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Between Globalism and Regionalism: The Role and Composition of The G-7

Stefano Silvestri

Stefano Silvestriis Vice-President of the IAI. Translation is by Susanna Barbatbun.

Table of Contents

Why Have a G-7 Summit?
Original Mandate of the G-7
Perceptions of the Actors: Relationships with the "Others"
The G-7, the Eu and Regional Participants
Should the G-7 be Enlarged to include other Countries?
Russia
Conclusions
References

Why Have a G-7 Summit?

It is useful to ask what purpose the G-7 summits serve (that is, the "group" of the seven most industrialized countries, currently comprising the US, Japan, Germany, France, Italy, Great Britain and Canada). An examination of the Final Declarations of the G-7 summits, from the first summit at Rambouillet (which did not include Canada), to the most recent one in Tokyo, reveals a slow, but steady, evolution of their objectives. Some of these were set right from the beginning:

Gradually, other objectives were added:

The pursuit of these objectives, shared by all the participants, or the pursuit of other global objectives related to the specific national interests of the individual participants may therefore constitute the raison d'être of the G-7 and it annual summits, though they may not always have been characterized by definite capacity for strategic decision-making. In other words, though the G-7 has convened summits annually since its inception, and though each meeting has ended with a general agreement among all participants, decisions have not always been significant or effective. Yet no one has ever seriously suggested discontinuing these meetings. Does this mean that there are reasons other than those of strategic effectiveness that justify the need for an annual G-7 summit?

As a system of global government, the G-7 is particularly lacking because it does not have universal membership, its highest decision-making body meets only once a year, and, most importantly, it has no mechanism for implementing the policies it sets out. As a forum for settling differences and reaching agreements among the Seven, the summits have proven useful only occasionally, the disadvantage being that they are convened at more or less regular intervals rather than as the need arises. Thus, they have essentially served as opportunities for the Seven leaders to meet, and have slowly been enlarged and structured so as to have become more similar to traditional international summits.

Original mandate of the G-7

The G-7 was originally established to facilitate the formulation of compatible policies in the most industrialized countries at a time when it did not seem that this could be guaranteed by the various institutional fora for negotiation (IMF, OECD, etc.). But the purposes of the summit have expanded to include the following:(1)

The general mandate of the G-7 should therefore be that of defining, or at least identifying, the broad lines or common strategic principles for a given year (beginning with those pertaining to the "grand strategy" in the monetary and macroeconomic fields). On some rare occasions, particularly during its initial phase, it proved useful for setting new policies; at other times, it has attenuated conflicts among the participating countries; sometimes it has influenced the domestic policies of the participants by enhancing the authority of the government with respect to the opposition in order to pass relatively unpopular policies. In all cases, it has increased mutual understanding and awareness of the perceptions and priorities of the heads of state and government.

But those who assert that the G-7 has progressively acquired increasing powers of government are overstating the case. They maintain that during its first phase (from 1975-1981), the G-7 contributed to strengthening the existing international organizations and institutions, thereby contributing to managing the problems created by economic disorder; in the following phase (1982-1988), they suggest that the G-7 rivalled international institutions as the primary forum for setting out common political aims. They go on to suggest that during the latest phase (which began in 1989), the other major international organizations will ultimately be subordinated to the G-7 in a hierarchical relationship.(2) This is a reflection of the progressive enlargement of the agenda to include politico-strategic issues in addition to politico-economic ones, but it is not consistent with the role actually played by the G-7 summits, nor with the effectiveness of their deliberations.

Hence, the view of those who maintain that it should be strengthened by enhancing its institutional structure and creating a permanent secretariat so that it can become the forum for regulating macroeconomic processes (and gathering world politico-strategic consensus) is not consistent with the historical evolution of the G-7. Furthermore, the "institutionalization" that this would require could reduce its effectiveness as a relatively "informal" meeting place and would put it into direct competition with other international organizations. In any case, it would be pointless unless it also aimed at achieving greater operational effectiveness and a more efficient decision-making process than is provided by the current system.

The same objections may be made against the more ambitious idea of turning the G-7 into a kind of "world council", whose actions with respect to other international institutions and organizations (UN, IMF, GATT, OECD, etc) would be similar to those of the European Council vis-a-vis the European Union (EU); that is, a council that would constitute both the final, definitive level of decision making and the "engine" that is engaged whenever there is the danger of an impasse. Past experience is not very encouraging. The G-7 has only been indicative of an imminent international agreement (e.g. within the GATT or IMF) on a few occasions; more often than not, particularly in the last few years, it has expressed positions which were later not acted on. Furthermore, the risk inherent in the creation of a G-7 Council is that it would be overburdened, as every major decision would be deferred to this higher level, while the effectiveness of the other international organizations would be greatly diminished. Such a council would also have to account for the different composition and decision-making processes of the various other international organizations, which, unlike the small group of equal partners in the G-7, generally have a broad membership and operate on complex voting rules. This means that the G-7 would be weighed down by the need to "relay" back and forth between the other institutions.

On the other hand, the G-7 has served a coordinating function for achieving common policies toward the East: it facilitated the decision of the G-24 to create the EBRD; and it achieved an agreement on the politico-economic support to be given to the new Russian leadership (first to Gorbachev and later, with greater resolve, to Yeltsin), which led to the "association" of the Russian head of state to the G-7 meetings. In these cases the G-7 clearly played an important role in consolidating the consensus of the most industrialized countries, overcoming the differences in the perceptions of the major countries, which could seriously have diminished the political impact of the decisions taken, or exacerbated the differences between the G-7 members (e.g. differences with Germany over its interest in a clear opening toward the East, or, for opposite reasons, divergencies with Japan's nationalistic positions).

The G-7 was also instrumental in achieving an agreement on the Missile Technology Control Regime (MTCR), which has significant implications for the future and could serve as an important precedent if there is a dispute over the implementation of other more universal non- proliferation measures.

