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