Although China was not named explicitly by G-7 trade ministers after their Oct. 29 meeting in Japan, it is clearly the focus of many of the efforts they intend to pursue as they work to foster “a free and fair trading system based on the rule of law” and enhanced economic resilience and security.
In their concluding statement the ministers expressed concerns about the “wide and evolving range of non-market policies and practices, notably when they are an integral part of comprehensive strategies to pursue global market dominance and unfairly target market share so as to create strategic dependencies and systemic vulnerabilities.” Specific areas of concern include “pervasive, opaque and trade-distortive industrial subsidies, market distortive practices of state-owned enterprises, and all forms of forced technology transfer,” as well as “actions to weaponize economic dependencies” and “coercive economic measures and threats thereof,” all of which are frequent complaints against Beijing from the U.S. and others.
To help address these problems the ministers unambiguously indicated their interest in reducing the amount of trade their countries do with China. “De-risking” efforts that seek to diversify supply chains away from an over-reliance on China are already underway, and the statement indicated that the G-7 partners will continue down that path. For example, the ministers pledged to “further deepen our trade and investment relations with countries that seek to ensure that technology transfers are conducted on voluntary and mutually agreed terms.” They also said they would work to increase the awareness of businesses in the G-7 and beyond about “the possibility of contributing inadvertently to enabling trade-related coercive measures through trade with and investment in countries willfully violating common international trade rules and norms.”
The ministers said their efforts to address the particular challenges presented by China will extend to the World Trade Organization as well. Efforts here will include strengthening the WTO’s deliberative function by creating “a dedicated space for discussions on the interface between trade and state intervention in industrial sectors,” along with moving toward “a fully and well-functioning dispute settlement system accessible to all members by 2024.” But the ministers also hinted at even stronger measures, stating for example that they are “prepared to explore ways to improve compliance with transparency obligations by all WTO members.”
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