Who Governs the Global Order

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G7 Japan JEON HEON-KYUN:POOL, AP

So the G7 met in Japan this past week.  And the media did in fact pay some attention to it.  But the attention was largely for the wrong reasons.  This caucus/club was often in the past dismissed by those not invited to the party.  Countries and experts alike referred to the G7 as the ‘Rich Man’s Club’.  The emergence of the G20 – at the time of the global financial crisis – redirected attention to this Informal as opposed to the G7.  There was criticism of course.  Media, experts and representatives of those countries not included reflected on the lack of legitimacy, failing to be universal, self-identification, etc.  But the G20 was never attacked for being a narrow interest as the G7 had been.  The G20 was the first, and remains the most notable global summit platform of established and emerging powers. Indeed at the time of the G20’s creation, there was much discussion of the likely passing of the G7 summit. Obviously that didn’t happen.

So what do we make of this ‘stub’ global summit and its impact on the global order.  Barry Bosworth writing at the Brookings blog site wrote the following judgment – though note before the actual gathering: 

While the gatherings [the G7]  used to be major milestones in the governance of the global economic system, they have steadily declined in significance in line with the group’s waning domination of the world economy. The G-7 continues to meet as a close-knit club of wealthy countries (Canada, France, Germany, the U.K., Italy, Japan, and the United States) with similar interests, but its governance role has been largely supplanted by gatherings of more diversified groups—such as the G-20, which accounts for 85 percent of global GDP, 75 percent of world trade, and about two-thirds of the world’s population—that can make greater claim to being representative of participating countries. The G-7’s share of global GDP has fallen from 68 percent in 1992 to 47 percent in 2015. And the absence of the world’s second largest economy (China) is a glaring illustration of its “old-boy” makeup. 

Leaving aside this bigger assessment, expressed well by Bosworth – and indeed others – what can we take away from the summit gathering?  What did the leaders signal; what was committed to by the leaders?

Most observers were hoping to read a commitment by the G7 on the global economy. There continues to be real worry over the health of the global economy and most especially the anemic growth.  And in the concluding communique the leaders and their officials acknowledged the fragility of the global economic recovery:

The global recovery continues, but growth remains moderate and uneven, and since we last met downside risks to the global outlook have increased.

On the economic risk front the description Leaders painted is disappointing:

Global trade performance has disappointed in recent years. Weak demand and unaddressed structural problems are the key factors weighing on actual and potential growth.

Was there therefore a call for action and a plan for collective policy?  Nope.  It has always amazed me that experts reference the fact that the G7 countries have as Bosworth suggests, “similar interests”.  We all were prone to suggesting that these states are ‘like states”.  And they certainly can be characterized as similar in certain characteristics – democratic form,  high per capita gdp, etc., but these folks have seldom seen ‘eye-to-eye’ on economic policy.  And there was no coordination coming out of this summit. This communiqué makes clear that there is no agreement on how to ‘juice’ global growth. Instead the Leaders suggest all forms of economic policy making – fiscal, monetary and structural and throw in trade as well – are available and leave it to the G7 countries individually to act in accordance with their own economic views, or as they urge:

Global growth is our urgent priority. Taking into account country-specific circumstances, we commit to strengthening our economic policy responses in a cooperative manner and to employing a more forceful and balanced policy mix, in order to swiftly achieve a strong, sustainable and balanced growth pattern.

So a poor effort, or as my colleague John Kirton, Director of the G7 Research Project here at the University of Toronto argued: 

 But it did poorly on its economic agenda, above all on the coordinated fiscal stimulus that its Japanese host sought the most and pursued to the end, and also on structural reform.

So if the key economic policy – economic coordination failed – what can we credit the Leaders for accomplishing?  Well, it was long 32 pages of communiqué – so much for short pithy messages.  There is much identified – support for global health, infrastructure, the Sustainable Development Goals (SDG) 2030, the Paris Agreement on climate change coming out of COP21, and indeed other issues – but agreeing to do what you’d largely agreed to already, without concerted collective effort identified and implementation dates identified was failing really to move the global governance yardsticks.  

So was there no success?  According to my colleague again, John Kirton there was success but in the security realm – as Kirton described it “… a summit of solid, security-driven success”.  Well let’s leave the Middle East aside – again a lot of not very real commitment – but there was one effort that warrants some comment.  And actually I don’t think in the positive.  Kirton argued:  

In the security realm, on the South China Sea, Japan mobilized all G7 leaders to publicly declare their commitment to “maintaining a rules-based maritime order” and “the fundamental importance of peaceful management and settlement of disputes” in the East and South China Seas, and to privately agree to support the imminent international court ruling in the Philippines case and keep addressing the issue at future G7 summits.  

Certainly support for freedom of navigation is a worthy commitment and that includes the South China Sea and the East China Sea.  But such affirmation is not helpful when Japan as host corrals the rest of the G7 to support these efforts.  And especially when it involves Japanese interests. It is detrimental especially in the face of China not being represented where it would be if it were a gathering of leaders say at the EAS, or APEC or the G20 or in fact the S&ED, the latter being a regular meeting of China and the United States.  Now of course if it were any of these settings – with China included – this statement would not have issued.  But that is the point.  What is engagement with China on its assertive behavior, it is not an opportunity to support Japan, where such support is not called for on this issue at the moment. This is unnecessary diplomatic support for an ally rather than more seriously tackling the issue.  

Where does one end up?  Well, this G7 summit at Ise-Shima Japan could be described possibly as a good informal discussion of G7 Leaders; but not much to ‘crow about’ in moving the yardsticks in global governance.  And that after all is the point, isn’t it. And certainly the statement on freedom of navigation in the South China and East China Seas was positively unhelpful.  

Image Credit: Pool AP, Jeon-heon Kyun

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