G7 finance chiefs move to diversify supply chains
May 13, 2023 10:59 AM
The G7 plans to launch a partnership scheme to diversify supply chains this year, ministers from the group said Saturday following finance talks in Japan ahead of a major summit next week.
The ministers did not directly mention efforts to reduce reliance on trade with China or Russia as motivation for the new framework, which focuses on clean energy technology.
But after meeting her Japanese counterpart, US Treasury Secretary Janet Yellen pointed to recent shocks to the global economy.
"Spillovers from Russia's war against Ukraine and disruptions caused by the pandemic have made clear the importance of diversified and resilient supply chains," she told reporters.
The Group of Seven's finance ministers and central bank chiefs highlighted the "urgent need to address existing vulnerabilities within... highly concentrated supply chains".
In a joint statement, they said they hoped to launch the partnership in collaboration with the World Bank "by the end of this year at the latest".
The scheme, dubbed RISE -- Resilient and Inclusive Supply-chain Enhancement -- builds on guidance released in April, and will offer interested developing countries "finance, knowledge and partnerships", the ministers said.
Their three-day meeting in Niigata, a coastal city in central Japan, took place just days before the leaders of the group of major developed economies gather May 19-21 in Hiroshima.
Support for Ukraine and the G7's relationship with China is expected to be high on the agenda at the summit, along with nuclear disarmament and action on climate change.
As the finance talks wrapped up Saturday, the ministers reaffirmed their commitment to sanctions on Russia and said they were working together to enforce them, but did not announce any concrete new steps to tackle sanctions evasion.
They also stressed the need to bolster financial stability following recent banking sector turmoil.
"We will continue to work closely with supervisory and regulatory authorities to monitor financial sector developments and stand ready to take appropriate actions to maintain financial stability and the resilience of the global financial system," the statement said.
The Niigata talks were also attended by the heads of the IMF, OECD and World Bank, as well as finance ministers from Brazil, India and Indonesia.