Boris Johnson under pressure from Biden and activists as the G7 approaches | G7
Boris Johnson faces increasing pressure from Joe Biden and grassroots activists to be bolder at next month’s G7 summit amid signs that disputes over vaccines and taxes will dominate what the Prime Minister hoped to be a low-key event.
Chancellor Rishi Sunak kicks off two weeks of intense international diplomacy ahead of the June meeting of leaders of major Western economies in Cornwall when he holds a virtual meeting of finance ministers and central bank governors on Friday.
After eventful summits when Donald Trump was President of the United States, the Prime Minister hoped the Carbis Bay summit would demonstrate unity and pave the way for a successful climate change deal at the November Cop26 conference in Glasgow.
Yet the UK government is now being pushed hard by the Biden administration in three areas: on a minimum corporate tax rate, on patent waivers to speed up production of Covid-19 treatments in poor countries, and a deal of burden-sharing for the G7 to finance a global immunization campaign.
Meanwhile, African countries angry at what they see as “vaccine apartheid” have issued warnings that they will take a hard line in Cop26 talks unless the G7 deliver a generous funding in Cornwall.
“Vaccine nationalism is hampering progress in the fight against the virus in Africa,” said Dr Ahmed Ogwell Ouma, deputy director of the African Center for Disease Control, as he called on G7 countries to ensure that vaccines were fairly shared. “Not to do so is a moral and political failure. I would like to ask Prime Minister Johnson that generosity is a strategic issue. As host of the June summit, PM Johnson must take the lead. “
Tasneem Essop, executive director of Climate Action Network – a coalition of 1,300 environmental NGOs, said: “If developing countries do not get urgent aid on vaccines and a drastic increase in climate finance to cover new investments, l adaptation and damage, Boris can forget about any deal in Glasgow.
The pressure on the government also comes from a popular campaign – Crack the Crises – organized by 75 diverse NGOs, including Oxfam, Save the Children, the Women’s Institute and the Royal Society for the Protection of Birds.
Kirsty McNeill, of Crack the Crises, said: “There is simply no way for the government to claim the title of Global Britain without a significant increase in its ambition over the next two weeks. Canceling aid cuts, agreeing to share the financial burden of immunizing the world, and working with others to get a decent tax deal would start to make it sound like we want to do our part for people and the planet.
Sources in Whitehall downplayed the chances of a breakthrough on one of the unresolved issues at tomorrow’s meeting, but Sunak is confident that a face-to-face meeting of finance ministers next week will result in a deal. of the G7 that would ensure that companies relate climate change risks to their business.
This modest step is unlikely to be enough for US Treasury Secretary Janet Yellen, advised by David Lipton, former number two at the International Monetary Fund. The United States fears that the lack of action on Covid-19 at the G7 will mean giving victory to Russia and China – both of which have provided vaccines to poor countries – in the international diplomatic fight over vaccines. Yellen also wants a global tax deal to cover the increase in US corporate taxes.
The plan proposed by Washington has two main pillars: one allowing countries to tax a portion of the profits made by large companies based on the income they generate in that country, rather than the location of the company in that country. for tax purposes, and a second global minimum corporate tax rate.
The proposals are being negotiated between 135 countries at the OECD in Paris, with the aim of reaching a deal by October after decades of stalled progress. Biden’s proposals received support from several countries, including the other G7 countries – Germany, France, Italy, Canada and Japan – but not Britain.
Sunak is believed to be comfortable agreeing on a global minimum corporate tax rate, although he prioritizes a first pillar deal with the ambition to raise tax levels paid by big tech companies like Amazon, Facebook, and Google.
The United States had proposed a 21% rate for a global business minimum, but dropped the recommendation earlier this month at 15% in an apparent attempt to garner international support.
British sources said a fiscal breakthrough was possible at the in-person meeting of finance ministers next week, but said Sunak’s concern was that accepting the US plan would make Britain worse.
Former Prime Minister Gordon Brown, who lobbied for G7 action on taxation and vaccines, said the UK would eventually give in to pressure from Washington.
“I don’t know why Britain is rejecting the US proposal for a minimum world tax rate,” Brown said. “I can only think it has something to do with protecting tax havens abroad.”