FACT SHEET: The G-20 St. Petersburg Summit
The G-20 is the world’s premier forum for economic cooperation – where Leaders representing economies generating more than 80 percent of global GDP assemble around the table to address the world’s most important and difficult economic challenges.
This year’s St. Petersburg G-20 Summit – the seventh that President Obama has attended since taking office – has reaffirmed the G-20’s leadership as the premier forum at which the major countries coordinate their economic policies to promote strong, sustainable and balanced growth and to address global challenges that no country can tackle alone. This year, G-20 Leaders were united in the belief that promoting growth and creating better-quality jobs is their top economic policy priority.
Leaders also agreed on a number of specific steps to strengthen the global economy, address climate change, fill holes in the international tax system, expand trade, strengthen nuclear industry liability, improve workplace safety, combat corruption, and promote global development. Among the most significant agreements were:
- to phase down the production and consumption of a potent category of greenhouse gases (hydrofluorocarbons) through the Montreal Protocol, a mechanism with a proven track record of success.
- to work together to address international tax evasion, to fix tax rules that allow multinational companies to avoid paying tax anywhere, and to support efforts by less developed countries to strengthen their revenue collection.
- to achieve a strong multilateral trade agreement this December, with trade facilitation at its core, and to extend the standstill on protectist trade measures for an additional two years through 2016.
Building a Stronger Global Economy through Jobs and Growth
The St. Petersburg Summit marks another milestone in the recovery from the global financial crisis that first erupted five years ago this month. Thanks in part to decisive action by the G-20, this Summit was the first in several years not to take place under the looming threat of financial crisis; instead, G-20 Leaders were focused on securing and deepening the gains we have made – and the key role of growth and jobs in this effort.
Crucially, the United States is a source of strength for the global economy because we’ve focused on creating jobs and growth. All told, our businesses have created a total of 7.5 million new jobs over the past 42 months. We have cleared away the rubble of the financial crisis and put in place new rules to strengthen our banks and reduce the chance of another financial crisis. At the same time, the United States is getting its fiscal house in order, with deficits falling at the fastest rate in 60 years.
Yet, even given this progress, both at home and around the world, G-20 Leaders came to St. Petersburg mindful of the challenges that remain – and reached a consensus on how to proceed, agreeing that our focus needs to be on creating the growth and jobs that put people back to work. They agreed to a St. Petersburg Action Plan with growth and job creation at its core:
- Focusing on job creation. All G-20 countries will present jobs plans at next year’s G-20 Summit in Brisbane.
- Reinforcing economic stability in Europe. The Euro Area committed to strengthen the foundations for economic and monetary union, including through further efforts to strengthen bank balance sheets, reduce financial fragmentation and moving ahead decisively and without delay toward a banking union. Advanced G-20 countries also agreed to maintain a flexible approach in implementing their fiscal strategies, while remaining committed to sustainable public finances.
- Managing emerging market volatility. Facing increased financial volatility, emerging economies agreed to take the necessary actions to maintain stability – including efforts to improve their economic fundamentals, increase resilience to external shocks, and strengthen financial systems.
- Coordinating reforms to promote growth. All G-20 nations committed to cooperate to ensure that policies implemented to support growth at home will also support global growth and financial stability and to push ahead more urgently with important structural reforms, in order to strengthen the foundations for long-term growth.
- Rebalancing the global economy. All G-20 nations reiterated their commitment to move more rapidly toward more market-determined exchange rate systems and exchange-rate flexibility.
Confronting Climate Change
- Addressing Hydrofluorocarbons (HFCs).
- G-20 Leaders committed to using the expertise and institutions of the Montreal Protocol to phase down the production and consumption of HFCs.
- This commitment marks an important step forward toward addressing HFCs – highly potent greenhouse gases that are rapidly increasing in use – through the proven mechanism of the Montreal Protocol. Phasing down HFCs would yield enormous climate benefits, reducing as much as 90 gigatons of CO2 equivalent between now and 2050, or roughly two years of global greenhouse gas emissions at current levels.
