Markets Wired

Thank you all for joining us.  I’d like to start by thanking the Italian government, especially Minister Franco and Governor Visco.  They’ve been wonderful hosts.

At the end of our G7 meetings last month, I said that I believed we were seeing a revival of multilateralism.  Then, ten days ago, we got word that the overwhelming majority of the world’s nations – now 132 countries representing more than 90 percent of global GDP – agreed to the outlines of a global tax deal.

Which brings us to today. We’ve just completed a long weekend of very productive meetings, and we continue to see consensus around – and enthusiasm for – a global corporate minimum tax rate of at least 15%, as well as a partial reallocation of taxing rights to reflect the realities of the modern business world.  This agreement will also put an end to a chaotic array of unilateral digital tax measures and provide increased tax certainty to our businesses.

This deal will end the race to the bottom. Instead of  asking the question: “Who can offer the lowest tax rate?,” it will allow all of our countries to compete on the basis of economic fundamentals – on the skill of our workforces, our capacity to innovate, and the strength of our legal and economic institutions. And this deal will give our nations the ability to raise the necessary funding for important public goods like infrastructure, R&D, and education.

The international tax deal protects the free, open economic order that is crucial for investment and growth. And at the same time it is  welcome news for middle and working class people around the world – and, I think, especially for the American people. President Biden has spoken about bringing America back onto the world stage, and now you’re seeing why.  Being back makes America better.  We can cooperate in ways that make us more competitive in the global economy.  We can solve problems together that we can’t solve alone. And not just on tax. This weekend, we discussed how our countries can work together to address a range of global challenges.

Recovering from the Pandemic

First is putting an end to the pandemic.  Right now, the best way to fight this pandemic is more equitable vaccine distribution worldwide and more fiscal policy support where feasible.

The United States, like other major economies, has made significant progress rolling out COVID vaccines.  But we know that the pandemic is far from under control in many parts of the world, especially in many low-income nations.  And as long as the virus continues to spread, we’re all still at risk.  To that end, the United States has pledged to share 580 million vaccine doses, and I’ve strongly urged my G20 counterparts to step up their support.

In addition to finance, the international community must do more to fill near-term gaps in planning, coordination, and logistics.  This includes accelerating the equitable delivery and distribution of vaccines, as well as diagnostics and therapeutics, and helping low- and middle-income nations fight new flare-ups of the virus quickly.  I pressed for G20 finance and health ministers to address these potential gaps in the leadup to our joint meeting in October.

Looking forward, we know this won’t be the last global health crisis, and I want to thank Italy for its leadership to enhance pandemic preparedness.  The G20 should aim to reach consensus on actionable financing and health governance plans to prevent, detect, and respond to future pandemics by our October meeting.

We also spoke about the pandemic’s adjacent economic crisis, and its impact on low-income countries.  By some measures, the slowdown of the global economy will erase decades of progress in the fight against extreme poverty in these places.  This weekend, the G20 stressed that we will provide support.

For example, a new $650 billion allocation of IMF Special Drawing Rights, or SDRs, will boost global reserves and provide much-needed liquidity.  To amplify the impact of the SDR allocation, the United States is working with our G20 partners to identify how major economies can on-lend a portion of their SDRs to further support vulnerable countries.  By our next meeting in October, we hope the G20 can set an ambitious target of $100 billion in SDR channeling, and agree to establish a new trust fund at the IMF that complements the Fund’s programs and supports green recoveries.  The Biden Administration is working with Congress to secure a U.S. contribution to the IMF, and we are encouraging our partner countries to contribute as well.

Some countries struggling with the economic impacts of the pandemic also now face difficulties meeting their debt obligations.  Moving forward, the Common Framework for Debt Treatments will be the primary tool for low-income counties to seek debt treatment.  We are committed to continuing to strengthen the Common Framework process, and we encourage low-income countries needing debt relief to come forward to the G20’s Common Framework process.

Climate

We also spoke about climate change.  The G20 includes some of the world’s largest emitters, and being across the water from Piazza San Marco and all the rest of Venice’s beauty, we had a clear view of what was at stake if we do not act decisively.

This weekend, we spent time discussing how we must better understand and monitor the financial risks of climate change, as well as the role that multilateral development banks will play in the push towards net-zero emissions.  That will include the banks setting ambitious timelines to align with the goals of the Paris Agreement, and undertaking further efforts to enable more private climate investment.  In fact, I will be convening the heads of the multilateral development banks to encourage them to increase their climate ambition, both to support the most vulnerable and to incentivize private investment.  To support these international efforts, I am proud that the United States is co-chairing a G20 working group to coordinate a broad range of efforts on sustainable finance.

And with that, I am happy to take your questions.

####