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Australia at the G7's Cornwall Summit

Kathryn Kotris, G7 Research Group
June 15, 2021

The G7 is committed to strengthening partnerships with other countries around the world to build back better. With its focus on combatting a global pandemic and restoring economic growth, it was important to extend invitations to democratic countries from many corners of the globe. Therefore, the leaders of Australia, Korea, South Africa and India were invited to participate in G7 Plus talks in a constructive and collaborative manner aimed at resolving both the COVID-19 and economic crises.

Australian prime minister Scott Morrison was in a position to provide valuable insights into the increasingly geopolitically strategic Indo-Pacific region. China has overtaken Japan as the second largest economy in the world and is seeking to enlarge its influence in a less conventional manner by disregarding the rules-based order of cooperation and adherence to international institutions. The pandemic originated in China, yet the actual source is unknown due to the Chinese government obstructing investigations by the World Health Organization (WHO). In an attempt to understand the source, to help prevent the next pandemic, Morrison had called on the WHO to be given the same powers as international weapons inspectors to enable them to investigate the origins of the pandemic properly. His statements, not intended to be political, focused on the need for a strong, independent and transparent WHO in its capacity as a global institution.

The Chinese government rejected this call. It retaliated by blocking key Australian exports, causing substantial economic harm, as 43% of Australian exports are to China. The entire region is experiencing increased tension due to these kinds of intimidation tactics used by China to influence sovereign countries' domestic decisions. This is particularly worrisome in the South China Sea, where the Philippines, Brunei, Malaysia, Taiwan, Vietnam and China have competing claims of sovereignty and through which more than $3 trillion in goods are transported around the world. China re-established diplomatic relations with the nearby Solomon Islands and is entering Australian waters under the guise of civilian vessels commandeered by China's navy. This aggression is referred to as grey-zone operations, short of a military build-up. Morrison is in unchartered territory as he navigates political differences with Australia's largest trading partner without compromising the interests of his country and its commitments to global governance. The G7 is an essential Australian ally.

The global geopolitical and economic shift is clearly moving east to the Indo-Pacific region and therefore of great importance to the G7 agenda. Morrison had a trilateral meeting with G7 host prime minister Boris Johnson and US president Joe Biden. Trade and national security are important complementary topics, especially as the United Kingdom was in the final stages of negotiating with Australia its first post-Brexit free trade deal. Hopefully there was a discussion on the importance of the US re-entering the Trans-Pacific Partnership. Both trade agreements will help buttress the region against Chinese government aggression. Furthermore, the US is instrumental in restoring the binding dispute settlement mechanism within the World Trade Organization (WTO). Morrison has been vocal in this call to action along with reform of the WTO, which may serve to constrain the Chinese government's ambition for global dominance. The G7 Cornwall Summit provided valuable opportunities for high-level meetings that would have otherwise been difficult to arrange.

Australia stands to benefit from the Build Back Better World (B3W) initiative launched by the US and the G7. There is a tremendous opportunity to transform Australia's extractive economy into one based on low carbon intensive industries through participating in the infrastructure plan by increasing and diversifying trade while assisting developing countries. Morrison and neighbouring Japanese prime minister Yoshihide Suga committed to collaborate on developing technological advancements to reduce greenhouse gas emissions in the region while supporting economic growth. They agreed upon efforts to reduce emissions from the production, use and transport of liquefied natural gas; clean fuel ammonia; promote clean hydrogen and derivatives produced from renewable energy or from fossil fuels with substantial carbon capture, use and storage; and reduce emissions from steel and iron ore production. These advances can be shared with the entire region, which includes mostly developing countries.

Morrison also had a bilateral meeting with German chancellor Angela Merkel. The leaders reaffirmed their commitment to a hydrogen accord by using German technology to develop an Australian hydrogen industry. The objective serves the economic interests of both countries and also enhances their commitments to reduce emissions. Australian industries would purchase German technology to transform their domestic energy sources in transportation, mining and manufacturing and, by extension, increase export capabilities. The goal is to produce hydrogen at less than $2 per kilogram ("H2 under 2"), which is competitive with other energy sources, thereby creating alternatives without taxing high emitters. Market forces will incentivize using the substitute and naturally eliminate the high-emission energy sources.

The G7 offers an opportunity for many countries to participate in and benefit from the revitalization of the global economy. Australia is in a unique position by having managed the pandemic more successfully than most countries – as did other Indo-Pacific countries. Its location and natural resources as well as its strong political institutions make it a regional stronghold for democratic redevelopment, economic strength and environmental rehabilitation. The Australian prime minister was a valuable participant in the Cornwall Summit. He demonstrated his commitment to their shared agenda in ending the pandemic and preparing for the future, reinvigorating the world economies, securing future prosperity, protecting the planet, strengthening partnerships, and embracing democratic values of freedom, equality, the rule of law and respect for human rights.

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