Trade ministers from the Group of Seven (G7) major democracies said on Wednesday they would use their “trade tools” if needed to counter practices that distort the market, in a statement that hardened language compared with a previous communique.
The G7 ministers met in southern Italy after the European Union imposed tariffs this month on imports of electric vehicles made in China to try to protect the 27-nation bloc’s motor industry from Chinese EVs that the EU says are heavily subsidised.
“We will continue to tackle non-market policies and practices, as well as harmful non-market excess capacity and other market distortions resulting from them,” said the six-page G7 statement, which made no specific mention of China.
“To that end, we remain committed to effectively using our trade tools, and as appropriate, develop new tools, to identify, challenge and counter these practices and to promote stronger international rules and norms, together with partners,” it added.
Wednesday’s statement took a tougher line than a final communique published last year after a G7 ministerial meeting in Japan, which focused on discouraging protectionism and market distortion more than on deploying trade tools.
Apart from tariffs, tools to curb unfair practices may include tighter rules to scrutinise foreign investments such as those the EU proposed early this year.
Britain, the only European G7 member that is not in the EU, signalled on Tuesday it was not ready to follow Brussels in imposing levies on Chinese EVs, saying its auto companies had not complained about any unfair practices from rivals.
The ministers, who met in the southern Italian region of Calabria, also said “economic resilience requires de-risking through diversification and reduction of critical dependencies,” in an apparent reference to China’s dominance of critical supply chains.
“We acknowledge that non-market policies and practices not only undermine the free and fair rules-based international economic order but may also exacerbate strategic dependencies and vulnerabilities and hinder emerging and developing countries’ sustainable development,” the statement said.
The G7 comprises Britain, Canada, France, Germany, Italy, Japan, and the United States, and the European Union is also invited to participate.