Earlier this week, the Global Economy and Development program and The Hutchins Center on Fiscal and Monetary Policy at Brookings hosted Treasury Secretary Jacob J. Lew to discuss the upcoming G20 leaders’ summit. Secretary Lew discussed the top agenda items of the summit, the Trans-Pacific Partnership (TPP), Apple’s tax battle with Ireland and the European Union, U.S. economic growth over the last eight years, policies that include emerging economies in global economic growth, combating cybercrime, fossil fuel subsidies, and carbon pricing.
Secretary Lew was introduced by Kemal Derviş, vice president and director of the Global Economy and Development Program. Following his opening remarks, the Treasury secretary was joined by David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy, in a discussion on what to expect from the G20 Summit later this week.
The secretary said that, at the G20 Summit, President Obama will encourage inclusive and shared growth, investment in jobs, pro-growth policies, and new fiscal measures while discouraging structural reforms that are not paired with macro-economic policies and combating excessive production. Obama will also continue to emphasize American leadership on financial reform and fiscal policy. The president is also expected to focus heavily on environmental issues at the summit, including discussions on implementing the final stages of phasing out fossil fuel subsidies and adopting the recommendations of the Green Finance Study Group.
During his opening statement, Secretary Lew remarked on how the G20 contributed to impressive growth and economic improvement in the wake of the 2008 recession. Lew explained that comparing the state of the U.S. economy eight years ago to the current economic situation is similar to comparing “night and day.” He expressed that, while there is still room for improvement, the U.S. remains a “pillar of strength in the world economy” as a result of coordination among G20 countries. Watch:
The secretary also discussed inclusive growth, one of President Obama’s top priorities for the G20 Summit. He explained how including emerging economies in growth can improve quality of life globally and commented on how increased globalization benefits the U.S. and global economies. Additionally, he highlighted the need for policymakers to discuss inclusive growth regularly, instead of solely in the context of trade agreements. Watch:
On whether he felt optimistic about passing the Trans-Pacific Partnership (TPP) before the end of Obama’s presidency, Secretary Lew said that he thinks there will be a vote on the trade deal by the end of President Obama’s term. He emphasized that the president remains committed to TPP and will use “every ounce of energy” that he and his administration have to see the deal through before he leaves office. Watch:
Secretary Lew expressed his concerns on the accusations that Apple evaded taxes in Ireland. He explained his desire to work with Congress to close tax loopholes and combat tax evasion. Secretary Lew also explained that companies should think about their reputations when making decisions on their tax policies. He stated that “a company doesn’t have to take an action just because it’s permitted” and that CEOs should think about the long-term effects of their tax policies before implementing them.
When asked if he believed that the European Union was unfairly targeting U.S. firms, Secretary Lew answered that the EU seemed to be highly focused on U.S. firms. Additionally, he mentioned that this could be an attempt by the EU to draw profits from the U.S. tax base. Watch:
Watch the full event video here.