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Bhattacharya1,M (pgr)

April 6th, 2022

The G7 in a Modern Era: A Necessary Repurposing?

0 comments

Estimated reading time: 10 minutes

Bhattacharya1,M (pgr)

April 6th, 2022

The G7 in a Modern Era: A Necessary Repurposing?

0 comments

Estimated reading time: 10 minutes

In this piece, Angus Lee traces the conception and early functions of the G7 and compares it to its modern existence. He argues that it still retains a unique position in international affairs and explores its advantages and the ways it can be better utilised. 

This June, Germany will host the 48th[1] G7 summit at Schloss Elmau in Bavaria. The theme of its G7 presidency, “Progress towards an equitable world”, incorporates a variety of priority areas, spanning from economic recovery and stability, sustainability and green investments in infrastructure and development, to championing open and equitable societies. These goals, part of “the G7’s responsibility for the global common good”, are now representative of the broad mandate that the institution has set for itself.[2] Can the G7 properly tackle such a mission, or is it a reflection of a different time and now over-reached in its capacity to influence world affairs?

The original purpose of the G7 originated from the economic malaise of the 1970s, reflected in the collapse of the Bretton Woods monetary system, and rising inflation and unemployment rates in Western countries. In 1975, German Chancellor Helmut Schmidt advocated for a collaborative economic conference amongst Western allies, resulting in the first G7[3] meeting in November 1975 at France’s Château de Rambouillet.[4] The value of economic summitry was subsequently reflected in the effective high-level discussions amongst member nations’ leaders, which helped coordinate strategies over the next few years to stabilize the inflationary problems that Western economies were experiencing in the latter half of the 1970s.[5]

At the core of these summits was a concerted effort to redress an unravelling of the international economic structures that formed and sustained the post-1945 Western order. Alongside rising unemployment and inflation rates, inter-Western relations declined due to the political and economic instability wrought by the ending of the Bretton Woods and the oil shocks in 1971 and 1973, respectively. For Schmidt, the origins of the G7 stemmed from an intellectual linkage that a strong international economic order was tantamount to global security at large. The growing instability in the former – a trend that was contributing towards an economic crisis in the West – was seen as a real threat to world stability.[6] The G7, then, was a practical application of that thinking. It was formed not only to act as an economic coordinating mechanism, but a body in which the political fractures of the 1970s, caused by structural economic transformations, could be repaired to ensure international security.

The summits showcased more than simply political coordination to resolve the economic issues at the time. The most creative aspect of the initial G7 summits was the means by which economic topics were subsumed within a political framework. Member states would exchange concessions – economic policy commitments – to achieve an agreeable political consensus wherein collaborative action could advance. The 1978 Bonn Summit demonstrated this creativity and effectiveness on full display. To build cooperative, coordinated action on the summit agenda, three of the major players – the U.S., West Germany, and Japan- agreed to trade policy concessions. In a three-way exchange, the Americans agreed to a long-term energy conservation plan, in exchange for Japanese commitments to increase their economic growth, while the Germans agreed to increased stimulus measures over the next year.[7] International policy bargaining helped to address fundamental matters and reconcile different national positions on economic questions, leading to a high-water display of political unity that overcame disagreements and focused on concerted action to address a greater economic crisis.

Since its inception, the G7 has become an annual feature of international affairs. It has also evolved beyond its original remit of international economic governance, increasingly dealing with more topical areas that intersect with the global economy. While the initial quartet of G7 summits dealt mainly with five economic areas – macroeconomic policy, trade, monetary policy, global North-South relations, and energy, later summits expanded to include a wide-ranging discussion of world affairs.[8] In the 1980s, the G7 began to incorporate more foreign policy matters. For instance, the Canadian Prime Minister’s briefing book for the 1987 Venice Summit contained briefs far beyond international economic coordination: terrorism, education, technology, arms control and disarmament all featured in the agenda, and discussions of security spanned from the Middle East to Asia.[9] In response to an expanding portfolio, the G7 began to incorporate ministerial meetings into its structures; foreign ministers, finance ministers, and central bank governors have been convening concurrent discussions at the summit since 1998.

Recent G7 summits reflect this trend of expanding into broader global economic-political topics. In the previous 2021 Cornwall Summit, the G7 championed causes in its “Build Back Better” theme, pledging to cooperate and address economic recovery, health, trade, climate, gender equality, and infrastructure.[10] These commitments were coupled with the Build Back Better World (B3W) initiative, an ambitious “values-driven, high-standard, and transparent infrastructure partnership led by major democracies to help narrow the $40+ trillion infrastructure need in the developing world”.[11] The B3W’s global objectives have been considered the Western challenge to China’s Belt and Road initiative, though a senior U.S. official has claimed that its purpose is “providing an affirmative, positive alternative vision for the world”.[12]

