G20 Primer on Buenos Aries Summit


A Canadian Primer to the G20 Summit in Buenos Aires, Argentina, November 30-December 1, 2018

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Image credit: G20

PRIMER

by Colin Robertson
CGAI Vice-President and Fellow
November 2018

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Table of Contents


Introduction

On Friday, November 30, the leaders of the 19 major economic nations and the EU will convene in the Costa Salguero convention centre along the Rio de la Plata in the Argentine capital, Buenos Aires. It is their 13th summit. This year’s host is Argentina’s President Mauricio Macri. The leaders are a diverse group – liberal democrats, authoritarians and autocrats. While the plenary sessions are the official focus, more attention will be on the interactions between U.S. President Donald Trump, Chinese President Xi Jinping and Russian President Vladimir Putin. Saudi Crown Prince Mohammed bin Salman, stained by the Khashoggi killing and the war in Yemen, is also attending.

North Americans will be watching the sideline meetings of President Trump with Mexico’s outgoing president, Enrique Peña Nieto, and Prime Minister Justin Trudeau. According to Larry Kudlow, Mr. Trump’s economic adviser, they or their representatives are supposed to sign the U.S.-Mexico-Canada Agreement (USMCA), although there are reportedly details still to be worked out.

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Who and What is the G20?

The G20 leaders’ summit is the culmination of a year-long process of over 50 formal meetings that include the central bankers, finance ministers and sherpas. The summit, that celebrates its 10thanniversary this year, is effectively the meeting of the principal shareholders in the global economy meeting with their executive board – the heads of the organizations responsible for keeping the global economic, finance and trade operating systems in working order. It also includes civil society engagement through the Business 20, Civil 20, Labour 20, Science 20, Think 20, Women 20 and Youth 20.

The ‘shareholders’ include the G7 nations: Canada, the United States, Japan, France, Germany, Italy, the United Kingdom and the European Union as well as Argentina, Brazil, Mexico, Australia, China, India, Indonesia, Korea, Russia, Turkey, Saudi Arabia and South Africa.  With 2/3 of the world’s population, their economies account for approximately 85 per cent of global economic output and  75 per cent of international trade.

Other participants include Spain, a permanently invited guest to G20 meetings. As host, Argentina has also invited Chile and the Netherlands to this summit. The heads of the United Nations, Organisation for Economic Co-operation and Development, World Trade Organization, International Monetary Fund, World Bank, Inter-American Development Bank, Financial Stability Board, International Labour Organization and the Development Bank of Latin America will also participate.

Countries chairing key regional groups – such as the African Union (Rwanda), the Association for Southeast Asian Nations (Singapore) and the New Partnership for Africa’s Development (Senegal) – are also invited and Argentina has included the Caribbean Community, represented by Jamaica, for this year’s G20.

The G20, originally a meeting of finance ministers, their deputies and central bankers, was formed in 1999 in the wake of the Asian and Russian financial crisis with Canada’s then-Finance Minister Paul Martin playing a lead role. It was raised to the leaders’ level in the wake of the 2007-2008 financial crisis when then-U.S. president George W. Bush convened a summit in Washington in November 2008 to address the crisis. As Council on Foreign Relations Fellow Stewart Patrick observes: “The event reflected a new reality. Western governments could no longer hope to resolve international economic crises themselves. They needed a more encompassing body that included rising nations.

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The G20’s Standing Agenda

The de facto standing agenda for the G20 includes:

  • Multilateral trading system. The leaders will speak to its importance but there is no sense the WTO’s Doha round is going anywhere. The U.S. is also unhappy with the operation of the WTO itself, especially its dispute settlement. Canada, working with like-minded countries, has taken the lead in trying to find a solution to make the process more transparent and efficient.
  • Promoting international investment. Barriers to investment continue to plague G20 economies. The need of governments to further open their economies will be addressed.
  • Achieving sustainable fiscal policy. This means saving in good times so you can spend in recession and then get back to balance as quickly as possible.
  • Supporting sustainable development. With the conclusion of the Millennium Development plan in 2016, nations are now committed to 17 goals in the new UN Sustainable Development Agenda to be achieved by 2030, including zero poverty, gender equality, good health and wellbeing, clean water and sanitation, reduced inequalities, decent work and economic growth.
  • Resistance to protectionismGlobal Trade Alert reports that since 2008, notwithstanding the G20 pledge for standstill at the London 2010 summit, governments have taken 11,743 protectionistmeasures ranging from local content requirements to discriminatory regulatory practices. According to the WTO, G20 trade restrictive measures for 2018 are more than six times larger than those recorded in 2017 and the largest since this measure was first calculated in 2012. While new import-facilitating measures rose significantly during this period, they are less than half that of trade-restrictive measures. WTO Director General Roberto Azevêdo has called for immediate action to de-escalate the situation.  Whether Trump and Xi curb the trade war is an open question. Which is cause for concern for investors across the globe. The U.S. and China remain far apart, as was seen with the failure of the APEC summit to agree on a final communiqué.

