The G7's message of unity

Over May 19-21, leaders of the Group of Seven (G7) came together in Hiroshima, Japan, conveying a message of unity in the midst of broader volatility, and addressing a host of issues including the Russia-Ukraine war, G7-Indo-Pacific relations, economic resilience and energy transition.

Based on the leaders' communique, various supplemental communiques and the sideline meetings at the summit, a number of trendlines are likely to continue to unfold in the coming months:

Russia isolation

Coordinated actions: The G7 took additional coordinated action to further restrict Russia's ability to conduct the war against Ukraine including a widening export ban, efforts on circumvention and third-parties, access to the international financial system and energy security.

• Export ban: Restricting access to G7 economies including an export ban on items used by Russia on the battlefield with carveouts for agricultural, medical and humanitarian products
• Circumvention: By targeting entities transporting materials to the front. Calling upon third parties to cease providing material support.
• International financial system: Work to restrict Russia's access to the international financial system.
• Energy disentangelement: Continuing to build on export bans and price caps to limit Russia's energy exports revenue.
• Diamonds: Restricting trade in Russian diamonds.

Individual countries: The US added additional entities from Russia and third parties to the US entities list and imposed sanctions on a further 300 individuals and entities.

• The US has already said the new export ban will restrict categories of goods key to the battlefield and cut-off 70 entities from Russia (and third countries receiving US exports) by adding them to the Department of Commerce entity list.
• Also noteworthy: 300 new US sanctions against individuals, entities, vessels and aircraft to go after circumvention.

Ukraine support

Fighter jets: The big headline going into the weekend's meetings was the decision by the US administration to authorize training of Ukrainian pilots on F-16 jets. This was a long-time request from Zelensky's government that the US administration had resisted for months.

Ukraine support: The US announced another tranche of US security assistance to Ukraine and really sought confirmation of unity for Ukraine. The communique says the G7 will be there as long as it takes. Much will depend on the counter-offensive set to begin this spring/summer.

Ukraine post-war reconstruction: The G7 confirmed their commitment to provide economic support necessary for the recovery and reconstruction of the Ukrainian economy. The G7 reiterated commitment to a complex approach providing bilateral economic aid while also actively working with multilateral institutions and the private sector to ensure Ukraine's post-war reconstruction and development.

Economic coercion

In their statement on Economic Resilience and Economic Security, the G7 leadership introduced a new term into the lexicon: economic coercion. Time will clarify what the G7 intends, but the focus on protecting against economic vulnerabilities — natural disasters, pandemics, geopolitical tensions and coercion — comes out of the growing intersection between economic and security spheres.

The group agreed to launch the Coordination Platform on Economic Coercion to increase collective preparedness to respond to and deter economic coercion and promote cooperation among the partners and driving collaboration with the developing world.

Quad meeting

The G7 communique highlights the objective of supporting a free and open Indo-Pacific. Within this context the leaders of the Quadrilateral Security Framework met alongside the G7 sidelines covering a host of shared challenges from cyber to critical infrastructure, climate and education.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.