Think 7 USA 2020
Think 7 USA 2020 assembled 27 high-level experts from all G7 members with leading reputations in the five key areas that the G7 presidency itself had identified as the focus for this year’s summit: health, economic recovery, trade, energy and environment, and peace and security. Together, they created this report that contains 25 consensus recommendations. DGAP’s Claudia Schmucker contributed to the section on trade.
(The online version of this text does not contain footnotes. To see the citations, as well as the biographies of all working group members, please download the PDF version here.)
Think 7 USA 2020 was held on May 14 and 15, 2020, by videoconference from its hub in Washington DC. It was designed, organized and hosted by the Woodrow Wilson International Center for Scholars, with support from the G7 Research Group based at the Munk School of Global Affairs and Public Policy at the University of Toronto.
Think 7 USA 2020 assembled 27 high-level experts from all G7 members, including the European Union and neighboring countries, with leading reputations in the five key areas that the G7 presidency itself had identified as the focus for the summit this year. The Think 7 thus focused on health, economic recovery, trade, energy and environment, and peace and security. The 27 participants came from think tanks and universities, with contributions from those who with high- level experience inside their government teams, especially in the United States.
Informed by the experience of the inaugural, full-blown Think 7 launched in Canada’s year as G7 host in 2018, and the subsequent Think 7 in France in 2019, Think 7 USA 2020 sought to make an independent, innovative and influential contribution tightly tied to the summit’s agenda priorities.
The result was the 25 consensus recommendations contained in this report. They are followed by the list of the participants and their biographies, and the rationales upon which the recommendations are based. We welcome your thoughts in the days and months ahead. These recommendations are presented in the form of commitments that the G7 leaders can adopt and present in their own summit communiqué(s).
In conclusion, we are grateful to the splendid support of Jane Harman, director, president and CEO of the Wilson Center. We also appreciate the support of our staff and colleagues, especially Jacqueline Orr, Savannah Boylan, Mariana Sanchez Ramirez and Gerassimos Pepelassis.
At the G7 Research Group, we are also grateful to Madeline Koch, executive director, and many of our researchers: Stéphanie Bussière, Meagan Byrd, Alessandra Cicci, Sonja Dobson, Hiromitsu Higashi, Maria Marchyshyn, Bogdan Stovba, Alissa Wang, Brittaney Warren, Kat Yampolsky and Mary Zelenova.
Director, Canada Institute
Woodrow Wilson International Center for Scholars
Director, G7 Research Group
University of Toronto
May 26, 2020
- We will support the most vulnerable and guarantee funding for Office for the Coordination of Humanitarian Affairs’ $6.7 billion call for the immediate global humanitarian response to COVID-19 in fragile countries.
- We will make an initial, immediate commitment of $20 billion to vaccinate the world’s population as a global public good and will also support global scientific collaboration to accelerate the development, production, equitable and affordable access to new COVID-19 diagnostics, therapeutics and vaccines (Access to COVID-19 Tools Accelerator).
- We agree to lead by example and implement the seven urgent actions that will prepare the world for future health emergencies as set out by the Global Preparedness Monitoring Board, engage in proactive collaborative global leadership, and provide the necessary political support and funding to this end, work to improve and reform the system of pandemic and preparedness response and drive the global effort to ensure equitable access to COVID-19 vaccines, therapeutics and diagnostics.
- We will strive to mitigate the catastrophic impacts of COVID-19 in the most vulnerable countries and populations by taking measures to slow and stop the spread through reliable monitoring and testing, a One Health approach, strengthened primary health care, and leveraging technology and digital health, while continuing our work to control anti-microbial resistance, ensuring human rights and working to meet our targets set in Sustainable Development Goal 3, including ending HIV/AIDS by 2030.
- We will address the gendered dimensions of COVID-19, in particular the role of women healthcare workers and the recent spike in gender-based violence. Building on the work of the G7’s Gender Equality Advisory Council and the Women’s Global Development and Prosperity Initiative, we will form a task-and-finish group to develop timely and effective measures to address the gender aspect of the pandemic, based on a multi-stakeholder approach that includes national governments, civil society and international institutions.
- We agree that as our economies reopen in the wake of the COVID-19 pandemic, we will undertake efforts to modify economic policies and regulatory structures to make our economies more flexible, resilient, jobs rich and pandemic proof, and compatible with equality of opportunity, including access to universal health coverage.
- We will promote economically and socially sustainable COVID-19 recovery strategies by providing best practice guidance on physical distancing and sanitization for businesses and institutions to encourage the rapid, safe reopening of our economies. We further commit to redirect our fiscal support toward policies that promote adaptation to new circumstances. This can involve redirecting current stimulus packages to active labor market policies (such as hiring and training subsidies), investment tax credits, employment services and online resource matching platforms.
- We will make a concerted effort to invest in human capital — especially health and education — to stimulate growth, stabilize living standards and make the global economy more resilient to economic and other shocks. This includes identifying and sharing best practices to provide workers with the skills they will need to find good jobs and to contribute to a strong post- pandemic economic recovery, engendering close and cooperative partnerships between business (especially small business and entrepreneurs), academia and local, regional and national governments to give workers and businesses the skills needed to prosper, including healthcare workers and post-secondary students.
