Trump says he's most promoted person 'ever'

WASHINGTON - President Donald Trump on Monday said his much-criticized attempt to stage the G7 at one of his golf courses was not intended to promote his business brand, arguing he's too famous to "need promotion."

"They say, 'Oh, you get promotion.' You don't think I get enough promotion? I get more promotion than any human being that's ever lived," Trump said at a meeting of his cabinet in the White House. "I don't need promotion."

Trump's latest defense of the now-scrapped plan to hold the international summit at his National Doral resort in Florida next year follows withering criticism.

Opponents say the bid smacked of corruption while even figures in the loyal Republican party baulked at the optics of the real estate tycoon holding the huge diplomatic event at his own hotel.

Trump on Saturday tweeted that he was pulling the idea and would consider other sites, including the presidential retreat of Camp David, near Washington, DC.

He has previously come under fire for the use of his golf resorts by White House staff and traveling members of the military, as well as his hiring of his daughter and son-in-law in senior White House advisory positions.

But Trump lashed out at accusations of corruption.

He noted that he gives away his presidential salary of about $450,000 and insisted that being president has personally cost him between $2-$5 billion in lost business revenues -- a calculation that has not been independently tested.

"I don't care. If you're rich, it doesn't matter," Trump said. "I'm doing this for the country."

"I'm very good at real estate, very, very good, much better than you even understand," he boasted, adding that he'd gone above and beyond ethics requirements by handing legal control of his business to his children.

"I didn't have to do that. I'm under no obligation to do it. I don't know if you know it, George Washington, he ran his business simultaneously while he was president," Trump said.

"George Washington was actually considered a very rich man at the time. But they ran their businesses. George Washington, they say, had two desks -- he had a presidential desk and a business desk."

The G7 at the Doral would have been "the greatest G7 ever," he said. At a different location, "I don't think it will be as exciting."

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After corruption allegations, Trump says G7 summit won't be at his resort

WASHINGTON - US President Donald Trump said on Saturday the next G7 summit will not be at one of his own Florida golf clubs, reversing a decision that had sparked corruption accusations.

Acting White House Chief of Staff Mick Mulvaney had announced the venue for the summit on Thursday, causing a firestorm among Trump's Democratic opponents in Congress, who called the move "among the most brazen examples yet of the president's corruption."

"Based on both Media & Democrat Crazed and Irrational Hostility, we will no longer consider Trump National Doral, Miami, as the Host Site for the G-7 in 2020," the president tweeted.

"We will begin the search for another site, including the possibility of Camp David, immediately."

Mulvaney had said in his Thursday announcement that the south Florida venue was "the best place" among a dozen US locations considered for the June 10-12 gathering next year.

Critics, including ethic campaigners, said holding the event at Doral would violate both the foreign and domestic emoluments clauses that are designed to shield a US leader from outside influence.

"He is exploiting his office and making official US government decisions for his personal financial gain," Jerry Nadler, the chairman of the powerful House Judiciary Committee, said in a statement following the Thursday announcement.

Trump is squarely in House Democrats' sights as he faces an impeachment investigation into allegations that he pressured Ukraine into interfering on his behalf in the 2020 US election.

Even before the Doral announcement, lawmakers were probing Trump's suggestion at the most recent G7 gathering in France in August that the next one could be hosted at one of his resorts.

On Friday, Congressional Democrats introduced new legislation called "Trump's Heist Undermines the G-7 (THUG) Act," which would have cut off all federal funding for the move to Doral, and require the White House to turn over all relevant documents that show how administration officials decided on the venue.

The measure had a chance of passing the Democratic-controlled House of Representatives, but its prospects of being put to a vote in the Republican-controlled Senate were slim.

Steep decline 

Trump National Doral is vital to his organization's finances and was once one of his biggest money-makers, but it has lately been in steep decline, according to The Washington Post.

The newspaper reported in May that the resort's net operating income -- the amount left after expenses are paid -- had fallen by 69 percent in two years.

Trump seemed to be aware early on of the allegations of impropriety that would follow the Doral announcement.

"We're going to have it there, and there's going to be folks who will never get over the fact that it's a Trump property. We get that, but we're still going there," Mulvaney had told reporters.

He said Doral would put on the event at cost, which he claimed would be as much as half what it would be at other venues. But he gave no estimates of the cost or comparisons.

