7 leaders can and should continue to put security issues in the Middle East on their agenda, address the impact of these issues on global economic growth, and increase outreach to regional partners and relevant international organisations. These actions have proven to increase compliance with its Middle East commitments.

G7 performance on Middle East security, 1975–2019 100

144

commitments made on Broader Middle East security since 1975

87%

Average compliance on assessed commitments in this area

197 5 Ra

Compliance (%) globalgovernanceproject.org

Conclusions (% words)

Commitments (%) 2020 — G7 USA: THE VIRTUAL YEAR

105

PROMOTING PEACE AND SECURITY

G7 performance on

European security

From nuclear disarmament to regional crises, there’s a precedent for the G7 to focus on regional security in Europe – and this year provides an opportunity for European leaders to align on common strategies for current challenges, writes Bogdan Stovba, lead analyst on European security, G7 Research Group

uropean security came onto the G7 summit’s public agenda at the 1981 Ottawa Summit, where leaders agreed that economic policies towards the Soviet Union should be compatible with security considerations. In addressing European security, G7 summits focused on tensions with, and later reforms in, the Soviet Union and Russia, as well as nonproliferation, nuclear disarmament and regional crises across the continent. Although European security is unlikely to be a key priority for the US-hosted G7 in 2020, it nonetheless provides an opportunity for the leaders to evaluate progress on resolving the ongoing crisis in Ukraine and to align on a common strategy ahead of the next round of meetings on the Normandy Format among Germany, France, Ukraine and Russia, which was revived at the G7’s Biarritz Summit in August 2019.

106

CONCLUSIONS From 1981 to 2019, the G7 dedicated 13,782 words (3%) to European security in its communiqués. In the first phase, from 1981 to 1986, the G7 dedicated an average of 9% of words per summit to European security, with a focus on relations with the Soviet Union. At the 1983 Williamsburg Summit, this spiked to 14%, in response to the USSR deploying nuclear missiles in Europe. In the second phase, from 1987 to 1991, the average words per summit dropped to 6%, and the focus shifted from confrontation with the USSR to assisting it with economic and political reforms. In the third phase, from 1992 to 2000, the average words per summit rose to 8%, as the G7 focused on regional crises in the Balkans and former Soviet states. The first half of this phase had more words than the latter half combined: in 1992 the G7 dedicated 21% of its communiqué to European security; in 1993, 11%, and in 1995, 12%. Between 1996 and 2001, the summits averaged between 3% and 5% on this subject. In the fourth phase, from 2001 to 2014, the average plunged to 2% per summit, with a focus on non-proliferation and strategic arms control. In the fifth phase, from 2014 to 2019, the average rose to 4% per summit, with a peak of 11% in 2014, triggered by Russia’s annexation of the Crimean peninsula. The G7 produced dedicated documents on the crises in the Balkans in 1992, 1995, 1996 and 1997, as well as one on Northern Ireland in 1998. The G7 also made two stand-alone statements: on the Nagorno-Karabakh conflict in 1997 and the Hague Declaration on Ukraine issued on the margins of the Nuclear Security Summit in March 2014. Notably, the 2008 crisis in Georgia is the only conflict in Europe not mentioned in the G7 summit documents.

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

G7 Research Group

In the rapidly globalizing world of the 21st century, the Group of Seven major market democracies serves as an effective centre of comprehensive global governance. G7 members – the United States, Japan, Germany, the United Kingdom, France, Italy, Canada and the European Union – contain many of the world’s critical capabilities and are committed to democratic values. At its annual summit and through a web of G7-centred institutions at the ministerial, official and multi-stakeholder levels, the G7 does much to meet global challenges, especially in the fields of security, sustainable development and economics. The G7 Research Group is a global network of scholars, students and professionals in the academic, research, media, business, non-governmental, governmental and intergovernmental communities who follow the work of the G7 and related institutions. The group’s mission is to serve as the world’s leading independent source of information, analysis and research on the G7. Founded in 1987, it is managed from Trinity College, the Munk School of Global Affairs and Public Policy, and the Department of Political Science at the U niversity of Toronto. Professional Advisory Council members, Special Advisors, international affiliates and participating researchers together span the world. Through the G7 Research Group, Trinity’s John W. Graham Library has become the global repository of G7/8 documents, transcripts, media coverage, interviews, studies, essays, memorabilia and artifacts.

The G7 Information Centre at

www.g7.utoronto.ca The online G7 Information Centre (www. g7.utoronto.ca) contains the world’s most comprehensive and authoritative collection of information and analysis on the G7. The G7 Research Group assembles, verifies and posts documents from the meetings leading up to and at each summit, the available official documentation of all past summits and ministerial meetings (in several G7 languages), scholarly writings and policy analyses, research studies, scholarship information, links to related sites and the “background books” for each summit now published by GT Media and the Global Governance Project (g7g20summits.org). The website contains the G7 Research Group’s regular reports on G7 members’ compliance with their summit commitments, as well as other research reports.

BOOKS ON THE G7 AND RELATED ISSUES FROM ROUTLEDGE Accountability for Effectiveness in Global Governance

The Global Governance of Climate Change

Marina Larionova and John Kirton, eds.

John Kirton and Ella Kokotsis

The European Union in the G8

The New Economic Diplomacy

Marina Larionova, ed.

Nicholas Bayne and Stephen Woolcock

The G8-G20 Relationship in Global Governance

The G8 System and the G20 Peter I. Hajnal

Marina Larionova and John Kirton, eds.

G7 RESEARCH GROUP Munk School of Global Affairs and Public Policy, 1 Devonshire Place, Room 209N, Toronto, Ontario M5S 3K7 Canada Telephone +1-416-946-8953 • E-mail g7@utoronto.ca • Twitter @g7_rg www.g7.utoronto.ca

PROMOTING PEACE AND SECURITY

G7 performance on European security, 1975–2019 100

197

197 5 Ra

mb ouil let 6 Sa n Ju an 197 7 Lo ndo n 197 8B onn 197 9 To kyo 198 0 Ve nice 198 1 Ot taw 198 a 2 Ve 198 rsai 3W lles illia msb urg 198 4 Lo ndo n 198 5 Bo nn 198 6 To kyo 198 7 Ve nice 198 8 To ron to 198 9 Pa 199 ris 0H ous ton 199 1 Lo ndo 199 n 2M unic h 199 3 To kyo 199 4N apl es 199 5H alif ax 199 6 Ly on 199 7D 199 env 8B er irm ingh am 199 9 Co log 200 ne 0O kina w a 200 1 Ge 200 noa 2 Ka 200 n ana 3 Ev skis ianlesBai 200 ns 4 Se a Is 200 land 5G len 200 eag 6 St les Pet 200 e rsb 7H u e rg ilige 200 8H nda okk m m aido -Toy ako 200 9 L’A qui 201 la 0M usk oka 201 1 De auv 201 ille 2 Ca mp Dav 201 3 Lo id ugh Ern 201 e 4 Br uss els 201 5 El ma 201 u 6 Is e-S him 201 a 7 Ta orm 201 ina 8C har levo ix 201 9B iarr itz

