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G-7 leaders come together on global minimum tax, Democratic ideals

President Biden spoke with French President Emmanuel Macron during the final session at the G-7 summit in Carbis Bay, England on Sunday.
President Biden spoke with French President Emmanuel Macron during the final session at the G-7 summit in Carbis Bay, England on Sunday.Doug Mills/NYT

As the leaders of the world’s wealthiest nations wrapped up their first in-person summit since the outbreak of the pandemic, they released a joint communiqué Sunday underscoring areas of solidarity — and the differences that remain — when it comes to tackling a host of global crises.

The group, including President Biden, did not reach agreement on a timeline to eliminate the use of coal for generating electric power, a failure that climate activists said was a deep disappointment before a global climate conference later this year.

The leaders sought to present a united front even as it remained to be seen how the plans would be executed.

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The agreement represented a dramatic return of America’s postwar international diplomacy, and Biden said it was evidence of the strength of the world’s democracies in tackling hard problems.

Speaking to reporters after the summit, Biden said the leaders’ endorsement of a global minimum tax would help ensure global equity, and a proposal to finance infrastructure projects in the developing world would counter the influence of China, providing what he said was a “democratic alternative.”

Those initiatives, he said, would promote democratic values and not an “autocratic lack of values.”

“Everyone at the table understood and understands both the seriousness and the challenges that we are up against and the responsibility of our proud democracies to step up and deliver to the rest of the world,” Biden said.

Prime Minister Boris Johnson of Britain, who hosted the summit, said that the gathering was an opportunity to demonstrate “the benefits of democracy.”

That would start, he said, with agreements to speed up the effort to vaccinate the world, which he called “the greatest feat in medical history.”

Asked about the failure to go further on climate policy by setting firm timelines, Johnson said that the general criticism was misplaced and failed to take into account the full scope of what was achieved during the summit.

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“I think it has been a highly productive few days,” he said.

At the same time, the nations agreed to an overhaul of international tax laws, unveiling a broad agreement that aims to stop large multinational companies from seeking out tax havens.

A US administration official called it a “historic endorsement to end the race to the bottom in corporate taxation with a global minimum tax that will help fund domestic renewal and grow the middle class.”

But for all the goodwill and declarations of unity, there were questions about how the proposals would be translated into real-world action.

For instance, on the tax laws, a number of hurdles have yet to be overcome.

The biggest obstacle to getting a deal finished could come from the United States. The Biden administration must win approval from a narrowly divided Congress to make changes to the tax code, and Republicans have shown resistance to Biden’s plans.

The president had also hoped to use his first trip abroad to show that democracy, as a system of government, remained capable of addressing the world’s most pressing challenges.

The communiqué issued Sunday fleshed out some of the proposals that have dominated the summit and was explicit in the need to counter the rise of China.

“Three years ago, China wasn’t even mentioned in the G-7 communiqué,” according to the administration official who briefed reporters on its contents. “This year, there is a section on China that speaks to the importance of coordinating on and responding to China’s nonmarket economic practices and the need to speak out against human rights abuses, including in Xinjiang and Hong Kong.”

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The communiqué promised “action against forced labor practices in the agricultural, solar, and garment sectors.”

’'I think we’re in a contest, not with China per se, but a contest with autocrats, autocratic governments around the world as to whether or not democracies can compete with them in a rapidly changing 21st century,’' Biden told reporters in the first news conference of his first foreign trip as president.

He singled out China and Russia for reprobation after working here to enlist allies in what he has repeatedly cast as the existential battle of the 21st century.

The question of how to deal with China, however, is divisive, and while Western leaders have criticized Beijing’s treatment of the Uighurs in Xinjiang, in briefings with reporters during the summit it was clear there were tensions over the language the group should adopt.

Biden urged the leaders to take a harsher public stance, confronting China over its use of forced labor and trying to create an alternative to the country’s massive Belt-and-Road Initiative, a trillion-dollar infrastructure program focused on the developing world.

Yet some G-7 leaders, including those of Germany, Italy, and Japan, have been reluctant to take on China too forcefully.

Still, Beijing has chafed at the group’s new focus on the country. ’'The days when global decisions were dictated by a small group of countries are long gone,’' a spokesman for the Chinese embassy in London said Sunday. ’'We always believe that countries, big or small, strong or weak, poor or rich, are equals, and that world affairs should be handled through consultation by all countries.’'

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Material from the Washington Post was used in this report.