An important draw is the club's size -- 900 acres, including three golf courses, according to Mulvaney, who said all the foreign delegations and the press could be housed "on campus."

The US last hosted the group of world leaders, then known as the G8 before Russia was disinvited, in 2012. The venue was Camp David.

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Bad hair day at the summit

Britain's Prime Minister Boris Johnson meets U.S. President Donald Trump for bilateral talks during the G7 summit in Biarritz, France on Sunday. Leaders of the world's top economies met in France over the weekend to discuss issues ranging from the Iranian nuclear crisis to trade, and fires in the Amazon.

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Brazilian women must be ashamed of Bolsonaro for mocking my wife, says Macron

BIARRITZ, France - Brazilian women are probably ashamed of President Jair Bolsonaro, French President Emmanuel Macron said on Monday, hitting back after the Brazilian leader mocked Macron's wife on Facebook.

The leaders have been feuding in recent weeks, with Macron blaming Bolsonaro for fires in the Amazon and accusing him of lying about climate change policy.

Bolsonaro responded on Sunday to a Facebook post that compared the looks of his wife Michelle, 37, with Macron's 66-year-old wife Brigitte.

"Do not humiliate the man hahahah," Bolsonaro wrote, in a comment widely criticized as sexist.

Asked about the incident at a news conference in Biarritz where G7 leaders are gathered for a summit, Macron said the comments were "extremely disrespectful" to his wife.

"It's sad, it's sad first of all for him and for Brazilians," Macron said. "Brazilian women are probably feeling ashamed of their president."

"Since I have a lot of esteem and respect for the people of Brazil, I hope they will very soon have a president who is up to the job," Macron added.

Later on Monday, Bolsonaro denounced Macron's plan for an international alliance to protect the Amazon, saying on Twitter that it would treat Brazil like a colony.

Brazil was angered after Macron, in the run up to the G7 summit, tweeted a photo of the burning Amazon forest, writing: "Our house is burning. Literally." Macron said he had been lied to by Bolsonaro over his commitments to fighting climate change.

In July, Bolsonaro cancelled a meeting with French Foreign Minister Jean-Yves Le Drian - getting a haircut instead.

Since taking office in January, Bolsonaro has railed against the enforcement of environmental regulations in Brazil and announced intentions to develop the Amazon region, where deforestation of the world's largest rainforest by loggers, ranchers and speculators has surged this year. 

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G7 pledges millions to fight Amazon fires

BIARRITZ, France - The G7 will give $20 million (18 million euros) to send firefighting planes to tackle the blazes engulfing parts of the Amazon, the presidents of France and Chile said Monday.

"We must respond to the call of the forest which is burning today in the Amazon," France's Emmanuel Macron said as President Sebastian Pinera of Chile, a guest of the G7, underlined that "countries of the Amazon are in dire need of fire brigades and water bomber planes."

Nearly 80,000 forest fires have been detected in Brazil since the beginning of the year -- just over half of them in the massive Amazon basin.

Macron had declared the situation an "international crisis" and made it a priority of the summit of the G7, which comprises Britain, Canada, France, Germany, Italy, Japan and the United States.

G7 leaders gathered in Biarritz held talks on the many environmental challenges facing planet Earth, with a focus on the record number of fires destroying swathes of the Amazon.

Macron has threatened to block a huge new trade deal between the EU and Latin America unless Brazilian President Jair Bolsonaro, a climate change sceptic, takes serious steps to protect the fast-shrinking forest from logging and mining.

Bolsonaro lashed out at the French leader over his criticism and suggested NGOs could be setting the fires to embarrass him -- without giving any evidence to back the claim.

But at the weekend, he finally caved in to international pressure to save a region crucial for maintaining a stable global climate, deploying two aircraft to douse fires and authorizing the army to help tackle the blazes.

'UNIVERSAL HERITAGE'

Canadian Prime Minister Justin Trudeau announced his country would send a water bomber plane to fight the Amazon blazes and contribute some $15 million to the effort.

The G7 also agreed to support a reforestation plan to be unveiled in September, the leaders said.

Brazil would have to agree to any reforestation plan, as would indigenous communities living in the world's biggest rainforest.

UN Secretary General Antonio Guterres said new planting was needed "to preserve this universal heritage, which is absolutely essential for the well-being of the world's population."