Compliance (%)

COMMITMENTS G7 summits have produced a total of 52 collective, future-oriented, politically binding commitments on European security, as identified by the G7 Research Group. They average 2% of all commitments per summit. The portion rose to 7% at the 1988 Toronto and 1993 Tokyo summits. The periods between 1981 and 1983 and between 1986 and 1993 had a higher than average number of commitments, with 5% and 4%, respectively. Between 1994 and 2019, the average was only 1%. After the start of the conflict in Ukraine in 2014 there was no noticeable increase in commitments on European security.

BOGDAN STOVBA Lead analyst, G7 Research Group Bogdan Stovba is a lead analyst with the G7 Research Group at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. His key research interests are European security, great power politics, and economic and political reforms in Central and Eastern Europe. Bogdan holds an honours bachelor’s degree in economics and political science and is currently employed as a management consultant in one of the ‘Big Four’ firms. Twitter @g7_rg  www.g7.utoronto.ca

108

Conclusions (% words)

85%

Average compliance on assessed European security commitments

Commitments (%)

COMPLIANCE The G7 Research Group has assessed five of the total 52 commitments on European security made by G7 members. With average compliance of 85%, G7 members had higher compliance on the subject of European security than on regional security more broadly (82%) and higher than the 76% average across all subjects. More specifically, there was 78% compliance with the commitment made at the 2001 Genoa Summit, 100% with the commitment to raise funds for the Global Partnership against Weapons and Materials of Mass Destruction made at the 2005 Gleneagles Summit, and 78% and 84% compliance with the commitments made at the 2006 St Petersburg and 2015 Schloss Elmau summits respectively. CORRECTIONS Given the limited data available, it is difficult to infer whether actions such as holding a ministerial meeting before the summit could improve compliance. However, a detailed analysis of the assessed commitments demonstrates that including specific timelines results in higher compliance. Moreover, the decrease in compliance scores from 100% in 2005 to 88% in 2006 for a commitment to pledge $20 billion for the Global Partnership suggests that shortening the timeline for a commitment might improve compliance. As compliance is not possible without commitments, the G7 should aim to translate more of its deliberations on European security into public and politically binding commitments.

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

VOTED #1 IN REGIONAL STUDIES BY OUR PEERS FOR THE THIRD YEAR IN A ROW*

Providing non-partisan insight and analysis for policymakers, civic leaders and the general public.

wilsoncenter.org years

years

*2019 Global Go To Think Tank Index Report, University of Pennsylvania

Africa Program l Asia Program l Canada Institute l Global Europe Program l Environmental Change and Security Program l History and Public Policy Program l Kennan Institute l Kissinger Institute on China and the United States l Latin American Program l Mexico Institute l Middle East Program l Polar Institute l Science and Technology Innovation Program l

PROMOTING PEACE AND SECURITY

G7 performance on

governing arms control

rms control, in particular the prevention of the proliferation of weapons of mass destruction, has been one of the G7’s core subjects since its creation in 1975. The acquisition of WMDs by both states and non-state actors such as terrorist groups in violation of the Non-Proliferation Treaty significantly challenges regional stability and international peace. At their virtual meeting on 25 March 2020, G7 foreign ministers concluded that Iran and North Korea remained two primary flashpoints. For the G7 leaders, arms control remains a topic for discussion that has been carried over from France’s presidency in 2019 and earlier. DELIBERATIONS The amount of attention that arms control has been given by G7 leaders has varied. It first appeared in 1977, when G7 leaders devoted 200 words (7%) in their communiqué to arms control.

110

Hiromitsu Higashi, research analyst, G7 Research Group, looks at the G7’s past performance in this area and identifies the main objectives for arms control – including bringing North Korea back to the negotiating table

The percentage remained below 10% – except in 1983 (19%), 1991 (23%) and 1992 (15%) – until 2002, when it rose to 1,847 words (12%) as the G7 launched the Global Partnership Against the Spread of Weapons and Materials of Mass Destruction. After that, arms control received regular, consistent attention, reaching a peak in 2012 with 4,240 words (38%), but plummeting to 447 words (3%) in 2013. It remained under 10% ever since. In 2019, only 23 words (0.3%) were devoted to arms control. COMMITMENTS From 1975 to 2019, the G7 made 349 collective, politically binding commitments on arms control, as identified by the G7 Research Group. This placed arms control in fifth place among all issue areas. There were three commitments made in 1977. The peak came in 2011, when the G7 made 44 commitments on arms control. Few commitments were made in recent years, with none made in 2019.

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

G7 performance on governing arms control, 1975–2019 100

349

collective, politically binding commitments made on arms control since 1975

197

197 5 Ra

Compliance (%)

commitments on arms control made in 2011, the highest of any year

81% Average compliance on assessed arms control commitments

Conclusions (% words)

COMPLIANCE The G7 Research Group has assessed 31 of the 349 commitments related to arms control for compliance by the G7 members. With average compliance of 81% – well above the average of 76% on all subjects – arms control has remained a priority for all G7 members in delivering on their decisions. Compliance reached an all-time high of 100% on commitments made in 2003, when the leaders issued five separate documents dedicated to the non-proliferation of nuclear weapons, one year after an all-time low on commitments made in 2002 (63%). In recent years, compliance has been relatively low. With only one commitment assessed from each summit from 2015 to 2019, average compliance was 69%. CORRECTIONS Findings by the G7 Research Group suggest a positive correlation