To reconcile the various aspects of the "spirit" of the G-7 and preserve its essence and effectiveness, it is therefore interesting to pursue the idea of a distinction between the summit meetings as such and the processes of coordination, consultation and eventual monitoring which precede, accompany and follow up the meetings. The latter could be better organized and structured (and possibly institutionalized, even if it is only issue-oriented and not permanent), leaving the summit meeting to play a freer, less formalized role.(3)

Perceptions of the Actors: Relationships with the "Others"

According to Dieter Senghaas,(4) the most salient characteristic of the world system is peace and concerted action among the members of the OECD, which constitutes a sort of single, "social body" at the global level. But the OECD members are not without dangerous divergencies and risks of internal conflicts, which would have terrible consequences if they were to explode. The formation of a group within the group (i.e. the G-7) is in itself an indication of the possible cleavage, although the participation (albeit "incomplete" as yet) of the EU in the G-7 contributes to attenuating the internal division (which will be negligible after the probable enlargement of the EU).

Given this premise, the greatest problem of world governance is the relationship between the OECD community and the rest of the world, where different realities are in competition and, potentially, in conflict with the OECD (and therefore with the G-7). This problem has been made more urgent and significant by the fact that at least one segment of the "outsiders" is going through a period of major growth in economy and trade, and is increasing its economic, trade, and in some cases, political links with members of the G-7. The North American Free Trade Association (NAFTA) and the Association of South-East Asian Nations (ASEAN) are cases in point.

If the G-7 countries are variously concerned with or interested in the political developments and strategic stability of the regions bordering on or encompassing their vital interests, it follows that this more complex strategic framework affects the G-7 actors in different ways, adding to the tensions among them and detracting from cooperation (and, therefore, from global problem management). In other words, although the positions taken by the actors in the G-7 summits are primarily influenced by their respective political situations domestically, and although their discussions address problems related to mutual relations, their long-term strategic perceptions are also largely defined by the differences in their international vulnerability, their concept of the future world balance, and their perceptions of the interests at stake within that context.

The position of Germany, for example, is closely tied to the urgent need for an effective response to the question of Eastern Europe and the former USSR, while Japan is largely defined by the need to clarify its position and role with respect to the new realities in the Asia-Pacific region, while not being subjected to an "excess" of leadership on the part of the United States.

This also explains the pressure for enlarging the G-7 to other regions outside the OECD. There are, however, significant divergencies within the G-7 on this point. For example, Germany is concerned about Eastern Europe and feels that it does not have the support of its allies; France complains that the allies are not giving enough importance to the South, which is its main concern; Italy is worried about itself; Britain feels that it has too many commitments and is warning its allies (including the US) that it will have to say "no" more often than not in the future.(5)

In addition, Canada seems to be almost as inwardly focused as ltaly; Japan is preoccupied with its competitiveness and feels that its allies fail to understand the nature of the new competition from the Asian-Pacific region; finally, the US, while willing to take on major global responsibilities, is concerned that commitments do not condition their freedom of action and national sovereignty (i.e. that they do not upset the consensual relationship between the President and the Congress). The following sections consider national positions in more detail.

United States. The G-7 member which should have an overview of the international situation and its own strategic role within it is the United States; however, the failure of the "grand strategy" for a "new world order", launched President Bush--and followed by his devastating election defeat by Bill Clinton--clouded the picture, leaving the United States in an ambiguous situation between global commitments and neo-isolationist forces.

Blackwill's recent analysis of the nature and orientations of future US foreign policy raises the question of whether the security policy of the only remaining superpower will be based on a set of consistent criteria, or whether it will shaped by ad hoc decisions necessitated by emergencies and influenced by factors such as the information policy of CNN and other major television networks, that is, the need to feed the media's insatiable "hunger for news"; the influence of sectorial pressure groups; the capacity and influence of the individual heads of a given dossier; and, of course, the initiatives taken by other countries.(6)

But even with a more systematic or objective identification of national interests and priorities, the US would not necessarily feel committed a priori to any given international organization, with the exception perhaps of only the United Nations because of its universal nature (and even participation in the UN is considered in terms of its consistency with national objectives). In other words, given that there is a fundamentally new strategic situation, the international institutions and organizations such as NATO, the CSCE, OECD, IMF, and the G-7, which were created to resolve or manage problems of the past, have no a priori validity. Blackwill asserts that vital interests stemming from the core US national objectives must first be clearly identified (this is consistent with perceptions of the new US administration). Only then can consideration be made of what existing or possible new institutions can do to promote these national security interests and objectives. In other words, a strategy must be devised before the appropriate institutional means may be identified to achieve its objectives.(7)

It is therefore possible that national interests will prevail over the collective interests that have matured within the international organizations; the latter, however, should serve as external checks on national decision-making processes.

This hinders the development of an improved system of burden sharing, as every management decision is made ad hoc, thus diminishing the long-term significance of international agreements and thereby subordinating every national contribution (in terms of both responsibilities and costs) to a case-by-case assessment of individual national interests--a situation which can complicate the governability of the international system and detract from solidarity among the G-7 members.

In reality, national perspectives may be mitigated by a common interest in providing for routine procedures within the international system, such as agreements for the management of certain issues, or alliances and formal consultative mechanisms. Optimal operation of this system, however, depends on how important it is perceived to be by the major international actors. Despite indications of renewed national egoism, the need to manage and, above all, prevent international crises makes the main international actors tend to favor a series of sectorial agreements (e.g. NPT, MTCR etc.) and other, more general "framework" agreements such as the CSCE, which predetermine both the attitudes and the interests of the participants and, therefore, the alliances and institutional structures.