He said the issue would be discussed during the UN General Assembly in New York in September.

Macron told France 2 it was hoped "at least 30 million" dollars could be raised for the project.

On Monday evening, the French leader met Brazilian indigenous chief Raoni Metuktire, who said he had asked Macron to "help us preserve our lands."

"The forests and lands of Brazil help the entire planet live," said the chief, an advocate for indigenous rights.

Greenpeace executive director Jennifer Morgan welcomed the G7 aid, but said the club must also "stop fueling the destruction of the Amazon through the import of agricultural products associated with deforestation and soil degradation."

British Prime Minister Boris Johnson promised 10 million pounds ($12 million) for Amazon reforestation projects, while luxury fashion giant LVMH pledged 10 million euros.

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US, France reach agreement on digital taxes

French President Emmanuel Macron said Monday G7 members had reached an agreement on the taxation of tech giants, a long-standing subject of friction between France and the US which has threatened to retaliate with tariffs on French wines.

Speaking alongside US President Donald Trump at a G7 summit in southwest France, Macron admitted that there had been "a lot of nervousness" about France's new tax on tech behemoths such as Google and Facebook.

But negotiations between France and the United States had produced "what I think is a very good deal," he said.

Macron explained that France would scrap its own digital tax once a new international levy being discussed among 134 OECD countries is in place. France hopes it will be ready in 2020.

Asked whether he would now rescind his threat to slap punitive retaliatory tariffs on French wines, Trump, who had described the French tax as "very unfair", was non-committal.

His wife Melania "loves the French wine", he joked.

The US leader, who was elected on a protectionist platform, had earlier announced that Paris and Washington were "close" to a deal.

"They want to make a deal and we'll see if we can make a deal," Trump said.

REIMBURSE EXCESS TAX

The French parliament passed its new levy in July amid frustration at the slow pace of negotiations on a new global accord to ensure tech multinationals pay a larger share of taxes on their operations.

Under EU law, American tax giants can declare their profits from across the bloc in a single jurisdiction -- in most cases low-tax jurisdictions such as Ireland or the Netherlands.

The French tax, which targets local sales rather than profits, has drawn accusations of discrimination from the so-called GAFA companies (Google, Apple, Facebook and Amazon).

It is expected to add 400 million euros ($444 million) to France's coffers this year, rising to 450 million in 2020.

Under the agreement struck in Biarritz, French tax authorities will look at how much companies paid in French "GAFA" taxes and how much they would have paid under the yet-to-be-decided international formula, French Economy Minister Bruno Le Maire told AFP.

"Everything that is paid in excess compared to the international solution will be credited to the company," he added.

Britain has also announced plans for a tax on tech giants, accused of exploiting fiscal rules to sharply cut their tax bills despite soaring profits.

"Frankly, we must do something to tax fairly and properly the online businesses that have such colossal sales in our country," British Prime Minister Boris Johnson said ahead of talks with Trump in Biarritz on Saturday.

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Japan denies it gave away too much in trade talks with US

TOKYO - Japan's top government spokesman denied on Monday that Tokyo made too many concessions in trade talks with the United States, saying the fact the 2 countries were able to reach a broad agreement was "very valuable."

The United States and Japan agreed in principle on Sunday to core elements of a trade deal that US President Donald Trump and Prime Minister Shinzo Abe said they hoped to sign in New York next month.

The agreement, if finalized, would cool a trade dispute between the two allies just as a trade war between the United States and China escalates, but some Japanese commentators say Tokyo gave up too much.

At a news conference in Tokyo, Chief Cabinet Secretary Yoshihide Suga was asked if the United States had dropped its threat to impose additional tariffs on Japanese automobiles.

"Negotiations are still under way so I'd like to refrain from commenting," Suga told reporters.

"But I believe that won't be the case," he added, because the two countries' leaders had confirmed, including at a summit in September, that Washington would not impose higher tariffs on auto and auto parts while trade talks were under way.

"Japan and the US have negotiated based on the joint statement last September. And related ministers agreed based on that, so it was very valuable," Suga said.

At the G7 summit in France, US Trade Representative Robert Lighthizer said the deal, which covered agriculture, industrial tariffs and digital trade, would open up Japanese markets to US goods and lead to a substantial reduction in tariffs such as on beef.