HIROMITSU HIGASHI Research analyst, G7 Research Group Hiromitsu Higashi is a research analyst for the G7 and G20 Research Groups based at the Munk School of Global Affairs and Public Policy at Trinity College in the University of Toronto. He joined the G7 and G20 Research Groups in his second year of undergraduate studies. His research interests focus on Japanese, Chinese and US foreign policy, in addition to his other interests in arms control and non-proliferation. Twitter @HiromitsuH  www.g7.utoronto.ca

globalgovernanceproject.org

Commitments (%)

between G7 performance on arms control and the attention this issue receives at a summit. The three summits from 2010 to 2012 – where at least 27% of words related to arms controls in each summit – produced 66 commitments in total. Average compliance was a strong 95%. There were also times where the correlation appears weak. At the 2007 summit, with 4,267 words (16.5%) on arms control, the four assessed commitments out of 38 produced compliance of 68%. Two main objectives for arms control in 2020 were the issues of preventing Iran from acquiring nuclear weapons and bringing North Korea, with its arsenal of WMDs, back to the negotiating table. During the G7 foreign ministers’ meeting, US secretary of state Mike Pompeo urged his G7 partners to join the United States in renewing sanctions on Iran. However, Japan and the European Union conveyed their desire for Iranian compliance with the Joint Comprehensive Plan of Action, from which the United States withdrew in May 2018. The G7 leaders should thus work to reach a consensus on the regional situation and find a road map to non-proliferation. As a long-standing guarantor of international peace and stability, the G7 gives the United States an opportunity to lead. 2020 — G7 USA: THE VIRTUAL YEAR

111

PROMOTING PEACE AND SECURITY

Now is the time for real results

Marcus Pleyer, president of the Financial Action Task Force, warns that COVID-19 has created the perfect conditions for fraudulent and criminal activity

hen governments and companies are at their most vulnerable, malicious forces will often strike. So it has proved with the COVID-19 crisis, which has created the perfect conditions for fraudsters, scam artists and money launderers. The Financial Action Task Force has been at the heart of efforts to contain the threat of criminals exploiting the pandemic, by sharing good practices and policy responses with governments and with the public and private sectors. The virus, however, has underlined the risks and

112

vulnerabilities of financial systems, including among G7 members. The costs of ineffective action are real. Drug traffickers, embezzlers, corrupt politicians and other criminals all use a variety of methods to clean the proceeds of their crimes. Although the G7 has repeatedly made commitments to toughen regulations to prevent money laundering, terrorist financing and proliferation financing, some countries continue to lag behind in vital areas. Even though countries have toughened up elements of their financial system, gaping regulatory holes remain. The unprecedented human and economic cost of COVID-19 must not obstruct G7 members in the fight against illicit finance. If we want to make societies safer and prevent illicit funds from fuelling organised crime and undermining the integrity of our economies, then the G7 needs to step up and set an example. WHAT CAN THE G7 DO? It is time for the G7 to reinforce its commitments to target the illicit profits of serious organised crime. As members of the FATF, the G7 members should demonstrate leadership to other members and to the wider global community, including the G20, by doing

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

MARCUS PLEYER President, Financial Action Task Force Dr Marcus Pleyer assumed the position of president of the Financial Action Task Force on 1 July 2020 for a two-year term. He serves as deputy director general in Germany’s Ministry of Finance, and represents Germany on the boards of the Development Bank for Agribusiness and the Foundation for Financing the Disposal of Nuclear Waste. He served as vice-president of the FATF from July 2019 to June 2020, and led the German delegation from 2016 to 2019. Twitter @FATFNews  www.fatf-gafi.org

the following: • Effectively regulate and supervise both the financial and non-financial sectors – especially lawyers, accountants and trust and company service providers – because they are vulnerable to money laundering and tax evasion. • Set up and expand public-private partnerships, to share crucial information, so that the billions spent on compliance by banks start to generate real results. • Ensure the rapid availability of information on beneficial ownership, i.e. the real people hiding behind anonymous shell companies, frequently used to launder the proceeds of crime, fund terrorism and evade sanctions. • Ensure law enforcement agencies have the skills and resources to conduct financial investigations, and to seize and confiscate the proceeds of crime, including through international cooperation. The G7’s work in these areas is crucial as criminals adapt to a drastically changed world. Law enforcement agencies have reported rises in online fraud, cyber fraud and the use of cryptocurrencies to launder illicit proceeds. The G7 should prioritise fully implementing FATF standards at home to combat these threats, and help other countries effectively implement them too. globalgovernanceproject.org

HOW THE FATF CAN HELP The FATF has ensured countries have the rules and tools to tackle money laundering and terrorist financing. The G7 needs the political will and capacity to use them in full. Under its German presidency, the FATF is looking to support the digital transformation of private and public sector tools to more efficiently detect illicit finance, to understand and combat environmental crime by following illicit financial flows connected to it, and to tackle the increasing scourge of ethnic- or racist-driven terrorism, to follow the illicit funds linked to far-right ideology. It will also prioritise work on the links of illicit arms trafficking and terrorist financing and migrant smuggling, one of the G7’s priority areas. The G7 has rightly focused on the issues of terrorism and proliferation. The FATF has led global efforts to combat the financing fuelling these two threats and maintained North Korea and Iran on its list of “high-risk jurisdictions subject to a call for action”. Cyber risks are a growing threat to the stability and integrity of the financial sector. The FATF has issued the first global standards to prevent the misuse of cryptocurrencies for money laundering and terrorist financing. More generally, it clarified that the revised FATF standards also cover so-called stablecoins. The FATF will continue to review and monitor virtual assets to assess the risks and opportunities presented by this developing technology. As threats emerge, the FATF will remain vigilant. G7 members play a crucial role in ensuring the integrity of the international financial system – which is only as strong as its weakest link. They need to show leadership, live up to their commitments and set an example in the fight against money laundering as well as terrorist and proliferation financing. By working together, we can combat illicit finance and provide a basis for strong, sustainable and inclusive growth for all. 2020 — G7 USA: THE VIRTUAL YEAR

113

PROMOTING PEACE AND SECURITY

Globalisation reimagined Close cooperation, addressing the challenge of military readiness and deterrence, and collaboration and innovation between adversaries are three ways re-globalisation could work. Jane Harman, director, president and CEO, Wilson Center, shares how 114

