Main Agreements Reached at The G20 in Rome Point by Point

Saturday the 30^th of October 2021 marked the start of the G20 Summit in Rome. Key issues on the agenda included climate change, global tax, vaccines, and tariffs —all complex and decisive questions that the Groupe des Vingt had to negotiate on a tight deadline. Let us take a look at the G20 Rome Leaders’ Declaration to get a clear view of what the world’s greatest economic powers agreed on.

Climate change

Climate change being one of the most politically and economically divisive issues, it is no wonder that the world’s major economies failed to reach an agreement until the last day of the Summit. Nevertheless, the Group of Twenty managed to settle on an accord to cap global warming at 1.5 degrees. The Summit’s final declaration consecrates the agreement in these terms: “We remain committed to the Paris Agreement goal to hold the global average temperature increase well below 2°C and to pursue efforts to limit it to 1.5°C above pre-industrial levels.”  At the closing press conference, Italian premier Mario Draghi stressed that for the first time in the G20’s final communiqué, all the participating countries had acknowledged the scientific validity of the 1.5° objective. However, during the press conference, the Prime Minister did not commit to a precise deadline regarding zero emissions but rather vaguely announced “mid-century” as the goal.

Other agreements include issues such as the end of coal-fired power stations financing; specifically, the leaders “[…] commit to mobilize international public and private finance to support green, inclusive and sustainable energy development and […] will put an end to the provision of international public finance for new unabated coal power generation abroad by the end of 2021“. Clearly, there was no shortage of controversy both inside and outside the Summit. Within the G20 countries, China, India, and Russia could not agree on a precise deadline by which climate goals should be achieved, thus explaining the vagueness of the “mid-century” target. As for the external reactions to the G20, environmentalist associations such as WWF highlighted the limited progress made on climate change, trusting in more incisive action at the UN Climate Change Conference COP26 which is currently being held in Glasgow.

EU-US agreement on duties

President of the European Commission Ursula Von der Leyen and US President Joe Biden announced the immediate removal of the tariffs introduced by former US President Donald Trump thus ending the US-EU trade dispute that had seen the previous US administration introduce tariffs of 25% on European steel imports and 10% on aluminum imports. Ursula Von der Leyen declared that the agreement “marks a milestone in the renewed EU-US partnership.  And it is a global first in our efforts to achieve the decarbonization of the global steel production and trade. It is a big step forward in fighting climate change.”

Minimum Tax

After years of negotiations, the Global minimum tax on multinationals was approved at the Rome Summit. The aim of this measure is to reduce tax competition between countries as well as put an end to corporate tax avoidance. More specifically, the minimum tax is set at a 15% rate starting in 2023, which will affect the world’s largest multinationals —those with an annual revenue of more than €750 million. Tech giants such as Facebook, Amazon, and Google will then have to pay a tax in every country where their goods and activities generate profits, regardless of their physical presence on the territory. In addition, 20% of the revenues will be allocated to countries where the revenue exceeds EUR 1 million. With the introduction of the Global minimum tax, digital taxes will also be abolished. President Biden, in particular, expressed his satisfaction as the initial draft of this tax had been proposed by US Treasury Secretary Janet Yellen.

Health

At a time when the pandemic is still affecting our daily lives, G20 countries have pledged to increase efforts to ensure universal access to COVID-19 vaccines. The goal is to vaccinate at least 40% of the world’s population by the end of 2021. As stated in the G20’s concluding statement, “[…] recognizing that vaccines are among the most important tools against the pandemic, and reaffirming that extensive COVID-19 immunization is a global public good, we will advance our efforts to ensure timely, equitable and universal access to safe, affordable, quality and effective vaccines, therapeutics and diagnostics, with particular regard to the needs of low- and middle-income countries. To help advance toward the global goals of vaccinating at least 40 percent of the population in all countries by the end of 2021 and 70 percent by mid-2022, as recommended by the World Health Organization (WHO)’s global vaccination strategy, we will take steps to help boost the supply of vaccines and essential medical products and inputs in developing countries and remove relevant supply and financing constraints.” 

COVAX, the International consortium that provides vaccinations to the populations of developing countries, had written an open letter to G20 leaders, pointing out that in low- and middle-income countries only 35% of the population has had access to at least one dose of vaccine and arguing that pressure should be put on manufacturers to be transparent about production schedules to ensure that COVAX is not de-prioritized in favor of bilateral agreements. Of the 1.3 billion doses planned in the COVAX program for the poorest countries, the G20 has so far only given out 356 million doses, as underlined by UNICEF.

As further proof of the G20 countries’ interest in the health emergency, medical personnel, so valuable in the fight against the pandemic, were invited to the traditional group photo of world leaders.

At the close of the G20, Prime Minister Mario Draghi addressed the activists who demonstrated in the streets of Rome, thanking them personally because, as per his words, “they keep us on the right track. Many say they are tired of the blah blah blah, I believe that this Summit has been full of substance. We have filled the words with substance”. However, Draghi admonished his colleagues of the G20 stating that their credibility depends on their actions.