La Malbaie crisis / News / News agency Inforos
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La Malbaie crisis

G7 falling apart, but ready for new sanctions against Russia

La Malbaie crisis

The summit of seven biggest economies of the world (the USA, Canada, Germany, Great Britain, France, Italy and Japan) in the resort town of La Malbaie, Canada,   proved G7 is no longer capable of working out a coherent common policy. If anything, it can be seen as a club of influential states set up under a "6 + 1" formula where “number 1” is, of course, the US. At the same time no-one seems surprised that it is precisely the unpredictable Donald Trump, the US President, who has actually created the discord in the G7 now.

However, a closer look at figures of trade imbalance between the United States and its world partners, might give us a better idea of why Mr. Trump is so unhappy with the "injustice" of the current situation. According to the Focus magazine published in Munich, in the year of 2017 the US’s total foreign trade deficit soared to some $552.3 bln.  According to Handelsblatt – the leading business newspaper in Germany – German exports to the US surpassed American import to Germany by Euro50.5 bln. 

And according to the data published by the Federal Statistical Office of Germany in Wiesbaden the disproportion in the German-US trade keeps growing: over 15 years from 2000 to 2015 it soared from Euro 14.6 bln to Euro 53.5 bln. So, is it really fair to accuse Donald Trump of “bullying” his G7 partners just because he wants to change the status quo in the best interests of his country?

At the end of the day, it was Donald Trump who proposed to give up trade  subsidies of any kind within the G7, and to invite Russia to rejoin the club, bringing it back to the G8 format. By the way, Moscow has instantly reacted to this saying it was not interested, while Trump's G7 partners, except for Giuseppe Conte, the new Prime Minister of Italy, struck the old tune demanding from Russia "significant progress" in resolving the conflict in the east of Ukraine. Nonetheless, at the end of the Canadian Summit Donald Trump made a diplomatic statement describing the event as "extremely successful", saying it was the Administration of his predecessor, Barack Obama, to be blamed for the unfairness of trade agreements. Before leaving for a meeting with the North Korean leader, Trump seemed to have no objections to the Summit Final Declaration draft, which stated the allegiance to "free" and "fair" trade, as well as a need to reduce duties and stop protectionist practices. But then, several hours later the fragile idyll of the La Malbai’s Summit finale was smashed to pieces by US President’s angry tweets.

"With only a pair of tweets Donald Trump has managed to blow up the transatlantic solidarity that has been there for four decades", Die Zeit weekly commented in a story titled "G7 Summit: America alone".   Before the German delegation led by Angela Merkel landed in Berlin, Donald Trump had already withdrawn his signature under the Final Declaration of the G7 Summit in Canada. "The G7 format – the core of the Western world, as we knew it – is now over," Die Zeit wrote.

In fact, it was a statement made by the Canadian Prime Minister Justin Trudeau that made Trump mad. Speaking at a press conference after the departure of the American "boss", he said that starting from July 1, Canada would impose duties on US imports, to retaliate for the recent import duties on steel and aluminum introduced by the US Administration. Trudeau also added that, although “Canadians are polite and reasonable”, they were not going “to be pushed around”. Donald Trump responded by calling Trudeau "very dishonest and weak" – an unheard-of insult, given that Canada is one of the closest allies of the United States, says Spiegel online. The Trudeau Administration responded – with some surprise - that the Canadian Prime Minister’s statement contained nothing that Mr. Trudeau did not mention during the formal, or informal - meetings between the two presidents, and that Trudeau would strictly adhere to the provisions fixed in the final document of the Summit.

The US President reiterated his threats to impose import duties on foreign-made cars that "flooded the US market". This time it was Germany’s turn to feel bad, as some 1.8 million jobs in that country are directly or indirectly connected to the automobile industry. As for the Russian Federation, despite "encouraging signs" from some EU countries, there is no reason to expect that anti-Russian sanctions would soon be relieved. On the contrary, using the “Skripal case” as a pretext, the UK Prime Minister Theresa May suggested, and the G7 agreed, to set up a so-called Rapid Response Mechanism to counter the activities of "hostile states", implying Russia in the first place.

DISCLAIMER: The author writes for this publication in a private capacity which is unrepresentative of anyone or any organization except for his own personal views. Nothing written by the author should ever be conflated with the editorial views or official positions of any other media outlet or institution.

 

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