The Cornwall Consensus

It is the name that the G7, Germany, Canada, the United States, France, Italy, Japan and the United Kingdom, the seven richest countries in the West, have given to the document in which experts, after an extensive process of analysis and consultation, they answer the question of how economies can be more resistant to external shocks. As we inevitably face significant risks, as the coronavirus pandemic shows, new global governance mechanisms are required, which make cooperation and collective action possible.

There are seven recommendations that will be presented to the G20 at the end of the month. One is to make and finance plans to deal with pandemics, such as strategies to develop and equitably distribute vaccines. To achieve this mission, public and private funding is required to enable research and development. The second is to accelerate the circular economy and actions that combat global warming. The third is to prevent cyber attacks, establish a global system of digital governance, but also generate competition, combat monopolies in that area and create a fair tax system that captures the wealth that is being generated. The fourth is to promote drug trade and patent reforms, as well as avoid export subsidies from large economies.

The fifth is to increase investment in the post-pandemic period, accelerate the green transition and establish minimum taxes on global and digital companies. The sixth is to broaden the spectrum of well-being measurements, not limit them to the Gross Domestic Product, to also consider indicators of health, labor, gender and inclusion of minorities. The seventh is to establish coordination mechanisms and emergency plans to guarantee distribution chains and the provision of critical goods for the economy, such as conducting seminars and essential minerals.

The new consensus is different from that of Washington in the sense that it does not consider globalization as an always positive force, which with the opening of markets, financial and goods, will generate prosperity and stability for all. Important risks are recognized and the need for effective governance is assumed, in which the richest countries assume a large part of the responsibility for financing in several crucial aspects, such as medicines, so that intellectual property recognizes that knowledge is a process of collective creation. The concept of international solidarity is deepened, so that innovation is shared with all nations. In general, an active state is proposed to generate innovation that allows reaching goals of public interest.

It is clear that humanity is going to face new shocks similar to the financial crisis of 2008 and the coronavirus, which deepened inequality and affected the quality of life of millions of people, so actions are required to prevent them and act accordingly. weather. This is important to reduce the costs of acute risks, such as pandemics, or financial crises, but action is also required to address chronic risks, such as deepening income inequality or climate change. From the discussion, concrete, short-term agreements have to be derived, such as guaranteeing vaccination in developing nations, which continue to lag behind, specifying global minimum tax agreements for corporations and digital companies, as well as generating research and funding funds. development, financed by the G7 countries, on medical and climate issues, under schemes in which intellectual property and knowledge are shared.

Twitter: @vidallerenas

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Guest column

A graduate in Economics from the Instituto Tecnológico Autónomo de México (ITAM), he has a Master’s Degree in Public Policy and Management from the University of Essex, United Kingdom and a Doctorate in Public Administration and Management from the University of York.

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