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The G8 in the Era of the G20

Andrew F. Cooper, Balsillie School of International Affairs and Department of Political Science, and Director, Centre for Studies on Rapid Global Change, University of Waterloo

Prepared for "Prospects and Possibilities for the 2013 G8 Lough Erne Summit:
Trade, Transparency, Tax and Terrorism"

June 14, 2013, Belfast
Organized by the School of Politics, International Studies and Philosophy, Queen's University Belfast
and the G8 Research Group, University of Toronto
with the support of the United Kingdom's Department for Employment and Learning, Newsdesk Media
and the Balsillie School of International Affairs
This conference was streamed live here. Watch the video here.
To find out more, please click here.

The role of the G8 in the context of the G20's emergence as the premiere forum for international economic cooperation has had to undergo reappraisal within the system of summit level global governance. A significant component of this restructuring has come in the form of the G8 selecting niche issues, where the forum can channel significant resources and attention into select agenda areas.

In the post-2008 crisis period, or the so-called "G20 Era", the G8 has focused on a number of niche areas to which the group has claimed ownership. Such initiatives include the G8 development program (such as the Maternal Health Muskoka Initiative).

Between 2008-20123 there has been, most strikingly, a trend in G8-G20 governance where the G8 has assumed a greater concentration on political/security dimensions of global governance, with the G20 working as a crisis committee on the global economy. As of late, the G8 has placed a significant focus on both traditional security issues (nuclear security and non-proliferation) as well as issues on the new security agenda, including food and energy security, development –with an emphasis on the intersections between security and development as well as maintaining a focus on global events that coincide with the intrinsic liberal democratic mandate of the G8 – the Arab Springs in particular.
In addition to the renewed niche approach of the G8 toward the global economy as outlined by the UK's agenda priorities for the Lough Erne summit, the work of the G8 has also demonstrated an agility to pursuing fast pursuit activities in the security domain. In this area as well, the G8 has nuanced its focus into critical niche issue-areas. Under the current UK presidency, G8 foreign ministers declared rape and other forms of sexual violence in conflict as war crimes under the Geneva Convention. The issue area furthermore illustrates the versatility of the G8 in selecting the mode of approach in addressing such issues, balancing both conventional club and non-conventional network forms of diplomacy.

On the conventional club side of inter-governmental diplomacy, the April 2013 foreign ministers' declaration on sexual violence in war is a case in point. Foreign ministers anchored their deliberations within the established charters, conventions and institutions governing atrocities and crimes of war. On the unconventional network diplomacy, sexual violence in conflict initiative furthers the G8 more recent strategy of using celebrity outreach. Recognizing the transformative capacity of celebrities is an innovative form of diplomatic projection increasingly used by the G8 to add both mass attention and legitimacy to the select issue areas. Beginning with Bono for poverty alleviation in Africa, the G8 has continued this tradition of channelling the transformative power of celebrities to garner mass support for the Sexual Violence in conflict initiative by incorporating Angelina Jolie and William Hague into the G8 process on this issue.

These trends necessitate some analysis to make sense of the substantive relationship between the G8 and G20. While the G20 has grabbed the position of the role as premiere global economic forum, it has not advanced from the role of a crisis committee to a global steering committee in which the G20 is doing everything everywhere. Big – both in the sense of the size of the agenda and the number of countries – is difficult and its ambitious agenda has stalled. In this environment, the G8's positive (its small like-mindedness image with a similar level of technical capability) as opposed to negative (a lack of legitimacy given its exclusion of the global South) come to the surface.

The challenge for commentators lies in gauging whether the G8 and G20's relationship will be characterized more so by cooperation and collaboration (a synergistic governance model), or by conflict (fragmentation) as the two forums move further into a phase of coexistence.
Although the focus of the G8 in the context of the G20's emergence has undergone a shift to the political/security dimensions governance, this is not to ignore the return toward an expansion of the G8's agenda with respect to a niche issue areas, which contain significant overlap with the G20 regarding governance of the global economy.