G20 Trade-Restrictive Measures
(average per month)

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What Does the Buenos Aires Summit Want to Achieve?

“BUILDING CONSENSUS FOR FAIR AND SUSTAINABLE DEVELOPMENT” is the theme of this year’s summit and President Macri has set three priorities:

The future of work: Unleashing people’s potential. Technological change is extraordinary in its magnitude and speed. G20 leaders want to avoid a scenario in which one nation seizes paramountcy in artificial or cyber-intelligence, leaving the rest far behind. The emergence of new technologies has led to the development of new forms of work that are rapidly changing production processes worldwide. Policy responses need to ensure that embracing technological change will not engender exclusion, social disintegration or backlash. Education is at the crux of this debate. Pointing to the GM Oshawa plant closing, the Mowat Center’s Sunil Johal observes that it “is a reminder that failing to take advantage of this opportunity to reform skills training, education and other vital social supports to be more responsive, client-centred and focused on outcomes will leave Canada out-of-step with the trajectory of the global economy – and risk leaving more workers disrupted out of their jobs, with nowhere to turn.”

Infrastructure for development: Mobilizing private resources to reduce the infrastructure deficit. The global infrastructure gap projected from now to the year 2035 amounts to US$5.5 trillion according to some estimates. The World Economic Forum’s global competitiveness index for infrastructure puts Canada in 25th position internationally. We can do better. Meanwhile, institutional investors, that include Canadian pension funds and big league players like Canada’s Brookfield, have US$80 trillion in assets under management, typically offering low returns. Mobilizing private investment toward infrastructure is crucial to closing the global infrastructure gap. It can also ensure a better return for those who today save and invest. This is a win-win objective and it requires international co-operation. China’s Belt and Road Initiative (BRI) is a major source of infrastructure funding but BRI financing on partner nations’ debt levels, governance and susceptibility to Chinese influence are increasingly under scrutiny and will doubtless be discussed at Buenos Aires.

A sustainable food future: Improving soils and increasing productivity. The G20 countries are key players in the global food system. Their territories account for about 60 per cent of all agricultural land and for almost 80 per cent of world trade in food and agricultural commodities. Approximately 10 millionhectares of cropland are lost every year due to soil erosion. Food production must double during the next 30 years to meet projected population growth and dietary changes. Feeding the world without erasing our forests and using up our water is the big challenge requiring international co-operation. In a recent report Canada’s Advisory Council on Economic Growth has argued that Canadian leadership in global food production could help drive an economic growth agenda for the country for generations. With a reputation for safety, quality and trustworthiness, Canada’s food brand is “enhanced by the country’s natural advantage, its stock of natural resources – fresh water and arable land – and an ecological footprint in producing food that is among the best in the world.”

Argentina has also pledged to build on past presidencies across a broad array of issues and they are all likely to be reflected in any communiqué, no matter how wishy-washy the language:

  • Empowering women
  • Fighting corruption
  • Strengthening financial governance
  • Continuing work towards a strong and sustainable financial system
  • Improving the fairness of the global tax system
  • Co-operating on trade and investment
  • Taking responsibility on climate action
  • Transitioning towards cleaner, more flexible and transparent energy systems

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What About Deliverables from Buenos Aires?

Not a lot. Achieving a consensus communiqué, given the rancorous relationships particularly between China and the U.S., may be all we can expect. Most of the action will be at the bilateral level. The working dinner on Saturday night between Trump and Xi will be closely watched. The trade war with China has seen the U.S. hit about half of all Chinese imports with tariffs. China has responded in kind but the U.S. buys much more from China than China buys from the U.S.

