July 4, 2020: "America is Back" supporting multilateralism

July 4 could be the date of the long-awaited US restart — the return of value-based international leadership. This was noted in the President's speech to mark the July Fourth celebration as well as during the NATO meeting last week, in which Biden himself highlighted America's absolute commitment to the North Atlantic alliance after the complications of Trump's term of office, with special emphasis on the country's commitment to multilateralism.

Five key points will act as clear indicators of this increased effort to promote multinational cooperation:

New collective action: One of the items on Biden's "America is Back" agenda is to recentralize and optimize multilateral institutions as a mechanism for addressing issues affecting the US and the wider world. The OECD's planned introduction of a global minimum corporate tax promises significant progress once it has been signed by the G7.

Global economic recovery: Although already underway in developed countries and expected to continue, it is not so clear whether this momentum is gaining traction in the emerging world, especially in Latin America. That is why the G7 and other international bodies must ensure that any measures taken benefit the global economy as a whole, paying particular attention to emerging economies. What is more, international financial flows have not returned to pre-pandemic levels in emerging markets, because of the effects of northern monetary policy among other reasons.

The end of the pandemic: The G7 commitment to provide 1 billion vaccines is a good start, but does not negate the need for 11 billion vaccines to meet the group's goal of ending the pandemic by 2022, nor does it undermine the fact that those seven states will likely need to fund the remainder of that rollout, willingly helping developing countries. It will likewise be necessary to fulfill the international intention of being prepared for the next pandemic.

Action on climate change: Brussels, Washington and several EU member states are trying to shape the guidelines on the type of climate change actions to be presented at the Glasgow summit in the fall (COP26). However, it may be more important to address how to include China, India and Brazil, and how to respond to Africa's concerns. Stricter obligations may lead to early transatlantic alignment on matters of global concern.

China and democracies: Although there is less alignment on the subject of China (because France and Germany want greater strategic flexibility than the US), there may be talk of multilateral action with NATO having adopted a unified position on the Beijing challenge.

It is therefore possible that America is indeed back. But keeping it here depends to some extent on the follow-up to its commitments and proposed multilateral actions. The Biden government will have to keep to its main international policy priorities in order to rebuild the confidence in collective action that was lost during the Trump era.

Gonzalo de Cadenas-Santiago, director of macroeconmic and financial analysis at MAPFRE Economics