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Cameron hails G7 summit free trade deals progress

Published 27/05/2016

David Cameron is attending the G7 summit
David Cameron is attending the G7 summit

The G7 summit in Japan has taken another step towards completion of a set of free trade deals which between them could boost the world economy by half a trillion US dollars (£340 billion), David Cameron has said.

The Prime Minister hailed agreement to accelerate negotiations on a deal to remove barriers to trade between the EU and Japan, which he said was worth a total of £89 billion to the two sides.

Speaking at the end of a two-day summit which has been overshadowed for British observers by the impending EU referendum and for the rest of the world by US President Barack Obama's visit to Hiroshima, Mr Cameron warned that the UK risked being frozen out of such deals if it voted to quit the European Union on June 23.

He also welcomed G7 agreement on issues ranging from the Islamist terror threat to Russian interference in Ukraine, the Mediterranean migration crisis and the danger to public health posed by drug-resistant superbugs.

In a press conference at the summit venue in Ise-Shima, Mr Cameron said the global economy was facing strains from the "economic transition" under way in China and the problems in some developing countries, but insisted that a series of free trade deals offered "the prospect of real benefit for the UK".

"Taken together, the trade deals linking Europe and the US, Europe and Canada, Europe and Japan and the US and Pacific could add half a trillion dollars to the world economy," he said.

"Britain, together with the EU, has been helping to drive this process, specifically on the EU/Japan deal - something that is worth £89 billion to both sides.

"If we were outside the EU, it would be far more difficult to achieve anything like this, anything on this scale, anything as comprehensive. It is yet another example of the way the EU makes us better off - better off in terms of jobs, better off in terms of growth, better off in terms of the investment by other countries into our economy that creates the growth and jobs and livelihoods we need."

The declaration released by leaders of the G7 countries - the UK, US, Japan, Germany, France, Italy and Canada, along with the EU - warned that global growth remains "moderate and below potential, while risks of weak growth persist".

Since last year's G7 gathering in Germany, "downside risks to the global outlook have increased" and trade growth has "disappointed", said the declaration.

It committed the G7 countries to using monetary, fiscal and structural tools "to strengthen global demand and address supply constraints", but steered clear of the co-ordinated stimulus package originally favoured by the summit's host, Japanese PM Shinzo Abe.

On the crisis in the steel industry, the leaders warned that excess capacity - largely driven by China's over-production of low-cost products - is "a pressing structural challenge with global implications".

In an indication of determination to resist the flood of cheap Chinese steel which has led to job losses and plant closures in G7 countries including the UK, the leaders agreed that "this issue needs to be urgently addressed through elimination of market-distorting measures".

The leaders also signalled readiness to assist frontline Mediterranean states with the migration crisis, stating that the large-scale movement of migrants and refugees was "a global challenge which requires a global response".

Mr Cameron welcomed the leaders' endorsement of the tax transparency programme drawn up at the anti-corruption summit he hosted in London earlier this month.

But Oxfam said the G7 had "s ided with the tax-dodgers and missed this opportunity to end the destructive era of tax havens" by failing to back a global public register of company ownership and an agreement to require big business to publish information on how much tax they pay in every country where they operate.

Max Lawson, the charity's policy lead for the Even It Up campaign, said: "People across the globe, including some of the world's poorest people, will pay the price."

Anti-poverty campaign One welcomed G7 commitments to help refugees, girls and women and to focus assistance on the neediest, but said the rich world had a responsibility to ensure that economic slowdown does not hit the poorest hardest.

The charity's executive director for North America and Asia, Tom Hart, said: "Global economic uncertainty underscores the critical importance of overseas development for humanitarian relief and political stability. Economic growth is the best way to lift people out of extreme poverty, and the slowdown of growth will hit those living in poverty first and hardest.

"G7 leaders have a responsibility to ensure that global economic instability does not force hundreds of millions more people into poverty. G7 leaders also have the opportunity for economic growth in their own countries by tapping into emerging new markets and one billion potential new customers in sub-Saharan Africa."

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