- We will assess the resources available to international financial institutions, particularly the International Monetary Fund (IMF) and World Bank, required to provide effective support for their members, covering both short-term emergency funding needs and medium-term financial challenges, particularly debt overhang. We will maintain our public debt moratorium for poor states and stand ready to provide more necessary effective assistance through such appropriate measures as debt forgiveness, action on private debt and consideration of a special issue of IMF special drawing rights where G7 members could pass on their allocations to others for the above purposes. We will coordinate closely in our efforts to help those countries hit most severely by the COVID-19 pandemic to recover.
- We will assure that emergency trade measures taken do not harm efforts to address the pandemic, including by rapidly removing all tariffs and unnecessary non-tariff barriers on medical products and other essential supplies, to lower the costs of finished goods, inputs such as active ingredients and scarce chemicals; abstaining from new policies that would undermine responses to the pandemic and waiving existing restrictions on purchases of medical products and other essential supplies; keeping supply chains open to facilitate imports of raw materials, inputs and final medical goods; and establishing an experts group to give us recommendations for making supply chains more robust and more resilient and building more effective emergency supply chains. We ask the World Trade Organization (WTO) and Organisation for Economic Co-operation and Development to monitor trade and investment restrictions imposed in response to the pandemic and to publish quarterly reports assessing their impact.
- We will support the WHO’s “open platform” policy on patents and licensing of COVID-19 diagnostics, therapeutics and vaccines to ensure adequate supply and effective distribution as they are approved. We will also address other trade-related intellectual property issues as the international economy evolves and give special focus to assuring access to medicines and medical supplies in the pandemic and other health emergencies.
- We will work to forge additional agreement on digital governance and data flows, e-commerce and e-service provision, given the increasing reliance on data collection and flows, internet- provided services and digital marketplaces.
- We support WTO reform in the year ahead to improve its functioning and enhance the role of the multilateral trading system to promote trade flows and support economic recovery. We will thus engage in a thorough, extensive search to select the next WTO Director General with the urgent need to reform the organization in mind.
- We will support efforts, through WHO, to revise the International Health Regulations, to develop and implement new protocols for foreign travel subject to international testing guidelines, and to allow emergency waivers of licensing requirements so that qualified practitioners can move between countries as the peak caseloads roll from one location to another.
- We support the more effective use of existing trade agreements and mechanisms, such as the WTO Trade Facilitation Agreement, and will identify additional steps to facilitate flows of essential goods and services that are needed during the pandemic. We will also consider this year new agreements to liberalize trade in medicine and medical supplies that can facilitate provision of such goods and increase global surge capacity during future health emergencies.
- We will devote concerted attention to potential abuses of government subsidies, under cover of responding to the pandemic, that would disrupt efficient supply of goods and to develop options for strengthening international disciplines on the use of subsidies.
Energy and Environment
- We will encourage major investments in the physical infrastructure of electricity grids, to ensure grid reliability and the capacity to bring new energy sources online and foster new smart grids that can handle more intermittent sources of energy and ensure higher levels of security against external threats and ensure that our hospitals, long-term care facilities and supporting healthcare infrastructure always have the electricity they need to control COVID-19. To this end we will promote renewable energy, battery storage, grid infrastructure, digitalization, and electric and hydrogen-fuel based mobility.
- We will strengthen global gas markets, while minimizing methane emissions, to promote energy security and respiratory well-being, by facilitating the movement of natural and liquified gas, in ways that assist the energy transition and allow for full complementarity with renewable energy sources.
- We will reduce energy sources that pollute the air and harm health, especially in urban areas, given the compelling evidence that the COVID-19 pandemic’s impact was worsened by poor air quality and particle pollution.
- We will do our fair share to meet the global goal of planting 1 trillion trees by 2030 for planetary and human health, by using locally appropriate trees that provide medicines and promote health and biodiversity, by nurturing their growth, and by creating 1 million new jobs for this purpose over the next years. We will mobilize our citizens, private sector and other stakeholders including Indigenous peoples to help in planting and maintaining tree health, while preventing deforestation and assisting others in such efforts.
- We will identify the challenges and propose solutions for the management of medical waste in our own and key developing countries. On this basis we will act against severe water pollution from contaminated waste, develop an early warning system using wastewater monitoring to prepare for potential future pandemics and reduce plastic pollution more generally.
- To support a healthy, green, fiscally sustainable recovery, we aim to phase out fossil fuel subsidies, unproductive agriculture subsidies and polluting coal-fired power plants in our countries; decarbonize our energy systems, including through financial institutional rules and incentives; invest in green hydrogen networks; promote a clean, circular economy of low emission technologies, resource efficiency and waste reduction, appropriate carbon pricing, and sustainable products and services; enhance digital technology applications for sustainable development; build and renovate buildings in energy-efficient and healthy ways; and foster smart mobility and active transportation.
- Building on the United Nations Secretary-General’s call on March 23, 2020, for a global cease- fire in the midst of the COVID-19 pandemic, we commit to a new and comprehensive Global Peace Process to restore trust through confidence-building measures, and to launch negotiations between like-minded countries for a United Nations Security Council (UNSC) resolution on general principles of international conduct, mutual respect, and common responsibility for peace and stability in the 21st century. This includes a common stance against terrorism and mass atrocities. We take urgent action together with other nations and organizations to mitigate the impact of COVID-19 in conflict zones and for refugees and internally displaced persons. In a spirit of trust and compromise, G7 members are ready to work intensively with the UNSC and relevant non-G7 partners, in renewed contact groups, to end the protracted armed conflicts in Afghanistan, Syria, Libya, Yemen and the Sahel in the near future. We support a new push in disarmament talks in line with the Non-Proliferation Treaty, including a renewal of New Start and a new treaty on intermediate range nuclear forces between the United States, Russia and China.
