Cornwall Consensus | The Economist

It is the name that the Group of Seven, Germany, Canada, the United States, France, Italy, Japan and the United Kingdom, the seven richest countries in the West, have given to the document which, after an extensive process of analysis and consultation, has launched by experts answering the question of how economies can be more resilient to shocks. external. As we inevitably face significant risks, as demonstrated by the coronavirus pandemic, new global governance mechanisms are needed that make collaboration and teamwork possible.

There are seven recommendations that will be presented to the G-20 at the end of the month. The first is to develop and fund plans to deal with epidemics, such as strategies for developing and equitably distributing vaccines. To achieve this mission, public and private funding is required to allow for research and development. The second is accelerating the circular economy and measures to combat global warming. The third is the prevention of cyber attacks, the creation of a global system of digital governance, but also the generation of competition, the fight against monopolies in this area and the creation of a fair tax system that captures the wealth that is generated. The fourth is to promote reforms in trade and patents 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 set a minimum tax for global and digital companies. The sixth is to broaden the scope of well-being measures, not limit them to GDP, as well as consider indicators of health, employment, gender and inclusion of minorities. The seventh is to establish coordination mechanisms and contingency plans to ensure distribution chains and the provision of commodities vital to the economy, such as holding seminars and base metals.

The New Consensus differs from the Washington Consensus in the sense that it does not always view globalization as a positive force that, by opening up markets, finance, and commodities, will generate prosperity and stability for all. Significant risks are recognized and the need for effective management is assumed, with richer countries taking a large part of the responsibility for financing in many critical aspects, such as medicines, so that intellectual property realizes that knowledge is a process of collective creation. The concept of international solidarity has deepened, so that innovation is shared with all nations. In general, an active case is proposed for the generation of innovation that allows to reach the objectives of the public interest.

It is clear that humanity will face new shocks similar to the 2008 financial crisis and the coronavirus, which have deepened inequality and affected the quality of life of millions of people, so action is required to prevent it and act accordingly. This is important to reduce the costs of acute risks, such as pandemics or financial crises, but actions are also needed to address chronic risks, such as worsening income inequality or climate change. From the discussion, specific, short-term agreements should be derived, such as ensuring vaccination in developing nations, which are still underdeveloped, setting minimum global tax agreements for digital companies and corporations, as well as generating research and funding funds. Funded by G7 countries on medical and climate issues, under schemes in which intellectual property and knowledge are shared.

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