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EU's Tusk warns 'trade wars will lead to recession' as world leaders meet in France for G7 summit

13,000 members of the French security forces have been deployed to Biarritz ahead of the summit.

Tusk speaking at a press conference before the start of the 45th G7 summit.
Tusk speaking at a press conference before the start of the 45th G7 summit.
Image: DPA/PA Images

Updated Aug 24th 2019, 11:55 AM

EUROPEAN COUNCIL PRESIDENT Donald Tusk has warned that “trade wars will lead to recession, while trade deals will boost the economy” during a speech at the G7 summit of world leaders in Biarritz, France. 

Leaders of the G7 club of countries are meeting in southern France today, with the burning Amazon rainforest, falling stock markets and divisions over trade and Brexit providing the backdrop to proceedings.

Speaking at a press conference this morning, Tusk cautioned that US President Donald Trump’s escalating trade skirmishes with China and Europe could force economies around the world into recession.

Tusk also said it was hard to imagine the EU bloc of countries ratifying its trade pact with South America’s Mercosur grouping as long as Brazil fails to curb the fires ravaging the Amazon rainforest. 

The European Union “stands by the EU-Mercosur agreement but it is hard to imagine a process of ratification as long as the Brazilian government allows for the destruction” of the Amazon, he said as world leaders flew in for the G7 summit in the French resort of Biarritz.

Trump and other Western leaders will face protests as they arrive in the town of Biarritz, where a heavy police presence will keep them far from view.

Thousands are set to march around 30 kilometres near the coastal town to denounce leaders over their records on poverty and environmental issues.

13,000 French security forces are on duty to guard against violence, with authorities wary about anti-government “yellow vest” protesters and anarchists.

On Friday evening, 17 people were arrested and four police officers were injured in the first clashes in the village of Urrugne near a camp of anti-G7 activists, local authorities said.

The summit was already shaping up to be a divisive encounter, but images of smoke above the Amazon rainforest this week have lent it a darker mood.

“The Amazon is burning and it’s something that concerns everyone,” French President Emmanuel Macron said on Friday in an interview with the Konbini website.

He has led international pressure on Brazilian President Jair Bolsonaro over the fires, telling him that France would join Ireland in blocking efforts to pass the Mercosur trade deal between a bloc of South American countries and the EU.

He has also called for emergency talks at the G7, which lasts from Saturday to Monday, aiming for “concrete measures” to tackle the crisis.

“We are going to try and mobilise everyone to raise funding for reforestation as quickly as possible,” Macron added on Friday.

In response, Bolsonaro said the fires could not be used as a pretext for possible international sanctions, adding that “some countries” will defend Brazil at the G7 summit.

france-biarritz-g7-security Policemen stand guard in Biarritz ahead of the G7 summit Source: Xinhua News Agency/PA Images

Trade threat

Talks in the beach resort will also be dominated by a gloomy forecast for the global economy.

Wall Street stocks plummeted on Friday after Trump escalated a trade war with China that is seen as responsible for a global slowdown.

“We don’t need China and, frankly, would be far… better off without them,” Trump tweeted on Friday, adding that US companies were “ordered to immediately start looking for an alternative to China”.

His outburst on Twitter came after China imposed tariffs on US imports worth $75 billion in response to an earlier round of American measures.

But Trump hit back immediately, raising tariffs further again.

“We see trade tensions as the single most important threat to global growth,” a top EU official told reporters ahead of the G7 summit.

Trump continues to threaten European companies with trade tariffs, including Germany’s car industry and France’s wine sector.

Last month, he promised “substantial reciprocal action” after French MPs backed a new law imposing a sales taxes on US digital giants such as Google and Facebook.

upi-20190823 Donald Trump speaks with members of the media ahead of his departure for France Source: UPI/PA Images

Boris Johnson debut

Although the Amazon fires and trade will dominate the agenda, the G7 meeting will also be the full international debut of British Prime Minister Boris Johnson.

He will meet Trump for the first time as leader and is expected to discuss the UK’s exit from the European Union, which the US president has enthusiastically backed.

“My message to G7 leaders this week is this: the Britain I lead will be an international, outward-looking, self-confident nation,” Johnson said on the eve of the summit.

But though he needs Trump’s support for a free-trade deal, he is at odds with the US President on a number of issues including the Iran nuclear crisis, climate change and global trade.

“Trade tensions are unsettling the global economy,” a British official told reporters. “There are differences with the US about how to resolve global trade imbalances.”

Trump will find himself under pressure from European leaders, particularly Macron, to ease off on his policy of “maximum pressure” on Iran over its nuclear programme.

Since pulling out of the landmark 2015 nuclear agreement limiting Tehran’s nuclear programme, Trump has imposed crippling sanctions on the Iranian economy.

Macron wants him to put a “pause” on the policy, an aide said recently, which would enable talks to take place to try to find a new diplomatic solution to the crisis.

With reporting from Stephen McDermott and - © AFP 2019

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