GCG 2023-06-09
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Key Takeaways of the G7 Hiroshima Summit

Key Takeaways of the G7 Hiroshima Summit

The Significance of the G7

The Group of Seven (the “G7”) summit is a forum of seven leading economies—the United States, Japan, Germany, the United Kingdom, France, Italy, and Canada. This forum was created in the wake of the inflation caused by the 1970s oil price shock and stagflation due to slow economic growth to address such global economic challenges. Since its first meeting held in 1975 in Rambouillet, France, the G7 has so far been meeting regularly and discussing the world’s political and economic issues.

The G7 became known as the G8 after Russia joined the forum in 1998. However, due to its recent annexation of Ukraine, Russia was provisionally excluded from the bloc with the other member states’ agreement. 

The 49th G7 summit was held for three days, from May 19 to May 21, 2023, in Hiroshima, Japan. In addition to the United States and other G7 member states, the European Union, South Korea, Australia, India, Brazil, Vietnam, Indonesia, Ukraine, Comoro Islands (as the representative of the African Union), and Cook Islands (as the representative of the Pacific Islands Forum (PIF)) were invited to this summit.

2023 G7 Hiroshima Leaders’ Communiqué

This summit’s communiqué included intensifying support for Ukraine and condemning Russia. In particular, the G7 decried Russia’s invasion of Ukraine to be “a serious violation of international law, including the UN Charter,” and simultaneously reaffirmed their unwavering support for Ukraine “for as long as it takes in the face of Russia’s illegal war of aggression.” Apart from the communiqué, the G7 issued a statement on Ukraine and pledged to strengthen their financial, humanitarian and military support for Ukraine.

In addition, the G7 endorsed the disarmament and non-proliferation of nuclear weapons. In particular, the communiqué highlighted that the Non-Proliferation of Nuclear Weapons (the “NPT”) should be a prerequisite for the global non-proliferation of nuclear weapons. Apart from the communiqué, the G7 adopted a statement on nuclear disarmament, declaring, “North Korea cannot and will never have the status of a nuclear-weapon State under the NPT.”

Regarding the global economy, the communiqué particularly emphasized “economic resilience and economic security.” It included the need for the supply of critical minerals, semiconductors, and batteries to be centered around G7 member states based on economic principles and international law. This statement is viewed to have taken the U.S. Inflation Reduction Act (IRA) into consideration.

Regarding Tokyo Electric Power Company Holdings (TEPCO)’s decommissioning work and discharge of Advanced Liquid Processing System (ALPS) treated water at Fukushima Daiichi Nuclear Power Station, the communiqué stated that the G7 “supports the International Atomic Energy Agency (the “IAEA”)’s independent review that will be conducted consistent with IAEA safety standards and international law.”

The G7 also expressed their concerns over the threats posed by China and, at the same time, their willingness to cooperate with China. In particular, although the G7 stated that they planned to “reduce excessive reliance on China's supply chains,” they would also “be ready to establish a constructive and stable relationship with China,” urging China to engage in discussions to work with the international community on overcoming the climate and ecological crises, supporting developing countries with their debts, and promoting global health and macroeconomic stability. The communiqué also included the guarantee of Taiwan's autonomy.

In addition, the G7 discussed topics, including the transition to a clean energy economy, response to the world food crisis, and the expansion of global infrastructure.

Reaction to the 2023 G7 Summit

What drew much attention in this G7 summit was the noticeably relaxed stance towards China. Previously, the “exclusion of China from the global supply chain,” a.k.a., “decoupling”, was a big motto and prevailing global trend, but the G7 leaders’ communiqué clarified that excessive reliance on Chinese supply chains should be resolved to reduce risks that can occur due to China and declared the necessity of establishing stable international relations with China. President Joe Biden also stated shortly after the release of the G7 leaders’ communiqué that “the U.S.-China tensions will ease in the near future.”

Meanwhile, the Ministry of Foreign Affairs of the People’s Republic of China immediately protested against the statements in G7 leaders’ communiqué on Taiwan and global supply chains and called in the Japanese ambassador to China to demonstrate its will to respond strongly. The Cyberspace Administration of China (CAC) also announced shortly after the end of the G7 summit on May 21, 2023, that it will exclude U.S. semiconductor company Micron Technology from its core infrastructure projects, citing network security issues.


DR & AJU’s Comments

Although the G7 summit is not considered to have made radical changes in economic policies, it is noteworthy that the international community’s stance toward China has changed. Meanwhile, China's exclusion of Micron Technology is likely to cause changes in the international situation and affect companies in both big and small ways, such as expanding opportunities for Korean semiconductor companies to enter the Chinese market. Therefore, export companies in Korea should closely monitor the changes caused by the 2023 G7 summit.

DR & AJU's Washington, D.C. Liaison Office and D&A Advisory, Inc. provide services that deliver accurate and crucial information and help companies operating overseas establish effective response strategies to the shifting geopolitical landscape.
DR & AJU will continue to closely monitor developments in the global public relations and international affairs to respond expeditiously through close cooperation with businesses when necessary.

GCG Introduction

DR & AJU’s Global Compliance Group (the “GCG”) is founded with the purpose to prevent and minimize corporate risks for companies in Korea. GCG's goal is to create a favorable business environment by providing strategic solutions to prevent, manage, and minimize various risks a corporate entity may face doing business domestically or globally. 
DR & AJU GCG provides various risk management services from pre-transaction investigation, strategic research, field investigation, to review of a potential dispute, monitoring, and representing in litigations and post-litigation follow-up work. Furthermore, GCG aims to be a strategic partner to our clients in their creative management by predicting and preparing political and regulatory risks due to changes in global dynamics or political landscape that our clients may face in or out of Korea.
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