LONDON: The new administration of U.S. President Joe Biden joins international talks on the global economy this week with other rich nations expecting a decisive break from the “America First” nationalism of Donald Trump.
U.S. Treasury Secretary Janet Yellen will join Friday’s online meeting with her Group of Seven (G7) peers at which they are likely to renew promises to pursue huge stimulus programmes to aid the economic recovery from COVID-19.
The meeting, the first G7 encounter since Biden took office, will also seek to breathe new life into long-running efforts to solve the problem of how to tax giant digital firms, many of them American such as Amazon and Google.
That is seen as test case of Washington’s renewed engagement after Trump effectively blocked any deal.
Britain, which is chairing the meeting, has said the talks will provide to chance to find “global solutions” to the hammer blow dealt to the world’s economy by the pandemic.
A G7 source said officials would discuss “how best to shape and respond to the phases of the global recovery from COVID-19” including support for workers and businesses in the near term while ensuring fiscal sustainability in the long term.
Other aides said there would be a discussion on coordinating fiscal stimulus among the G7 countries, which aside from the United States and Britain include Japan, France, Germany, Italy and Canada. They will also be joined by the heads of their national central banks and the European Central Bank.
Biden has proposed a further $1.9 trillion in spending and tax cuts on top of Trump’s $4 trillion. British finance minister Rishi Sunak is expected to say in March that he will borrow yet more money – after racking up the biggest ever peacetime deficit – while promising to fix the public finances after the crisis.
The G7 source said the meeting would also discuss support for vulnerable countries to aid the global recovery.
The finance ministers and central bank governors were likely to sign a joint statement, the source said.
DIGITAL TAX
The meeting comes as much of the global economy continues to reel from the impact of lockdowns although vaccination programmes are raising the prospect of recovery later this year.
The different pace of the rollouts is likely to mean some regions lag behind, with the euro zone at particular risk of a slow recovery.
Britain wants to make climate change and biodiversity loss a top priority of it G7 presidency ahead of the COP26 conference it is due to host in November.
There could also be some signs of progress on how to sort the rules for taxing cross-border commerce.
Nearly 140 countries are negotiating the first update in a generation to the rules for taxing cross-border commerce, to account for the emergence of big digital companies like Google, Apple and Facebook.
Biden is seen as more open to a deal and some involved in the talks believe an agreement is within grasp this year.
British Prime Minister Boris Johnson is due to host the first in-person summit of G7 leaders in nearly two years in June in a seaside village in Cornwall, southwestern England, to discuss rebuilding from the pandemic and climate change.
(Additional reporting by Jan Strupczewski; Writing by William Schomberg, editing by David Milliken, Mark John and Toby Chopra)
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