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

recent Washington Post op-ed argued that as the world confronts COVID-19, one cure is a push for re-globalisation. Instead of sticking with protectionism, the author called for “a renewed integration of our world that centres on the well-being of its people”. The op-ed was written not by Angela Merkel, or Justin Trudeau, or Emmanuel Macron. In fact, it was not written by any citizen of a G7 country, but by King Abdullah II of Jordan. Globalisation certainly is not perfect, but the pandemic has taught us the tragic lesson that going it alone does not work either. Not with political instability, terrorism, nuclear proliferation, environmental change and other global challenges looming. Perhaps the G7 should take a page from King Abdullah’s book. Some countries, Canada included, never turned their backs on global cooperation. But for the sceptics and naysayers, this moment is an indispensable reminder that the best path to global security is through global cooperation. Here are three ways re-globalisation could work. First, close cooperation between friends. Officials from the United States and Canada like to point out that their undefended land border is the longest in the world. That makes it even more impressive that, while confronting COVID-19, the North American allies have managed to close the border to non-essential travel while continuing the flow of critical food and medical supplies in both directions. An estimated 200,000 people and $1.7 billion Third, collaboration and innovation even between adversaries. in goods crossed the border daily before the pandemic. Now, In 1956, a year before the Sputnik launch, Soviet and American Canada’s Border Services Agency says that in early April the scientists worked together to confront the great medical challenges number of US visitors dropped by 87% at land ports and 96% of their day: polio and smallpox. At the height of the Cold War, US at airports compared with the same period last year. At the and Soviet diplomats made an introduction between American same time, commercial traffic was down 24% compared to last virologist Albert Sabin and Russian scientist Mikhail Chumakov. year – still significant, but not enough to Sabin had created an oral polio vaccine, but disrupt important supply chains. Although lacked the resources to conduct large-scale the joint border restrictions have been testing. Chumakov had the means to extended, international coordination produce it at scale and successfully Director, president and CEO, Woodrow allows a middle path between total administer it to millions of Russians. While Wilson International Center for Scholars lockdown and careless reopening. most people remember Jonas Salk as the man who discovered the vaccine, Sabin and Jane Harman is an internationally SHIFTING STRATEGIES Chumakov are to thank for eliminating the recognised authority on US and global Second, addressing the challenge of military disease in much of the world. security issues, foreign relations and readiness and deterrence. Military postures A decade later, American physician lawmaking. She was a nine-term member and strategies are shifting as some soldiers Donald Henderson led an effort at the World of the US Congress, serving on many are called home to enforce curfews and Health Organization to administer the security committees, including armed transport supplies, and others are ordered smallpox vaccine around the world, using services, intelligence and homeland to freeze in place wherever they are. For G7 a Soviet method for preserving the vaccine security, in the House of Representatives. members, and by extension for the North in harsh environments. The result was the Drawing upon a career that has included Atlantic Treaty Organization, this will eradication of a 3,000-year-old disease that service as President Jimmy Carter’s have worrying consequences for military during the 20th century killed three times Secretary of the Cabinet and innumerable readiness and deterrence. This year’s as many people as all the century’s wars diplomatic missions, she is a member US-Europe exercise was meant to be the and armed conflicts combined. COVID-19 of the Defense Policy Board and the largest deployment of US troops to Europe is not nearly as deadly and should not take Homeland Security Advisory Committee. in 25 years, demonstrating the ability to as long to cure, but the lessons of history She also serves surge in support of NATO allies during a demonstrate that the future of global on the Executive crisis. Instead it has taken place on a much security depends less on gunpowder and Committee of smaller scale. While members bicker about more on soft power. the Trilateral defence spending, the far more important Securing our future involves reimagining Commission and the question is how the alliance will reimagine globalisation. It requires striving for the Advisory Board of its deployments, policies and protocols best of North American coordination, the Munich Security so it can remain agile while still deterring transatlantic military cooperation and Conference. threats. In the meantime, the allies should international collaboration on health share best practices as they deploy troops to challenges that imperil us all. This is the deliver critical medical equipment, rapidly effort that G7 leaders should support. It Twitter @TheWilsonCenter build hospitals and support local law should not take King Abdullah II to remind  wilsoncenter.org enforcement. us of that.

COVID-19 is not nearly as deadly as smallpox and should not take as long to cure, but the lessons of history demonstrate that the future of global security depends less on gunpowder and more on soft power”

JANE HARMAN

globalgovernanceproject.org

2020 — G7 USA: THE VIRTUAL YEAR

115

PROMOTING PEACE PEACE AND SECURITY AND SECUTIRY

Interview with Mara Karlin What are the prospects for ending America’s and its allies’ longest war in Afghanistan? Afghanistan will play an increasingly de minimis role in US national security interests. The drag on resources, time and attention has been substantial. The American public does not seem terribly interested. The dilemma for US policymakers will be how to establish a sustainable and effective level of engagement. The increasingly moderate state of Afghanistan may well take some steps backwards without substantial western support. The international community has to determine how closely to watch Afghanistan without having it consume too much attention and resources while keeping an eye on an increasingly dispersed terrorist threat in Africa, across the Middle East and in South East Asia. What are the lessons of Afghanistan? One, as long as democracies do not have to pay much blood or treasure, they will continue to be largely disinterested in the activities of their militaries. Two, our paradigm for understanding the phases of conflicts is superficial and profoundly problematic. For the US military, the paradigm of the pre-war phase, the hot war phase and the post-conflict phase clearly is not working. Three, despite substantial evidence that whole-ofgovernment approaches to insurgencies and terrorism are more productive and effective, they are nevertheless tremendously difficult to implement.

Editor John Kirton asks Mara Karlin, director of strategic studies, Johns Hopkins School of Advanced International Studies, what lessons can be learned from recent conflicts and how the G7 can act to prevent future wars

What lessons have been added by the wars in the Middle East? Syria shows that even the most operationally effective partners can be strategically problematic. In Libya, the European allies could not deliver early in the conflict in line with US expectations. This, in particular, inhibited any meaningful and early US response to Syria. It made many in Washington question the impact of using force. What about Ukraine in 2014? Russia’s invasion of Crimea was a reminder of how meaningful the information war is. It was hard to get clear information about who was 116

G7 USA: THE G7VIRTUAL USA: THEYEAR VIRTUAL — 2020 YEAR — 2020 globalgovernanceproject.org

involved, what were they doing and why. It was a beautiful way to flummox a democratic system. Just before this, there was Chinese misbehaviour in the South and East China Seas. I fear that the efficacy of these actions has led some to romanticise authoritarianism and to focus on profound frustration with democratic decision-making and accepted rules of war. Are there lessons in how the situation in the Baltics is unfolding? There is a remarkable level of investment and refocusing by members of the North Atlantic Treaty Organization on the threats posed by Russia since it annexed Crimea in 2014: increased investment, war-gaming and strategic dialogues. But the very real question still exists: who is NATO willing to defend, where and how? How well has the United States learned these lessons? It is trying hard. It took a year or so after Crimea for the national security apparatus to accept that Russia had to be high on that priority list. It has increasingly acknowledged that the priorities need to be China, Russia and then other threats. It is difficult to determine how best to implement that shift. We have not seen the substantial capability investment or meaningful posture changes required to do so effectively. How well have the United States’ G7 allies learned the lessons? Germany has done so slowly, not for lack of political leadership but more due to a lack of domestic support to actively deal with these threats. Britain’s last strategic defence and security review was a marked improvement, and demonstrated a desire to invest in its military and to rebalance the force structure. Unfortunately, that has not come to fruition, courtesy of Brexit.

understandably so. Now it was making that critical shift. This has not been helped by President Trump’s berating allies. I am curious to see who ends up stepping up to facilitate the shift.

