Background to the Issue
The G8 is a select club of industrialised, economically powerful and technologically developed democratic nations. Specifically, the member nations are: the United States of America, Canada, the United Kingdom, France, Germany, Japan, Italy and more recently, Russia. Originally there were only six countries in the group who first met in France in 1975, to coordinate an approach to global economic problems of the time. The next year, 1976, in Puerto Rico USA, Canada joined the summit. The European Union has had observer status by sending official representatives since the 1977 meeting in London, England. A more recent and full fledged addition, Russia has been attending the summits after its centrally-planned, communist economy collapsed. It became an official member at the 1991 meeting in Denver USA.
The host-country of the G8 rotates each year through the seven original members. The European Union participates only in the discussions and is never a host. The order of the rotation is: France, the United States, the United Kingdom, Germany, Japan, Italy and Canada. Russia is now entering into the rotation and has been designated as the host of the 2006 summit. The host country accommodates the summit and organizes the agenda. It must put extensive work into pre-summit deal-making so that the meetings are productive and it must organize the attendance of any independent economic advisors, non-governmental organizations, or representatives from countries of interest. The central purpose of the G8 is to bring the heads of state of member countries together in an informal forum regarding the most important, often economic, issues of the year.
The meetings are aptly called "summits" due to the high level of the discussion. The actual purpose that they serve is to provide each leader with access to one another in a private, informal setting. The summits produce agendas, which are basically plans of action that the G8 nations commit to for the future. The concrete commitments and results produced by the agenda of a summit illustrates the important amount of influence the host country, which sets the agenda, can exert over the meeting. Therefore the host country has an important impact on global economics and politics through the vast repercussions of the summit and its agenda. The summits also serve to bring international media and academic attention to the agenda discussed. Recently, demonstrations as large as 200 000 people outside the summit in Genoa, Italy (2001) resulted in clashes between police and protestors, the shooting death of a protestor and many police and civilian injuries.
Over the course of its history the summits have changed significantly. The early summits were focused entirely on economic matters such as controlling inflation and managing global currency markets. The summit process gradually evolved to handle international economic issues as well as political and social issues. The economic issues that have been addressed by the summits include: macroeconomic coordination, monetary relations, structural reforms, trade policy, agriculture, energy, the environment, foreign debt, North-South relations and coping with the collapse of many communist economies. The non-economic issues covered include: the environment since 1986, drugs since 1987, nuclear non-proliferation since 1990 and the fight against terrorism on and off since 1978. Today, along with the standard economic and political issues, there are minor but productive meetings on global human rights issues and technological issues such as internet regulation.
The summit members usually comply with the consensus decisions generated by their meeting and agenda. The G8 is also effective in establishing international organizations to address specific issues. The "G20" group of twenty nations making the transition to industrial economies and democracy was established for example to cope with the Asian financial crisis of the late 1990s. The G8 summit ultimately provides a framework for the leading nations of the world to establish an informal global governance and standard. The summits are generally very productive in addressing current problems and networking to find solutions. Canada has hosted four G8 summits. They were in 1981, in Ottawa-Montebello; in 1988, in Toronto; in 1995, in Halifax and in 2002, in Kananaskis. Canada will host next in 2010.
Key Points of Interest for Canada
Canada has enjoyed the most prosperous growth in the G8 the past several years and is the only G8 country with a budget surplus. Canada has a very key interest in the G8. It is one of the least powerful members of the G8 and is given the opportunity beyond conventional means to impact and shape global economics and politics at the highest level. Canada can influence larger powers such as the United States, the United Kingdom and Japan and is in a position envied by many other middle powers. Canada’s foreign policy and economic agenda are advanced through our membership. It is akin to being able to punch above our weight as the expression goes. Canada is particularly successful because our current prime minister has a the decade of G8 negotiation experience.
The type of Canadian interest in the G8 is apparent in our recent hosting agenda from the 2002 Kananaskis, Alberta summit. The major themes were generating global growth and combating terrorism. There was an economic slowdown after Sept. 11th that has hurt the G8 nations’ productivity. "Smart Growth" was the catchphrase of economic planners at the summit who were pushing for growth in the global security and environmentally sustainable economies. The G8 renewed its commitment to fighting terrorism as another major theme involving putting a stranglehold on Al-Qaeda and dealing with the escalating violence in the middle east and tensions with North Korea and Iraq. Canada adopted a 30 point plan with the United States to work towards mutual security. A $30 billion dollar fund was established to disarm Russia’s nuclear weapons and to insure that chemical or biological weapons are destroyed and kept from the hands of terrorists.
