Finance chiefs from the world’s rich economies are set to propose a new partnership on supply chains that’ll be open to other nations and would require countries to have minimum standards on human rights and environmental policies to join.

Officials are well advanced in drafting a statement for this week’s Group of Seven meeting, with the additional details on diversifying supply-chains to be included, according to people familiar with the matter. The planned partnership will aim to start by year end, they said, declining to be named as the drafting isn’t public.

Efforts to diversify the supply chain of renewable energy resources is also likely to be increased, one person said. China has a dominant position in the supply of some rare earths, and policy makers from around the world have spoken of the need to diversify sources.

Finance ministers and central bank chiefs from the G-7 on Friday began a second day of talks in Niigata, Japan, with three hours of closed-door morning talks on global financial stability. After a “family photo,” there’ll be a lunch seminar on welfare followed by more talks in the afternoon and a social dinner.

Meetings resume Saturday morning, with a concluding statement and press conference set for around 12:30 pm Japan time.

Japan, as this year’s G-7 host, invited officials from emerging economies including Brazil and Indonesia to the gathering. That’s a departure from protocol aimed at countering China’s growing influence with the so-called Global South.

With recent Group of 20 meetings marred by discord over Russia’s invasion of Ukraine, the G-7 has allowed the US and allies to push priorities such as tightening up sanctions on Russia and diversifying supply chains from China.

Treasury Secretary Janet Yellen on Thursday said Washington intends to crack down on Russia’s ability to skirt sanctions imposed by the US and allies after its invasion of Ukraine. She hopes to discuss with her G-7 counterparts a new set of possible restrictions on outbound investments to China that the Biden administration has been mulling for some time but has not yet finalized.

Yellen also warned failure to avoid a looming federal government default would undermine Washington’s ability to provide international leadership and defend US national security.

Policy makers will discuss the macro economic outlook as a confluence of risks hang over the summer.

European Central Bank Governing Council member Joachim Nagel said Thursday inflation remains “very sticky.” Asked whether borrowing costs may still be rising in September, the Bundesbank president said “there’s nothing off the table.”

Officials also took advantage of sight-seeing tours organized by Niigata local authorities to promote the prefecture famous for its sake, rice and skiing.

Nagel toured Niigata’s historical homes and gardens, also trying on a samurai hat for local press. European Central Bank Governor Christine Lagarde visited a sake factory and a garden where she was greeted by crowds of school children waving French and other G-7 country flags.

--With assistance from Joe Mayes, Christopher Condon and Alessandra Migliaccio.

Author: Kamil Kowalcze, Erica Yokoyama and Emi Urabe