G7 trade chiefs vow to build stronger supply chains amid global uncertainty

They also emphasised the need to diversify the supply of raw materials, including critical minerals for energy transition

Japan's ministers attend the G7 Trade Ministers' Meeting in Osaka, western Japan. AP
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Trade ministers from the Group of Seven (G7) advanced industrial economies pledged to work together to ensure smooth supply chains for essentials like food and energy amid global geopolitical and economic uncertainty.

The officials agreed that collaboration with international partners beyond the G7 and co-operation with the private sector are essential for supply-chain resilience, Japan's Ministry of Foreign Affairs said.

The G7 Trade Ministers' meeting was held at the weekend in Japan's western city of Osaka.

The ministers agreed on "achieving inclusive and sustainable growth through efforts to build resilient supply chains and ... promoting further collaboration and co-operation with trusted public and private sector partners", the ministry said.

The agreement will help develop a multilateral trading system and build an inclusive society.

They also stressed the need for diversifying the supply of raw materials, including critical minerals for energy transition, with a focus on collaborating with the Global South.

Critical minerals are a key area where international co-operation is needed to ensure secure clean energy transition, G7 foreign ministers said in April during a meeting in Japan.

At the time, the ministers agreed to a joint plan for critical mineral security that the International Energy Agency will support, by producing medium and long-term outlooks for demand and supply to help inform decision-making, the Paris-based agency said.

The G7 stressed the need at the time to prevent economic and security risks caused by vulnerable supply chains, monopolisation and lack of diversification among existing suppliers.

Demand for critical minerals — key elements in electric vehicle batteries, electronics and solar panels — is expected to rise sharply as the world shifts to cleaner technology to reduce carbon emissions.

However, global miners are facing significant headwinds from high energy prices, rising infrastructure costs and supply-chain disruptions.

Industry participants are also concerned about the growing reliance on a few countries for strategic raw materials.

The Democratic Republic of the Congo and China were responsible for about 70 per cent and 60 per cent of global production of cobalt and rare earth elements, respectively, in 2019, the IEA said.

Latin America accounts for 40 per cent of global copper production, led by Chile, Peru and Mexico, it said in a report last week.

The region, which supplies 35 per cent of the world's lithium, also holds more than half of global lithium reserves, mainly located in Argentina and Chile.

Future Minerals Forum held for the first time in Saudi Arabia

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Yoko Kamikawa, Japan's Minister for Foreign Affairs, said on Sunday that non-transparent industrial subsidies, market distorting practices by state-owned enterprises and all forms of forced technology transfer are among the key concerns for the G7.

The minister highlighted the need for effective action for a "level playing field".

Market-distorting policies "harm the whole of the international community, not to mention the proper development of developing countries" and it is important to share such awareness with wider partners beyond G7, including developing countries, the minister said.

Updated: October 29, 2023, 11:24 AM