- We agree to mandate a task force in order to constitutionalize the digital sector by expanding the Universal Declaration of Human Rights to include a Universal Declaration of Rights on the Internet. Safeguards are needed to protect its end-users in turbulent times when potential and actual victims of a pandemic are or can be traced, named and eventually shamed regardless of their privacy worldwide, for the first time ever. Such provisions should combine free access for all and protection against harassment of all kinds, as well as transparency and security. Within this framework for action, and building up on, first, the 2019 Christchurch Call to Eliminate Terrorist and Violent Extremist Content On Line and, second, on the 2019 Biarritz Summit Charter for a Free, Safe and Open Internet, we aim in particular to strengthen cooperation in investigating hate speech, as well as promoting hate speech awareness through digital education.
- We will continue meeting at appropriate intervals this year to ensure the effective implementation of these commitments and to build on them in response to changing needs. We invite the G20 to support our efforts in this regard.
Health Working Group
- Hugo Dobson, School of East Asian Studies, University of Sheffield
- James Hospedales, EarthMedic; former executive director, Caribbean Public Health Agency
- Ilona Kickbusch, Geneva Graduate Institute, Global Pandemic Monitoring Board
- Chiara Oldani, University of Viterbo “La Tuscia”
- Lord Jim O’Neill, Chatham House
- James Orbinski, Dahdaleh Institute for Global Health Research, York University; Dalla Lana School of Public Health, University of Toronto
Economy Working Group
- Sir Nicholas Bayne, London School of Economics and Political Science
- Robert Fauver, former U.S. sherpa
- Shihoko Goto, Asia Program, Woodrow Wilson International Center for Scholars
- Meg Lundsager, Woodrow Wilson International Center for Scholars
- Dennis J. Snower, President, Global Solutions Initiative
International Trade Working Group
- Louis Bélanger, Graduate School of International Studies, Laval University
- Michelle Egan, School of International Service, American University
- Matt Goodman, Center for Strategic and International Studies
- Jeffrey J. Schott, Peterson Institute for International Economics
- Claudia Schmucker, German Council on Foreign Relations
- Earl Anthony Wayne, School of International Service, American University; Woodrow Wilson International Center for Scholars
Energy and Environment Working Group
- Dan Hamilton, Foreign Policy Institute, School for Advanced International Studies, Johns Hopkins University
- John Kirton, G7 Research Group, University of Toronto
- Kazuo Matsushita, Institute for Global Environmental Strategies
- Miranda Schreurs, Bavarian School of Public Policy, Technical University of Munich
- Duncan Wood, Mexico Institute, Woodrow Wilson International Centre for Scholars
Political Security Working Group
- Ash Jain, Scowcroft Center for Strategy and Security, Atlantic Council
- Dries Lesage, Ghent Institute for International Studies, Ghent University
- Karoline Postel-Vinay, Centre de Recherches Internationales, Sciences Po Paris
- Yves Schemeil, University of Grenoble-Alps
- Christopher Sands, Canada Institute, Woodrow Wilson International Center for Scholars
- Jan Wouters, Leuven Centre for Global Governance Studies, KU Leuven
The COVID-19 pandemic is a global public health emergency with immediate and secondary health impacts, as well as cascading and compounding economic and social effects that are global in nature, and that cannot be solved by any one country acting alone. Millions of people have been infected. COVID-19 continues to spread globally with differing patterns and waves of infection nationally and regionally.
As the first wave of infection peaks in North America, and as subsequent waves of infection emerge in Asia and Europe, we are reminded that the second wave of the 1918 influenza pandemic killed more people than the first. In Africa alone, where the first wave is still unfolding, by the end of 2020 up to 190,000 people could die of COVID-19, and an additional 44 million people could be infected. With limited disease detection and testing capacity in low- and middle-income countries, thousands of deaths are not being reported, obscuring the true toll of the COVID-19 pandemic.
The impacts of COVID-19 go beyond the direct morbidity and mortality effects of the virus itself. Secondary health impacts include up to an additional 1.2 million children under five who could die in the next six months as a result of the pandemic though the disruption of health systems and decreased access to food. This would be the first increase in global child mortality since World War II. Similarly, indirect maternal deaths could rise from 8% to 38% in the same period, setting back major gains in maternal child health. Other secondary health impacts include increases in vulnerability to the effects of HIV, undetected tuberculosis through disrupted health services, disruptions in chronic disease care and the already-evident collapse of public health such as measles immunization programs.
The impacts of COVID also cascade across sectors, can compound with other risks in vulnerable groups and can emerge as network hyper-risks that ramify across systems and geographies. National and global economic fragility and massive public debt are new realities, as are unprecedented job losses especially in the informal sectors of low- and middle-income countries. The World Bank projects that the sharpest historic decline in global remittances could push 40–60 million people into extreme poverty, and national, regional and global food insecurity is a new reality. The more than one billion people who live in informal peri-urban slums and barrios without safe potable water or adequate health or sanitation services are especially vulnerable. Other hazards may affect communities experiencing COVID-19, as evidenced by the recent Tropical Cyclone Harold in Fiji. Recent projections indicate public health containment, control and mitigation measures, such as widespread testing and contact tracing and physical distancing, may need to be maintained into 2022, further exacerbating health, social and economic impacts in already brittle and weakened economies.
