The G8 summit to be hosted by Prime Minister Jean Chrétien in Kananaskis on June 26-27 is in its final stages of preparation. This week, finance ministers are meeting in Halifax. Foreign ministers are at Whistler Mountain for their deliberations, presumably to urge certain courses of action on their bosses regarding the main agenda. To say nothing of a cycle of G8 environment ministers, G8 justice ministers, G8 labour ministers -- you get the picture.
Among those offering support and advice is a little-known group, which I co-chair: the G8 Preparatory Conference. The conference assembles a small number of knowledgeable private citizens, with extensive experience on a variety of international issues, from each of the participating countries. It is co-chaired by Dr. Fred Bergsten of the Institute of International Economics in Washington, and includes a number of distinguished participants: Dr. Henry Kissinger, Renato Ruggiero, former head of the World Trade Organization, and Dr. Wendy Dobson of the University of Toronto.
This year's report by the preparatory group is currently being released, just in time for the Big Show (or this year the Big Little Show because of the scaled-down nature of the proceedings).
We commend Canadian leadership for limiting the agenda for this year's summit, shunning the traditional laundry list of whatever items may be on leaders' minds, to three main themes:
Not that a shorter agenda will make the solutions any easier.
Summits began as economic discussions, and the world economy still dominates the summit agenda. On that front, the preparatory conference report has a lot to say.
Our report underlines that the world's two leading economies, the United States and Japan, are on the edge of devastating problems, which will affect business activity and jobs everywhere if action is not taken to correct their currency and exchange-rate difficulties.
Japan's ongoing "stagflation" is well known. But the country is essentially exporting its economic problems through a sharp rise in its trade surplus, caused by its falling exchange rate, which in turn is caused in part by structural weakness in the Japanese banking system. These are not issues that keep Canadians awake at night -- but they will, if Japan fails to act, and another Asian financial crisis ensues.
At the same time, the United States' alarming external trade imbalances and pending decline of the dollar may well lead to a burst of inflation and higher interest rates, thereby curtailing economic growth in Canada and Europe, and inevitably leading to further trade protection generated from an already inward-looking U.S. Congress.
Whether the G7/G8 can influence outcomes to these problems remains to be seen, since they are, after all, the internal responsibility of the U.S. and Japanese governments. But the leaders must, after all, lead, and given the potentially devastating external impact of these problems, it is essential that pressure be put on both countries to correct the situation.
These problems are not unrelated to international trade policy, a topic that has been part of the annual agenda since the G7 was founded in 1975. Open trade is vital to economic growth in developed countries; poor countries won't get anywhere without it. Trade liberalization is worth more to the poorest nations than all the foreign aid they are likely to receive.
In other words, leaders, if you can only do one thing, cut back those agricultural subsidies, make last fall's Doha round of negotiations work, and call a moratorium on the creation of any new trade barriers while the Doha discussions go on.
Among other things, progress on the trade file will help to ensure success on Prime Minister Chrétien's favourite item on this G8 agenda, Africa and development. He has worked hard to ensure some success in the attack on African poverty. He has built a team of partners from African nations, who will be attending the summit briefly. He has visited the continent himself, and sent his G8 ambassador on several additional consulting missions.
They are working with the New Partnership for Africa's Development (NEPAD), a group of African leaders who have set themselves an ambitious agenda committed to preventing conflict, promoting democracy, tackling disease and meeting targets for new investment.
The G7 must support and encourage NEPAD -- it was initiated by Africans, who accept responsibility for its success. But that does not mean unconditional support. We in the preparatory conference call for effective governance, sound economic policies and a clear commitment to building educational and health-care capacities on the part of African leaders before there is further assistance and extended debt forgiveness.
But the G7 must live up to its part of the bargain by meeting its Millennium Development obligation to provide additional assistance, a process that has been initiated but is far from complete. It must also institute further debt relief, a politically popular and relatively inexpensive form of assistance, but very significant among a wide range of poor countries.
Terrorism is the final component of the agenda. It is clearly (and rightly) the security preoccupation of our time, and will certainly be the focus of U.S. President George W. Bush's concerns. The preparatory conference report underlines the need for multilateral co-operation, and not unilateral action, to combat this scourge, particularly in the creation of "homeland defences." Co-operation must cover intelligence actions, law enforcement, border controls and immigration policy, to say nothing of the suppression of terrorist financing.
There are many conventions on terrorism at the United Nations and elsewhere. The problem is enforcement. The G8 leaders should recommit to meeting the obligations under these conventions, and mean it. They should also provide material assistance to other countries to build their own antiterrorism capacity.
Barbara McDougall is a former secretary of state for external affairs. She is president of the Canadian Institute of International Affairs, and co-chairman of the G8 Preparatory Conference.
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