Lighthizer said Japan imports about $14 billion worth of US agricultural products and added the agreement would open up markets to over $7 billion of such products. He said beef, pork, wheat, dairy products, wine, and ethanol would benefit.

The Nikkei newspaper reported on Saturday that Japan has agreed to cut its tariffs on US beef and pork to the levels applied to members of the Trans-Pacific Partnership (TPP) agreement. Trump pulled the US out of the TPP, which had been championed by his predecessor, Barack Obama.

Trump said on Sunday Japan had agreed to buy excess U.S. corn that is burdening farmers as a result of the tariff dispute between Washington and Beijing.

Abe referred to a potential purchase of the corn and said it would be handled by the private sector.

"It's a very big transaction, and we've agreed in principle. It's billions and billions of dollars. Tremendous for the farmers," Trump told reporters about the deal during a joint announcement with Abe at the G7 meeting in France.

The Japanese leader said more work remained, but he expressed optimism that it would be finished by the time of the United Nations General Assembly next month. (Reporting by Leika Kihara and Kaori Kaneko Editing by Chang-Ran Kim and Darren Schuettler) 

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US, Japan agree trade deal 'in principle'

BIARRITZ, France - US President Donald Trump and Japan's Prime Minister Shinzo Abe on Sunday announced a deal in principle on a major bilateral trade deal.

"It's a very big transaction," Trump said after talks with Abe on the sidelines of the G7 summit in the French resort town of Biarritz.

"Billions and billions of dollars," he said.

"It involves agriculture, it involves e-commerce. It involves many things. We've agreed in principle."

Abe confirmed the two nations had "successfully reached consensus" after "intense" negotiations.

Both leaders said they hoped for a formal signing during the UN General Assembly in New York next month.

However, Abe cautioned: "We still have some remaining work that has to be done… mainly finalizing the wording."

US Trade Representative Robert Lighthizer said the agreement will especially benefit US farmers -- a politically important group for Trump in his uphill push for reelection in 2020. 

Asked whether US tariffs already imposed on Japanese cars would be scrapped as a result of the deal, Lighthizer said some tariffs would be removed "but not those."

Trump also said the tariffs were "staying the same" but would not go up.

BILATERAL ALTERNATIVE TO TPP 

Trump and Abe enjoy close ties but the US president has frequently claimed that Tokyo has an unfair advantage in bilateral trade.

Negotiators have agreed Japan will place tariffs on US agricultural products up to levels that apply to members of the Trans-Pacific Partnership (TPP) pact, Japan's public broadcaster NHK and major Japanese dailies reported.

Both sides agreed Japan will cut tariffs on US beef and pork to TPP levels, but will not set new quotas for butter and skimmed milk, NHK said, citing unnamed sources.

Japan has repeatedly said the extent of the opening up of its agricultural market would be within the concession it had made to members of the TPP pact.

After an abrupt US withdrawal from the TPP, 11 countries circling the Pacific last year signed a slimmed-down version of the trade deal, and the pact has been championed as an antidote to growing US protectionism under Trump.

The US president has since sparked fears of a trade war by levying steep tariffs and denouncing unfair trading practices.

The United States will eliminate levies on a wide range of Japanese industrial products, but its tariffs on Japanese automobiles will be left for further negotiations as Trump sees the US trade deficit with Japan as a problem, NHK said.

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G7 finance chiefs pour cold water on Facebook's digital coin plans

CHANTILLY, France -- Group of Seven finance chiefs cast a cloud over prospects for Facebook's Libra digital coin on Wednesday, insisting tough regulatory problems would have to be worked out first.

The massive social media company's plan to launch a digital coin has met with a chorus from regulators, central bankers and governments saying it must respect anti-money-laundering rules and ensure the security of transactions and user data.

But there are also deeper concerns that the powers of big tech companies increasingly encroach on areas belonging to governments, like issuing currency.

"The sovereignty of nations cannot be jeopardized," French Finance Minister Bruno Le Maire told journalists after chairing the first day of the two-day meeting.

"The overall mood around the table was clearly one of important concerns about the recent Libra announcements, and a shared view that action is needed urgently," he added.

German Finance Minister Olaf Scholz said Facebook's plans do not "seem to be fully thought through", adding that there were also data security questions.