As is always the case at these summits, security will be paramount with a 20,000-officer-strong security operation commanded by Argentine Security Minister Patricia Bullrich, who recently indicated people should carry guns if they so pleased. Anti-globalization protests will inevitably take place.

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Canadian Objectives

This is Justin Trudeau’s fourth G20 summit. According to the PMO release on the G20 meeting, Prime Minister Trudeau will build on the issues advanced at this year’s Charlevoix G8 summit: “To create good, middle-class jobs, invest in economic growth that benefits everyone, advance gender equality and women’s economic empowerment, fight climate change, protect our oceans, and promote clean energy.” Mr. Trudeau will be accompanied by Foreign Affairs Minister Chrystia Freeland and Finance Minister Bill Morneau.

As G8 lead until the end of the year, Mr. Trudeau must see if he and Ms. Freeland can find consensus among his G7 fellow leaders, as they did on Venezuela, on Russia’s recent actions in Ukraine and on human rights abuses by Saudi Arabia. Neither is likely to happen, although Canada has now imposed sanctions on 17 Saudi nationals that “in the opinion of the Government of Canada, [are] responsible for or complicit in the extrajudicial killing of journalist Jamal Khashoggi… The explanations offered to date by Saudi Arabia lack consistency and credibility.”

Mr. Trudeau and Ms. Freeland will also canvas their counterparts on the Canadian efforts to reform the WTO, especially its dispute settlement process.

Mr. Trudeau will want to speak with transpacific leaders (Mexico, Australia, Japan) about the December 30 implementation of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). The summit will be an opportunity for Trudeau to push European leaders, especially German Chancellor Angela Merkel and French President Emmanuel Macron, to move on their own ratification of the Canada-EU Comprehensive Economic and Trade Agreement (CETA) and to push other European leaders to get it done. While the agreement took effect in September 2017, it requires the approval of all 28 EU member states. Italy has threatened not to ratify CETA and various member states such as Austria want the EU Court of Justice to rule on the investment court system.

Canada hosted the G20 in Toronto in 2010.

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Do We Really Need a G20?

Yes. At a time when globalization, the maintenance of a liberal international order and multilateral co-operation are under question, the G20 is an important forum to discuss, and hopefully advance, common global interests. More people will work on the draft of the final communiqué than may read it but the process of getting there is what really matters. The ongoing meetings between central bankers and finance ministers (the original G20) now include other ministerial meetings as well as regular discussions with business, civil society and think tanks.

The G20 filled a gap in the architecture of top table meeting places at the UN and G7. The permanent members of the United Nations Security Council – Russia, China, France, Britain and the U.S. – represent the world of 1945 and the early Cold War. As we witness with Syria and other crises, getting the Security Council to act constructively is very difficult. Reforming it is an exercise in futility. The G7 group of leaders – the U.S., France, Britain, Germany, Japan, Italy and Canada – was created in 1975-1976 following the economic crisis that OPEC induced. It is Eurocentric. It doesn’t include China, India or Brazil. Russia joined in 1998 but it was suspended in 2014 after its invasion of Crimea.  The G20 complements at the leadership level the work of the other major financial and economic institutions: the “Bretton Woods twins” – the IMF and World Bank – and the WTO. As Patrick observes: “The G20 has the potential to act more nimbly and (at least in principle) transcend stultifying bloc politics that afflict the United Nations and other universal membership organizations.” Some suggest that the G20 should create a parallel foreign ministers’ track, arguing that the political and the economic go hand-in-hand, but this is probably a bridge too far for now.

So, the G20 makes sense. Like the G7, much of the G20’s value is in its process. What is important about these summits is not the prepared statements delivered at the main table, but the frank discussions and informal meetings that take place in the corridors and meeting rooms around the main conference. Winston Churchill, who popularized the word “summitry”, observed that “jaw-jaw” between leaders is better than “war-war”.

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The Economic Picture

The IMF’s World Economic Outlook (April 2018) reports that the global economic upswing that began around mid-2016 has become broader and stronger. This growth exceeds that achieved in any of the years between 2012 and 2016. World growth strengthened in 2017 to 3.8 per cent, stimulated in part by the Trump administration’s tax cuts.  But there are risks.  Growth has proven to be less balanced than hoped and inequality, which has helped spur populist movements around the globe, is a challenge. For the EU, there is the ongoing Brexit saga.