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Picking Economic Niches in the Era of the G20

In the current period, and particularly in the lead up to the G8's Lough Erne Summit, we are witnessing a G8 that is on the one hand distinctive from the G20 in terms of its core role and focus within global governance through its focus on issues of security issues, while on the other hand, a forum that is, simultaneously reasserting itself back into the domain of global economic governance with the G20, albeit in a complementary fashion and compartmentalized fashion. The dynamic of this agenda and relationship with the G20 is in large part evidenced through the work of the G8 under the agenda of the current UK presidency. UK Prime Minister David Cameron has stated that the Lough Erne Summit will be an "economic G8", illustrating how the like-mindedness and smallness of the G8 is an asset and can be used toward filling important niche roles within global economic governance, and perhaps leading toward synergistic governance with the G20 on areas of mutual concern.

On trade, the G8 under its current UK presidency is conscious of the impact of potential of several free trade agreements to be negotiated over 2013. These FTAs include EU-Japan, US-EU, and Canada-EU. As countries nested within G8 membership it is highly feasible for the G8 to re-enter focus on the economic domain, and using the established political capital amongst its membership to bring these FTAs into fruition.
On tax havens and tax evasion, the UK seeks to pitch this as a core priority issue at Lough Erne for the tremendous impact that tax evasion, avoidance and tax havens have on dampening global growth by keeping from national governments tax revenues and compounding accumulated government deficit and debt accumulated over the post-GFC period. A strict approach to tax compliance is crucial to reviving the prospects for global growth by giving national governments access to entitled fiscal resources. With the G8 taking on this niche economic issue will complement the work of the G20 on tax compliance by providing a sustained and concerted focus on tax compliance with organizations currently working on this issue – the OECD and the FATF in particular. With the vast economic agenda of the G20, the G8 has the potential to play a significant role to play in keeping tax compliance on high order over 2013.

Feeding into both domains of trade and taxation, but also distinctive from them is the third G8 priority of transparency, accountability and open government in order to combat corruption. The primary focus of this agenda item is the development domain, where developing countries are constrained from realizing their development potential due to high levels of corruption within their national governments and in their economic practices. The two core areas where transparency is of central importance is in aid flows to developing countries, ensuring that aid resources are spent effectively so that the returns of these aid flows are identifiable to developed country donors. The second crucial dimension of transparency is how countries doing business in developed countries can do their part to enhance transparency. A core area of focus here is in the extractive industry and construction sectors. In doing business in developing countries, companies in the extractive and construction sectors must ensure that their work is carried through in a transparent manner, ensuring that economic activity does not fuel corruption and conflict, and hindering the prospects of peaceful development.

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Animating New Niches via Established Legitimacy and Political Capital

In outlining its agenda priorities in terms of Trade, Taxes, and Transparency provides the G8 a highly functional and complementary role to play in the domain of economic governance. In particular the established legitimacy of the G8 in working with developing countries, within Africa in particular, illustrates adaptability of the G8 in projecting and carrying out work in these issue-areas via the G8's existing development partnerships.

By focusing these issues on how to work toward tangible outcomes within the global South, the G8's existing work focusing on African development (G8-Africa development partnership) has already set out linkages and inter-institutional relationships through which these new areas of focus can be channelled. For the G20, the G8's new focus on such niche issues may contribute to a more efficient approach to addressing these governance issues, by utilizing its built in advantages in terms of political capital, (resources and expertise) of the G8 by working through already established channels.

In taking stock of the evolution in the relationship between the G8 and the G20, at the time of the lead up to the Lough Erne Summit illustrates that the G8 continues to have an important role to play in matters of global economic governance vis-à-vis the G20's lead status on global economic governance. As the UK's Lough Erne agenda illustrates, the value-added of the G8 vis-à-vis the G20 is in providing a focus on niche issues. From the G20's perspective, the G8's assuming a largely economic agenda should not be viewed in competitive, or mission creep terms. Rather, from the stand point of effective governance, the G20 should utilize and defer the established political capital of the G8 to carry out work on niche areas of global economic governance, with the primary end being a tangible recovery from the GFC and sustainable development post-GFC.

With the G8 reintegrating itself into the economic sphere, its continually evolving relationship with the G20 will undergo yet another reappraisal of to what extent the G8-G20 relationship constitutes a synergistic approach to global governance.

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