G7 summit: the challenges to Western unity 

The G7 Leaders’ Summit is taking place on 19 – 21 May in Hiroshima, Japan. Economic security and combating economic coercion will be the dominant themes, driven by the US as they push allies to curb dependencies on China.  

Opposition to Russia and support for Ukraine will be the other main theme. Leaders will discuss a tightening of sanctions and how to address circumvention. 

Japan chairing the meeting gives this year’s G7 a specific Indo-Pacific tilt with China in the backdrop, reflecting the evolving focus of the G7 towards Asia. 

Other policy areas to be addressed are climate and energy, digital and tech, and economic and supply chain security, setting a high-level direction of travel on these geopolitically sensitive sectors, which will influence policymaking at the national level.  

To align or not to align? 

Following Russia’s invasion of Ukraine, the G7 has reasserted its role as one of the most consequential Western-led forums for international cooperation, notably on sanctions.   

The US will use this year’s summit to go one step further. It will push allies to align on its approach to China and on global economic cooperation – in a bid to isolate Russia and constrain China and reduce economic dependencies. This is also aimed at maintaining the West’s advantage over China in strategic sectors including tech and green industries.  

Behind the official agenda, US-China tensions will be the subtext of most of the discussions. The US continues to push allies towards a tougher stance on China. Not all G7 members agree with this confrontational approach. While they accept the need to reduce economic dependencies, France and Germany in particular favour a more balanced stance towards China.   

The EU Commission President and the Council President will attend the summit and will have to balance diverging views within the EU, as shown by the reactions to Macron’s comments last month on the need for the EU to avoid being a “follower” of US policy on China. There will also be general uneasiness within the EU about the US election (2024) and how the result could impact US-EU relations.   

Other issues are exacerbating these divergences. Economic uncertainty, concerns around financial stability and persistently high inflation are leading to defensive and more protectionist measures, particularly following the US Inflation Reduction Act. The US will try to convince allies that the IRA ultimately strengthens the West’s strategic advantage in key green industries vis-à-vis China, but for most allies the IRA remains an aggressive unilateral US move that threatens their industry.  

On Russia, the G7 will be united. It will discuss sanctions circumvention which has become a key concern, and an important test for the credibility of Western sanctions policy. President Zelenskyy will join the summit virtually. G7 members are expected to announce a ban on the restarting of imports of Russian oil along pipelines previously closed by Russia, to ensure that Russia is not able to benefit financially from these exports in the future.  

Key policy areas  

Trade and economic security: a separate statement will be issued after the summit on this subject, reflecting the priority it represents for the G7. The US wants to shift the focus of trade away from traditional market access, free trade-based cooperation, towards using trade as a broader strategic foreign policy tool – as demonstrated by US moves to restrict exports of advanced semiconductors to China. China is at the centre of this approach. There will be resistance in varying degrees from most other G7 members, reflecting different approaches towards China. There are likely also to be explicit discussions on coordination over economic coercion from China, particularly as the EU is in the process of finalising its anti-coercion package.   

Climate and energy:  The summit will discuss COP28 (December 2023) where G7 members are expected to play a key role in the global stocktake of the Paris agreement. The G7 stance on fossil fuel phaseout will be an important bellwether. We expect disagreements on gas investment, with a current clash between Germany, pushing for increasing public investment in the gas sector, and France and the UK who maintain that this would be incompatible with climate goals.  

Digital and technology: Digital and (emerging) technology issues play strongly into the broad themes of trade and economic security. There is broad consensus among the G7 on key areas including the free flow of data, emerging technology (including AI) and digital resilience and competition, although detailed approaches still vary and cooperation on emerging technology, particularly on AI, is still at early stages. Semiconductors have become a major geopolitical flashpoint and there are widespread moves from G7 members towards increasing their own semiconductor production capabilities.   

Health: Covid recovery and approaches to future pandemics will feature.  particularly the coordination of surveillance of new health threats, cooperation on the rapid supply of vaccines, and general pandemic preparedness. Leaders will also look at the use of technology and innovation to improve patient care and to cut waiting times and how best practice can be shared between countries. Standalone issues may include combatting increasing global anti-microbial resistance and future treatments for dementia.   

Nuclear non-proliferation and disarmament: The summit is taking place on the 75th anniversary of the Hiroshima bombing. There will be discussions on the future of the Iran nuclear deal (JCPOA) and on the North Korea nuclear programme, although no decisive progress is expected.  

Looking ahead 

Despite internal divergences, the G7’s level of coordination contrasts with the paralysis of wider global bodies like the UN, the WTO and the WHO – where Russia and China are represented. But it remains a limited group of major industrial democracies and has limited leverage on policy non-aligned countries in South America, Africa and the Gulf.   

The leaders’ level discussion will be at high-level but will have a direct impact on how individual G7 members approach crucially important certain policy issues – notably in industrial policy, tech, trade and sustainability.   

This blog was written by Francois-Joseph Schichan, a Director based in London and former French Diplomat, and Will Haworth, a Consultant based in London and former UK foreign and trade official, with inputs from Sir Simon Fraser and Sir Julian King. 

To find out more about how Flint can help you navigate the risks and opportunities of these developments,get in touch.    

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