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Tighter global financial conditions include higher borrowing costs, less available credit after a borrowing binge and declining stock markets.

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In several key economies, growth is being supported by policies that seem unsustainable over the long term. The new Global Financial Stability Report says financial conditions have also tightened markedly in emerging and developing economies over the past six months. Global trade is rebounding although protectionist actions, especially by the Trump administration, are disrupting long-established supply chains.

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There are also the geopolitical risks.

Conflict continues in Yemen, Syria, Iraq, Afghanistan and Central Africa. Famine ravages the Horn of Africa. Russia still occupies parts of Ukraine and tensions have flared anew. China continues to muscle into the South China Sea. After abandoning the nuclear deal with Iran, the Trump administration has re-imposed sanctions. There is little discernible progress in the U.S.’s negotiations with North Korea over its nuclear and missile capacity. While the flow has diminished, refugees from Africa and the Middle East continue to stream into Europe and as the United Nations High Commissioner for Refugees reports there are over 68.5 million displaced persons. Among them are nearly 25.4 million refugees, over half of whom are under the age of 18. There are also an estimated 10 million stateless people who have been denied a nationality and access to basic rights.

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Further Reading

The official Argentine site has useful information, as does Global Affairs Canada. The best Canadian source for G20 documentation, with a chronology of past summits, is the University of Toronto’s G20 Information Centre managed by John Kirton. The Centre for International Governance Innovation (CIGI) in Waterloo does excellent research work on G20 issues. Both are also involved in the G20 Insights project that has produced a series of excellent policy briefs drawing on work by the Think 20.

G20 Economies 1992 and 2017

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Primer to the G7

A Primer to the G7 Summit in Charlevoix June 8-9, 2018

by Colin Robertson CGAI Fellow  June 2018

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Table of Contents


Introduction

On Friday and Saturday, June 8-9, the leaders of the major democratic nations will meet in their 44th summit to discuss global geopolitical and socioeconomic issues at Charlevoix’s magnificent Manoir Richelieu. Each leader will have their own agenda. Prime Minister Justin Trudeau’s challenge as chair is to bring his fellow leaders into as much consensus as possible given their disparate perspectives on diverse issues including gender, work, climate, energy, our oceans, protectionism, populism and extremism.

The summit, in the picturesque La Malbaie region, 150 kilometres northeast of Quebec City, takes place against an erosion of trust in our government institutions – international, national, regional and municipal, in once-mainstream political parties, in business, in the media and in our leadership generally.

There is also a growing beggar-thy-neighbourism among international trade and investment partners. For U.S. President Donald Trump, it is “America First … Buy American and Hire American”. The recent application of 25 per cent tariffs on steel and 10 per cent tariffs on aluminum from Canadian and European producers will make Mr. Trump as popular as the proverbial skunk at the garden party.

The geopolitical challenges facing the leadership of the leading liberal democracies were discussed at a May meeting in Toronto of the G7 foreign and security ministers. They include denuclearization (or not) in North Korea and Iran and containing chemical, biological and nuclear proliferation. Collective action, including spending, on security and defence against both conventional and unconventional threats, including cyber, is likely to be discussed. The U.S., once the guardian and anchor of the liberal, rules-based international system, is no longer willing to carry the system and pick up the tab.

There are continuing conflicts in Syria, Iraq, Afghanistan, Yemen, Central Africa and Mali, and the threat of what are now described as “returning foreign terrorist fighters”. Russia continues to occupy parts of Ukraine and meddle in the democratic processes of others. In the South China Sea, China’s armed forces occupy and exercise on newly created territory. The Israeli-Palestinian situation is worse. There is renewed famine in the Horn of Africa. There is organized crime trafficking in people, drugs, guns and weapons of mass destruction.

Venezuela is a failing state with over 5,000 fleeing daily to neighbouring nations. The United Nations High Commissioner for Refugees (UNHCR) estimates that nearly 20 people are forcibly displaced every minute. An unprecedented 65.6 million people around the world have been forced from their homes. Among them are nearly 22.5 million refugees, over half of whom are under the age of 18. It strains the EU, divides its member nations and is a ready tweet for Trump. Canada has developed a strategy and is putting the spotlight on the plight of Myanmar’s Rohingya.

