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Editorial: The Importance of Failure of G7 Summit to Global Trade

Port Wings, 20 June 2018:

The G7 summit ended in farce and a renewed threat of trade war as US President Donald Trump rejected an attempt to write a consensus statement and bitterly insulted the Canadian host.

Just minutes after a joint communique that had been approved by the other leaders of the Group of Seven allies was published, Trump launched a Twitter broadside from aboard Air Force One, a AFP report said.

With all the parties ready for the shadow economic war, the summit of the Group of Seven (G7), the world’s richest countries, had to end in an unusual manner.

The summit underlines the straining international ties between the US and EU. Although German Chancellor Angela Merkel has come forward with mediation efforts, she has also opined that it was better to make public the differences with America. French president Emmanuel Macron is of the view that the six nations should go ahead by themselves and adopt policies and strategies in emergency situations.

The list of countries with the largest trade surplus with the United States is led by China, which exports $375 billion more than it imports. It is followed, very far away, by Mexico ($71 billion), Japan (69 billion), Germany (65 billion), Vietnam (38 billion), Ireland (38 billion), and Italy ($31 billion).

The main characteristic of G7 summit is the joint statement which describes the policy shifts to be generally adopted on economic issues.

Contrary to the norm, what was issued was a joint statement of six countries which excluded USA.  It sharply criticizes USA’s international relations and economic policies.  It was not bonhomie but differences between America and alliance nations that were constantly echoed before and after summit.

Besides trade matters, on several other issues including climate change, relations with Iran, Israel-Palestine relations and Russia’s re-entry, disagreements were laid bare.  Trump left prematurely even before the summit ended, and without showing keenness on any bilateral talks or consensus efforts and also ordered the officials not to sign the joint statement. It was the understanding that there would be talks as well as a solution for the slapping of tariffs on steel and aluminum imports from European Union (EU) and Canada that was shattered through Trump’s arrogant walk out. The EU has now realized that America, led by Trump who is unable to talk with other political leaders in a language of mutual respect, cannot be trusted again. Trump’s remarks on Twitter about Canada and Prime Minister Justin Trudeau hinting at the ‘poverty’ in the conduct of the summit, was utterly humiliating.

In short, EU believes that the latest international approaches and internal-business policies of USA undermine Europe both politically and economically. The economic sanctions announced by the US on Russia pose a threat to the latter’s gas pipeline to Europe and may lead to energy crisis for them. Similarly, if the sanctions on Iran are resumed, then it is Eruope’s non-oil business worth 130 billion that will be affected.  What was in display at the G7 summit was Europe’s conviction that if Europe – already with weaker power equations post-Brexit – backs Trump’s autocratic decisions, it would be weakened economically too. Such concern over Europe turning politically and economically weak was also evident in the detailed statement by EU President Donald Tusk.

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