Furthermore, the nation state is now far from being the only or even the main repository of political legitimacy, and it no longer has the power or operational capacity necessary to address and resolve the crises which threaten it or involve it in some way. According to certain neo- nationalist rhetoric, the nation-state, while unable to impose its preferences, would maintain the right to veto unfavorable decisions. In other words, the phenomenon of what may be defined as lame powers (or incomplete powers) would become widespread; that is, there would be many powers with some, but not all, instruments necessary to act on the international framework. Though they may be unable to shape it as they wish, they have enough power to prevent developments that are not to their advantage, and to defend their interests, whatever the global interest.

But in a situation in which every strategic decision may be defeated by a national veto, no crisis can be effectively addressed or resolved; therefore international security and the governability of the system would be rapidly diminished to the point that a veto right would become superfluous, as the problem would be one of a constant threat that an individual state would not be able to manage alone. Thus national egoism would be suicidal and it would be in the common interest to return to higher forms of consensus and international and/or supranational legitimacy. In other words, the veto right alone is not an instrument of crisis management and therefore does not serve the vital interests of the nation states.

After making increasing allowances for sectorial and national priorities, the international system has recently been returning its attention to the identification of collective interests and priorities, reassessing the importance of formal alliances and well-structured international organizations. Perhaps because of the hope of building a new international order based on the United Nations, the crisis in the international organizations (particularly in the field of security) was underestimated and thus exacerbated. The differences between the European and US positions on GATT and Clinton's attempt to use the creation of NAFTA and a possible strengthening of the Pacific Economic Community to pressure and threaten the European Union are indicative of a tactical and utilitarian view of multilateral instruments (much like nationalist views). This constitutes a significant limitation on the institutional development of the G-7 as a world governing body; at the same time, however, it reaffirms its potential strategic importance as an organ of consultation and mutual understanding that could serve to prevent the rise of nationalist or protectionist conflicts.

But there are also developments in the opposite direction. The importance that the US is attaching to the "enlargement" of NATO to the East (and the French and German efforts to enlarge the WEU), the attention that Japan is giving to the CSCE, and the fact that there is an attempt to "regionalize" the crisis management powers that are formally delegated to the UN Security Council are all important indications of a reassessment of the importance of these "traditional" structures, provided that they allow for a more modern and effective approach to the complex issues of the new security situation and the new international order.

This re-assessment also seems to include the G-7, at least in the view of the Clinton Administration. However much Clinton seems to be personally in favor of a "debureaucratization" of the summits and of restoring them to their original form, the fact is that at this time of major international transformations, the US administration seems to want to preserve the potential inherent in the open, undefined structure of the G-7; the opportunity provided by the summit to address virtually any issue directly, and the dramatic enhancement of visibility it offers, makes it seem neither easy nor opportune to accept even stronger forms of institutionalization, however necessary they may appear, to increase the G-7's effectiveness.

France. The evolution of the position of France is interesting: it has always maintained that defending its national interests is a priority; however, it has not only pursued European integration and a policy of preferential agreement with Germany, but given that it has also gradually felt the weakening of the systemic guarantee that had formerly been ensured by the US commitment to global concerns (which Paris had criticized, but not disdained), it has also taken significant steps toward NATO. France is now torn between two extreme options: the continued Europeanization of its national interests, or marked neo-nationalism(8). For all practical purposes, however, the neo-nationalist option may be seen as only a negative, residual outcome of the possible failure to achieve the alternative: that is, as something that may be imposed on France by adverse positions taken by its international interlocutors rather than as a reasonable choice to be made in its best interest. This is supported by the recent controversy in the GATT negotiations, in which there was renewed French national assertiveness. But in the end, it was demonstrated that Paris was perfectly aware that its national interests could only be effectively served to the extent that they were influencing the common EU bargaining position. Though the EU had to mediate renewed national interests and positions in order to achieve a positive conclusion to the GATT negotiations, its role as the only real advocate of those interests and therefore as an international interlocutor was reaffirmed and strengthened; thus, it was demonstrated that nationalism can only be successful in Europe if it is somehow "Europeanized".

A permanent member of the UN Security Council and a country that has always advocated an independent role for Europe, France does not seem to be as interested in a "political" evolution of the G-7 as in maintaining its economic dimension and its "image". But even according to this view, the G-7 could still have a particular political relevance when major macroeconomic issues have to be addressed, such as the relationship between the rich and the poor, that is, the North-South and East-West relationships.

Great Britain. The position of Great Britain is somewhat different, not because it assumes a more "nationalist" position than the others, but because it seem quite convinced of the basic need to consider European issues within an international perspective. Of course, this position is reinforced by the "liberalist" tenets of the British political and economic systems, which require the maintenance of stable world political conditions and specific rules to protect free competition.(9) But if this somewhat limits Great Britain's contribution to the construction of the European Union, it also makes this country one of the most culturally and politically ready and willing to assume the responsibilities and burdens associated with managing the international system; thus, it is a " model member" of the G-7 and a determined adversary of the renationalization of the international system which impedes the establishment of a new order.

It is perhaps also for this reason that Great Britain seems to be the country that has been most concerned with revising the format of the G-7 summits to make them more meaningful and effective. This is in line with Britain's traditional empiricist policy and is aimed at diminishing the useless bureaucratic "fat", while restoring the original purpose of the G-7 summits as meetings restricted to direct encounters between the heads of state and government. Of course, the highly centralized and well-coordinated structure of the British government tends to favor the adoption of this position.

Germany and Japan. The positions of Germany and Japan are more complex and, in some ways, parallel: they are both major economic powers which are destined to play an increasing role in the international arena, but they are also both somewhat "reformist" with respect to the pyramidal hierarchy of the postwar international order (in which, at least formally, France and Great Britain maintain privileged positions.) The current reformism of these two countries, however, is completely different from that which characterized their foreign policies until the Second World War, when their aim was to tip the balance of power in their favor; their goal today is simply to become integrated into the existing management structures as equal powers. The most interesting indication of this process lies in their progressive transformation from "security consumers" to "security producers" through their participation in UN peace missions and in the CSCE, as well as in their willingness to pay the high costs of ensuring the effective operation of crisis prevention and crisis management strategies.

