A New Trans-Atlanticism

In the last month, there’s been a lot of developments in Trans-Atlantic political economy. In this post, I pull together three threads highlighting these developments. The first, on the initial recommendations of the G7 Expert Panel on Economic Resilience; the second, on the New Atlantic Charter; and the third, on the G7 communique itself.

From June 9:

The initial recommendations from the G7 expert panel on economic resilience are out.

This “Cornwall Consensus” breaks in important ways from the Washington Consensus.

Thread. (g7uk.org/economic-resil…) Facing the pandemic, it notes that we must work to ensure that “intellectual property protections and licensing rules foster innovation while not undermining our ability to safeguard global health,” and that TRIPS shouldn’t be “used to abuse market power over life-saving drugs.”

It calls out corporate tax avoidance for depriving governments of revenue and fueling inequality.

It calls for a redress of this problem through a global minimum tax and adoption of a target for public investment for the decade to come.

It calls for root-and-branch reform of the World Trade Organization and trade policy, recognizing that the gains from trade have not been evenly shared — imperiling democracy and cohesion.

The global trade rulebook must facilitate rather than hinder our response to the climate crisis and inequality.

It notes that unions and union density can help make our economies more resilient.

It calls for greater use of anti-trust and competition policy to lessen the power of monopolies.

There’s a lot more, including a lot of supply chain recommendations that are broadly in line with Biden’s supply chain review released yesterday.

From June 11:

Redlining the New Atlantic Charter:

“we commit to continue building an inclusive, fair, climate-friendly, sustainable, rules-based global economy for the 21st century.” (whitehouse.gov/briefing-room/…)

And “we intend to strengthen the institutions, laws, and norms that sustain international co-operation to adapt them to meet the new challenges of the 21st century…”

And “We will work through the rules-based international order to tackle global challenges together; embrace the promise and manage the peril of emerging technologies; promote economic advancement and the dignity of work; and enable open and fair trade between nations.”

Note what’s not in there: the phrase “free trade” or a commitment to various so-called “free trade agreements”, which was found in the 2017 G7 declarations. (obamawhitehouse.archives.gov/the-press-offi…)

They’ve also moved beyond the “free and fair” formulation that could be found in the 2018 G7 Communique. That year also included a commitment to modernize the WTO. (consilium.europa.eu/en/press/press…)

In 2021, four of five modifiers for the global economy are progressive (“inclusive, fair, climate-friendly, sustainable,”) with an oldie (“rules-based”) thrown in, but even the rules will be “strengthened” and “adapted” to make sure they can meet the demands of the moment. Subtle changes, but, as this @gilliantett piece notes, these subtle performances are what drive collective expectations about political economic changes. (ft.com/content/aa45ec…)

From June 14:

A lot has changed in four years.

Here’s a few comparisons between the Carbis Bay G7 Communique from 2021, and the Ise-Shima G7 Declaration from 2016. (whitehouse.gov/briefing-room/…) (Here’s the 2016 version) (obamawhitehouse.archives.gov/the-press-offi…)

2016 has 3 mentions of the word “protectionism.”

2021 has 0.

2016 says trade barriers hurt people, and TPP and other trade deals are needed to help.

2021 calls for modernization of trade deals and suggests gains haven’t been widely shared.

2016 language on trade and climate nexus pledges to back the Environmental Goods Agreement, which reduces tariffs on a dubious list of “green goods.”

2021 worries about carbon leakage, and says trade should support decarbonization (rather than other way around).

2021 mentions versions of “inequalities” 8 times.

2016 only has one oblique mention, connected to a point about worry about over-spending.

2021’s climate language reflects a six industry sectoral strategy, while 2016 language is much less sectorally organized. 2016 called for lists of tax havens.

2021 called collecting taxes if the tax havens won’t.

These are big changes!