A theme that was topical to the Kananaskis summit was largely humanitarian in nature. Canada pioneered an "Africa Action Plan" that would help develop and improve Africa’s economy and society. US$12 billion dollars of development assistance was officially sent. Also, US1.3 billion went towards clearing the debt of the heavily indebted poor countries in Africa so they could spend debt payments on social programs. Finally, US$1 billion dollars was put towards the AIDS crisis in Africa of which Canada contributed the relatively large amount of US$100 million. The summit was a success and the model of having the Africa Action Plan, a minor topical theme, as the most advertised feature of the summit generated a lot of domestic public support and international goodwill towards Canada.
Recommendations for Canadian Foreign Policy
The approaching G8 summit is to be held in Evian, France in 2003. Judging by the agenda the French are setting and Canada’s past initiatives and accomplishments it should be possible to construct a productive foreign policy towards the next G8 summit.
The French have committed to continuing the Africa Action Plan and inviting African leaders to the conference in Evian. The agenda of social and economic aid should be continued. Canada should prepare for a relatively expensive humanitarian commitment that will draw economic support for Africa from the other G8 nations and engender much goodwill from the international community. This is an opportunity to reaffirm multilateralism in the world today that has been polarised by American foreign policy and the war in Iraq.
On the issue of economic growth, there aren’t any policy changes necessary at the macro-economic scale besides minor policy adjustments to cope with the evolving currency market that is raising the value of the Euro and Canadian dollar substantially while the American dollar falls in value. Canada should try to forge trade deals particularly for our export oriented industries, as they are hurt by a high Canadian dollar and the higher cost that it makes their goods when sold in foreign markets. The United States is suffering from considerably below average economic growth that has been addressed by a massive federal tax cut. This makes it unlikely for the US to have a balanced budget anytime in the near future and thus they should be advised to address their massive national debt and not allow it to get out of hand or too wasteful.
The US invasion of Iraq alienated France and Germany and might make it difficult for security issues and international political issues to be discussed at this forum. Canada could try to coax a conciliatory gesture from either side by getting the US to sign the international convention banning landmine use or by getting France or Germany to cooperate in the reconstruction and democratic rehabilitation of Iraq.
The topical theme that France is going to address and advertise is responsibility in market economies, corporate governance and corruption. This is in response to the devastating corporate scandals that have slowed the economic recovery of the G8. Scandals such as Enron, WorldCom and Global Crossings will be prevented in the future by setting standards for corporate accountability, transparency and government vigilance. Canada can take this opportunity to be a key played in establishing the rules that govern the world’s multinational corporations of which many have larger economies than medium sized countries.
Domestic and International Consequences of Recommended Action
The consequences that Canada could achieve in its foreign policy towards the G8 could range from minimal to very great. Canada should maintain it’s Africa Action Plan with France and reciprocally assist France in it’s effort to improve corporate governance. Canada will play the role of honest broker at this summit between the polarised world order that is divided over the war in Iraq and the United State’s policy for rehabilitation.
The domestic consequences of this proposed Canadian foreign policy will be centered around economic issues. A high Canadian dollar will mean our export oriented economy will have difficulty selling goods in foreign markets. If this summit improves Canada’s trade relations then there could be recovery for those Canadian industries. Being the only country in the G8 with a balanced budget is a source of pride for Canadians and should not be lost by commitments to spending in the G8. The security of Canadian shareholders will improve as well if the French proposal is adopted by Canada and Canadian corporate governance is more transparent and accountable.
The international consequences are potentially much greater. Canada must serve to diffuse tensions between France and the United States so that the US will attend the summit at all. Canada can potentially bring both the United States and France and Germany together in the common goal of humanitarian aid and rehabilitation of Iraq. It could result in the eventual end of the American occupation of Iraq the sooner democracy can develop. Canada’s Africa Action Plan is also a positive step towards multilateralism and prevention of conflict through eradication of economic desperation.
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