As the world engages in unprecedented containment, control and mitigation measures, COVID-19 will continue to hit poorer countries particularly hard, where new outbreaks expose and exacerbate inequity and vulnerability. As the pandemic and its cascade effects continue to unfold, even the best-case scenarios leave the United Nations warning of global famines that could affect 250 million people by the end of 2020. Here, those most at risk are in 10 countries affected by conflict, economic crisis and climate change, or who are in other complex humanitarian settings. As of May 7, 2020, the United Nations Office for the Coordination of Humanitarian Affairs has tripled its unprecedented and “Extraordinary Appeal” to $6.7 billion in support for an immediate global humanitarian response to COVID-19 in fragile countries.
Although there has been an unprecedented global scientific response to COVID-19, there is still no treatment or vaccine; the type and duration of immunity are not yet known, but the emergence of viral mutation is a certainty and can emerge anywhere. The corollary morbidity and mortality patterns may be better or worse than what has occurred and is currently occurring. A vaccine must be globally effective and must be a global public good, and access must be equitable to ensure appropriate containment, control and mitigation of the COVID-19 pandemic.
Promoting Flexibility, Resilience and Opportunity
Deregulation: Large portions of our domestic economies have been altered by the pandemic and our initial responses to it. Many small businesses are being restructured to reflect the new realities and their workforce plans and business models are being altered. It is essential that domestic labor market regulations, often introduced to meet the conditions of many decades ago and accumulating in a complex fashion, do not hinder the restructuring required in our new, COVID- 19–disrupted economies.
Regulatory policies in domestic markets sometimes interfere with restructuring efforts and cause our recoveries to be slower and lower than could otherwise be the case. Small businesses, startups and entrepreneurs operating under new physical distancing regulations and moving to new best practices will need considerable flexibility in their business models in terms of work regulations and labor market rules. They must have the freedom to adjust their business plans in light of new realities.
Additionally, financial market regulations that hinder access to capital will reduce opportunities to restructure workplace organization and the restocking of inventories. Capital requirements will be higher than pre-pandemic conditions. Enhanced access to capital will be critical to the smooth and sustainable reopening of operations.
Regulations restricting operating hours will also need to be relaxed so that small businesses can make up for fewer workers and hence lower productivity rates. Increased hours of operation can help small businesses adjust to the new environment.
The Organisation for Economic Co-operation and Development (OECD) has focused on the need for deregulation in its ministerial communiqués for years. This is thus an opportune time for leaders to include a commitment to deregulation in their communiqué.
Such redesigned, flexible regulations will foster a more rapid jobs-rich economic recovery. They will also reduce health harms caused by longer-term lockdowns, including mental illness, domestic violence, increased alcohol abuse and “deaths of despair.”
Promoting Resilience: As the COVID-19 pandemic can be overcome anywhere only when it is overcome everywhere, G7 leaders are called upon to show the way forward, with a unifying vision and specific recommendations. The initiative that the G7 has already taken in this regard to support global health, prevent economic collapse and secure financial stability has been rightly held in high regard around the world.
The G7 has a central role to play in indicating which policy actions require international coordination and which actions are appropriate at the national level, in response to the needs and conditions within each member.
The pandemic has created a new world with profound economic challenges. The G7 can provide leadership in adapting to this new world. The measures already taken by G7 members to protect our economic and financial systems are welcome in the immediate short run, but they largely focus on preserving the existing systems, such as keeping incomes flowing to people who have lost their jobs and to businesses that have been shut down, as well as preserving the financial integrity of poor countries. The challenge of the G7 in the coming months, however, is to provide guidance for policy adaptation to new circumstances. Unless this adaptation is achieved, the world faces a terrible legacy of disease, unemployment and poverty.
If the world were facing a great depression — with excess production capacity and unemployment everywhere — the macroeconomic stimulus would be appropriate. But the world is not facing this danger. The economic problem created by COVID-19 is the “Great Economic Mismatch.” While large parts of the world economy have been closed down by widespread physical distancing, there has been an explosion in the demand for goods and services that meet our health needs and that are compatible with keeping our distance — such as medical supplies, food deliveries, the associated financial, logistical, marketing and distribution services, and much more. The problem the world faces is to overcome the mismatch between excess supply of resources in some sectors and excess demand for resources in others.
Resources must therefore be redirected from where they are idle to where they are desperately needed. Over the past decades, most market economies have just had to adapt to rapid changes in technologies and reasonably foreseeable swings in consumer tastes and resource endowments. In the post–COVID-19 world, these adaptations are neither sufficient nor appropriate. The challenge now — one that governments have not yet addressed — is to readapt to the new circumstances.
Readaptation calls for radically new ways of thinking that reveal new opportunities. Currently governments in rich countries are paying firms to retain employees who are currently idle (e.g., the UK government is paying up to 80% of the wages of furloughed workers) and to support the unemployed (e.g., the U.S. government is paying unemployment benefits of over 26 million claimants). Just as the G7 and G20 coordinated national policies to overcome the financial and economic crisis of 2008, so the G7 and G20 now face a new coordination challenge. The challenge is to encourage governments to transfer a substantial portion of the worldwide fiscal stimulus to promote a redirection of labor from the collapsing to the expanding sectors. This redirection of resources can take many forms, including support for hiring in the expanding sectors, for job search and matching services, and for matching the demands and supplies of physical capital.
