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G7 Steps Up Russia Sanctions, Seeks to Cut China Trade Dependency

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Leaders of the world’s richest democracies agreed on Friday to stiffen sanctions against Russia, while a draft communique to be issued after their talks in the Japanese city of Hiroshima stressed the need to reduce reliance on trade with China.

The Group of Seven (G7) leaders, who will be joined this weekend by Ukrainian President Volodymyr Zelenskiy, pledged to restrict any exports to Russia that could help it in its 15-month-old invasion of Ukraine.

“This includes exports of industrial machinery, tools, and other technology that Russia uses to rebuild its war machine,” they said in a joint statement released on Friday, adding they would pursue moves to limit Russian revenues from trade in metals and diamonds.

On China, which G7 powers increasingly see in terms of a threat to economic security, they were to agree its status as the world’s second-largest economy meant it was necessary to foster cooperation, an early draft of the final communique seen by Reuters said.

“Our policy approaches are not designed to harm China, we do not seek to thwart China’s economic progress and development,” noted the draft, which is still subject to change, calling for “stable and constructive” ties with Beijing.

But the draft nonetheless urged measures to “reduce excessive dependencies” in critical supply chains and counter “malign practices” in technology transfer and data disclosure.

It reaffirmed the need for peace and stability in the Taiwan Strait and urged China to press Russia to end its aggression in Ukraine.

The G7 – the United States, Japan, Germany, Britain, France, Italy and Canada – will use the three-day meeting to debate strategy on a Ukraine conflict that shows no sign of easing.

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The summit venue, Hiroshima, was destroyed by U.S. nuclear bombings 78 years ago that ended World War Two. Japanese Prime Minister Fumio Kishida, who represents Hiroshima in Japan’s lower house of parliament, said he chose it for the global gathering to focus attention on arms control.

Russia’s threats of possible recourse to nuclear weapons, together with the nuclear programs of North Korea and Iran, have all added to concerns about proliferation.

In the draft, G7 countries – among them nuclear-armed France, Britain and the United States – expressed their “commitment to achieving a world without nuclear weapons” through a “realistic, pragmatic, and responsible approach.”

CIRCUMVENTING

Having emerged as the world’s wealthiest nations after World War Two, the G7 democracies have become increasingly challenged by an ascendant China and unpredictable Russia.

Amid evidence that existing Russian sanctions are being weakened by circumvention, they said the group was “engaging” with countries through which any restricted G7 goods, services or technology could transit through to Russia.

“We note and encourage commitments made by these countries to ensure our measures are not circumvented and have the intended effect,” they said, without naming any territories.

Breakdowns of German trade data show its exports to countries bordering Russia have risen sharply, fueling concerns about the re-exportation of goods from those neighbors.

It was not immediately clear how much the new sanctions effort would affect Russia, whose finances have already been squeezed by moves to cut revenues from its vast energy reserves.

“The wordings are quite open,” a senior EU diplomat said of G7 language designed to accommodate different approaches by different countries.

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Ukraine has urged its Western allies to go even further in isolating Russia, for example by tightening loopholes in the financial sector.

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Separately, the U.S. administration added 71 entities to a trade blacklist and Britain published plans to ban imports of Russian diamonds, copper, aluminum and nickel, although data show Russia’s imports of those commodities were already small.

Reflecting the EU view that wider diamond sanctions would only shift Russia’s trade elsewhere from the established gem capital of Antwerp in Belgium, the G7 draft merely referred to possible moves towards future restrictive measures.

The G7 countries reaffirmed their condemnation of Russian aggression and promised further support for Ukraine, in terms of military help and financial aid for its war-shattered economy this year and next.

Zelenskiy will attend on Sunday, two officials involved in the G7 summit said, declining to be identified because of the issue’s sensitivity. He is expected to fly there on a French government jet after attending an Arab League summit in Saudi Arabia.

The G7’s draft communique further reaffirmed its goal of net-zero emissions by 2050 at the latest, but also cited what it regarded as the continued role of liquefied natural gas as reliance on Russian energy was reduced.

“Recognizing the primary need to accelerate the clean energy transition, we stress the important role that increased deliveries of LNG can play,” the draft document said.

Topics
Russia
China

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