"I am convinced that we must act quickly and that (Libra) cannot go ahead without all legal and regulatory questions being resolved," Scholz told journalists.

France, which chairs the Group of Seven advanced economies this year, has asked European Central Bank executive board member Benoit Coeure to set up a G7 task force to look into cryptocurrencies and digital coins like the Libra.

Coeure presented a preliminary report to ministers and central bankers at the meeting, in the quaint chateau town of Chantilly, north of Paris.

Central bankers say that if Facebook wants to take deposits, it needs a banking licence, which would subject it to the strict regulation that goes with operating in that industry.

Some central bankers also say that allowing people to transact anonymously is a non-starter given financial sector regulations that require payments firms to hold basic information about their customers.

JAPAN: GLOBAL CONSENSUS NEEDED

Bank of Japan Governor Haruhiko Kuroda said the G7 task force was likely to evolve over time into something including a broader range of regulators beyond the group, given the huge impact Libra could have on the global economy.

"If the Libra is aspiring to be used globally, countries must seek a globally coordinated response," Kuroda said.

"This is not something that can be discussed among G7 central banks alone."

G7 finance ministers are also concerned about how best to tax big tech companies, with France keen to use its presidency of the two-day meeting to get broad support for ensuring minimum corporate taxation.

G7 governments are concerned that decades-old international tax rules have been pushed to the limit by the emergence of companies like Facebook and Apple, which book profits in low-tax countries regardless of the source of the underlying income.

The issue has become more vexed than ever in recent days as Paris defied US President Donald Trump last week by passing a tax on big digital firms' revenues in France, despite a threat from Trump to launch a probe that could lead to trade tariffs.

Their bilateral dispute aside, France and the United States are in favor of rules ensuring minimum taxation as part of an effort among nearly 130 countries to overhaul international tax rules.

Although a G7 agreement would set the tone for the broader push, an agreement among all of the G7 ministers on a minimum rate or range of rates is likely to prove elusive as Britain and Canada have reservations, a French Finance Ministry source said.

"If we don't agree at the G7 level on the broad principles for taxing digital companies today or tomorrow, then quite frankly it will be complicated to find among 129 countries at the OECD," Le Maire said. 

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France urges G7 to find 'international solution' on digital taxes

PARIS - French Finance Minister Bruno Le Maire on Tuesday urged the G7 club of top world economic powers to find an international solution to taxing digital giants at their meeting outside Paris this week.

"I am convinced that during this G7 we are capable of finding a satisfactory international solution," said Le Maire, whose country angered the United States earlier this month by becoming the first major economy to impose a tax on digital giants like Google, Apple, Facebook and Amazon.

He said such a consensus would then open the way to an international agreement under the aegis of the Organisation for Economic Cooperation and Development (OECD).

"This would be the best way to solve this problem," said Le Maire, who on Wednesday and Thursday will host G7 finance ministers for a meeting in Chantilly outside Paris.

Le Maire, who is due to meet his American counterpart Steven Mnuchin on Wednesday ahead of the official opening of the meeting, expressed dismay over a probe ordered by US President Donald Trump that could trigger reprisal tariffs.

The so-called Section 301 investigation is the primary tool the Trump administration has used in the trade war with China to justify tariffs against what the US says are unfair trade practices.

"This is the first time in our long relationship that the American government has decided to open such a procedure against France," he said.

"France is a sovereign country and will continue to act as one," he added.

France's new law aims to plug a taxation gap that has seen some internet heavyweights paying next to nothing in countries where they make huge profits as their legal base is in smaller EU states.

The law will levy a 3 percent tax on revenues generated from services to French consumers by the largest tech firms.

Britain has also unveiled plans for a similar tax. But smaller EU states such as Ireland and Luxemburg -- which host the European headquarters of digital giants -- have prevented a consensus in the EU.

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Canada Senate passes law legalizing recreational marijuana

OTTAWA - Canada's Senate passed a law Thursday legalizing recreational marijuana, moving it closer to becoming the first member of the Group of Seven nations to legalize the production, sale and consumption of the drug.

Bill C-45, or the Cannabis Act, passed the Senate with 52 votes for, 30 against and one abstention after months of debate over the ramifications of legalization.

The Cannabis Act will now go back to the House of Commons, which passed the bill in November 2017 but needs to sign off on changes made by the Senate.

