G7 Finance Chiefs Agree on Scheme to Diversify Supply Chain -Draft Communique

Kiyoshi Ota/Pool via REUTERS
Kazuo Ueda, governor of the Bank of Japan (BOJ), center, and Christine Lagarde, president of the European Central Bank (ECB), prior to the central bank session of the Group of Seven (G-7) finance ministers and central bank governors meeting in Niigata, Japan, on Saturday, May 13, 2023.

Reuters – Finance leaders of the Group of Seven (G7) advanced economies agreed to launch by the end of this year a scheme to diversify global supply chains that will “contribute to safeguarding energy security,” according to a final draft of their communique seen by Reuters.

The G7 finance chiefs also called for the need to “remain vigilant, stay agile and flexible” in guiding policy amid heightened uncertainty about the global economic outlook, the draft showed.

The draft communique made no mention of the U.S. debt ceiling stalemate.

On banking-system woes, the draft communique said the financial system was “resilient” due to financial regulatory reforms implemented after the 2008 global financial crisis.

“We will address data, supervisory, and regulatory gaps in the banking system,” the draft communique said.

The G7 finance leaders, who gathered for a three-day meeting in the Japanese city of Niigata, will release the communique later on Saturday.

China has been much on the minds of G7 finance leaders, with current chair Japan leading fresh efforts to diversify supply chains and reduce their heavy reliance on Beijing.

Under the partnership scheme, the G7 economies would offer aid to low- and middle-income countries so they can play a bigger role in supply chains for energy-related products, such as by refining minerals and processing manufacturing parts.

“Diversification of supply chains can contribute to safeguarding energy security and help us to maintain macroeconomic stability,” the draft communique said.

The G7 would work with interested countries and relevant international organizations with the aim of its launch by the end of this year at the latest, it said.