HIROSHIMA, Japan — At his first G-7 summit two summers ago along the sandy English beaches of Cornwall, President Joe Biden vowed that the U.S. was ready to lead again on the world stage.
Whatever initial skepticism met those sunny pronouncements faded in the weeks and months after Russia’s invasion of Ukraine in February 2022, as the G-7 — with the U.S. playing a leading role — mounted a robust and largely unified response.
But now, as Biden takes off Wednesday for his third G-7 summit, it’s Washington giving the other leaders heartburn.
The White House’s struggle to strike a deal with the new Republican House majority, which is demanding spending cuts in exchange for raising the nation’s debt ceiling, is sparking fears of a historic default that would have a catastrophic effect on the global economic landscape.
There were doubts Biden would even make the trip, so precarious is the current dynamic in America’s capital. The latter half of the trip was scrubbed on Tuesday so the president could return to Washington early in an effort to cement a deal. It would have included the first-ever visit to Papua New Guinea by a U.S. president, before participation in the Quad Summit in Australia.
“Biden promised our allies that we would be a more reliable partner, but it’s the U.S. that is defaulting on critical diplomatic duties,” said Brett Bruen, director of global engagement under former President Barack Obama. “It’s really bad for relations when the president says he will show up, we make a country go to all the security and set-up trouble preparing a major visit, but then he has to pull out at the last minute.”
For all the G-7 has accomplished since Russia invaded Ukraine last February, it will meet amid a confluence of pressing issues as the war bogs down. China’s continued economic rise is creating more visible fissures among democratic allies. And the joint initiatives being prepared ahead of the summit could amount to little if the U.S. blows a hole in the global economy.
“Often a G-7 has an economic issue that's overhanging. It could be a global financial crisis, could be a Eurozone crisis, or it has a military issue or a geopolitical issue overhanging it. This one has both,” said Josh Lipsky, senior director of the Atlantic Council’s Geo-economic Center. “It is rare to have the debt ceiling, Russia, Ukraine, China all coming to a head at this G-7. It's just extraordinary.”
But National Security Council spokesperson John Kirby said G-7 priorities have long included supporting Ukraine and taking steps to further isolate Russia. The group also has put an emphasis on issues important to Biden, like addressing climate change and strengthening ties with developing countries.
“Since the president took office, revitalizing our alliances and partnerships, and reestablishing America's leadership around the world has been one of his top priorities," Kirby said while briefing reporters Tuesday about the trip. "Thanks in no small part to his hard work during the G-7, you will see that our allies and partners are more united than ever.”
The expectations for this summit are modest at best. China, a more divisive topic within the group, is likely to receive more focus in Japan than the war in Ukraine, where the allies have essentially done all they can. A U.S. push to broaden sanctions and export controls against Russia is already running into opposition from Europe, which has already absorbed the brunt of the economic pain resulting from the West’s sanctions regime. Economic concerns also undergird Europe’s general reluctance to risk billions in trade with China by embracing Washington’s more hawkish stance.
“Most of the G-7 desires putting forth a united front [on China] even if it is not a particularly hawkish united front,” said Ian Bremmer, the CEO of the Eurasia Group, a political risk consultancy.
Maintaining a united front will likely mean nipping at the margins and scaling back some of the rhetorical bluster about democracies and ambitious joint initiatives. For instance, the G-7 infrastructure bank, a Biden priority unveiled with great fanfare at Cornwall and again last summer in Bavaria, appears to be falling by the wayside.
“There’s just not a lot of there there,” Bremmer said in reference to what was initially dubbed Build Back Better World, a joint G-7 initiative to give developing countries a financing alternative to China’s Belt and Road Initiative for major infrastructure projects. “There’s just not a lot of money, and it’s becoming clear that the G-7 is not really capable of competing with China on Belt and Road.”
Infrastructure isn’t even on the agenda in Hiroshima. Meanwhile, there’s growing speculation that the most significant G-7 move on China will be a joint statement — separate from the official communique — denouncing economic coercion practices that likely won’t mention China, or any other country, by name.
“The question is how far can the Europeans be nudged towards something that's stronger, that has more teeth as a coordinating mechanism, as opposed to vague statements of principles,” said Thomas Cynkin, a senior fellow at the Atlantic Council’s Scowcroft Center for Strategy and Security. Without any strict definition or punishment mechanisms, such a statement will likely have little effect, he noted, on China’s political retaliation against trading partners, which is often hard to prove.
“You know, Lithuania decides to tilt a bit more towards Taiwan. Suddenly all these exports from China dry up over supposedly nonpolitical factors,” Cynkin said. “And the Chinese are good at plausible deniability, so it's a little difficult to pinpoint.”
There is more alignment toward China on security issues than economic ones. Japanese Prime Minister Fumio Kishida’s chosen location for the summit, the city leveled in 1945 by the first of two atomic bombs the U.S. dropped on Japan, will put some of the focus on the imperative of nuclear non-proliferation. It also will highlight the growing risk of a new nuclear arms race should relations continue to deteriorate between the West and autocrats in China and Russia.
But daylight remains. French President Emmanuel Macron somewhat walked back his strident comments following his visit to Beijing last month about how Europe shouldn’t be drawn into a fight between the U.S. and China over Taiwan or, as he put it, “crises that aren’t ours.” While any economic coercion statement will imply a link between politics and trade, Europe’s general reluctance to strongly rebuke Xi Jinping makes clear that the West itself remains subject to China’s economic might.
Despite differing relationships with China directly, G-7 allies no doubt realize the importance of their collective strength, the value in sticking together. As such, they’re likely to find common ground around shoring up supply chains and lessening dependence on China for the critical minerals needed to manufacture semiconductors and other technological products.
They’re also looking to strengthen relationships outside the G-7 by inviting several non-member nations to the summit, from Indo-Pacific powers like South Korea and Australia to smaller nations from across the global South, like Vietnam, Indonesia, Comoros for the African Union and Cook Islands for the Pacific Forum. Their attendance, and the imperative of countering China’s inroads in the southern hemisphere, help explain why so much of Biden’s early rhetoric about the superiority of democracies appears to be giving way somewhat to a more pragmatic approach.
While allies likely appreciate the gravity of the situation in Washington, Biden’s hasty decision to skip the Quad Summit — where he was to meet with additional international leaders to strengthen Indo Pacific ties — offers China a fresh talking point about the U.S. lack of follow-through in the region.
It also underscored for partners “that despite welcome U.S. focus on the region … domestic politics is still a restraint,” said Charles Edel, a senior adviser and the Australia chair at the Center for Strategic and International Studies. “That will be talked about widely.”
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By: Eli Stokols
Title: Biden brings debt crisis burden with him to G-7 summit
Sourced From: www.politico.com/news/2023/05/17/biden-g7-debt-crisis-00097316
Published Date: Wed, 17 May 2023 03:30:00 EST