Such coordination of readaptation policies would help people move from the physically interactive old world to a new world in which much consumption and production is compatible with physical distancing. For developed countries, instead of shopping physically downtown, consumers could visit their shops virtually and place their orders. Instead of meeting their suppliers physically, businesses could do so virtually. Commercial real estate could be repurposed, provided that current government grants are reframed accordingly. With adequate public support, for example, many retail food outlets could be converted into delivery services and the restaurant space that is thereby freed up could be used for testing facilities, medical centers, logistical support hubs and temporary accommodation for medical staff.
For developing countries, readaptation policies will involve addressing different tradeoffs between public health and economic prosperity. The G7 can provide guidance on how to readapt to the post–COVID-19 world when physical distancing is impossible and sanitation facilities are in short supply. This approach will help focus international economic and financial relief for the countries that have the greatest need, in terms of economic and health impacts at home and abroad.
In order for prolonged physical distancing to be achieved in developed countries without prolonged economic hardship, certification systems will need to be created, for which the G7 could provide best practice information. Such systems would specify, monitor and enforce the physical distancing rules. The medically acceptable distance between employees will depend on the air flow within the establishment, the ventilation systems, the protective barriers, the availability of sanitizers and masks, and so on. Monitoring and enforcement would be analogous to that conducted under current health and safety checks for enterprises. Once such systems are in place, businesses would require physical distancing certification in order to operate. Those that fail their certification tests would be closed. Such systems would be the economic counterparts to testing and contact tracing in the healthcare arena.
With adequate public support, many of the jobs that currently are physically interactive could be restructured into physically distanced ones. Some of this restructuring is already taking place as free enterprise responds to the pandemic. On its own, however, this market activity will not be sufficient to avoid major economic disruptions, since the social gains from matching supplies and demands far exceed the private gains. If everyone were confident that many of their previous economic transactions could now be done through physically distanced activities — D-activities, for short — far more consumption and production would take place than if all individuals were left to their own devices in finding the outlets themselves. Thus government support is essential.
Fortunately, the funds for such support are already potentially available through the many generous government rescue packages. All that is required is that these packages — financing unemployment benefits, loans, guarantees and grants — be redirected into support for hiring and training subsidies, investment tax credits, employment services and online resource matching platforms that serve to promote the transition to D-activities.
Many of the economic activities that have taken place through physical interactions could be reframed as physically distanced interactions. Although some sectors — such as aviation and various forms of tourism — will be unable to make the transition to D-activities profitably, most other jobs are amenable to reframing. Even jobs that currently cannot mostly be done from home — such as food preparation and serving, public transport, installation and maintenance, cleaning, protective service, construction, extraction, education, manufacturing, retail sales, farming and fishing, forestry, as well as community and social service — have the large, untapped potential to be transformed into D-activities.
Needless to say, the transformation would involve a loss of productivity, because working at a distance requires more space, equipment and digital infrastructure than the current forms of work. For other jobs that are more compatible with distanced work — such as architecture, engineering, legal services, office support, management, business and financial operations, arts and design, and programming — the productivity loss would be substantially lower. These productivity losses are the irreducible minimum cost of maintaining physical distancing. The choice that policymakers currently face is between paying this cost or paying the far higher cost of supporting people and businesses whose productivity has vanished.
It may well take a long time before the pandemic is over, since the virus will need to be eradicated everywhere in the world in order to avoid dangers of recurrence elsewhere. But once this has happened, people around the world will expect their politicians to deliver more resilience to health shocks. Protection from pandemics will be viewed as essential as protection from floods or fires. Investment in such protection will be seen as essential, perhaps even a human right. Such resilience will need to be built up in advance.
The readaptation policies would give policymakers an exit strategy from their costly fiscal commitments, for once economic activity has been redirected to where it is needed, no further support would be required. As a result, it would become less likely that the current health crisis leads to the public and private over-indebtedness that could precipitate the next financial crisis.
Investment in Human Capital
Skills: Dealing with the fallout of the global pandemic will be the biggest challenge facing the international community over the next several months and years. The International Monetary Fund’s (IMF) projections of the world economy contracting by 3.0% in 2020 is sobering, as is the World Trade Organization’s (WTO) expectations for global trade to drop by up to 32% this year. But the prospect of an economic downturn on a scale not seen since the Great Depression requires a rethink of priorities in policy coordination. In 2008, the G20 was instrumental in stabilizing financial markets and averting a crash on a massive level. This spring, coordination among G7 finance ministries and central banks has been key to preventing panic selloffs and ensuring more than adequate liquidity.
Yet as unemployment surges and bankruptcies rise as a result of months of lockdown worldwide, the divide between those who were able to survive relatively unscathed or even thrive during the pandemic and those whose livelihoods were destroyed will only widen further. Failure to address that divide could lead to greater polarization of societies and fan the flames of political extremism.
Sharing Best Practices: Long before the pandemic swept the globe, the world’s economies were facing massive transformations in workplaces, spurred on by the rapid deployment of new technology that was redefining, eliminating and creating jobs across the G7 and other countries. Each G7 member has come up with some cluster of initiatives to support the reskilling and upskilling needed for existing workers to keep up with the vast changes in the workplace. Educational institutions and private sector companies have been searching for new models that will provide better education for current members of the workforce as well as those entering the workplace for the first time.
The needs created by this massive transformation in work has been highlighted by the frequently reported skills shortages in surveys of chief executive officers and by the serious efforts undertaken by many on the future of work, with organizations such as the World Economic Forum producing annual studies on the needs and opportunities ahead.
The president of the United States is just one of the G7 leaders to launch a major work skills initiative, championed by his daughter and his secretaries of commerce and labor. The prime minister of Canada has been pursuing a similar initiative. In Europe, the German model is often cited as an effective, if unique, set of practices, and the United Kingdom has undertaken a major transformation with new laws encouraging private sector training initiatives.
