G7 toughens stance on unfair trade

(Patria) - Trade ministers of the Group of Seven (G7) developed countries announced yesterday that they will use their "trade tools" if necessary to counter market-distorting practices, a firmer stance compared to before, reports RSE.

G7 ministers met in southern Italy after the European Union this month imposed tariffs on imports of electric vehicles produced in China, in an attempt to protect its industry from Chinese electric vehicles that the EU says are heavily subsidized.

"We will continue to address non-market policies and practices, as well as harmful non-market excess capacity and other market distortions that result from them," said the six-page G7 statement, which does not specifically mention China.

"To this end, we remain committed to effectively using our trade tools and, as needed, developing new ones, to identify, challenge, and counter these practices and promote stronger international rules and norms, together with partners," the statement added.

This is a tougher stance compared to last year's final statement after the G7 ministerial meeting in Japan, which focused more on discouraging protectionism and market distortions than on applying trade tools.

In addition to tariffs, tools to curb unfair practices can include stricter rules for controlling foreign investments, such as those proposed by the EU earlier this year.

The United Kingdom, the only European G7 member not in the EU, signaled on Tuesday that it was not ready to follow Brussels in imposing levies on Chinese electric vehicles, saying its car companies had not complained about any unfair practices by rivals.

Ministers, who met in the southern Italian region of Calabria, also said that "economic resilience requires reducing risks through diversification and critical dependencies," apparently alluding to China's dominance over key supply chains.

"We recognize that non-market policies and practices not only undermine a free and fair rules-based international economic order, but can also exacerbate strategic dependencies and vulnerabilities, and hinder the sustainable development of developing countries," the statement said.

The G7 comprises the United Kingdom, Canada, France, Germany, Italy, Japan, and the United States, and the European Union was invited to participate in this meeting.