While the intentions of B3W with respect to China’s own global projects are not categorically defined, the scale of this initiative underscores the G7’s ability to champion global governance. Far beyond the informal gatherings of high-level officials in the 1970s, the G7 has evolved into a formidable institution capable of projecting unified economic-political influence on a global scale. Of course, the G7’s shift from dialogues on inter-Western matters to a more global outlook was a necessary adjustment to its raison d’être. The economic problems that led to the G7’s creation do not apply today, nor would the G7 have likely continued if its remit was exclusively on Western economic coordination. The question, however, is whether the institution in its modern form is the ideal mechanism to enact global change. Criticism leveled towards the G7, namely the unrepresentative nature of a seven-country body appearing to act as a global steering group, or accusations of the summits being ritualistic and weak on action, does suggest that the G7 is antiquated and does not properly fit into the contemporary international framework.[13]

Indeed, the rise of newer groups, such as the G20, may be a better representative forum for discussion on global issues. Countries such as China, India, South Korea, Brazil, and Saudi Arabia have their part to play in the world economy, and their inclusion is a more accurate depiction of the international system today. During the second G20 London Summit in 2009, commentators at the time believed that the G20 would be the replacement to the G7.[14] More contemporary assessments have praised the G20’s potential, noting similar capabilities to the G7 in addressing issues beyond world economic coordination.[15] Writing about the G20’s position as the new instrument for global economic governance, academics Colin Bradford and Johannes Linn go further, suggesting that the G7 “end the pretense that [it] is the global steering committee”.[16]

Still, the G7 retains several features that can be used to its advantage. First, the G7 has an established history, both in the duration of its existence and its context as an inter-Western vehicle for discussion. The G7 is forged in the Western post-1945 alliance structures and is tempered by decades of economic-political unity. While there are ideological and geopolitical differences amongst its members, each summit still produces a communiqué, which at worst is an expression of unity, and in the best of cases emphasizes action through consensus. This structural vitality makes the G7 an invaluable forum for dialogue and cooperation amongst member states, and can be used to develop more unified positions before proceeding into broader multilateral bodies.

Second, with only seven members, the G7’s relatively smaller number of participants makes it more efficient and dexterous in targeting challenges and implementing actionable change. This may be one of its chief utilities. Building a consensus amongst seven countries, even to a minor extent, is significantly less difficult than having twenty member states in the G20 reach an agreement, let alone more cumbersome multilateral organizations such as the UN. The G7 is therefore capable of more easily developing a collective position and translating that into other multilateral bodies. Considering that the G7 summit precedes other summits such as the G20 and COP, the opportunity to coordinate policies on global matters in advance is a rare asset. While this dynamic may run the risk of encouraging coalitions and factionalism, the G7’s established history gives it a level of cohesion that is difficult to find in larger settings. A unified position is more likely to draw in other actors to participate in G7 initiatives, rather than create opposing coalitions and challenges. This very advantage, however, does run the risk of validating critics on the G7 being unrepresentative. Nonetheless, the small size of the G7 allows for a greater range of action, such as the announcement of the B3W, or it makes it easier to coordinate on a multilateral front, as recent retaliatory sanctions against Russia demonstrate.[17]

Finally, the annual frequency of the G7, combined with its institutional structure, continues to sustain its importance. Though the G7 has been described as “[f]ly-in, fly-out” summits concerned with creating “over detailed, but often anodyne, communiques”, form is just as valuable as substance.[18] For instance, after the 1979 quadripartite Guadeloupe Conference, British Prime Minister James Callaghan asserted that “[t]he forty-eight hours…spent together has been worth forty-eight thousand Foreign Office telegrams”.[19] A consistent forum for the meeting of the top heads of state, along with their foreign and finance ministers meeting concurrently, is not a common characteristic of international platforms. With a full year to prepare for each summit, countries build political rapport on issues throughout the year, which are further solidified with top-level contacts and the production of a communique. The summit meetings taking place for three consecutive days is an underappreciated reality, especially in a setting with only friendly nations. This environment is further bolstered by the G7’s “responsibility for the common good” which makes it a forum for any potential important issue. Unlike other multilateral institutions constrained by specific mandates, a broad scope permits the G7 to mould its agenda and identify priority areas, seen with the “Build Back Better” theme and the B3W in the context of the COVID-19 pandemic recovery process. This fluidity is a unique dynamic where member countries can identify emerging or sudden international problems of any nature, develop a cohesive consensus on the road to the summit, and crystalize an actionable position.

To be certain, the G7 is not without flaws. Nor is it an institution that can purport to act as a global steering committee when it omits so many parts of the world. But the G7 today continues to occupy an important part of international governance, with ambitious goals that have global impact. While other institutions have come into their own to tackle specific global issues, the G7’s historical evolution provides it with a distinct position in managing world affairs. Its closely-aligned members, alongside a broad and flexible remit, permits the G7 to extend into various international topics of both immediate and far-reaching importance. This amplifies its already formidable economic-political influence – an impact that could be utilized even more than it is now to champion causes not just within the G7, but to collaborate with actors across the world. It holds many strengths to continue to be a powerful world institution for positive change; subsequent summits may show that the G7 is indeed up to the task of being a vehicle for action to fulfill its self-imposed “responsibility for the global common good”.