Redefining the international roles of these two countries, however, is a disruptive element that must not be underestimated. There are strong nationalist and even racist impulses, which raise specters of the past, particularly in Germany because of the difficulties associated with rapid integration of eastern Länder and the complex relationship with the countries of Central and Eastern Europe. Nevertheless, it must be kept in mind that both countries--particularly Germany--are highly integrated in the international system, and their long-term goals are consistent with preserving international solidarity. Following years of preoccupation with their borders on the former Soviet empire, Germany and Japan now find themselves confronted with two rapidly changing areas characterized by great economic potential (especially the Asia-Pacific region, which has already started to realize this potential) and by high risks of internal conflict.

The G-7 has served as an international springboard for Germany and Japan. This has been particularly important insofar as these two major economic powers are not yet permanent members of the Security Council. Since Germany has always been more integrated in multilateral political contexts than Japan (which was confined to a strictly bilateral relationship with the United States), it has perhaps benefitted more from its participation in the G-7. In other words, the G-7 represented an additional, important component in the multilateralization that has increasingly characterized Germany's political relationships, as well as its economic and trade policies; in the context of the relatively few multilateral experiences of Japan, however, the G-7 has assumed great internal political significance, even in terms of domestic policy, though the country has not always been able to take full advantage of this.

Italy and Canada. While Italy and Canada are very different, they have similar interests in the G-7. Both countries are currently having trouble with their political profiles and international roles as a result of difficult domestic problems. For Italy, the problem is one of maintaining strong foreign ties that represent both a source of legitimacy and a long-term strategic objective. This is necessary to prevent the country, which is economically strong but politically and institutionally weak, from being relegated to a marginal, "Mediterranean" position which could give rise to nationalism and fuel more serious internal regression.(10)

Canada, on the other hand, despite its policies of increasing economic liberalization with the US (which has fueled nationalist resistance even in the English-speaking population), has serious concerns about keeping its national identity distinct from that of its American neighbor, as the recent election campaign has demonstrated. It also has a major problem of federal reorganization, primarily with respect to Quebec and the French-speaking population. Greater integration in multilateral organizations for the management of international affairs could therefore contribute to easing the problems of national unity and identity. Furthermore, Canada has always endeavored to maintain a high level of commitment to international responsibilities, both in the UN and in the CSCE (in addition to its traditional participation in NATO forces in Europe, which though much reduced in terms of numbers has retained its symbolic value). For parallel reasons, Italy is also moving in the same direction.

The foregoing analysis of national positions leads to the following conclusions:

The G-7, the EU and Regional Participants

In the last few years there has been a definite trend toward regional integration, particularly in trade, but also more generally in the fields of economic, security and foreign policy.

This trend has been followed to various degrees by Western countries, not only because it offers better prospects for economic development and cooperation, but also because it was seen as a useful bulwark against communist penetration. Though the latter rationale is much less important now, it is still valid in Asia because of the persistence of communist or para- communist regimes in the People's Republic of China. North Korea, Vietnam and Burma. There is increased interest in regional alliances and organizations, both as possible economic partners and, more generally, as politico-institutional frameworks which can somehow contribute to the political stability of the countries in the region.

For some time now, the G-7 has actually become the G-7+1, thanks to EC representation, both by the Commission (president and commissioner in charge of external affairs), and by its president. This innovation followed what had already taken place in another highly "political" context, that is, the CSCE: the positions of EC countries within the CSCE had long been coordinated, and, in 1975, the Helsinki Act was signed by then-head of the Italian government, Aldo Moro, in his capacity both as national representative and as president of the Community.

The European Commission was first represented in the G-7 at the London Summit in May 1977 by then-Commission President Roy Jenkins. Jenkins was also invited to the three subsequent summits (Bonn, 1978; Tokyo, 1979; Venice, 1980), while his successor, Gaston Thorn participated in the summits in 1981, (Ottawa), 1982 (Versailles), 1983 (Williamsburg) and 1984 (London). The Commission's role gradually increased, both because it was consistently invited (and thus increasingly became an "obligatory" presence) and because it began to play a role of its own: at the 1988 Toronto Summit, Jacques Delors was among the main actors, and at the 1989 Paris Summit, the Commission's role was explicitly recognized when the Seven entrusted it with the management of the PHARE program to provide aid for economic restructuring of the former communist countries of East-Central Europe

The president of the European Community also participates in the G-7 summits, but is only "visible" when the office is held by a country which is not a member in its own right (e.g. The Netherlands at the 1986 Tokyo and 1991 London summits; and Belgium at the 1987 Venice and 1993 Tokyo summits).

Thus it seems that no one wants to make an issue of EC participation--at least not since President Bush's failed attempt at the 1990 Houston Summit. On that occasion, the issue was raised in the context of the US controversy over the Europeans' tendency to coordinate their foreign policy positions in advance, and coincided with the pre-Maastricht debate on the possibility of a greater common role for Europe in the political and security fields. Now a new phase is beginning: that of the European Union. Although the Maastricht Treaty was destined to be implemented more slowly and uncertainly than had been hoped at the end of 1990, the transition from the Community to the European Union has not merely been a nominal one. Granted, the Common Foreign and Security Policy (CFSP) is regulated by a decision-making system that is more "intergovernmental" than those for other Community policies, particularly Stage III, Economic and Monetary Union (EMU). Still, the CFSP has become an integral part of the Union, as has the future "common defense policy" (and what may eventually follow as "common defense" if the EU members so wish). The WEU, the European multilateral defense organization, once quite separate from the EC, is now also included in the transition toward EU and is tied to the political decisions of the European Council. This new situation puts into perspective the question of full participation of the EU and its political and decision-making institutions (the Commission and the Council) in the work of the G-7, including what has been defined as "high politics".