On the economic front, the IMF World Economic Outlook (April 2018) continues to show broad-based momentum with the long-awaited cyclical recovery in investment and manufacturing.

There is continuing strong performance in the euro area and in Japan, China, the United States and Canada, all of which grew beyond expectations last year. The G7 economies – facing aging populations, falling rates of labour force participation and low productivity growth – will likely not regain the per capita growth rates they enjoyed before the global financial crisis.

In Europe, Brexit continues to pose uncertainties. Now there is Italy and questions about its continuing membership in the Eurozone. Joblessness, especially youth unemployment, besets southern Europe. Global debt levels – both private and public – are very high, threatening repayment problems as monetary policies normalize.

Protectionism and the prospect of trade restrictions and counter-restrictions threaten to undermine confidence and derail global growth prematurely. The Trump administration’s trade policies will certainly be discussed: the tariffs just applied on steel and aluminium, the investigation into the auto industry, the tariffs on China and the ongoing NAFTA negotiations. The uncertainty is bad for growth and creates uncertainty and distrust amongst trade partners. The markets are reacting negatively and investment decisions are put on hold.

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Figure 1: Public Trust in Institutions: 2018 Edelman Trust Barometer

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Who and What is the G7?

The G7 is the forum at which the leaders of the big liberal democracies talk about what troubles them and how they can collectively fix it.  Its current membership:

  • Canada – Prime Minister Justin Trudeau
  • France – President Emmanuel Macron
  • Germany – Chancellor Angela Merkel
  • Italy – incoming Prime MinisterGiuseppe Conte
  • Japan – Prime Minister Shinzo Abe
  • United Kingdom – Prime Minister Theresa May
  • United States – President Donald Trump
  • European Union – Commission President Jean-Claude Juncker and Council President Donald Tusk

Collectively, they represent more than 60 per cent of global net wealth and 45 per cent of global GDP. The G7 provides 76 per cent of the world’s “official development assistance,” which is defined as government aid intended to improve economic and social development in poor countries. The G7 also provides 81 per cent of the global humanitarian assistance. Through their membership in NATO, the European and North American G7 members provide the backbone of collective security and humanitarian relief. Japan is not a NATO member but NATO and Japan are currently strengthening relations to address shared security challenges

As in the past, other leaders will be invited to Charlevoix, including United Nations Secretary General António Guterres, International Monetary Fund managing director Christine Lagarde, and the heads of the World Bank and the Organization for Economic Co-operation and Development. The leaders of other countries (e.g. Vietnam), including some that could be swamped by rising sea levels, are also expected to be invited.

The G7 came into being in the wake of the 1973 OPEC oil crisis and the appreciation by then-U.S. secretary of the Treasury George Shultz and former president Richard Nixon that the leading democratic powers needed a forum at which their leaders could meet in sustained but informal discussion over a couple of days. Russia was a member from 1997-2014 but Vladimir Putin was disinvited after the Russian invasion of Crimea and Ukraine.

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Figure 2: The flag of each Group of Seven (G7) country.

Former prime minister Pierre Trudeau hosted Canada’s first G7 summit in 1981 at Montebello, and since then we have hosted summits in Toronto (1988, Brian Mulroney), Halifax (1995, Jean Chrétien), Kananaskis (2002, Jean Chrétien), and Huntsville (2010, Stephen Harper).

Summitry for the G7 is not cheap, but think of it as an insurance premium for global wellbeing. The Trudeau government allocated $600 million in its 2018 spending estimates for Charlevoix. The bill for Canada’s hosting of the 2010 Huntsville summit topped $1.1 billion. Most of the money is spent on security.

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The Road to Charlevoix

The leaders’ summit is the culmination of a year-long process of meetings that for Charlevoix brought together their sherpas, foreign and security ministers, finance and development ministers, energy and environment ministers, with sessions involving the so-called G7 engagement groups: Business7, Civil7, ThinkThank7, Labour7, Science7, Women7 and Youth7.

Meeting in Toronto in April, the foreign and security ministers produced a detailed communiquéthat addressed four main themes: (1) a rules-based international order; (2) non-proliferation and disarmament; (3) transnational threats to security; and (4) conflict prevention and support for United Nations efforts and reform. They also released a declaration, Defending Democracy – Addressing Foreign Threats, with specific measures related to democratic institutions and processes, disinformation and media, fundamental freedoms and human rights. There were also specific commitments to advance international humanitarian law and their women, peace and security initiative.