Much insecurity and instability in recent decades stem from dysfunctional systems where people cannot trust their governments to deliver”

What is needed now from the G7 members to prevent war? It’s complicated! The United Kingdom is flailing. The United States has been plagued by profound domestic disarray. Italy, Germany and Japan have many challenges. The impact of COVID-19 is unclear, but surely profound. That said, the G7 is an overwhelmingly functional group. It is small enough to play a meaningful leadership role. G7 leaders need to be creative and innovative. Simply put, not enough capable institutions are stepping up at this strategic inflection point – one that only grows more imperative given the implications of COVID-19. Is it time to bring Russian president Vladimir Putin back to the G7? It is hard to see the Russians playing a positive and productive role. Nevertheless, it might be useful to engage them superficially to get an understanding of their views.

The French have taken important steps in Mali. They are a great example of the United States partnering with a capable ally. US operational assistance has been crucial, but there is a question as to whether such support will continue. The French have adopted responsibility for swathes of not-very-well governed areas. Failing to support them will have unhelpful repercussions.

How can the G7 leaders advance global security? Much insecurity and instability in recent decades stem from dysfunctional systems where people cannot trust their governments to deliver. The G7 has an important role in facilitating stability across the Middle East and North Africa. These are profoundly economically underdeveloped countries with heavily corrupt, flawed systems. They end up having outsized effects regionally and beyond. The G7 can pick a handful of countries and help transform their systems. Lebanon springs to mind.

How well has NATO adapted? Compared with 10 or 15 years ago, it is making progress in thinking about challenges posed by Russia and China. So much of NATO discussions since 2001 focused on Afghanistan – and

MARA KARLIN Director of Strategic Studies, Johns Hopkins School of Advanced International Studies Mara Karlin is director of strategic studies at the School of Advanced International Studies at Johns Hopkins University. She is also a nonresident senior fellow at the Brookings Institution. Karlin has served in national security roles for five US secretaries of defence, and most recently served as the deputy assistant secretary of defence for strategy and force development. She is the author of Building Militaries in Fragile States: Challenges for the United States. Twitter @SAISHopkins

 www.sais.jhu.edu

globalgovernanceproject.org globalgovernanceproject.org

2020 — G7 2020 USA: —THE G7 USA: VIRTUAL THE VIRTUAL YEAR YEAR

117

PROMOTING PEACE AND SECURITY

Interview with Carl Gershman

There is an ongoing and sinister battle for narratives that is endangering our democratic structures, as Carl Gershman, president, National Endowment for Democracy, explains to editor John Kirton How severe is the threat of foreign interference in democratic elections? It’s not only serious and severe – it’s growing. It takes the form of cyberattacks and disinformation operations. There was a time when election monitoring meant upholding electoral standards. Now it means dealing with external threats that did not exist before. 118

How have democratic countries been working to respond? So far there have been limited initiatives. The European Union’s East StratCom Task Force focuses on disinformation, which intensifies in pre-election periods. At the 2018 Charlevoix Summit, the G7 called for a Rapid Response Mechanism to strengthen the capacity of democracies to deal with these

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

problems. The current COVID-19 crisis could shake the complacency about the security of democracy. Josep Borrell, the EU’s high representative, talks about a “battle of narratives” between democracy and authoritarianism. The beginning of a response to this problem by the democratic countries is to recognise that such a battle actually exists. What successes have the existing measures had before the COVID-19 crisis struck? The most interesting case is Taiwan. Before its election in January 2020, it was subject to 30 million cross-border cyberattacks a month. With the help of civil society, Taiwan has become effective in responding to Chinese trolling operations modelled on the Russian Internet Research Agency in St Petersburg that tried to manipulate the 2016 US presidential election. Such operations now franchise their interference by paying local groups to spread disinformation on social media, making it look like the messages are indigenous. Taiwan offers a model for how to respond to these problems. Of course, it faces an existential threat from China and so has marshalled the political will to defend itself. But these problems are not unique to Taiwan, and other democracies should study the Taiwan model. How is the National Endowment for Democracy working to help? We work with international organisations and networks to promote greater cooperation and information sharing between government and civil society. We help groups such as the Doublethink Lab in Taipei and Proekt in Moscow, which has exposed Russian interference in elections in Africa and Latin America, as well as a group called the Insider, which focuses on Russian interference in Europe. CNN reported in early 2020 on the Internet Research Agency’s operation in Ghana called Eliminating Barriers for the Liberation of Africa that employed Ghanaians, who didn’t know they were working for Russia, to send racist disinformation to the United States to stoke racial division and undermine the cohesiveness of American society. The EBLA compound was raided by Ghanaian security services, after which Facebook and Instagram took down some platforms. It’s very important that internet companies do not allow themselves to be used by such operations. How are G7 efforts to respond to COVID-19 being exploited? The East StratCom Task Force reported on a coordinated disinformation campaign by state-backed actors alleging the pandemic was caused by minorities and that the European Union is on the verge of collapse. China has tried to promote the idea that COVID-19 was started by the United States, even though it’s well known that it started in Wuhan as early as November 2019. Indeed, China violated the International Health Regulations by allowing millions to leave the city for two months before it was locked down in January. Such propaganda, as well as Chinese efforts now to share globalgovernanceproject.org

CARL GERSHMAN President, National Endowment for Democracy Carl Gershman is president of the National Endowment for Democracy, a private organisation supported by the US Congress with the mission to strengthen democratic institutions around the world through non-governmental efforts. Previously, he was senior counsellor to the United States Representative to the United Nations, and also alternate representative of the United States to the UN Security Council. He also served as lead consultant to the National Bipartisan Commission on Central America. He has been a resident scholar at Freedom House and executive director of Social Democrats, USA.

