Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: I'm outside of Durban and South Africa for the convening
Speaker 2: of the Finance Ministers of the G twenty and the
Speaker 2: Central Bank Governor. Is really sort of overshadowed in large
Speaker 2: part with a lot of the macro developments in the world,
Speaker 2: namely Trump's trade war, but also these questions about FED
Speaker 2: independence and the potential shockwaves that could send across the
Speaker 2: planet in terms of global financial stability, and of course
Speaker 2: this question of multilateralism and its future in the absence
Speaker 2: seemingly of the United States. And we're very pleased to
Speaker 2: be joined now by Mattias Korman, who is the Secretary
Speaker 2: General of the OECD and who's got a pretty unique
Speaker 2: view in terms of the picture for sort of the
Speaker 2: global growth at the moment and all of the risks
Speaker 2: that are sort of posing that are being posed to
Speaker 2: it at this stage. What are the different sort of models,
Speaker 2: the different outcomes that you're seeing for global growth, just
Speaker 2: given the different possible outcomes we can get from this
Speaker 2: trade war with the United States.
Speaker 3: Well, we have recently released our economic outlook for the
Speaker 3: global economy and compared to what we forecast back in.
Speaker 1: December or even earlier this year, we have further.
Speaker 3: Downgraded our outlook for growth and indeed expecting inflation to
Speaker 3: remain higher for longer and to come down more slowly.
Speaker 3: I mean, it is clear that there is a high
Speaker 3: level of uncertainty in the global economy, high level of
Speaker 3: policy uncertainty, increasing cride restrictions, tightening financial conditions. All of
Speaker 3: that is vying on a consumer and business confidence and
Speaker 3: hence having a negative impact on the investment and growth outlook.
Speaker 2: And also think about the sort of political dimension of
Speaker 2: this and the sort of moving away from the United
Speaker 2: States from the multilateral order. Is there a risk associated
Speaker 2: do you think with basically this breaking out into kind
Speaker 2: of a g sex world versus a kind of bricks world,
Speaker 2: and then there's this sort of G twenty that sits
Speaker 2: in the middle trying to bring these things together.
Speaker 1: What's the risk of that sort of world?
Speaker 3: Well, I mean, I've just gone out of a G
Speaker 3: seven Finance minister's meeting, and I think the G seven
Speaker 3: is working very constructively and very cooperatively.
Speaker 1: I certainly don't see that risk. And next year the
Speaker 1: United States will be sharing the.
Speaker 3: G twenty, So I mean, I think the US will
Speaker 3: continue to be a very important contributor to global conversations
Speaker 3: on key policy issues. Now, I mean, right now, there's
Speaker 3: clearly an area where there is a level of disagreement.
Speaker 3: There's some issues to be resolved, and it comes to
Speaker 3: global tride arrangements. I mean, there's no question that open
Speaker 3: markets and rules by stride have been a key driver
Speaker 3: of increased incomes and living standards around the world. But
Speaker 3: it's also true that there are some issues to be
Speaker 3: resolved when it comes to the rules by striding system.
Speaker 3: I guess what we're saying from an OCD point of
Speaker 3: view too countries around the world is work those issues
Speaker 3: through on the basis of dialogue and corporation. Work those
Speaker 3: issues through and find vise to make global triding arrangers
Speaker 3: international trading around now it's fairer and work better in
Speaker 3: the way that preserves the economic benefits of open markets
Speaker 3: and rules by stride.
Speaker 2: And if you just got off that car with the
Speaker 2: G seventies, so presumably also with Scott Bessen on that car,
Speaker 2: what was the message. What kind of insight can you
Speaker 2: give into the Americans like inside is.
Speaker 3: That G seven countries continue to think very carefully about
Speaker 3: the challenges and opportunities in the global economy and work
Speaker 3: together in a very cooperative and constructive way and trying to.
Speaker 1: Deal with some of those issues like.
Speaker 3: Supplies, shine, resilience related to challenges, economic security related challenges,
Speaker 3: issues around unfair tried practices and how based to tackle them.
Speaker 3: But I guess the key focus here is I mean,
Speaker 3: it is important for the global economy and to boost
Speaker 3: the global economic outlook to as quickly as possible, to
Speaker 3: restore policy certainty, as well as dealing with some of
Speaker 3: the structural challenges.
Speaker 1: In front of us.
Speaker 2: And you're not just an observer of the global economy,
Speaker 2: you're also a participant in some of the initiatives, namely
Speaker 2: the global minimum tax initiative that has been sort of
Speaker 2: launched a few years ago, had a lot of momentum
Speaker 2: under Biden, had lost some of that momentum under Trump,
Speaker 2: with some carveouts for the United States. I'd like to
Speaker 2: get an update from you on where we stand with
Speaker 2: that today.
Speaker 1: Well, I mean that's not quite right. Do why you
Speaker 1: find that?
Speaker 3: I mean, the United States aide of global tax implies
Speaker 3: for some time. It was introduced under the first Trump
Speaker 3: administration and the OICD Global room Tax, which is now
Speaker 3: being legislated or is in the process of being legislated
Speaker 3: by sixty seven countries around the world and more countries
Speaker 3: coming on.
