Canadas looks for ways to keep G7 alive, sees loss of stature in new G20

The Canadian Press ~ The News
Send to a friend

Send this article to a friend.

OTTAWA - When Finance Minister Jim Flaherty welcomes his G7 colleagues in Iqaluit next month, one purpose of the two-day meeting will be to ensure it is not the last of its kind.
There's a chance it might be. There are no more on schedule, with the next opportunity - April's meetings of the World Bank and International Monetary Fund in Washington - being given over to the upstart Group of 20 body.
Government sources say Canada is one of several countries seeking to keep the G7 - or G8 when Russia is added at the leaders' level - going and relevant even though the G20 is now the go-to council for solving the world's problems.
Officials say there remains merit in keeping the G7 going, and that Flaherty's plans to re-invent the meetings in Iqaluit on Feb. 5 and 6 as a "fireside chat" among friends, with no formal communique, is aimed at proving the usefulness of the body.
The idea is to make the informal brainstorming "a blueprint for future meetings" that will prove more useful and frank than the formalized dispatches that comes out of the disparate G20 forum, said one official.
Another advantage of keeping the G7 alive is that the countries can provide a united front of the leading industrial powers to the G20 summits, which include countries such as China, India, Saudi Arabia, Argentina, Turkey and Indonesia, which have far different agenda's on many issues.
"There likely is merit in making sure those who are lie-minded and who rely on each other for trade and commerce and investment have some sort of united front," said one official.
A key reason it's important to Canada that the G7 remain an influential institution is that collapsing the group into the larger G20 dilutes the country's influence at the top table.
Canada is not alone in dreading the crowding of the neighbourhood. Japan has always purported to speak for Asia, and now must share the microphone with China, India, South Korea and Indonesia.
Italy also wants to preserve the smaller group in order to keep punching above its economy's weight.
"Canada and Canadian leaders have always benefited from being part of this cosy circle that could talk about anything, and be part of that inner core," explains Andrew Cooper, associate director at the Centre for International Governance Innovation in Waterloo, Ont.
"All of a sudden you've got a lot of other countries that were not seen at Canada's level, (for) five, 10, 15 years , and Canada doesn't have a privileged position anymore."
On the other side, President Barack Obama has voiced summit fatigue about the multiplying number of annual meetings, and France has talked about a new body that would be greater than G7 or G8 but not as large as 20 nations.
Cooper says it's an open question how long the smaller group can exist, although he said it may devolve into a sub-group within the G20, such as the BRIC countries (Brazil, Russia, India and China).
But there may be more than national pride involved in keeping the G7 and G8 as separate, recognized global institutions of policy-making.
Relatively new as an instrument of global governance, the G20 is already showing cracks, says John Kirton, director of the G8 Research Group at the University of Toronto, because the make-up is so diverse.
"There are issues already that the G20 have not been able to succeed at or even take up, exchange rates being the overwhelming one," noted Kirton, since China is adamantly opposed to allowing markets decide the value of its yuan.
"But we do know that the G7 does discuss, come to consensus on and act on exchange rates."
Kirton adds that all of the world's major financial centres are located within the G7 countries, so it remains an indispensable body for establishing rules to regulate and supervise banks and financial institutions.
Designing Iqaluit so that it does not conclude with a formal declaration will be a good thing, says Kirton. G7 finance ministers will want to discuss strategies to move China off a fixed, devalued currency "and you don't want to announce that to the world."
A government official says Flaherty's concept of an informal discussion is actually taking the G7 back to its roots, and will allow for a freer discussion "without having to match up with someone else's (G20) communique."

Organizations: G7, World Bank, International Monetary Fund International Governance Innovation G8 Research Group University of Toronto

Geographic location: Canada, Iqaluit, China Russia India OTTAWA Washington Indonesia Saudi Arabia Argentina Turkey Japan Asia South Korea Italy Waterloo France Brazil

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page

Comments

Comments