Twitter @NEDemocracy  www.ned.org

humanitarian aid, are part of this battle of narratives – and also a cover-up. How can we respond to disinformation campaigns about COVID-19? Countries are understandably concerned with the internal crisis caused by the pandemic. But they cannot neglect the battle of narratives. How can G7 leaders help? G7 mechanisms such as the Rapid Response Mechanism should be used to develop a response. There needs to be greater vigilance about the flow of under-the-table funds across borders to groups and political parties, as well as the spread of disinformation and hate speech. Sharing best practices on civic education campaigns to promote media literacy, such as those in Estonia and Finland, is also important. In addition, regional and other bodies should deploy cybersecurity teams to assess risk and provide capacity for election authorities to defend against hacking and identify vulnerabilities in the adoption of electronic electoral technologies. The G7 should also call for transparency of electorally related data on social media platforms regarding political ads and bots aimed at manipulating political opinion. And it should call for greater cooperation between government and civil society in defending democratic elections, looking at the Taiwan model. The most interesting investigative work is coming from civil society, and the G7 should study that. Should G7 ministers responsible for digitalisation and public safety meet? Absolutely! That should be done as a matter of course. This is an unusual moment. People are coming to realise that democracy is under threat – it’s not just electoral interference but also systematic efforts to sow distrust and increase political and social polarisation. This crisis can increase G7 cooperation and also help create the political will to act. But meaningful action will require careful preparation, and there needs to be real cooperation, not just declarations. This interview took place on 13 April 2020 2020 — G7 USA: THE VIRTUAL YEAR

119

PROMOTING PEACE AND SECURITY

Interview with David Beasley

Food for thought

In what ways has the rapid spread of COVID-19 affect the World Food Programme’s work? We are facing a hunger pandemic, a crisis of hunger that could reach biblical proportions. We estimate that the number of people facing a crisis level of hunger could rise from about 150 million to 270 million by the end of this year. This level isn’t just people being simply hungry. These are people who do not know where their next meal is coming from, who literally are on the brink of starvation. And it is hitting every lowor middle-income country where we work. Spikes of hunger are already evident in West and Central Africa and Southern Africa, and the increase is very large – about 270% – in Latin America. It’s nothing short of catastrophic. Even right now, 30 million people depend on the WFP just to stay alive. They have no other 120

access to food. If COVID-19 leads to funding shortages for the WFP or creates other reasons that prevent us from reaching those people, 300,000 people could starve to death every single day over a three-month period. In a worst-case scenario, we could be looking at famine in about three dozen countries. In fact, by August 2020 in 10 countries we already had more than one million people per country on the verge of starvation. To meet this challenge, we need the largest humanitarian response in history. We are gearing up to help as many as 138 million people, about 40 million more than we helped in 2019. But just to meet this unprecedented crisis requires nearly $5 billion over the second half of the year.

Some 617 million children in schools around the world are falling short of minimum proficiency in reading and mathematics

How are violent conflicts and resulting mass migration flows in countries such as Syria creating new demands for the WFP’s services, and challenges to its ability to meet those demands? Conflict is the biggest factor in the rise of

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

photos: shutterstock.com

David Beasley, executive director, World Food Programme, explains to editor John Kirton the crucial role the organisation plays in ensuring people worldwide have access to food – and the life-threatening challenges brought to supply chains by COVID-19 and enduring conflicts

G20 Research Group G20 Research Group The G20 Research Group is a global network of scholars, students and professionals in the academic, research, business, non-governmental and other communities who follow the work of the G20 leaders, finance ministers and central bank governors, and other G20 institutions. It is directed from Trinity College, the Munk School of Global Affairs and Public Policy and the Department of Political Science at the University of Toronto, which also host the G7 Research Group and the BRICS Research Group. Our mission is to serve as the world’s leading independent source of information and analysis on the G20. As scholars, we accurately describe, explain and interpret what the G20 and its members do. As teachers and public educators, we present to the global community and G20 governments the results of our research and information about the G20. As citizens, we foster transparency and accountability in G20 governance, through assessments of G20 members’ compliance with their summit commitments and the connection between civil society and G20 governors. And as professionals, we offer evidence-based policy advice about G20 governance, but do not engage in advocacy for or about the G20 or the issues it might address. Publications include:

Accountability for Effectiveness in Global Governance,by Marina Larionova and John Kirton, eds. (Routledge)

China’s G20 Leadership, by John Kirton (Routledge)

The Global Governance of Climate Change: G7, G20 and UN Leadership, by John Kirton and Ella Kokotsis (Routledge)

G20 Governance for a Globalized World, by John Kirton (Routledge) (also available in Chinese)

The G20: Evolution, Interrelationships, Documentation, by Peter I. Hajnal (Routledge)

Background Books and eBooks For each summit the G20 Research Group produces a “background book,” available free of charge in print and online, outlining the perspectives of the leaders and key stakeholders and offering analysis by leading global experts. It also works with GT Media on the Global Governance Project to produce related analysis and publications. Compliance Assessments For each summit the G20 Research Group, working with the Russian Presidential Academy of National Economy and Public Administration (RANEPA), assesses each G20 member’s compliance with the previous summit’s priority commitments. Cumulative compliance assessments are compiled on key issues. Pre-summit Conferences With local partners in the country hosting the summit along with a core group of international partners, the G20 Research Group produces or participates in conferences in the lead-up to each summit analyzing the institutional workings of the G20 and the issues, plans and prospects for the summit. Field Team The G20 Research Group sends a field team to each summit and some ministerial meetings to assist the world’s media, issue its own reports

and analyses, allow students to witness world politics at the highest level at close hand, and collect the documents and artifacts uniquely available at the summit, to build the G20 archives at Trinity College’s John Graham Library and online at the G20 Information Centre website. G20 Information Centre @ www.g20.utoronto.ca The G20 Information Centre is a comprehensive permanent collection of material available online at no charge. It complements the G7 Information Centre, which houses publicly available archives on the G20 as well as the G7 and G8, and the BRICS Information Centre, and the Global Governance Project at g7g20summits.org. Speaker Series The G20 Research Group hosts occasional speakers in its efforts to educate scholars and the public about the i ssues and workings of the G20. Past speakers have included senior officials of the International Monetary Fund and the World Bank and scholars and policy makers from Mexico, Turkey, China, Australia, Brazil, Italy and elsewhere. Research The G20 Research Group conducts research on the causes of summit and system performance and the G20’s relationship with the G7, BRICS, United Nations and other formal multilateral institutions.