In this framework, the progressive development of the EMU is likely to pose the problem of EU participation (the Commission or at least the new European Monetary Institute) in the so- called "meetings of the deputies" which are part of the decision-making process of the G-7 (and which generally involve the deputy economic ministers). This will be more likely if delegates from the central banks also regularly participate.

It is hardly necessary to stress that the political nature of the EU, its legal importance and its broad competencies (supranational and multilateral) clearly distinguish it from all the other international organizations (with the exception perhaps of the UN Security Council, in terms of the political and legal importance of its decisions). Thus, the justification for Community participation in the G-7 does not lie in the fact that the Seven have entrusted the EC (now EU) with certain tasks in the past; rather, its participation is justified by the different nature of the EU with respect to the other international organizations.

This would ensure a sort of indirect participation in the G-7 for a large number of European countries, several of which (e.g. Spain and The Netherlands) fulfill the economic criteria required by an eventual enlargement of the G-7 (see Table 1 in the following section). The objection has been raised that the Treaty of Maastricht did not technically give the EU full legal personality, on par with that of the other G-7 participants. This formal objection carries little weight, but it could assume greater importance if the EU does not succeed in acquiring a more substantial "political personality".

But even if this were the case, the implementation of Stage II of the EMU, not to mention the decision to proceed to the implementation of Stage III (even by a more limited number of countries) would still pose the problem of increasing the exclusive competencies of the EU in the economic field and, consequently, the need to adjust the consultative mechanisms of the G-7 accordingly.

The definition of the collective international interests of the EU is more complex. Several legal premises are set out in Title V of the Treaty of Maastricht, which establishes the CFSP. Also, certain priorities were defined in general terms at the European Council in Lisbon (June 1992). According to these documents, the highest priority for the EU should be on the areas bordering it to the east and south. This was also affirmed by the European Councils in Edinburgh (December 1992) and in Copenhagen (June 1993), at which the decision was made to begin negotiations on enlargement and on the institutionalization of relations with East-Central Europe. Finally, at the special session of the Council of Europe in Brussels in 1993, the following areas within the CFSP were identified as requiring immediate action:

The priority security interests of the EU were identified as the preservation of the territorial integrity of the EU, economic stability, and environmental protection. In principle, the EU announced its support for the following: promotion of democracy, the rule of law and the principles established by the CSCE; economic reform and the processes of regional cooperation and integration ("regions" in global terms); and the reinforcement of arms control and non- proliferation regimes. The preferred instrument was identified as preventive diplomacy, including the application of political and economic pressure and support for peacekeeping and peace-enforcing operations determined by the UN or the CSCE.(11)

These are very general statements. Now (more than in the past when there was a "global enemy"), it seems very difficult to establish a precise list of interests or an exact scale of national priorities. Everyone recognizes a generic set of shared interests within a few major global issues of security (non-proliferation; anti-terrorist initiatives, guarantees for the world balance of powers, etc), economic growth and stability, environmental protection, etc; nevertheless, there are sharp differences on the priority to be given to the various elements and the best way to address them. The greatest differences are on the definition of the criteria for responsibility (i.e. what is usually referred to as burdensharing), particularly when there is a need to use force and/or to make major economic sacrifices, or when it is necessary to make significant adjustments in the existing socio-economic or political equilibria within the various countries (e.g. the enormous difficulties created at the GATT negotiations in all the major countries by the conflict of relatively circumscribed and often minority interests).

As far as Europe is concerned, the main issue is whether the EU and its major members (those which also participate in the G-7 in their own right) are capable of recognizing and addressing not only the issues in their immediate interest, but also global problems. And, what is more important, as a Japanese observer has recently noted, is their ability to make an accurate assessment of two closely related issues: the external impact of European security, that is, how European affairs can influence world affairs; and the external challenges to European security.(12)

A correct assessment should entail the acceptance of an appropriate level of responsibility and its associated costs; an assessment influenced by short-term internal concerns impedes the assumption of wider responsibilities, making decisions within the G-7 more difficult and less significant.

In any case, it is inappropriate to draw parallels between the EU and other institutions such as the IMF (or GATT, or the OECD); or, for that matter, regional organizations such as NAFTA, APEC or ASEAN. The EU is represented in the G-7 insofar as it expresses either the sole or joint (according to the principle of subsidiarity) decision-making capacity and political will of a group of industrialized countries, including three G-7 members; other international organizations could be invited to the G-7 or associated to its deliberations only in insofar as they have the appropriate (non-exclusive) technical competences, or represent the instruments for applying the national directives agreed on in the G-7.

Before considering the inclusion of other regional organizations in the G-7, it is necessary to determine the extent to which they share its objectives and functions. A careful examination of the purposes for which NAFTA or APEC was created, and of the competences each has been assigned, demonstrates that they share only a rather limited number of the general objectives and potential functions of the G-7, and those they do share are not their exclusive domain; often they do not have specific competences in the fields of interest of the G-7. All things considered, the only international organization that comes close to the model is the ASEAN, if the political consultative mechanisms developed alongside (e.g. the Post-Ministerial Conference) are included. But this is far from the "EU model" (or even the EC) and does not include a single G-7 member; thus, its eventual institutional participation in the G-7 is very problematic and inadvisable.

Some advocate a "technical" enlargement as they feel that the G-7 discussions suffer from the absence of adequate representation of certain major, autonomous levels of decision making, such as the governors of the central banks (particularly when those institutions are autonomous with respect to their governments). Van Lennep (former Secretary General of the OECD) has pointed out that the G-7 does not have a specific place within the system of the international organizations which deal with economic coordination (e.g. the OECD or the IMF), unlike other groupings, such as the G-10.(13) While this may imply a need for greater institutional linkages between these organizations and the G-7, it could also lead to the opposite conclusion, i.e. that it would be inappropriate to embark on further institutionalization of the G-7 as this would create the need for completely overhauling the international system and those mechanisms that allow for consensus-building and the management of its hierarchical relationships.