Security ministers produced a communiqué addressing trafficking in persons, counterterrorism and cyber-security. There was also a declaration around managing foreign terrorist fighters and a commitments paper that discussed managing threats domestically, countering violent extremism, preventing violent extremist and terrorist use of the internet, cyber-security and the fight against cyber-crime, and trafficking in persons.

In May, G7 leaders released a statement “rejecting the electoral process” that led to the May 20 presidential election in Venezuela and declared their commitment to a “peaceful, negotiated, democratic solution to the crisis in Venezuela”.

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The Charlevoix Agenda

As G7 host throughout 2018, Prime Minister Trudeau announced in December, 2017 that the theme of advancing gender equality and women’s empowerment will be integrated throughout the presidency, and at all ministerial meetings.  According to Mr. Trudeau: “This focus on gender as an overarching theme throughout everything the G7 does is something that we want to establish, not just for this year and next year, but for many years to come.” An advisory council, including billionaire philanthropist Melinda Gates and Nobel Peace Prize winner Malala Yousafzai, is developing gender-related recommendations touching on each one of the five themes for the G7 summit:

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Figure 3: A map illustrating the rank of various countries on the World Economic Forum’s 2017 Global Gender Gap Index. Canada ranks 16th. (Source: BBC)

There has been some criticism that the focus on the oceans has replaced traditional geographic focus on Africa that G7 leaders began in 2001. African development was a central theme of the summit Chrétien hosted in Kananaskis (2002). The foreign ministers discussed Africa and it will doubtless get leaders’ attention.

But with limited time, Canada is putting a focus on oceans. Canadian waters include three oceans: the Arctic, the Atlantic and the Pacific. Our oceans cover roughly 70 per cent of the globe and are fundamental to managing our climate because they produce approximately 80 per cent of our oxygen. The oceans are also the primary source of food for over a fifth of the world’s population. The oceans discussion is expected to focus on three issues: overfishing, plastics dumped in ocean waters and coastal states facing rising sea levels.

Plastics are a solvable problem. Around eight million tonnes of plastic enter the marine environment each year, and the figure is set to rise. The Ellen MacArthur Foundation estimates that 311 million tonnes of plastic were produced in 2014, which will double within 20 years, and projects that there will be more plastic than fish in the oceans by 2050.

The EU is already moving ahead with a directive to curb the use of plastics.

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Figure 4: A graphic from the Ellen MacArthur Foundation outlining the anticipated plastic-to-fish ratio in the world’s oceans by 2050. (Source: Ellen MacArthur Foundation)

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What About Deliverables from Charlevoix?

Deliverables come in two parts. There are the useful initiatives – on gender, on oceans – that the various working groups have negotiated, some of which involved collective financial commitments, in the months leading to the summit. For example, leaders are expected to announce an initiative, with initial funding from governments and pension funds,  focusing on gender diversity in global capital markets, on strengthening expertise in sustainable infrastructure and on financial disclosures to create sustainable change.

Then there are the top-table agreements on critical issues hammered out in their face-to-face formal and informal discussions at Charlevoix. For example, the G7 Leaders collectively rejectedthe electoral process that led to the recent Venezuelan election. The extent and number of these commitments is their test at Charlevoix, especially given the divide between President Trump and the other leaders on so many issues. As host and chair, the pressure will be on Justin Trudeau to find consensus and translate that into a shared communiqué.

Initially seen as a constructive and capable internationalist, Mr. Trudeau’s reputation has taken a beating after his recent Asian trips – fumbling the conversation, especially with Abe, over what is now the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP); the rebuff in Beijing from Chinese Premier Li Keqiang in what many thought would be a framework for closer economic relations with China; the India trip that has given his critics continuing material over his dress, invitee list and the suggestion that the Indian Security Service wanted to upend the visit.

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Figure 5: Public perception of the Prime Minister’s performance abroad has soured in recent months. (Source: Abacus Data, March 2018)

In setting out the priorities for Charlevoix, Mr. Trudeau declared that “Canada is proud to put forward a progressive agenda for the 2018 G7. The themes we have chosen for the year will help focus our discussions on finding real, concrete solutions to promote gender equality, women’s empowerment, clean energy, and economic growth that work for everyone. As G7 partners, we share a responsibility to ensure that all citizens benefit from our global economy, and that we leave a healthier, more peaceful, and more secure world for our children and grandchildren.”

