Group of 20 leaders have unanimously endorsed a global minimum tax on corporations in a move being hailed by United States Treasury Secretary Janet L. Yellen as benefiting American businesses and workers.
Finance ministers of G-20 countries a few months earlier had agreed on a 15% minimum tax and its formal endorsement at the summit Saturday in Rome of the world’s economic powerhouses was widely expected.
In the first major announcement of the two-day G-20 summit in Rome, the bloc endorsed a "historic" agreement that would see multinationals subject to the minimum tax rate said Yellen, who attended the talks.
She predicted in a statement that the deal on new international tax rules, with a minimum global tax, "will end the damaging race to the bottom on corporate taxation."
The reform plan, already backed by almost 140 countries, seeks to end the practice of big corporates such as Apple and Google parent Alphabet of sheltering profits in low-tax countries.
"We call on the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting to swiftly develop the model rules and multilateral instruments as agreed in the Detailed Implementation Plan, with a view to ensure that the new rules will come into effect at (the) global level in 2023," the draft conclusions, seen by Reuters, said. The conclusions are to be formally adopted Sunday.
Climate goals lagging ahead of Glasgow
But no consensus had yet emerged on a collective commitment on climate change, on the eve of the crucial COP26 conference starting in Glasgow on Sunday. Hosts Italy are pushing the G-20 to collectively endorse the United Nations goal of limiting global warming to 1.5 degrees Celsius above preindustrial levels, one of the aspirations of the landmark 2015 Paris climate accords.
"From the pandemic to climate change, to fair and equitable taxation, going it alone is simply not an option," Italian Prime Minister Mario Draghi told leaders ahead of the closed-door talks. G-20 members, many at different stages of economic development, remain at odds over the other major goal of reducing greenhouse gas emissions to net-zero by 2050.
"We have a moment now when we can try and take some of the nebulous commitments in Paris, solidify them into hard, fast, commitments to cut emissions, to cut cars and coal and so on," said British Prime Minister Boris Johnson, who will host the Glasgow talks.
Ahead of the day's talks, European Council President Charles Michel said that agreement on more stringent climate goals would be "difficult to accept" for countries dependent on coal – a veiled reference to China.
The stakes are high, as the G-20 – which includes China, the U.S., India, the European Union and Russia – accounts for 80% of global gross domestic product (GDP) and nearly 80% of greenhouse gas emissions.
As the leaders huddled in Rome's fascist-era southern neighborhood of EUR, thousands of climate protesters, many of them young, gathered in the city center to demand tougher action. "We're asking G-20 leaders to stop playing games among themselves and finally listen to the people and act for the climate, as science has been asking for years," Fridays for Future activist Simone Ficicchia told Agence France-Presse (AFP).
'Grave' concern on Iran
The Rome meeting was the opportunity for a flurry of bilateral meetings between G-20 leaders, notably U.S. President Joe Biden, who is hoping to reassert U.S. leadership following the tumultuous Trump years.
After Iran said it would resume discussions with world powers next month on reviving the 2015 nuclear accord, Biden with his French, German and British counterparts expressed their "grave, growing concern" over Tehran's nuclear program.
The deal has been floundering since Biden's predecessor Donald Trump walked out in May 2018 and imposed sweeping sanctions.
Unequal vaccine access
Another key topic is the coronavirus pandemic, with both Chinese President Xi Jinping and Russian President Vladimir Putin raising the issue of the unequal global distribution of vaccines, in their comments to the group via video link.
Putin blamed disparities on "dishonest competition, protectionism and because some states, especially those of the G-20, are not ready for mutual recognition of vaccines and vaccination certificates," in his speech broadcast on Russian state television.
No new pledges are expected to address the vast gap in COVID-19 vaccine access between rich and poor countries. But Draghi urged counterparts to "do all we can" to meet a World Health Organization (WHO) goal of vaccinating 70% of the global population by mid-2022.
According to a source following the summit discussions, "all the leaders" agreed to commit to that target.