G20 finance ministers meet to seek consensus before US election

Finance ministers and central bankers from the Group of 20 meet this week to renew efforts to reach consensus on economic policy ahead of the US election, and will avoid discussing the wars in Ukraine and Gaza to try to prevent them dominating the talks.

Negotiators from the G20 major economies have agreed to leave discussion of the conflicts out of a joint statement by the finance leaders gathering on July 25-26 in Rio de Janeiro, Brazilian diplomats said last week.

A meeting of the same ministers and central bankers in Sao Paulo in February failed to issue a joint statement, after Russia and major Western nations were unable to agree how to describe the war in Ukraine and Israel’s shelling of Gaza.

The new approach may help to shift the focus to economic cooperation on issues such as climate change and poverty. Two Brazilian government officials said the hosts also hoped to achieve an increase in support for a proposed global tax on the super-rich that Brazil has made a priority of its G20 presidency.

Pressure has mounted to make progress before the next finance track meeting in October – the last before a G20 summit gathering heads of state in November, the month when US elections take place.

“We’re arriving in July aware that we need to close deals. October will be completely overshadowed by the US election,” said one of the Brazilian officials, who requested anonymity so he could speak openly.

The strong polling of former US president Donald Trump, who has called for massive tax cuts for individuals, could undermine the idea of a global billionaires tax. Brazil is still prioritizing a joint declaration on international tax cooperation during its G20 presidency.

Another Brazilian official who asked not to be named said tax was “a central theme in the finance track this year, regardless of the US election.”

Brazil has won backing for the idea from Belgium, Colombia, France and Spain, as well as the African Union and South Africa, which will assume the G20 presidency next year.

It is seeking further support by casting the proposal as a way to make the global tax system more progressive, aligning with its G20 agenda to reduce global inequality.

That marks a shift from Brazil’s approach in Washington in April, when it linked the billionaire tax proposal with funding for climate policy and global poverty reduction during the IMF and World Bank spring meetings.

US Treasury Secretary Janet Yellen baulked at the idea of internationally redistributing revenue from a global wealth tax.

One of the Brazilian sources said that the G20 chair would seek to build on the language from last month’s G7 meeting of major Western nations, which Brazil considered positive.

This would be an important step towards demonstrating the G20’s initial support, although Brazil has acknowledged the effective implementation of such a global initiative would take years.

In its joint statement, the G7 said it would “work constructively with the Brazilian G20 Presidency to advance international cooperation. We will work to increase our efforts aimed at progressive and fair taxation of individuals.”

Brazil’s proposal, crafted by French economist Gabriel Zucman from the independent EU Tax Observatory, calls for an annual 2 percent levy on fortunes exceeding $1 billion, potentially raising up to $250 billion per year from some 3,000 individuals.