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The G7 Summit and the Reform of
Global Institutions

Nicholas Bayne

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THE REVIEW OF INSTITUTIONS

In preparing for Halifax, Chrétien and his team had not just to provide for spontaneous exchanges between the leaders, the limits of which have been explained. A second and harder challenge was to prepare, with the help and consent of the other G7 partners, a meeting from which the leaders could show convincing and durable results. He needed to select topics carefully and not overload the agenda. He had to avoid the pitfall of the G7 promising what they could not deliver Chrétien has always been keen on that. But he needed to identify topics where the G7 Summit could make a difference.

The Naples Summit of 1994 had called for a review of international institutions. President Clinton had come to Naples to propose a new programme of trade liberalization, to follow on from the Uruguay Round. But he had not prepared the ground in advance; and the European Union thought this premature, since the Uruguay Round had been long and painful and was not yet ratified. The Naples Summit agreed instead on a more open-ended institutional review, to consider how 'the global economy of the 21st century will provide sustainable development with good prosperity' and 'what institutional changes may be needed to meet those challenges'. This was set as one of the tasks for the next year's Summit. The Canadians decided to make it the principal objective for Halifax.

This was a wise decision, but not obvious nor without dangers. For example:

But there was ready agreement, in the preparations for Halifax, that all this should now change. The G7 members recognized, whether consciously or not, that the institutions had been transformed by the end of cold war confrontation, through world-wide membership and the emergence of new influential actors. They could no longer dictate to the institutions and expect them and their members to follow blindly. But they were still well-placed to take the initiative and influence the institutions profoundly, if they acted with tact and openness to the views of others.

The G7 recognized also that strong and effective international institutions would help them to resolve the tensions of globalization, between domestic and international pressures. They could counter protectionist and inward-looking tendencies which were feared in the United States, especially after the mid-term elections of November 1994 were so unfavourable for the Clinton Administration, and in the European Union, which seemed to the non-Europeans obsessed by its own internal dynamics. But to strengthen the institutions the G7 mem- bers not only had to contribute ideas; they also had to provide an example. This meant that they should identify themselves with the drawing up of multilateral rules and implement them effectively. They should commit themselves to observe the rules strictly and to cooperate in their enforcement. They should undertake to use multilateral dispute settlement mechanisms to resolve any disputes among themselves, to abide by the judgments and to work to create such mechanisms where they did not yet exist. Such an approach would strengthen the institutions, influence others to keep the rules also and help to restore the reputation of the G7.

The G7 Summit could not conduct a comprehensive review in a single year that would overload the agenda again. In their preparatory work the personal representatives of the heads of government the Sherpas surveyed the field, dividing the subject matter by issue rather than by institution at this point. In the process, several broad areas were set aside as not ripe for Halifax, though suitable for treatment later. In particular:

With these major issues reserved for later action, Halifax concentrated on:

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