Canada has new deals with the European Union and the Trans-Pacific Partnership that it now needs to consolidate into measurable results. The negotiations with the U.S. and Mexico on NAFTA are in flux. Canada depends on the global economy and it still needs to build ties in Asia and the rest of the Americas in general and with China and India in particular. Leaders will be interested in the Trudeau government’s decision to buy the Trans-Mountain pipeline and proceed with construction.

As to the other leaders:

Japanese Prime Minister Shinzo Abe, attending his seventh G7 summit, is concerned about rising China, the now-nuclear North Korea and maritime security in the Indo-Pacific, especially the vital sea lanes through the South China Sea on which Japan depends.

New Italian Prime Minister Giuseppe Conte, leads a coalition government, Italy’s 65th government in 73 years. Mr. Conte, “the synthesis of the Five Star movement”, is the sixth unelected prime minister in a row. He can be expected to press fellow leaders on the need to address the migration crisis of migrants crossing the Mediterranean from North Africa. Italy’s national statistics institute, Istat, says that there are five million foreigners legally resident in Italy. That’s 8.3 per cent of the country’s population of 60.5 million. More than 690,000 migrants, most from sub-Saharan Africa, have arrived by boat from Libya since 2013. With a GDP of $1.6 trillion and a debt-to-GDP ratio of 133 per cent, leaders want to know what is next for Italy. Its economic situation is precarious and political uncertainty undermines market confidence. But is Italy simply “too big to bail”?

French President Emmanuel Macron is at his second G7. Mr. Trudeau says President Macron has promised to pick up the baton on advancing gender issues when the French host the G7 summit in 2019. A committed Europeanist, President Macron is driving a series of domestic reforms that has created considerable backlash, especially from the trades unions.

German Chancellor Angela Merkel is the doyenne of the group (this is her 13th G7 summit). A couple of years ago, the Economist described her as the “Indispensable European” arguing that “without Ms. Merkel, it is hard to see Europe mastering its destructive forces.” This assessment still applies. She recently completed negotiations to form another grand coalition – her fourth government. She and Mr. Trudeau spoke recently about climate change, protectionism and the need to make “meaningful investments” for educating girls and aiding women in crisis settings.

US President Donald Trump is the wild card at this, his second G7 appearance. He has clashed repeatedly with his G7 colleagues and takes a different tack on most issues – defence spending, trade, climate, and immigration and refugee policy. His Middle East policies – leaving the Iran nuclear agreement and moving the U.S. embassy to Jerusalem – have put him at odds with the rest of the G7. The imposition of tariffs on steel and aluminum under specious ‘national security’ grounds and the threat to use this same approach on autos has led Canadian and European leaders to retaliate. He will be quizzed on the on-off-maybe on summit with North Korea as well as the Iran nuclear agreement that he has now abandoned to the chagrin of the Europeans, each of whom lobbied him personally to stay in the deal. Mr. Trump will also likely continue to urge his fellow leaders to “pay their fair share” on collective defence. While NATO spending has gone up and Allies, including Canada, have commitments for more spending within the G7, only the U.S. and Britain meet the NATO set norm of spending 2 per cent of GDP on defence.

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Figure 6: A graph outlining how much NATO members have allocated for defence expenditures as a share of their GDP. (Source: NATO)

British Prime Minister Teresa May is also attending her second G7 summit. She still needs to secure a favourable deal from the Europeans ahead of their impending divorce. In the wake of the Skripal affair, she will be pushing for G7 solidarity in continuing sanctions against Russia.

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Do We Really Need a G7?

Yes. The rules-based liberal international order and multilateral co-operation are under protectionist and populist pressures, both from within and without. The G7 summit is the top table where the leaders of the major liberal democracies visibly demonstrate (or not) their ability to collectively manage the geopolitical pressure points and the growing socioeconomic consequences of globalization. Winston Churchill, who popularized the word “summitry”, observed that “jaw-jaw” among leaders is better than “war-war” and with trade conflicts on the rise within the G7 partnership they need to talk. For over forty years, frank discussions and informality have characterized the G7 summits.