G20 Research Group Munk School of Global Affairs and Public Policy, 1 Devonshire Place, Room 209N, Toronto, Ontario M5S 3K7 Canada Telephone 1-416-946-8953 • E-mail g20@utoronto.ca • Twitter @g20rg www.g20.utoronto.ca

PROMOTING PEACE AND SECURITY hunger over the past three years. Of the more than 900 million people in the world facing hunger, 60% live in conflict-affected countries. These are places such as Syria and Yemen, where seemingly unending war is not only driving up hunger but also setting back human progress for generations. The worsening conflicts in South Sudan and the Central Sahel were already likely to increase hunger in 2020 even before COVID-19. United Nations secretary-general António Guterres has called for a global ceasefire, and I must say that of all the actions needed, ending wars would immediately make the most difference in our quest to end hunger. How is food security now harmed by outbreaks of famine, natural disasters and pests such as locusts? There have been no declared famines. But the other issues you cite are major contributors to food insecurity. And then adding COVID-19 to the mix creates a perfect storm that threatens to become a global humanitarian catastrophe. In what ways is affordable, accessible, appropriate, nutritious food essential for human health and development, in ways that support the Sustainable Development Goals? SDG 2 – zero hunger – and SDG 17, which is sustainable development through partnerships, are in my opinion the critical linchpins to all the SDGs. A country cannot develop well without being able to feed itself. Children cannot grow, their brains do not develop enough to learn, and then the entire country is set back in its effort to become more prosperous. Education, economic growth, resilience against the impact of climate shocks – improvement in all these areas comes down to food security.

135m were on the brink of starvation at the end of 2019, increasing to an estimated 265m people as a result of COVID-19

countries could face famine in the worst-case scenario

60%

of people facing hunger live in conflict-affected countries

it’s that we are all connected and the world is only as strong as its weakest health system. As hard as the pandemic is hurting developed countries, it is hurting already vulnerable people the hardest. We need to help them where they live now, so they don’t feel forced to migrate and strain other economies even more. People don’t want to leave home, but they’ll do what it takes to find food for their families. One thing many people do not know about the WFP is that we are the logistics arm of the humanitarian world. That’s even more important now, with limits on cross-border travel in some areas and the steep decline in commercial air travel. That’s why we’re working with the G7 leaders and others to also obtain money to set up a network of logistics hubs and transport systems to keep humanitarian supply chains moving around the world. These hubs provide field hospitals and medical evacuations to the front-line humanitarian and health workers, as needed and strategically. In the big picture, I want to say that in my three years at the WFP I have often had to reach out to G7 leaders to help the most vulnerable around the world. They’ve always taken my call and they’ve stepped up to help. Now, more than ever, we need that generosity to respond to this unprecedented crisis. I believe they will, so we can ensure that those who stand to lose the most at least have a chance at survival.

How can G7 leaders best help? The G7 leaders represent countries that donate the vast majority of the WFP’s funding, and they are already strong supporters of the work we do. We know that all of them are working hard to get economic activity going back in their home countries. And we are working hand in glove with them to respond to this crisis. If the pandemic has taught us anything,

DAVID BEASLEY Executive director, World Food Programme David Beasley was appointed in 2017 as executive director of the United Nations World Food Programme, which won the 2020 Nobel Peace Prize. In a public service career that spans four decades, he has worked across political, religious and ethnic lines to champion economic development, humanitarian assistance, education, and intercultural and interfaith cooperation for the most vulnerable people across the globe. He served as governor of the US state of South Carolina from 1995 to 1999. He was first elected to public office at the age of 21 as a member of the South Carolina House of Representatives. Twitter @wfpchief  www.wfp.org

122

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

From Routledge… Social Closure and International Society

The G20

Tristen Naylor

Peter I. Hajnal

Evolution, Interrelationships, Documentation, Second Edition

Status Groups from the Family of Civilised Nations to the G20 An examination of how actors compete for a seat at the table in the management of international society and how that competition stratifies the international domain.

This revised and updated edition presents detailed analysis of the history and current state of the G20, and the challenges it faces.

Accountability for Effectiveness in Global Governance Edited by John J. Kirton and Marina Larionova

The Global Governance of Climate Change G7, G20, and UN Leadership

John J. Kirton and Ella Kokotsis

This book examines how well central global institutions comply with their commitments and how their effectiveness can be improved through measures to deliver better results.

An analysis of the regimes for controlling global climate change that demonstrates the effectiveness of the G7 and G20 as an alternative to the United Nations.

Also available as eBooks: visit www.taylorfrancis.com

A STRONGER G7 SYSTEM

In the face of a global pandemic, the G7 this year will hark back to its erstwhile status as a crisis group – but it must still address the pressing issues that weave an unbroken thread through the annual summits, writes Karoline Postel-Vinay research professor, Sciences Po, Paris

Return of the crisis group 124

G7 USA: THE VIRTUAL YEAR — 2020 globalgovernanceproject.org

he world in which the 2019 G7 summit took place seems far away. Major crises were unfolding in the international community in the background of the Biarritz meeting: a US-China trade war, the burning Amazon rainforest, escalating military tension in the Strait of Hormuz, to name a few. Most were linked to long-standing, complex issues such as climate change, and most remained present throughout 2020. Yet the pandemic that has unfolded globally since January 2020 constitutes a ‘meta crisis’ that either overshadows pending issues, such as nuclear weapons dissemination or terrorism, or amplifies others led by economic and social inequalities and sustainable development. The 2020 G7 is thus returning to its ‘crisis group’ status that defined it when the United States, in 1973, helped launch the informal meeting of the ‘group of four’ in response to the oil crisis. The G8 (with Russia from 1998 until 2014) regained that status amid the financial crash in 2008, which led to the establishment of the G20 summit as the premier forum for international economic cooperation. The significance of the current health crisis and its many ramifications will need to be assessed in the long run. Yet the extraordinary circumstances in which the G7’s 2020 meetings took place, starting with its emergency videoconference on 16 March, indicates the momentous challenges now confronting the G7 leaders. RESTORED COMMON INTEREST The pandemic and its immediate impact have dominated the leaders’ agenda. But as the G7 must ensure some continuity in its yearly summits – not least because other pressing issues unrelated to COVID-19 still require global coordination – the group will have to address the questions discussed at the Biarritz Summit in 2019. Its achievements and shortcomings must be taken into account in order to lay the foundations for a constructive meeting. Some commentators consider Biarritz’s major success to be restoring momentum after the confusion that marked the end of the 2018 Charlevoix Summit. A clear commitment to cooperate among the seven major democratic powers is crucial for any significant input to global governance, and the 2019 French presidency was so

globalgovernanceproject.org

the goodwill demonstrated at Biarritz should prevail in some measure.