In practice, national delegations have already been enlarged to include central bankers; collective institutions which make their decisions on the basis of consensus or unanimity among members countries have been rightly excluded, as have those which do not formulate their own policies but merely record and implement the decisions made by member countries.

This would make sense only if the G-7 were to be transformed into a system of world government, with the necessary structures and decision-making mechanisms, and, therefore, a hierarchical relationship with the other international organizations. But this does not seem to be politically foreseeable nor feasible, and would entail the need to resolve the conflict of competence and roles which would arise with the Security Council.

In any case, two things are necessary:

This requires an analysis of the operational mechanisms of the G-7 so that they can be made more suitable for the achievement of the stated objectives. Finally, a solution must also be found to the question of the quality and intensity of the participation of EU representatives not only in the G-7 summits, but also in the working groups and committees related to them.

Should the G-7 be Enlarged to Include other Countries?

In quantitative terms, the G-7 now gathers the countries which produce two-thirds of the world's wealth (more than 14,000 billion of a total 21,000 billion dollars), though they comprise less than one-eighth of the world's population (650 million out of a total of 5.4 billion). This does not mean that it includes the "richest" citizens; in fact, in a classification of countries on the basis of individual incomes, only one of the G-7 countries is in the top seven. According to the World Bank, the "richest" people in the world are ranked as follows: Swiss, Luxemburghers, Japanese, Swedes, Fins, Norwegians, and Danes; while the "club" of the most populous countries comprises, in rank order, China, India, the US, Indonesia, Brazil, Russia, and Japan--little more than half the world's population, but with a GDP of only 10,800 billion dollars.

This leads to the question of whether and why the G-7 should be enlarged to include one or more other countries. Certain countries could be invited to join because they have become rich enough (perhaps even richer than certain current members), or because they are densely populated, or strategically important, or because they represent the positions of a continent or a sub-continent, etc. Table 1 clearly demonstrates that an economic criterion in itself is not a clear indicator for enlargement. Granted, a mix of criteria could be established, similar to those made when addressing the issue of an eventual enlargement of the permanent members of the UN Security Council. But the G-7 is not the UN. The countries which are indispensable for the effective functioning of the G-7 are not only those that enable the system to function but, above all, those that are prepared to assume the related responsibilities/costs, and share a basic strategic agreement.

The G-7 has never aspired to manage any given policy better than other institutions, and it should not set such an objective now, as this would further complicate the international scene. It must, however continue to be a forum for high politics, using its members to achieve a better definition of mutual objectives, the identification of possible convergencies and, wherever possible, the attenuation of the inevitable divergencies in major strategic priorities in the fields of economy, security or others. The wide range of subjects that may be dealt with at a G-7 summit can only be justified by the recognition that it is in this forum that the top political leaders of the major industrialized powers talk to each other about politics and not about individual technical issues (whether they be economic, military, environmental, or others) which are discussed in other frameworks for negotiation with established or ad hoc competence.

TABLE I

Economic Indicators for Selected Countries

Country

GDP 1992

Population
(Millions)

Growth in
GDP 92-91 (%)

Inflation 1992

USA 5.945 257 2.1 4.3
Japan 3,666 124 1.3 1.7
Germany* 1,774 80 0.5 4.1
France 1,270 57 2.1 2.8
Italy 1,222 58 0.9 5.4
UK 1,048 58 -0.5 5.4
Canada 569 27 1.5 1.5
Russia 400 150 -19 2,500
Spain 578 40 1 6
China** 434 1,184 12.8 10.4
Mexico 324 91 2.7 15.5
The Nederlands 325 15 1.2 3.7
South Korea 297 44 4.8 6.2
Australia 289 18 2.2 1
India 270 898 4.2 11.7
Sweden 247 9 -1.7 2.2
Brazil 246 159 -1.4 1,156
Switzerland 240 7 -0.6 4.1
Taiwan 208 21 6.1 4.5
Indonesia 128 187 5.7 7.5
Saudi Arabia 122 12 4.5 -0.5
Ukraine 113 52 -18 1,1830
South Africa 112 39 2.1 13.

* Only the figure for population takes German reunification into account.
** The GDP of China has recently been reassesed by the IMF and is greater than that of Canada.
Source: IISS, The Military Balance 1993-94 (London: Brassey's, 1993).



We are currently in a situation similar to that in 1974-75, when the G-7 was created (then there was the oil crisis; now the crisis is politico-strategic). There is no shortage of international institutions: Europe and the West are seeking the best ways to make the many interlocking institutions work; but the new situation in the world suggests various "hierarchical" relationships and a division of roles between existing organizations. The new catchword is subsidiarity--an ambiguous term that has been adapted from Catholic social doctrine and applied to the legal framework of the European Union. It is supposed to open the way to inter-institutional cooperation between international organizations and individual countries according to a principle of efficiency, which is as difficult to establish as it is politically necessary.

This means that the leaders invited to the G-7 must be those who will serve its purposes: that is, those who represent countries having a clear priority interest in--or, better, an indispensable need for--mutual understanding (i.e. a need to listen to each other before they take a decision, whether or not they eventually come to a decision) on a series of global issues for which their position will be of crucial importance.

Governments interested in participating in the G-7 should also be those that have identified the need for concerted and concordant action in the management of international affairs; however, they must also be aware that their objectives cannot be achieved only through the coalition and juxtaposition of the national positions formulated within each individual country. We are living in a period of re-nationalization of foreign policies, characterized by the prevalence of internal political priorities over international consensus and, therefore, a greater "weakness" of the governments of all the major industrialized powers. This process is only partially offset or resolved by the action of the various existing international organizations. In contrast, the formalization typical of the decision-making process of international organizations (tendency to agree on the lowest common denominator, etc.) tends to increase the power of national pressure groups. In the absence of formalized decision-making structures (rather, in the absence of a classical decision-making structure), the G-7 can, at least theoretically, make international consensus prevail over domestic priorities among its members. Thus, it can be a useful counterweight to the process of re-nationalization of foreign policy (in other words, it can become a useful external constraint that the leaders can hold up to internal public opinion).

