Finance chiefs of the Group of 20 major economies revived a pledge to "fight protectionism" in a communique issued after their virtual meeting Wednesday, a reference that was missing under former U.S. President Donald Trump's administration.
"We acknowledge the important role of open and fair rules-based trade in restoring growth and job-creation. We recall our commitment to fight protectionism," the communique said, reflecting incumbent President Joe Biden's focus on multilateral engagement, in stark contrast to Trump's "America First" approach.
The G-20 finance ministers and central bank governors affirmed their commitment to reaching an agreement on a minimum global corporate tax rate by mid-2021 as part of new international taxation rules.
"It was a major achievement that the G-20 was able to show our commitment again to hammering out an agreement," Japanese Finance Minister Taro Aso told reporters after the teleconference.
The talks came two days after U.S. Treasury Secretary Janet Yellen urged other nations to set a minimum global corporate tax rate to "end the pressures of tax competition and corporate tax base erosion," as Biden -- who took office in January -- seeks to raise the corporate tax rate to 28 percent from 21 percent.
According to the communique, the global economic outlook "has improved mainly due to the rollout of vaccination campaigns and continued policy support," after the world economy posted a sharp contraction last year due to the coronavirus pandemic.
However, the recovery appears "uneven" and "fragile," it said, citing downside risks such as the spread of new coronavirus variants and varying paces of vaccination.
"We commit to remaining vigilant and avoiding any premature withdrawal of support measures," the communique said, vowing to strengthen health systems and facilitate equitable and swift access to safe, effective and affordable vaccines.
The G-20 talks on global tax issues are part of 140-member negotiations led by the Organization for Economic Cooperation and Development amid criticism that global digital giants such as Google LLC and Apple Inc. are not paying their fair share of taxes.
The talks had stalled since Trump sought a "safe-harbor" clause that would allow companies to choose to operate under the current taxation rules, opposing targeting major American tech firms.
Biden's proposed increase in the U.S. corporate tax rate is part of his $2 trillion investment plan to create millions of jobs and rebuild infrastructure.
As countries have cut corporate taxes to attract multinational companies, Yellen's call for her G-20 peers to set a minimum global corporate tax rate is intended to offset disadvantages that may arise from Biden's tax hike plan.
In Wednesday's session, the G-20 finance chiefs also agreed on a "final" six-month extension to the end of this year of debt relief for developing nations reeling from the pandemic, according to the communique.
With the Debt Service Suspension Initiative's extension through December, the G-20 nations aim to maintain their support for developing countries fighting the pandemic.
The initiative was launched in May 2020 by the G-20 and Paris Club of traditional creditor nations with a deadline set for the end of the year but was later extended by six months to June this year.
Some G-20 members, especially Group of Seven industrialized nations, have wanted the scheme to be carried out in a transparent manner, as China, a G-20 member and the world's largest official creditor, is said to have been receiving payments preferentially in violation of international agreements.
The online meeting was held on the sidelines of virtual spring gatherings of the World Bank and the International Monetary Fund.
The G-20 groups Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.