The post-pandemic economic recovery is likely to increase the deployment of technology and transformations in the workplace across a wide range of sectors. Mid- and lower-skilled workers are those most likely to suffer, but many at all levels of education will likely need to learn new skills to hold good jobs and to be most productive in contributing to an economic rebound.
G7 leaders should ask their employment and economic ministers to convene leaders from the business, education, union and subnational government sectors already involved in responding to changing skills and employment requirements to provide a report on best practices for meeting the job skills needs that can most effectively support rebounding G7 economies and good jobs for G7 workers. This initiative would build on the many previous G7 efforts aimed at strengthening economic practices and performance.
Strengthen International Financial Institutions
The unfolding economic dimensions of the pandemic reveal the short- and medium-term challenges of restarting all economies. All countries are experiencing reduced trade, affecting those employed in export sectors and those reliant on crucial imports for production. Growth in G7 members will not be strong or sustained without growth resuming in emerging markets and developing countries.
Countries already are turning for assistance to the IMF, World Bank and other institutions, which are responding with rapidly available financing. Countries are also requesting access to larger scale financing over a longer time horizon. Numerous additional requests are likely, particularly for those countries unable to restore access to international capital markets.
The international financial institutions must remain able to respond quickly and effectively to these needs, without raising concerns about the adequacy of their resources. Given the size of recent requests to the IMF, strains on IMF financing could appear in the coming year or two. The wide range of financing options for the IMF, and other institutions, should be actively analyzed and discussed among G7 finance ministers with a view to raising these issues among G20 members as well.
Protecting Vulnerable Countries: The G7 has a long history of working together to help other countries that are more needy. The 2005 Gleneagles Summit, for example, unveiled an agreed plan to support development in Africa through increased assistance resources as well as enhanced cooperation among the G7, with recipient countries and with relevant international institutions and nongovernmental organizations (NGOs). The G7 has been among the most generous donors responding to natural and human-made disasters around the world.
Although the COVID-19 crisis has created severe economic damage in all the G7 members, as well as other more developed economies, it is likely that the pandemic will even more severely damage many countries that are much less able to defend their economies and societies and that do not have the resources to rebound well from the effects of the pandemic.
A G7 leaders’ pledge to coordinate and collaborate in relief and development assistance as well as to explore other viable steps to help the most severely hit countries would send a very positive encouraging message to the rest of the world. The G7 effort could encompass coordination of bilateral assistance as well as coordination in the IMF, the World Bank and other international bodies to mobilize resources to help those countries most negatively affected by COVID-19. This should include a commitment to study a serious debt relief initiative working with the IMF, the World Bank, regional development banks and the Paris Club.
In addition to working in coordination with other donor countries, G7 governments would engage closely with major and respected NGOs, many of which are based in G7 members, to help meet the most pressing needs of poorer countries trying to recover from the effects of the pandemic.
Again, such an initiative would be entirely consistent with previous G7 practice.
As G7 leaders agreed in March, vigorous support for global trade and investment will underpin the economic revival and prosperity that are so needed today and that play an important role in tackling the pandemic. The G7 seeks to promote an international trade and investment environment that is free, fair, nondiscriminatory, transparent, predictable and stable.
Global trade and investment were already facing serious challenges before the pandemic. It added serious disruption to global supply chains from both the demand and supply sides. In the near term, the G7 must act boldly, with others, to avoid any further disruption to the logistics networks that are vital for the international response to the pandemic and to the well-being of the G7 and others. The G7 should adopt a forward-looking action agenda to assure that global supply chains become more resilient and more robust, with special attention to improvements for sectors vital to meeting future pandemics or emergencies of a similar scale.
The G7 needs to signal clearly its commitment to countering “beggar thy neighbor” trade and border practices that would undermine efforts to fight COVID-19. Such policies and practices would also harm efforts to foster economic recovery that is so needed. The G7, as a group of global leaders, should pay special attention to vulnerable developing and least developed countries.
If the G7 acts boldly and in a concerted fashion, it can have major global impact. The G7 should lead by example in avoiding protectionist measures that complicate global resolution of the COVID-19 pandemic. The G7 should demonstrate leadership by deepening cooperation on specific actions and working with others, including relevant international organizations and institutions, to address the disruptions of international trade and investment flows.
To that end, G7 leaders could:
- Commit to vigorous action as a group and with others to assure that emergency trade measures do not harm efforts to address the pandemic in G7 and other economies.
- Work energetically with the WTO, the OECD, multilateral banks, other international organizations and countries to this end, including by asking the WTO and OECD to monitor trade and investment restrictions imposed in response to the pandemic and publish quarterly reports assessing their impact.
- Initiate a concerted effort to remove all tariffs and unnecessary nontariff barriers on medical products and other essential supplies as rapidly as possible, to lower the costs of finished goods as well as inputs, such as active ingredients and scarce chemicals, that can boost domestic production of complex medicines.
- Agree to abstain from unnecessary, new “buy national” policies that harm responses to the pandemic and to waive existing restrictions on purchases of medical products and other essential supplies; and work vigorously together and with others to keep supply chains open to facilitate imports of raw materials, inputs and final goods in the medical category.
- Seek agreement rapidly among major partners to adopt an “open platform” policy on patents and licensing of COVID-19 tests and treatments to ensure adequate supply and effective distribution of medicines and therapeutic tests as they are approved.
