Leaders to discuss trade, tax and Syria at G8 summit

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UK Prime Minister David Cameron will today host the leaders of the G8 – the United States, Japan, Canada, Russia, Germany, France and Italy, representing half of the global economy – at the Lough Erne golf resort in Northern Ireland.

The crisis in Syria will inevitably dominate the Monday-Tuesday (17-18 June) talks but persistent worries about the global economy will also be central to the discussions.

The leaders of the European Union and US are also likely to announce the start of formal negotiations on a free trade deal that could be worth more than $100 billion a year to each economy.

EU and US negotiators aim to finish their work by the end of next year. An EU mandate to negotiate the deal was approved by trade ministers meeting in Luxembourg last week (14 June). On the US side, a 90-day legally required consulting period will end on June 20th.

Tax high up G8 agenda

Cameron has made tackling tax avoidance – which campaigners say costs about $3 trillion a year – one of the key parts of the formal agenda at the summit.

He has turned up the pressure to clamp down on secretive money flows by pressing Britain's overseas tax havens into a transparency deal and announcing new disclosure rules for British firms.

"It is important we are getting our house in order," Cameron said on Saturday (15 June) after representatives of overseas tax havens linked to Britain agreed to sign up to an international transparency protocol.

Aid campaigners said Britain's action will count for little if the rest of the G8 does not follow suit.

G8 leaders will probably shy away from adopting a measure aimed at curbing tax avoidance by highlighting when companies channel profits into tax havens, and will include a watered-down alternative, according to the draft communique.

Global tax evasion in the headlines

Tackling corporate tax avoidance has become a political goal internationally following public anger about revelations over the past year that companies like Apple and Google had used structures US and European politicians said were contrived to minimise the amount of taxes paid.

But the draft summit text suggested there will be no agreement on a rule that would force companies to publish their profits, revenues and tax payments on a country-by-country basis.

Global tax evasion could be costing more than $3 trillion a year, according to researchers from Tax Justice Network while as much as $32 trillion could be hidden by individuals in tax havens.

US President Barack Obama will seek the help on Monday of Russia's Vladimir Putin, Syria's most powerful ally, to bring Bashar al-Assad to the negotiating table and end a two-year civil war.

Syria remains a problem

At their first private face-to-face meeting in a year, Obama will try to find common ground with Putin on the sidelines of a G8 summit in Northern Ireland after angering the Kremlin by authorising US military support for the Syrian president's opponents.

During talks with British Prime Minister David Cameron in London on the eve of the summit, Putin renewed his criticism of the West's position in startling tones, describing Assad's foes as cannibals.

"I think you will not deny that one does not really need to support the people who not only kill their enemies, but open up their bodies, eat their intestines, in front of the public and cameras," Putin said at a joint news conference with Cameron.

"Are these the people you want to support? Is it them who you want to supply with weapons?"

Cameron conceded London and Moscow remained far apart.

Prism scandal reveals UK listening to foreign leaders

The international summit comes amidst embarrassing allegations that foreign politicians and officials who took part in two G20 summit meetings in London in 2009 had their computers monitored and their phone calls intercepted on the instructions of their British government hosts, according to the Guardian.

Some delegates were tricked into using internet cafes which had been set up by British intelligence agencies to read their email traffic, the newspaper alleges.

It is likely to lead to some tension among visiting delegates who will want the UK prime minister to explain whether they were targets in 2009 and whether the exercise is to be repeated this week.

Tax evasion deprives EU governments of roughly €1 trillion annually, according to estimates.

France, in particular, wants to underscore its determination to tackle tax fraud.

Although limited in scope, action to tackle tax evasion at European level has proven to be effective. Under the EU Savings Directive, for example, member countries exchange information on non-resident tax-payers to the value of €20 billion.

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