On the basis of the premises outlined in the foregoing, it is difficult to support the inclusion of countries like China, India, Indonesia or Brazil in the G-7 without posing the problem of transforming the G-7 into something totally different, much more formalized and, therefore, also much less suited to high politics and much more suited to the management of sectorial or specific policies. If such an enlargement of the G-7 is contemplated, then attention must also be given to the problem of its increased institutionalization and transformation into a traditional type of international organization. This would require use of the principle of subsidiarity to identify those functions that would presumably be better managed by such a new structure, as opposed to those which would be managed by the Security Council, or by other organizations or structures (international or national).

This does not exclude the possibility of linking the G-7 summits more or less coincidentally to other international conferences, or to meetings with other leaders. For example, on the occasion of the 1989 Paris Summit, Mitterrand also decided to invite a certain number of heads of state from Third World countries to Paris, and met with them immediately before the opening of the G-7 summit. The participants in this meeting produced a communiqué addressed to the G-7 and attended a dinner meeting with the G-7 participants the evening before the opening of the summit. This constitutes an interesting precedent, which was also followed in Tokyo in 1993, albeit in a different way and with other participants

Russia

This important country is undergoing a difficult period of political, social and economic transformation in an effort to establish a new national dimension, which is not easy to identify. Once the traditional enemy of the West, Russia is, for the moment, an ally and possible partner in the management of world affairs,

But the transformation is still under way. There are encouraging indications of stabilization in the economic, political and military fields--as demonstrated by the failure of the anti-Yeltsin campaign. Those working toward fragmentation and disorder must contend with a powerful opposing forces, the most important being that only 17 percent of the total population of Russia is non-Russian (compared to 48% in the former USSR as a whole); Russians are in the minority only in Dagestan (a multinational area with no dominant ethnic group); Kabardino-Balkaria (bi- national); Chechnya (where there are internal divisions); Ingushia (which cooperates with Russia); North Ossetia, Tatarstan; Kalmykia, and Tuva. But these republics do not constitute a geographic entity and are heavily dependent on economic and technological exchange with Russia. Finally, they do not have the history or experience of an autonomous nation-state.

Yeltsin's victory over his opposition seems, at least for the time being, to have resolved the internal debate on the future international political orientation of Russia. The leading party, which may be defined as "Euro-Atlantic", seems to be oriented toward developing closer ties with the G-7. Though there is still a strong, "hard-core" Eurasian party comprising nationalists and old USSR nostalgics, an alternative may be provided primarily by what may be defined as a "moderate" Eurasian party. The latter is currently allied with the Euro-Atlantic party, but emphasizes the need for defending the vital interests of Russia. This requires the pro-Russian stabilization of the geostrategic space of the former USSR, and is supported primarily by the military and the old military-industrial complex.

Clearly, the openings and proposals that will be made by the West will affect the relative strength of these parties. In addition to the importance of the G-7 in this regard, the framework for cooperation in Europe--the role of NATO, the WEU, and the CSCE-will be significant in determining Russia's future position If it can make a credible bid for increased integration into Europe, it is likely than Euro-Atlantic proponents will prevail; but if this prospect appears more unlikely or is frustrated, the moderate Eurasian position will probably take on greater importance. This would entail the risk of adding momentum to the "hard-core" Euroasian tendency.(14)

Russia has attended three G-7 summits (at the first it was represented a the USSR). Gorbachev participated in the London Summit, where he supports the concept of a new world economic order. In this setting, which envisaged a "synergy" between the G-7 and Russia,

Gorbachev presented a plan that called for a series of economic reforms for the USSR, but that actually aimed at joint leadership of world events. This proved to be overly ambitious with respect to its real possibilities and was not taken any further.

The putsch in Moscow which led to Yeltsin's takeover of power in the name of Russia (not the USSR) took place one month after the London Summit. Thus, Yeltsin participated in the Munich and Tokyo summits as the head of post-communist Russia. On this basis he called for the enlargement of the G-7 to the G-8. As a result of this turn of events, the G-7 guaranteed credits and aid for a total of 24 billion dollars, though this was tied to the "full implementation" of reforms and the "stabilization" of the ruble--two conditions that proved impossible to meet. Furthermore, Russia was to be invited to join the G-7 not as a full member, but as a special guest.

The issue of economic aid to Russia became the focus of discussions between the G-7 and Moscow. At the Tokyo Summit, Yeltsin achieved what could be called limited success on the economic plane. More importantly, he achieve political recognition from the West and the US as a strategically. Thus, the US sought and obtained Russia's support to maintain order in its sphere of strategic influence, while Yeltsin obtained trust and political support for his leadership in Russia--an exchange that served Yeltsin well during the Parliament's revolt against his decision to dissolve it. Such support could be reciprocated by Russia if the US were compelled to use military force in crucial crises in the Gulf or in Asia (e.g. in North Korea). Thus, the G-7 considers Russia a necessary partner and, at least for the time being, a reliable one in the management of the international situation.

Should the G-7 be enlarged to include Russia or not? The current formula has several clear advantages:

It is true, however, that Russia is a special case in comparison to other potential new G-7 members: it is a nuclear superpower whose strategic decisions are of vital importance for the G-7 countries; and (unlike China) it claims to share the basic political and economic orientation of the G-7.

Full membership of Russia in the G-7 would certainly contribute to completing the transformation of the G-7 from an essentially economic summit into a politico-strategic one. Actually, as has been demonstrated elsewhere in this article, the economic "specialization" of the G-7 was more a consequence of the topics dealt with at the summits than the result of a decision to limit their agenda; furthermore, it was meant to be seen in the context of discussions of high politics typical of such summits. Given that Russia's power is more of a political and military nature than an economic one, however, its full membership in the G-7 would only serve to accentuate the politico-strategic categorization of the G-7.