- Seek rapid agreement to develop and implement new protocols for foreign travel, subject to international testing guidelines, and to allow emergency waivers of licensing requirements, working with appropriate international institutions and the widest possible range of countries, so that qualified practitioners can move smoothly between countries as the peak caseloads roll from one location to another.
- Establish a G7 experts’ group to develop options for making supply chains more robust and more resilient and to provide leaders with recommendations for action. This G7 group should work with the private sector and gather input from other partners. A specific task for G7 experts should be to develop recommendations and a strategy to build more effective emergency supply chains to meet the next global health crisis.
- Support more effective use of existing trade agreements and mechanisms, such as the WTO Trade Facilitation Agreement, to identify additional steps and to facilitate flows of essential goods and services needed during the pandemic.
- Support WTO reform during the year ahead in order to improve its functioning and enhance the role of the multilateral trading system to promote trade flows and support a strong economic recovery.
- Commit to a thorough and extensive search starting now to select the next WTO director general, doing so with the urgent need to reform the organization in mind.
- Devote concerted attention among the G7, in the WTO and elsewhere to potential abuses of government subsidies under cover of responding to the pandemic in ways that would disrupt efficient supply of goods.
- Develop and pursue options for strengthening international disciplines on the use of all forms of subsidies over the year ahead.
- Take specific actions to forge additional international agreements on digital governance and data flows, e-commerce and e-service provision, given that the economy to emerge from this crisis is likely to be more reliant on data collection and flows, on internet-provided services, and on increased use of digital marketplaces.
- Craft an action agenda on trade-related intellectual properties issues in the context of a more technology rich emerging economy, and give special focus on assuring access to medicines and medical supplies in the pandemic and other health emergencies.
- Task G7 trade teams to explore and propose new agreements to liberalize trade in medicine and medical supplies that can facilitate provision of such goods and increase global surge capacity during future health emergencies.
The G7 leaders should task their trade teams to talk monthly over the year ahead to pursue this agenda and to provide quarterly updates to leaders.
Energy and Environment
The COVID-19–catalyzed health crisis has coincided and converged with and compounded an energy and environmental one. The plunging economic activity from the COVID-19 lockdowns has come as the critical energy sector suffers from the additional blow of a dramatic drop in world oil prices. While this price decline would normally benefit oil-importing members of the G7 and the world, at present, with the continuing COVID-19 created lockdowns destroying much energy demand, consumers are not benefiting, and producers and their employees are suffering. The crisis thus gives the longstanding G7 quest for energy security a new and more immediate, precise priority.
Reliable Electricity Grids
The first is the need for energy reliability and resilience in electricity markets, so hospitals, long- term care homes, the entire healthcare infrastructure and supply chains can keep the lights on and the operating rooms, ventilators and other machines working to save patients’ lives. The healthcare workforce and indeed all employees need electricity to keep working in their homes, especially as the surging use of digital communications and teleconferencing has on occasion created blackouts that imperil human life. There is thus a need for the G7 to strengthen the reliability and resilience of its members’ energy grids, in part by diversifying the source of electricity generation to embrace a broader array of renewable energy sources that together create supply and grid stability and generate new jobs. Such renewables should include solar, onshore wind, offshore wind, run-of-the-river hydro, and — to provide reliability — pumped hydro, tidal and geothermal sources.
Global Gas Networks
Such energy security can also come from greater inter-country connectivity of natural gas networks, done in ways that minimize the associated methane emissions, wasteful wellhead flaring and the other environmental risks that leaky pipelines and particular production techniques can bring. Those countries seeing the COVID-19 lockdowns destroy their domestic demand and sales for their abundant gas production could then find markets in less COVID-19–afflicted countries where the economies are opening and the demand for gas is coming back. As methane-minimized gas produces far fewer greenhouse gas emissions than the coal and oil, whose products have long been shipped around the world, both the economy and environment benefit from global gas networks.
Clean Air, Water and Oceans to Counter COVID-19 and Zoonotic Disease and Death
Recent years have seen the costs associated with environmental degradation for human health and the environment rise exponentially. The COVID-19 crisis is a zoonotic disease that has made the leap from an animal to a human. In the future, the world is likely to see new coronaviruses, as human encroachment on the natural environment reduces the living space for wild species. The economic costs of the COVID-19 pandemic are unprecedented. The human lives that have been lost are a tragedy.
The COVID-19 crisis has affected those with pre-existing respiratory and heart conditions the hardest. Air pollution is known to be a major contributor to asthma and other respiratory illnesses. Improving air quality by reducing particulate matter and nitrous oxide from automobiles and fossil fuel burning will simultaneously improve quality of life while reducing economic burdens from higher healthcare costs and sick people’s reduced productivity. Global warming associated with fossil fuel burning is likely to further contribute to the spread of known diseases such as malaria, dengue fever, West Nile virus and Lyme disease and invite new diseases to emerge and spread.
At the same time, the world’s oceans and seas are filling with plastic, causing havoc for marine mammals, fish and birds, which mistake the plastic for food. Agriculture runoff is compounding the problem, with nitrogen levels in water systems choking aquatic life. The damage being caused from human-made plastic and agricultural pollution to the natural environment is enormous. It affects fisheries, drinking water and human health.
Now is the time for the G7 to recognize the co-benefits associated with policies and programs that improve air and water quality. Many of the Sustainable Development Goals to which the G7 members have committed could be fulfilled with commitment by the G7 to cooperate to improve air and water quality. The win-wins would be significant.