- Phasing out inefficient fossil fuel subsidies. Building on the commitment made at the Pittsburgh G-20 Summit in 2009 to phase out inefficient fossil fuel subsides, G-20 Leaders agreed on the methodology for a new peer-review process of fossil fuel subsidies, an important step in combatting climate change: the International Energy Agency estimates that eliminating subsidies – which amount to more than $500 billion annually – would lead to a 10 percent reduction in greenhouse gas emissions below business-as-usual by 2050.
Building Stronger International Tax Standards
- Fighting tax evasion. G-20 Leaders committed to fight cross-border tax evasion, requiring financial institutions to learn where their customers are resident for tax purposes and report that information to tax authorities. This measure will help to stop tax cheats from hiding their money in foreign bank accounts. The G-20 committed to make automatic exchange of information between tax authorities – based on the U.S. FATCA legislation – the single, new global standard, with automatic exchange of information expected to begin by the end of 2015.
- Ending tax avoidance. G-20 Leaders endorsed an ambitious action plan to change national tax rules that encourage multinational companies to shift their profits to low- or no-tax jurisdictions, allowing them not to pay tax on much of their income.
Opening Doors to Greater Global Trade
- Supporting a WTO Trade Facilitation Agreement. With its support for a strong outcome at the upcoming WTO Ministerial Conference in Bali, with a trade facilitation agreement at its core, G-20 Leaders reaffirmed the significance of the WTO to the multilateral trading system.
- Combating protectionism. Protectionist trade barriers weaken trade and investment. That is why the G-20 Leaders committed to extending their commitment to refrain from protectionist measures for two more years through 2016.
Establishing a Global Nuclear Liability Regime
- Recognizing that countries may opt for nuclear power as a part of their energy mix, G-20 Leaders called for a commitment to nuclear safety, security, and nonproliferation and reiterated the call for the establishment of a global nuclear liability regime to ensure appropriate and swift compensation for nuclear damage in the case of a nuclear accident.
Improving Global Labor Conditions
- Given the recurring loss to human life across the world on account of unsafe working places, G-20 Leaders directed the G-20 Task Force on Employment to partner with ILO in consultation with countries, and to consider how the G-20 might contribute to safer workplaces.
Strengthening Global Anti-Corruption Efforts
- G-20 Leaders endorsed a number of anti-corruption initiatives:
- Beneficial Ownership: The G-20 endorsed action to ensure greater transparency about shell companies, which can be misused to facilitate illicit financial flows stemming from corruption, tax evasion, and money laundering.
- Mutual Legal Assistance: To facilitate cooperation, G-20 countries adopted high-level principles on mutual legal assistance. These will be implemented in accordance with each country’s legal system.
- Foreign Bribery: To promote better business environments, the G-20 Anti-Corruption Working Group finalized two sets of principles on enforcing anti-bribery commitments and on addressing solicitation of bribes.
- Asset Recovery: To facilitate the return of moneys taken though the proceeds of corruption, G-20 countries agreed to assess their laws and procedures against high level asset recovery principles and to produce publicly available guides on their asset recovery regimes – inspired by a U.S.-led G-8 initiative.
Promoting Global Development, Food Security, and Public Health
- Development. The G-20 set the course for its future work on core development priorities: food security, financial inclusion and remittances, infrastructure, human resource development and domestic resource mobilization. Leaders expressed their strong support for the elaboration of a post-2015 development agenda.
- Food Security.
- In 2013, the G-20 held the Second Meeting of Chief Agricultural Scientists (MACS) to improve global food security. The MACS works to strengthen collaborative research in priority areas and to intensify sustainable agricultural production to meet the world’s increasing demands for healthy, safe and nutritious food.
- The G-20’s Agricultural Market Information System (AMIS) is generating greater food market transparency and coordination of policies in response to market uncertainty.
Global Public Health. To respond to the human and economic threat of emerging infectious diseases, including current H7N9 Influenza and Middle East Respiratory Syndrome (MERS-CoV) outbreaks, the G-20 called upon countries to improve rapid and effective responses to public health threats and to strengthening compliance with the World Health Organization’s International Health Regulations.