Originating as an informal meeting of finance ministers, the G7 has morphed into a significant summit of the world’s most advanced economies.
This year, the leaders of France, Germany, Italy, the UK, Japan, Canada and the US have come together in England to discuss pandemic recovery and climate change, with the Hon Scott Morrison MP attending as a guest. The Nexus team has collated the most substantial outcomes of the meeting, the Prime Minister’s actions on the UK trade agreement and how domestic politics have transpired in his absence.
2021 G7 Summit
Along with the permanent G7 member states and representatives, Australia, India, South Korea and South Africa were invited to attend this year’s G7 summit. The agenda spanned the pandemic, climate change and a commitment to promote open and democratic societies. The meeting successfully created a consensus for unified action on the global stage.
Health and the continuing pandemic were prominent in the deliberations. As vaccination rates continue to climb globally, these discussions primarily dealt with economic recovery and the role of advanced economies in ensuring an equitable distribution of vaccines to poorer nations.
Beyond restating their commitment to concurrent initiatives, the G7 communique rattles off their contributions thus far, noting the “collective commitment since the start of the pandemic of over $10 billion” in support of the Access to COVID-19 Tools (ACT) Accelerator. This is a World Health Organisation (WHO) and partners global collaboration to accelerate development, production, and equitable access to COVID-19 tests, treatments, and vaccines. It is also the leading body for COVAX support. In the short term, the G7 nations have promised to “share at least 870 million doses directly over the next year” to developing nations on a most needed basis.
Economic discussions were not concrete, noting the disparate nature of each member’s domestic market. Beyond a vague commitment to create “a fairer tax system fit for the 21st century” by “reversing a 40-year race to the bottom”, the G7 did not reach a significant economic consensus on joint action.
Unsurprisingly, climate change ranked as a high priority in the European-dominated event. Most significantly, the official communique declares, “we [the G7 nation states] collectively commit to ambitious and accelerated efforts to achieve net-zero greenhouse gas emissions as soon as possible and by 2050 at the latest”.
Likewise, biodiversity and the increasing rate of extinction led to the G7 2030 Nature Compact. A commitment to “halt and reverse biodiversity loss by 2030”. This is to be achieved by transitioning to a “nature positive economy” under a responsible, rules-based framework for the use of natural resources.
Significantly for Australia, the G7 nations have reiterated their desire to transition away from coal power, noting their investment in “technologies and policies that further accelerate the transition away from unabated coal capacity”. While the Prime Minister has pointed out that Australia is not a signatory to the G7 communique, this demonstrates that fossil fuel exports may face greater international resistance in the future.
With geopolitical tensions rising, the advanced economies of the G7 reached a joint position and strategy to counter the rise of China and other threats to the democratic, rules-based international order. Their 2021 Open Societies Statement declares that they “reaffirm our shared belief in open societies, democratic values and multilateralism as foundations for dignity, opportunity and prosperity for all and for the responsible stewardship of our planet”. This has been widely reported as a stand of solidarity with Australia, the most recent victim of China’s wrath.
The Anglo-Australian Free Trade Agreement
The 2021 G7 Summit provided the perfect opportunity for The Hon Scott Morrison MP and his British counterpart, The Right Hon. Borris Johnson MP to discuss a Free Trade Agreement (FTA) between Australia and the UK. Signed in principle on the 15th of June, the FTA will see closer economic ties, cementing the shared heritage of both commonwealth nations.
The Right Hon. Borris Johnson MP – a high-profile proponent of BREXIT – has long toted trading opportunities outside the EU common market as an advantage of Britain’s independence, to limited success. This FTA, therefore, supports his domestic narrative. For Australia, the impetus for a more diversified range of trading partners aims to weaken the power of China and its ability to affect Australia through economic coercion.
Australian agriculture is set to see the gradual elimination of tariffs for beef and lamb exports over the next ten years, despite fierce resistance from UK farmers. In addition, Australian rice and sugar will have immediate access to UK shelves when the treaty is actioned.
In another windfall for Australia, farms and business will soon be able to leverage more of the skilled UK labour force. Working visas will enable British nationals to work in Australia for an additional two years. Seasonal work will also be bolstered with agricultural visas set to help alleviate the shortage of farm labourers.
While the FTA will not come into force until 2022, Australian exporters will soon have better access to the world’s fifth-largest economy and over 50 million high-income consumers.
While the PM is away…
The Prime Minister’s domestic absence this week provided several Ministers, MPs and the Opposition plenty of opportunities to demonstrate their ability through the media and on the floor of parliament.
Deputy Prime Minister, the Hon Michael McCormack MP, stepped up last week as the acting Prime Minister. His performance in question time on the 15th and 16th of June saw him defend the government’s position, from asylum seeker policy to the government’s vaccine rollout.
This week also saw Immigration Minister the Hon Alex Hawke MP decide on the high-profile case of the Murugappan family. The Minister made a public statement on Tuesday, which confirmed that the family would be moved from offshore processing to placement in community detention in Perth. At the same time, ongoing legal action over the validity of their asylum claim is underway in Australia’s Administrative Appeals Tribunal and Federal Court.
Labor’s shadow Health Minister the Hon Mark Butler MP launched a new high-profile campaign against the government’s changes to the Medicare Benefits Schedule, emphasised during Question Time this week. This campaign was publicised by the Labor frontbench through media and will likely be a part of Labor’s election strategy.
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