Planting One Trillion Trees
Forests make a powerful contribution to humans’ physical and mental health, providing medicines, and separating animals from humans and thus stopping infectious diseases such as COVID-19 from moving from animals to humans. Forests also clean water, air and soil and support recreational, tourist and forest products industries, rural communities and Indigenous peoples. Protecting forests and planting trees from species appropriate to local conditions can be a strong source of new jobs, especially for the young and poor. They are the real “shovel ready” stimulus.
President Trump, hosting the G7 summit this year, publicly promised at the World Economic Forum in Davos in January to contribute to the global effort to plant one trillion trees. All other G7 members have pledged to foster afforestation, including by expanding natural protected areas, to meet their UN Biodiversity goals due this year. The current jobs crisis caused by the COVID-19 pandemic presents an urgent need to put the newly unemployed to work and an opportunity to do so by planting trees and protecting forests, in the many places of unused land in their countries and their extensive territories overseas. G7 countries possess over 20% of the 0.9 billion hectares for potential tree restoration globally, led but the United States with 78.4 million and Canada with 78.4 million. The United Kingdom and France have overseas territories in locations allowing year- round tree planting, assisted by Japan, Italy, and EU members such as Spain and Greece.
Current and projected unemployment rates in G7 members suggest that at least one million newly unemployed workers (including new school leavers and students seeking summer jobs) would be available. The cost of their salaries, training and worksite support could be largely or fully offset by savings from unemployed insurance or welfare. The estimated cost is $0.30 a tree, with the 20% G7 share of the $300 billion for the global total of one trillion trees costing $60 billion over 10 years or $3 billion per year.
Leaders could task their G7 employment and environment ministers to oversee the effective implementation of this commitment and report annually to leaders, assisted by G7 members’ space- based Earth-resource sensing capabilities. They could work with the Trillion Tree Initiative and the Bonn Challenge co-launched by Germany in 2011 with 48 members now.
This builds on past G7 summit commitments on forests: at the 1987 Venice Summit on air and water pollution, and tropical forests; George H.W. Bush’s 1990 Houston Summit on tropical forests; Angela Merkel’s 2007 Heiligendamm Summit on REDD+ with 78% compliance from G7 members: the 2008 Hokkaido-Toyako Summit with 72% compliance, the 2009 L’Aquila Summit on REDD+ with 89% compliance and Angela Merkel’s 2015 Elmau Summit with 91% compliance. G7 leaders have kept their promises on trees in recent years.
Peace and Stability
With his March 2020 call for a global cease-fire in the context of the COVID-19 crisis, United Nations Secretary-General António Guterres moved the debate on international security to a more systemic and fundamental level, expressing the hopes of the entire global population. The ongoing wars, arms races, terrorist attacks and world record of refugees since World War II directly and indirectly undermine efforts to tackle COVID-19 and the several other global crises the world has to confront, by making conditions so much worse on the ground, and diverting vast amounts of resources and political energy.
While commemorating the end of World War II 75 years ago this summer, G7 leaders can enhance global basic trust, on which collaboration for peace and stability depends. Doing so will boost negotiations at the highest level and pave the way for recognizing a common responsibility in promoting the necessary cooperation for peace and stability in the 21st century. This restoration of trust is necessary for a timely diplomatic push among G7 and relevant non-G7 partners to end ongoing regional wars and to start talks on the most urgent agenda issues to rescue the global regime for nuclear arms control.
As President Trump has pointed out several times, sharing the burden and responsibilities among G7 members and others and the commitment of non-G7 major powers to nuclear arms control are both vital to make the world a safer place.
The G7 should also take urgent action with other countries and organizations to mitigate the impacts of COVID-19 for the populations in countries hit by civil wars and terrorist attacks, and for refugees and internally displaced persons.
The current COVID-19 crisis also underlines the growing need for policies promoting the respect of fundamental rights on the internet. Despite the growing prominence of digitalization in many realms, we lack tools to protect personal and collective rights on the internet and align them on shared global public values.
A new agenda for a sustainable digital world should go beyond previous G7 commitments on open data (2013); the digital divide and the role of women in science, technology and mathematics (2016); the gender digital divide and artificial intelligence (2018); and the Biarritz Strategy for an Open, Free and Secure Digital Transformation (2019). What should be targeted now is a true constitutional universal order to protect the governance of the internet — interactions within the internet, or made possible by digital technologies.
Priority should be given to review all legal options — declarations, constitutions, treaties or framework conventions. Such a move would better link security and privacy. The COVID-19 crisis has shown how essential it is to fine-tune the balance between tracing and a right to privacy: during the lockdown, hospitals have been hacked, people have filled in forms to be allowed to leave home, tests results have been disseminated, and hate speech has proliferated, notably against people suspected to have infected others (even nurses and physicians).
Drafting a consensual resolution would require the collaboration of international organizations such as ICANN, the International Telecommunication Union, the World Intellectual Property Organization, the World Summit on the Information Society, the World Health Organization and the WTO (now engaged in a new round of negotiations on e-commerce). The G7 should strengthen cooperation in data collection and research on misconduct on the internet, misinformation about COVID-19 via fake news and the causes of fake news. Education should be mobilized to help learners adopt correct perceptions of collective threats, and address with objectivity and sincerity the issue of inequality, which has been exacerbated by the COVID-19 crisis.
This report was originally published on the website of the Woodrow Wilson International Center for Scholars at https://www.wilsoncenter.org/publication/think-7-usa-2020-report-think-7-summit.