Angus Lee is a recent graduate of the MSc History of International Relations programme at the LSE. He is currently a research assistant at LSE’s Department of Social Policy, and is also an independent researcher in Canada and the UK.

Featured Image: Picture of G7 leaders along with the European Council and European Commission Presidents at the first day of the 47th G7 meeting in Carbis Bay, United Kingdom on the 11th of June 2021. Taken from Flickr.

[1] The 2022 summit is technically the 47th meeting, as the 2020 G7 summit was cancelled due to the COVID-19 pandemic. There have been 48 planned summits in total.

[2] “Policy Priorities for Germany’s G7 Presidency in 2022”, January 2022, G7 Germany, https://www.g7germany.de/resource/blob/998352/2000328/6cb78b73c9f000183e69738c255d9cc9/2022-01-21-g7-programm-en-data.pdf.

[3] The first meeting only featured 6 countries, as Canada was not included until the next summit in 1976 in Puerto Rico.

[4] Kristina Spohr, The Global Chancellor: Helmut Schmidt and the Reshaping of the International Order (Oxford: Oxford University Press, 2016), 18.

[5] Ibid., 28. Also see OECD Data (Annual), Inflation (CPI), https://data.oecd.org/chart/6fUx.

[6] Spohr, The Global Chancellor, 12.

[7] Nicholas Bayne, “The foundations of summitry” in International Summitry and Global Governance: The rise of the G7 and the European Council, 1974-1991, eds. Emmanuel Mourlon-Druol and Federico Romero (New York: 2014), p. 27.

[8] While the first 4 summit declarations contained these 5 topics, the clearest example would be the 1978 Bonn Summit’s communiqué, which placed each of the economic areas under a separate header. See: http://www.g7.utoronto.ca/summit/1978bonn/communique.html.

[9] “Draft Venice Economic Summit – Prime Minister’s Briefing Book – Scenario”, June 8, 1987, Library and Archives Canada, RG 25-A-4, Volume 27077, File 35-4-ECON SUMMIT CONF-VNICE-1987.

[10] “Carbis Bay G7 Summit Communiqué”, June 13, 2021, https://www.g7uk.org/wp-content/uploads/2021/06/Carbis-Bay-G7-Summit-Communique-PDF-430KB-25-pages-3.pdf.

[11] “FACT SHEET: President Biden and G7 Leaders Launch Build Back Better World (B3W) Partnership”, June 12, 2021, White House,  https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/12/fact-sheet-president-biden-and-g7-leaders-launch-build-back-better-world-b3w-partnership/.

[12] Steve Holland and Guy Faulconbridge, “G7 rivals China with grand infrastructure plan”, June 12, 2021, Reuters, https://www.reuters.com/world/g7-counter-chinas-belt-road-with-infrastructure-project-senior-us-official-2021-06-12/; “G7 leaders attempt to rival China with infrastructure project”, June 12, 2021, Aljazeera, https://www.aljazeera.com/news/2021/6/12/g7-leaders-attempt-to-rival-china-with-infrastructure-project.

[13] Colin I. Bradford and Johannes F. Linn, “Is the G-20 Summit a Step Toward a New Global Economic Order?”, September 11, 2009, Brookings, https://www.brookings.edu/research/is-the-g-20-summit-a-step-toward-a-new-global-economic-order/.

[14] Richard Wray, “World leaders relaunch G20 as top economic forum”, September 25, 2009, The Guardian, https://www.theguardian.com/world/2009/sep/25/g20-reform-pittsburgh-developing-nations.

[15] Bradford and Linn, “Welcome to the New Era of G-20 Global Leadership” in “G-20 Summit: Recovering from the Crisis”, July 2016, Brookings, https://www.brookings.edu/research/g-20-summit-recovering-from-the-crisis/, 16.

[16] Ibid., 18.

[17] “G7 Leaders’ Statement on the invasion of Ukraine by armed forces of the Russian Federation”, February 24, 2022, UK Prime Minister’s Office, https://www.gov.uk/government/news/g7-leaders-statement-on-the-invasion-of-ukraine-by-armed-forces-of-the-russian-federation-24-february-2022; Mark Sobel, “Ukraine conflict cripples G20 but unifies G7”, March 9, 2022, OMFIF, https://www.omfif.org/2022/03/ukraine-conflict-cripples-g20-but-unifies-g7/; “G7 Leaders’ Statement on Ukraine: 11 March 2022”, March 11, 2022, UK Prime Minister’s Office, https://www.gov.uk/government/news/g7-leaders-statement-on-ukraine-11-march-2022;

[18] Richard N. Haass and Charles A. Kupchan, “The New Concert of Powers: How to Prevent Catastrophe and Promote Stability in a Multipolar World”, March 23, 2021, Foreign Affairs, https://www.foreignaffairs.com/articles/world/2021-03-23/new-concert-powers.

[19] Ian Aitken, “Salt to Sugar”, January 8 1979, The Guardian.

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