This is its advantage over the other top table leaders’ forum – the UN Security Council and the G20.

The Security Council’s permanent members – Russia, China, France, Britain and the United States – represent the world of 1945 and the early Cold War. As we witness over Syria, North Korea and other recent crises, getting the Security Council to act constructively is very difficult. Reforming the Security Council is an exercise in futility.

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Figure 7: A graphic outlining how individual countries break into the G7, G8, and G20. (Source: Foreign Policy in Focus/Bloomberg)

The G20, founded in 1999 with strong Canadian encouragement, includes the G7 members – Canada, the United States, Japan, France, Germany, Italy and the United Kingdom – as well as Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.  With two-thirds of the world’s population, their economies account for approximately 80 per cent of world trade and global production.

Like the G20, much of the G7’s value is in its process – the meetings of sherpas and ministers throughout the year and the working groups examining issues like gender, climate, youth employment, health, food safety, development, energy, environmental protection, non-proliferation and support for the UN’s peacekeeping and peace-consolidating operations.

More people may work on the draft of the final communiqué than will read it but the process of getting there is what really matters. The ongoing meetings between the leaders’ sherpas – their personal representatives – and relevant ministers keep the dialogue going. They are supported by their discussions with business, civil society and think tanks. Canada’s sherpa, deputy minister Peter Boehm, a veteran diplomat and former Canadian ambassador to Germany, captured it best when he said: “The G7 is a collective, it’s not a global government. Yes, we’re going to have differences – we wouldn’t be having these meetings if we were all agreed on everything … The leaders are really only together for about 48 hours, so are we going to solve all the problems in the world? No. Can they have a good discussion and push things forward? Yes. Can they convince some of the more recalcitrant leaders that maybe they should be a bit more open-minded? There’s a good possibility of that too.”

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Figure 8: Graphs displaying the growth of U.S. trade as a percentage of GDP, and global protectionist measures.

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Further Reading and Listening

The Government of Canada’s G7 site contains much useful background. The best Canadian source for G7/8 documentation, with a chronology of past summits, is the University of Toronto’s G7 Information Centre managed by John Kirton. CGAI has also released a series of Global Exchange podcasts based on presentations in early May by Peter Boehm, the G7 ambassadors resident in Ottawa and a panel of Canadian experts looking at what Canada wants from Charlevoix.

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Figure 9: The 2018 G7 logo, which evokes Charlevoix’s rich natural landscape. (Source: PMO)

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A Canadian Primer to the 2012 US Primaries and Caucuses

Contents page from A Canadian Primer to the 2012 US Primaries and Caucuses published by the Canadian Defence and Foreign Affairs Institute

Introduction

Who’s running for the Republicans and what are their platforms?
Where do they stand?
What’s the difference between a primary and a caucus?
Is the process starting earlier than usual?
Are the Iowa caucuses (January 3) important?
What about the Iowa Straw Poll held last August?
And the New Hampshire primary (January 10)?
Do the parties do their primary process differently?
Haven’t there been a lot more candidate debates?

Do the debates matter?
Are all of the Republican presidential candidates on every ballot?
Are the primaries just for presidential nominees?
How are delegates apportioned?
Does the primary winner ‘take all’?
Does President Obama have to go through the primary process?
When are the conventions?
What are the chances of a convention fight?

What about a third party candidate?
What about Senate and House races?
And elections for Governor?
Do incumbents have an advantage?

How much does this all cost?
What is the mood of America?
Has Canada been a factor in the Republican race?
Why does this matter to Canada?
Want to know more?
2012 Election Calendar

See columnist Barry Cooper’s ‘In U.S. politics, ideas come second to money’ in Calgary Herald, January 11 2012

The Republicans have begun in earnest to choose a candidate whom they hope can defeat President Barack Obama. The procedure is remarkably complex. Colin Robertson, the first advocacy secretary in the Canadian Embassy in Washington, D.C., called it a “spaghetti bowl of competing interests and factions.”

The various bits of spaghetti include elected officials and bureaucrats, lobbyists and think-tanks, mainstream media, along with bloggers and tweeters, party organizations and factions within them, all operating in an atmosphere of partisan intensity. As Newt Gingrich told ABC News, politics in America “has become a really nasty, vicious, negative business and I think it’s disgusting.”…

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