The pandemic that has unfolded globally constitutes a ‘meta crisis’ that either overshadows pending issue, such as nuclear weapons dissemination, or amplifies others led by economic and social inequalities determined to avoid a disappointing conclusion that it lowered expectations – giving up the idea of a collectively agreed statement – while securing enough grounds for unanimous agreement. A minimal final declaration was eventually produced, but more importantly a sense of common interest and trust was re-established among the leaders. This is essential when the G7 has once again become a crisis group. The leaders’ monthly videoconferences in March and April to respond to the pandemic were a positive indication that, despite strategic differences,

HEALTH AS A GLOBAL GOOD Other progress made at Biarritz is also noteworthy. The converging views on global health, and specifically the decision to increase financial support for the Global Fund to Fight AIDS, Malaria and Tuberculosis, was an important reminder that health is not only a concern for national governments but a global common good as well. The relevance of that decision is acutely obvious today. Other decisions must be underlined, such as a G7 and Africa Partnership. The commitments on digital transformation and women’s social and economic empowerment are relevant and likely to become ever more pressing. The numbers of COVID-19 cases recorded by many African countries are still relatively low compared with data coming from Asia, Europe and North America, but rising fast. Global health and Africa experts, along with the World Health Organization, have warned of the catastrophic and multidimensional impact the pandemic could have here. This should be high on the agenda. Based on its shared values, the G7 could propose a strong and coherent contribution to Africa’s response to the impending crisis. MAKING A DIFFERENCE Such a contribution, and the task of addressing the unfolding global economic crisis – a task that in all likelihood will be handled better by the G20 – falls precisely within the area where the G7, because of its size and its relative homogeneity, can make a difference.

KAROLINE POSTEL-VINAY Research professor, Sciences Po, Paris Karoline Postel-Vinay is a research professor at Sciences Po, Paris, and a senior research fellow at Sciences Po’s Centre for International Research. Her research areas are international relations theory and analysis and North-East Asian politics. She has published extensively on global governance issues, and among others a book on the G20 (Le G20, laboratoire d’un monde emergent) translated into English and Spanish.

2020 — G7 USA: THE VIRTUAL YEAR

125

Increasing the impact of the

Jessica Rapson, senior researcher, G7 Research Group, looks at the data behind G7 commitment success and highlights the measures that can increase the impact of the group on global policymaking

126

better address the pressing global issues that the G7 seeks to resolve. Using data from 4,369 unique commitment assessments produced between 1975 and 2017, the G7 Research Group has identified two key predictors associated with G7 commitment success, even when economic factors are adjusted for. Specifically, holding meetings with relevant ministers before G7 summits and producing a greater number of commitments at the summits are associated with higher compliance on commitments made. Using each G7 member’s commitment outcomes for 537 individual commitments (n [sample size] = 4,369), 13 variables were assessed. They included features

time on compliance score (n = 4,369)

Compliance score

n times of global crisis, G7 members have come together to combine their considerable resources and better coordinate policy responses. The 5,525 collective commitments made at past G7 summits, as identified by the G7 Research Group, reflect this sensitivity to major world events. The G7’s response to the COVID-19 pandemic will likely result in numerous additional commitments to fund vaccination research, pass stimulus packages and bolster medical support. With an estimated success rate of only 76% compliance with past G7 commitments, efforts are needed now more than ever to ensure that these commitments are met. It is thus important to understand how commitment outcomes can be improved to

Figure 1: Effect of ministerial

Ministerial time

G7 USA: THE G7VIRTUAL USA: THEYEAR VIRTUAL — 2020 globalgovernanceproject.org YEAR — 2020 globalgovernanceproject.org

Mean compliance (for a given country and summit)

A STRONGER EMPOWERING WOMEN G7 SYSTEM 1 0.75 0.5 0.25 0 -0.25 -0.5 -0.75 -1 0

100

150

200

250

300

350

400

Total number of commitments

associated with gross domestic product, the total number of commitments made at the summit, the number of same-issue commitments made at the summit, whether a same-issue ministerial meeting was held that year, the binding level of the commitments, whether the commitment was related to trade, and whether the commitment mentioned a specific date, the United Nations or developing countries.

↑ Figure 2:

Effect of total number of commitments on G7 compliance (n = 299)

MINISTERIAL MEETINGS On occasion, relevant ministers from G7 members meet to discuss the specifics of policy initiatives being proposed at G7 summits. It was found that commitment success was significantly higher for commitments that were made following a ministerial meeting on the same subject as the commitment. That is, on average and holding all other variables accounted for constant, commitments where a relevant ministerial meeting was held before the G7 summit had success rates 4.5% higher than those where no relevant ministerial meeting was held at all (see Figure 1). This is significant at the 1% level (p [probability] < 0.000). Compliance outcomes when same-subject ministerial meetings were held after the summit were not found to be significantly different from when no such meetings were held.

JESSICA RAPSON Senior researcher, G7 Research Group Jessica Rapson is a senior researcher at the G7 and G20 Research Groups and a Master of Public Policy student at the Munk School of Global Affairs and Public Policy in the University of Toronto. She is also a researcher at the Policy, Elections and Representation Lab. Her research focuses predominantly on environmental, economic and evidence-based policy. Twitter @g7_rg  www.g7.utoronto.ca

globalgovernanceproject.org

NUMBER OF COMMITMENTS The total number of commitments made at G7 summits has varied from 10 made at the 1976 San Juan Summit to 355 at the 2015 Schloss Elmau Summit. The relationship between the total number of commitments produced at a given summit and the commitment outcomes for each G7 member with any specific commitment from that summit is convex (see Figure 2). On average and holding all other variables accounted for constant, as the number of overall commitments made increases, commitment success rates increase until a maximum success rate is reached at 130 commitments. After this point, additional commitments seem to provide diminishing returns for commitment success. This is significant at the 5% level (p = 0.034). RECOMMENDATIONS Holding meetings with relevant ministers before G7 summits and producing a greater number – up to 130 – of commitments at the summits are both associated with higher commitment success. This success may be because ministerial meetings help to enhance information sharing and policy coordination, while higher numbers of overall commitments draw attention to the importance of goal setting at G7 summits. Caution must be taken with inferring a causal relationship between the effects of these two actions, as treatments were not randomly assigned. The low percentage of variance explained by the variables included in the model (approximately 7%) should also be noted. Despite potential confounds and the seemingly low explanatory power of the model, the results provide some empirical evidence to suggest that holding meetings with relevant ministers before G7 summits and increasing the focus on commitment making may be effective for increasing commitment success, thus justifying their use as a tool to increase the efficacy of the G7. Data and analysis for this article can be found at www.github.com/rapsoj/g7-compliance. 2020 — G7 USA: THE VIRTUAL YEAR

127

Your Your haven haven to do to do nothing. nothing. Or Or absolutely absolutely everything. everything.