Such a development could create tension within the G-7 and the Security Council, adding to diverse and opposing pressures. A country like China, which is represented in the Council, but not in the G-7, could use its role in the UN in an adversarial way. Certain countries that are excluded from the G-7 could concentrate their efforts on enlargement of the Council. Finally, other countries, which are represented in the G-7, but not in the Council, and which could also be excluded from an eventual enlargement of the latter (such as Italy and Canada), could assert that an eventual enlargement of the Council, while consistent with a common interest, should be compensated with a greater decision-making role of the G-7 (or G-8).

In sum, particularly if the current G-7 members are not ready to make a concerted effort to address the problems associated with the redefinition of the international system, the acceptance of Russia as a full member of the G-7. does not seem to be an optimal solution, particularly given the uncertain future of this country. The credit (economic and political) granted by the G-7 to Yeltsin's government is still at risk--more an attempt to forecast a virtuous future than a reasonable certainty. Thus it would seem more useful to preserve a flexible arrangement, such as the one adopted by the G-7 during the last three summits, possibly giving it greater formal visibility (e.g. preparatory meetings with Russia at the ministerial and sherpa levels).

Conclusions

In sum, it does not seem useful to envisage a strong institutionalization of the G-7, although there are likely to be some forms of "creeping institutionalization". The utility of the G-7 lies largely in the fact that it is not "required to decide" and actually does not even have a formal decision-making system. This both distinguishes it from the other international organizations, and prevents difficult conflicts of competences or roles. Nevertheless the G-7 can continue to be very useful because it can have a positive influence on international consensus and, above all, on domestic consensus within the member countries.

Thus it does not seem either useful or necessary to think of enlarging the G-7 to other countries, or to other international organizations in the short term; the EU is an exception largely justified by its political, legal and institutional differences, and the best ways and means of integrating it into the consultative mechanisms of the G-7 must be sought.

The basic problem in the G-7 consultative process is that it was created primarily to facilitate consensus among the G-7 members on policies which affected them directly and which they decided on independently. While this continues to be important, the G-7 is now faced with policies that concern third countries and which it can therefore not take decisions on alone. In other words, the G-7 must engage in "foreign policy", at least on strategic issues. This requires deeper and more intensive consultations among the G-7 members, as well as greater attention to their national interests, which are often largely determined by their respective regional contexts. To avoid weighing down and needlessly (if not dangerously) bureaucratizing this structure, it is useful to consider separating the summit meetings as such from the processes which precede, accompany and follow them.

Given the new complexities and uncertainties of the international situation and the domestic political difficulties that the G-7 members have experienced to some degree, it would be advisable to maintain this body, though it is not clear exactly how it should be strengthened or revitalized. If anything, efforts should be made to find a way to combine maximum effectiveness with maximum flexibility, but without adding to the problems or misunderstandings among the current participants.

It would therefore seem most appropriate to introduce as few changes as possible and to concentrate instead on the substance of deliberations. In the final analysis, the success or failure of the G-7 will depend on its capacity to maintain a high level of visibility.


(1) Atlantic Council of United States, Working Group on Political Affairs, Summit Meetings and Collective Leadership in the 1980's, Washington, D.C., April 1980, pp. 38-40.

(2) J. Kirton, "The Seven-Power Summit as New Security Institution", in Building a New Global Order: Emerging Trends in International Security, ed. D. Dewitt, D. Haglund, and J. Kirton (Oxford: 1993), pp.338-339.

(3) For a detailed consideration of these issues, see the article in this collection by G. Garavogli, and P.C. Padoan, and by A. de Guttry.

(4) D. Senghaas, "Global Governance: How Could it be Conceived?", Security Dialogue,vol.24, no. 3,1993, pp. 253-54.

(5) See G. Nonnenmacher, "The National Interest: Germany", Paper prepared for the Bertelsmann Stiftung, September 1993.

(6) R.D. Blackwill A Taxonomy for Defining US National Security Interests in the 1990s and Beyond (Cambridge, MA: 1993).

(7) Ibid.

(8) See F. Heisbourg, "France: Redefining National Interests", Paper prepared for the Bertelsmann Stiftung, September 1993.

(9) L. Martin, "The National Interest: United Kingdom", Paper prepared for the Bertelsmann Stiftung, September 1993.

(10) See S. Silvestri, "Italy", Paper prepared for the IAI, 11 September 1993.

(11) See G. Burghardt, "Is There a Common National Interest of the Twelve?", Paper prepared for the Bertelsmann Stiftung, September 1993; and Conclusions of the Presidency, European Council, Brussels, 29 October 1993.

(12) M. Nishihara, "European Security in a Wider World", paper presented at the 35th IISS Annual Conference, Brussels, September 1993.

(13) See Van Lennep, "Institutional Aspects of International Economic Policy Cooperation and Coordination", in H.J. Blommenstein, ed., The Reality of International Economic Policy Coordination (Amsterdam: 1991), pp. 61-78. The G-10 actually comprises 11 countries and grew out of Working Group-3 of the OECD in 1964. It now includes the current members of the G-7 plus Holland, Sweden, Belgium and Switzerland. It has institutional links with the IMF, and played a major role until the collapse of the Bretton Woods system, after which its functions were taken over by the meetings of the economic ministers of the G-5/7

(14) See H. Adomeit, "Russia: Partner or Risk Factor in European Security", paper presented at the 35th Annual Conference of the IISS, Brussels, September 1993; D. Simes, "Russia Reborn", Foreign Policy, No. 85, Winter, 1991-92, pp. 41 et seq.; and S.A. Karaganov, "Russia's Interests: A New Consensus", Paper prepared fir the Bertelsmann Stiftung, September 1993.


Source: The International Spectator, 29, No. 2 (April/June 1994), Special Issue, pp. 141-159. Copyright ©, Istituto Affari Internazionali. Reproduced by permission of Istituto Affari Internazionali.


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