Legalizing weed was a 2015 campaign promise of Prime Minister Justin Trudeau, who has admitted having smoked a joint with friends "five or six times."

The initial timeline for legal pot sales called for it to be available by July 1, Canada's national day, but August or September now appears more likely.

It would then be up to Canada's provinces and territories to set up distribution networks and enforcement.

The sale of medical marijuana has been legal in Canada since 2001.

Bill C-45 would allow individuals over the age of 18 to possess up to 30 grams of marijuana for personal use.

Sales to anyone under 18 would be banned under federal law but provinces and territories could set their own age limits.

Statistics Canada has estimated that the market will be worth Can$5.7 billion ($4.5 billion US), based on last year's consumption data.

Uruguay approved the recreational usage of marijuana five years ago and nine US states have too but Canada will be the first G-7 country to do so.

'CANADA IS BEING DARING'

In an interview with AFP last month, Trudeau said the world is closely following Canada's plans and predicted several nations would follow suit.

"There is a lot of interest from our allies in what we're doing," he said.

"They recognize that Canada is being daring... and recognize that the current regime (of prohibition) does not work, that it's not preventing young people from having easy access to cannabis.

"In many countries, especially in Canada, it is easier (as a minor) to buy a joint than buy a beer," Trudeau said. "Organized crime is making huge sums of money on the illicit sale of marijuana."

Trudeau insisted that creating a regulated market would take it out of the hands of crime groups and "better protect communities and children."

However, he added the allies he spoke with "are interested in seeing how things go... before they try it," without specifying which nations.

It would also allow the federal government and the provinces to levy taxes on legal weed sales amounting to hundreds of millions of dollars annually.

Pot sales would be through authorized retail stores much like the current situation regulating alcohol sales in Quebec and Ontario.

A total of 105 businesses have been authorized to grow marijuana and offer pot-based products. Under the new law, individuals could grow up to four plants at home.

The government has also set aside funds to study the impact of legalized cannabis consumption on public health.

mbr/cl/wd/ska

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G7 vows growth efforts as Japan's Abe warns of global crisis

ISE-SHIMA, Japan -- The Group of Seven industrial powers pledged on Friday to seek strong global growth, while papering over differences on currencies and stimulus policies and expressing concern over North Korea, Russia and maritime disputes involving China.

G7 leaders wrapped up a summit in central Japan vowing to use "all policy tools" to boost demand and ease supply constraints.

"Global growth remains moderate and below potential, while risks of weak growth persist," they said in a declaration. "Global growth is our urgent priority."

Japanese Prime Minister Shinzo Abe, talking up what he calls parallels to the global financial crisis that followed the 2008 Lehman Brothers bankruptcy, said the G7 "shares a strong sense of crisis" about the global outlook.

"The most worrisome risk is a contraction of the global economy," led by a slowdown in emerging economies, Abe told a news conference after chairing the two-day summit. "There is a risk of the global economy falling into crisis if appropriate policy responses are not made."

In the broad-ranging, 32-page declaration, the G7 committed to market-based exchange rates and to avoiding "competitive devaluation" of their currencies, while warning against wild exchange-rate moves.

This represents a compromise between the positions of Japan, which has threatened to intervene to block sharp yen rises, and the United States, which generally opposes market intervention.

The G7 vowed "a more forceful and balanced policy mix" to "achieve a strong, sustainable and balanced growth pattern", taking each country's circumstances into account, while continuing efforts to put public debt on a sustainable path.

Abe has stressed the need for flexible fiscal policy to sustain economic recovery, while German Chancellor Angela Merkel has been skeptical about public spending to boost growth.

The G7 called global industrial overcapacity, especially in steel, a "pressing structural challenge with global implications".

NORTH KOREA, 'BREXIT' WORRIES

The G7 demanded that North Korea fully comply with U.N. Security Council resolutions and halt nuclear tests, missile launches and other "provocative actions".

The group condemned Russia's "illegal annexation" of the Crimean peninsula from Ukraine. The declaration threatened "further restrictive measures" to raise the costs on Moscow but said sanctions could be rolled back if Russia implemented previous agreements and respected Ukraine's sovereignty.

The G7 also expressed concern over the East and South China Seas, where China has been taking more assertive action amid territorial disputes with Japan and several Southeast Asian nations.

