By Stacy Meichtry in Biarritz, France, Josh Zumbrun and Rebecca Ballhaus in Washington
Once a showcase for international cooperation, Group of Seven
summits have turned into minefields of geopolitical discord -- and
this year's gathering promises another feast of high-level
squabbling.
The club of rich nations is divided on how to deal with nearly
every issue they are set to discuss during the three-day summit
beginning Saturday at the French sea resort of Biarritz, from
tensions over Iran's nuclear program to the U.S.'s trade war with
China.
The divisions stem from disagreements over the system of global
trade and multilateral cooperation that emerged in the wake of
World War II.
British Prime Minister Boris Johnson, who is making his G-7
debut, is threatening to crash the U.K. out of the European Union
at the end of October. President Trump, who is no fan of
international institutions, has unilaterally wielded tariffs to
punish both China and G-7 allies.
"We're facing a historic challenge to the world order," French
President Emmanuel Macron, who is hosting the summit, told
reporters.
The summit's working sessions will begin on a contentious note
Sunday morning with a meeting focused on the global economy, which
was added at the last minute at Washington's request, a senior
administration official said in a press briefing.
Mr. Trump is expected to use that forum to tout the policies
that he says have led to economic growth in the U.S. -- many of
which have come under fire from European allies -- and "contrast
this with Europe, where growth is effectively flat," the official
said.
Divisions between the G-7 members were thrown into relief
Wednesday as Mr. Macron rebuffed Mr. Trump's call to readmit Russia
to the club of nations. The French president said Moscow, which was
ejected in 2014 over its annexation of Crimea from Ukraine, needed
to make progress in peace talks with Kiev before it is welcomed
back.
"To say that without any conditions Russia can return to the
table would be a sign of weakness of the G-7," Mr. Macron said.
Mr. Trump would likely address the question of Russia rejoining
the group at the summit, another senior official said, but the U.S.
expects Moscow to ask for readmission before any invitation would
be extended.
It was the Trump administration's steel and aluminum tariffs on
G-7 allies that derailed last year's summit in Canada.
Finance ministers of the G-7 countries other than the U.S.
issued a unified rebuke of U.S. trade policy at a gathering in
advance of the heads-of-state summit.
When the leaders gathered, Mr. Trump initially agreed to a joint
statement, but after departing the summit he withdrew -- via a
tweet sent from Air Force One -- after Canada's Prime Minister
Justin Trudeau deemed the steel and aluminum tariffs "kind of
insulting."
A photograph of Mr. Trump squaring off with German Chancellor
Angela Merkel went viral, encapsulating the tensions.
A year later, Canada is the only G-7 country to escape the steel
and aluminum tariffs. But the deal it struck, the
U.S.-Mexico-Canada Agreement, has yet to make it through the U.S.
Congress.
Meanwhile, the Trump administration is threatening G-7 allies
with tariffs on goods, ranging from wine and cheese to aircraft and
automobiles. That is a chief concern for Japan and Germany, the
largest automobile importers to the U.S. outside of North
America.
Mr. Trump is scheduled to hold bilateral meetings this weekend
with Mr. Trudeau, Japanese Prime Minister Shinzo Abe and Ms.
Merkel, among others, one of the senior administration officials
said.
Japanese officials who attended the contentious 2018 summit
fretted afterward that Mr. Trump might cancel the G-7 in 2020, when
the U.S. is due to host. A White House official said the
administration is fully committed to hosting the G-7 summit in
2020.
Japan is working on a trade agreement with the U.S., but it
faces a challenge: For a deal to be completed quickly, it must be
limited in scope so that it doesn't need congressional
approval.
This limitation would also apply to a U.S.-U.K. trade deal.
Though Messrs. Trump and Johnson -- who will meet for the first
time since Mr. Johnson became prime minister -- have declared their
enthusiasm for a sweeping accord, Congress has threatened to block
it, especially if it undermines the 1998 peace agreement that ended
tensions in Northern Ireland.
The U.S. has launched a process to impose tariffs against France
-- potentially against all French imports to the U. S. -- because
of a newly-passed tax on digital services that falls heavily on
U.S. tech companies. Mr. Trump is expected to raise the matter in
his meeting with Mr. Macron.
On Wednesday, Mr. Macron renewed France's call for a universal
tax code on digital services. U.S. and Chinese tech giants base
their operations in low-tax countries like Ireland to lower their
tax bill -- a situation Mr. Macron called "a kind of permanent
tax-haven status."
Another potentially contentious front for Mr. Trump is a meeting
he is scheduled to have with Indian Prime Minister Narendra Modi,
who is not a G-7 member but was invited by Mr. Macron to attend the
summit, where Mr. Trump is expected to raise the escalating
conflict in Kashmir, one of the senior administration officials
said.
Summits like the G-7 stem from the 1970s when countries united
to respond to oil-price shocks and the mid-1980s when the Reagan
administration came around to the view that the dollar was
seriously overvalued.
The U.S. coordinated an effort to bring about its depreciation
with its partners in the Group of Five: Japan, Germany, France and
the U.K. The outcome was the Plaza Accord of 1985, forged in the
swanky New York hotel, that agreed on joint currency intervention
to bring the dollar down.
This year analysts warn the sheer number of disagreements could
make it impossible for the G-7 to agree on a final statement.
Citing the G-7's chaotic finish in Canada last year, Mr. Macron
said leaders have ditched the longstanding practice of negotiating
for months in advance over the statement's final wording.
Matthew Goodman, a senior vice president at the Center for
Strategic and International Studies, said the leaders "will not
agree on trade, and maybe not even agree on a communiqué as a
result."
Stephen Fidler and Peter Landers contributed to this
article.
Write to Stacy Meichtry at stacy.meichtry@wsj.com, Josh Zumbrun
at Josh.Zumbrun@wsj.com and Rebecca Ballhaus at
Rebecca.Ballhaus@wsj.com
(END) Dow Jones Newswires
August 23, 2019 05:44 ET (09:44 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.