Speaker 1: Board, is also a reality.
Speaker 3: So what's been happening is that at the G seven again,
Speaker 3: I mean, there have been a lot of conversations about
Speaker 3: how to manage in the most appropriate way side by
Speaker 3: side arrangement between the US version of the Global minimum
Speaker 3: Tax and the global attax which was negotiated through the
Speaker 3: ODG twenty Inclusive framework, and I when the United States
Speaker 3: continues to be a subject to key aspects of the
Speaker 3: OSDG twenty version of the Global Minroom Tax, but there
Speaker 3: are also some pragmatic approaches to ensure that there is
Speaker 3: not an unnecessary level of double up when it comes
Speaker 3: to the imposition of global rom attax arranging.
Speaker 2: So I guess there was a concern after this G
Speaker 2: seven meeting, and there was a bit of a car
Speaker 2: out that there was a two tiered system where the
Speaker 2: UNI it says we'll play by slightly different rules. So
Speaker 2: are you saying that has basically not altered in any
Speaker 2: way the participation of other countries. We heard from Frederick
Speaker 2: Mounts yesterday saying that the system was no longer appropriate,
Speaker 2: that they had.
Speaker 1: To be revisited.
Speaker 2: We had that walk back a bit by the Finance
Speaker 2: Minister no As fa As And again I mean.
Speaker 3: I've come out of a G seven meeting now, and
Speaker 3: I mean Germany is a strong supporter of the global
Speaker 3: women tax arrangements as they've been negotiated through the always
Speaker 3: ce G twenty inclusive framework, and of course European countries
Speaker 3: who were among the first to implement the Global women tax,
Speaker 3: oridents who were through a relevant EU level directive, and
Speaker 3: I'm very confident that Germany and other countries across Europe
Speaker 3: that will continue to attack this very important reform forward.
Speaker 2: So at this point, no other country is seeking a
Speaker 2: similar situation to what the UNITS has negotiated.
Speaker 3: The US was the first country in the world to
Speaker 3: essentially impose a global women at tax on its internationally
Speaker 3: operating businesses US headquartered international pride businesses, and so what
Speaker 3: is yet to be finalized. I mean what the G
Speaker 3: seven has assessed and reflected in a statement, which is
Speaker 3: an important statement, is the opportunity for side by side
Speaker 3: arrangement with a clear focus on making sure that this
Speaker 3: doesn't create new risks of bias, eerosion, profit shifting that
Speaker 3: it does reserve a level applying field, and the US
Speaker 3: continues to be engaged through the OCD processes, but to
Speaker 3: come up with a pragmatic side by side arrangement that
Speaker 3: helps to preserve the policy objectives, which is to make
Speaker 3: the international tax arrangements fair and work better, to preserve
Speaker 3: the tax basis for governments, but to also provide certainty
Speaker 3: for business in terms of the international tax arrangements operate.
Speaker 3: So we're preserving the policy objectives, would be coming up
Speaker 3: with a pragmatic way, and that is the discussion now
Speaker 3: that will happen in the broader inclusive rymework on how
Speaker 3: the US system and the OCD G twenty system can
Speaker 3: operate in a complementary why the most appropriate white possible.
Speaker 2: And the OECD itself is also one of the great
Speaker 2: pillars of these multilateral organizations trying to bring tries together
Speaker 2: to cooperate economically. Of course, the United States is also
Speaker 2: one of the the largest funder of that, and there's
Speaker 2: been some doubt about the US's commitment to these sort
Speaker 2: of initiatives, but you can't think the United States will
Speaker 2: remain a support of the OECD and that funding work
Speaker 2: keep flowing.
Speaker 3: Look, I mean, I can't speak for the United States,
Speaker 3: but you're right. I mean, the United States is an
Speaker 3: incredibly important founding member of the OCD. In fact, you know,
Speaker 3: we started our life as the Marshall Plan Secretary, that's
Speaker 3: the Organization for European Economy Cooperation. The OCD is very
Speaker 3: much a US diplomatic foreign policy success story, and all
Speaker 3: of my interactions with the US government, with US business,
Speaker 3: and with stakeholders in the United States is that there
Speaker 3: is very strong support for the work we do.
Speaker 1: Are bringing together like minded market place.
Speaker 3: Democracies from around the world, focusing on your policy based
Speaker 3: practice and the development of the best practice standards. But
Speaker 3: you know, in the end of it, of course, coman
Speaker 3: days are matters for the United States to consider through
Speaker 3: its internal processes as APPROBA.
Speaker 2: Let's see Escorman, thank you so much for your time
Speaker 2: here on the sidelines of the Jeekes twenty meeting.
Speaker 1: Outside of Durban.
Speaker 2: South Africa. There sort of a sort of continued support
Speaker 2: for that INITIAT for the Global Minimum Tax that came
Speaker 2: into a little bit of doubt after the United States
Speaker 2: wanted some amendments to its seemingly moving forward with the
Speaker 2: support seemingly also of the Germans, where there was a
Speaker 2: little bit of doubt as well