Without mentioning Beijing, the G7 reiterated its commitment to the peaceful settlement of maritime disputes and to respecting the freedom of navigation and overflight. The group called for countries to refrain from "unilateral actions which could increase tensions" and "to settle disputes by peaceful means".

China was not pleased with the G7 stance.

"This G7 summit organised by Japan's hyping up of the South China Sea issue and exaggeration of tensions is not beneficial to stability in the South China Sea and does accord with the G7's position as a platform for managing the economies of developed nations," Foreign Ministry spokeswoman Hua Chunying said in Beijing. "China is extremely dissatisfied with what Japan and the G7 have done."

The G7 also called large-scale immigration and migration a major challenge and vowed to increase global aid for the immediate and long-term needs of refugees and displaced people.

Referring to Britain's referendum next month on whether to leave the European Union, the G7 said an exit "would be a serious risk to global growth".

The leaders pledged to tackle a global glut in steel, though their statement did not single out China, which produces half of the world's steel and is blamed by many countries for flooding markets with cheap steel.

On climate change, the G7 said they aim to put into effect by the end of the year the Paris climate agreement, in which almost 200 nations agreed a sweeping plan to end global dependence on fossil fuels to limit rising temperatures.

The G7 comprises Britain, Canada, France, Germany, Italy, Japan and the United States.

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Canada officially enters recession

OTTAWA - Reeling from low oil prices, Canada fell into a recession in the first half of the year, government data confirmed Tuesday, putting Conservative Prime Minister Stephen Harper on the defensive in the run-up to October elections.

According to Statistics Canada, the economy contracted 0.5 percent in the second quarter after retreating 0.8 percent in the previous three months.

It is Canada's second recession in seven years and it is the only Group of Seven nation in economic retreat. The figures are the weakest since the 2008 global financial crisis.

The data reflects fears about the health of the global economy as more gloomy evidence emerged of a slowdown in China, a main engine of growth worldwide.

Harper, whose Tories are trailing their rivals in opinion polls ahead of the October 19 election, blamed the overseas turmoil for Canada's woes, and emphasized an expansion in the economy in June.

"We are living, once again, in a time of ongoing global economic instability," Harper said.

"Obviously there has been challenges, particularly in the energy and some commodity sectors because of falling prices. But the fact of the matter is over 80 percent of the Canadian economy has been growing."

Canada, the world's fifth-largest oil producer, has been hit particularly hard by the halving of world oil prices from above $100 last year.

In the second quarter, its mining, quarrying and oil and gas extraction sector posted a "notable decrease" for a second consecutive quarter, said the government statistical agency.

Analysts said the damage however could be limited.

"Despite the weak start to the year, there is good reason to believe that the worst is over," said TD economist Brian DePratto.

DePratto cited the sharp increase in GDP in June, "providing positive momentum to start the second half of the year." He predicted a "sharp rebound" in the third quarter with growth reaching 2.5 percent by year's end.



- Harper under fire -

On the campaign trail, where the economy has dominated the debate, opposition parties pounced on the grim data, urging voters to send the Tories packing.

"Under Stephen Harper, this has been Canada's lost decade," leftist New Democratic Party candidate Andrew Thomson told a press conference in Ottawa.

"Ten years of job losses, continued crumbling of infrastructure, tax breaks for the wealthy and a situation where the middle class continues to struggle to get ahead, 150 billion dollars in new debt and two recessions -- people are telling us they have had enough."

Thomson -- whose critiques were echoed by the Liberals -- said the Conservatives' stewardship of the economy has been a failure.

"We need to bring change to Ottawa," he said.

Harper has insisted that, oil aside, the rest of the economy is doing well, although the figures point to broad declines in a third of sectors.

At a steel plant in Hamilton, Ontario, he urged voters to support his party's leadership, saying he had "the proven experience to keep us safe and keep our economy moving forward."



- Business investment down -

In the second quarter, business outlays for machinery and equipment, communications and audio and video equipment, furniture, fixtures and prefabricated structures, and intellectual property products fell.

New housing construction decreased, but this was mitigated by an increase in renovations and strong resale activity, according to Statistics Canada.

Canadians also bought more cars and trucks, insurance and financial services, as well as food, beverages and accommodation services in the period.

Overall, exports edged up 0.1 percent after decreasing 0.3 percent in the first quarter. Imports declined 0.4 percent.

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