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Analytical Studies

Country Objectives for the Genoa Summit Meeting 2001
United States

Contents:
Political Data
Economic Data
Summit Issues

Political Data

President
GEORGE W. BUSH (Republican)
Next election: Tuesday November 2, 2004

Vice President
DICK CHENEY

Department of State
Secretary COLIN POWELL

Department of Defense (DOD)
Secretary DONALD RUMSFELD

Central Intelligence Agency (CIA)
Director GEORGE J. TENET

National Security Advisor
CONDOLEEZZA RICE

U.S. Mission to the United Nations
Ambassador-designate (Ambassador not yet named)

Department of Agriculture (USDA)
Secretary ANN VENEMAN

Department of Commerce
Secretary DONALD EVANS

Department of Energy (DOE)
Secretary SPENCER ABRAHAM

Department of Labor (DOL)
Secretary ELAINE CHAO

Department of Transportation (DOT)
Secretary NORMAN MINETA

Department of the Treasury
Secretary PAUL O'NEILL

White House Assistant for Economic Affairs
LARRY LINDSEY

Office of the U.S. Trade Representative (USTR)
Trade Representative Robert Zoellick

Department of Education
Secretary RODERICK PAIGE

Department of Health and Human Services (HHS)
Secretary TOMMY THOMPSON

Department of Housing and Urban Development (HUD)
Secretary MELQUIADES "MEL" MARTINEZ

Department of the Interior
Secretary GALE NORTON

Department of Justice (DOJ)
Attorney General JOHN ASHCROFT

Department of Veterans Affairs (VA)
Secretary ANTHONY PRINCIPI

Environmental Protection Agency (EPA)
Administrator
CHRISTINE WHITMAN

Office of Management and Budget (OMB)
Director
MITCHELL E. DANIELS JR.

HOUSE OF REPRESENTATIVES

House of Representatives:
Total 435: 221 Republicans, 210 Democrats, 2 independent, 2 vacancies.

Next election date:
House of Representatives every two years (next election is Tuesday November 5, 2002).

SENATE

Senate:
Total 100: 50 Democrats, 49 Republicans, 1 independent.

Next election date: Senate and president every four years (next election, Tuesday November 2, 2004).

Economic Data

GDP:
Nominal Value:
9,963.1 trillion (2000)
Annual % Change: 5% (2000)
GDP per capita: 48,441 US$ (2000)
Economic growth rate: 5% (year 2000)
1.3% (1st quarter of 2001)
Consumer Price Inflation: 0.4% (May 2001)
3.6% (year 2000)
Unemployment Rate: 4.4% (May 2001)
Interest Rate: Fed's Fund Rate 4% (June 21,2001)
Exchange Rate: US$ to Euro - $0.8516
Cdn$ to $US - $1.5268
Yen to $US-$124.25
(June 20,2001)
Current Account: $US 443 billion deficit (2000) (Latest 12 months)

Foreign Aid: $9.1 billion (in 1999). In absolute terms, second largest donor in the world after Japan. Per capita last in the world at 0.1% of GNP.

World Ranking: First

Major Trading Partners
Exports to: Canada, Mexico, Japan
Imports from: Canada, Japan, Mexico

3 Major exports: capital goods, automobiles, industrial supplies.

Summit Issues for United States

ENVIRONMENT

The environment platform of the United States has solidified in the days leading up to the G8 Summit. President Bush made it clear during the United Nations Climate Change negotiations in Bonn, Germany that the US would not support the 1997 Kyoto Protocol. The treaty required industrialized nations to reduce emissions of 6 gases, mainly CO2 by an average of 5.2% by 2010.

According to the Bush administration, Kyoto is an unrealistic and flawed plan as it fails to include developing countries such as China and India, which he argues are large emitters of greenhouse gases. Bush also felt that Kyoto failed to address other important pollutants such as black soot and tropospheric ozone. Most importantly, Bush regards lowering greenhouse gas emissions as harmful on the US economy. He forecasts the lay-off of workers and high energy prices for consumers if the Treaty is ratified in the US. As a result of this view Bush's administration will not impose mandatory emissions reductions for CO2 on US power plants and will not consider CO2 as a pollutant under the Clean Air Act. Bush firmly believes the need for a revaluation of the Treaty due to rising energy prices and energy shortages, not only in the United States, but worldwide. Bush's preoccupation with the energy crisis has also led to a proposal to open a part of Alaska's Arctic National Wildlife Refuge to drilling and place further pressure on OPEC to increase drilling. Bush's National Energy Report and establishment of the National Energy Policy Development Group was created to tackle what he sees as America's most serious energy shortage since the 70's. According to Bush, the imbalance between demand and supply will hurt the economy, standard of living and national security of the US.

In the the two weeks leading up to the summit, the Bush administration has released a series of multi-million dollar studies and initiatives at Bonn. Specifically, the US has promised $120 million, three year investment in research on the natural carbon cycle, climate modeling and the link between atmospheric chemistry and climate. Research funds were also allocated to studying the effect of forestry practices in Belize and Brazil, as well as research aimed at reducing the cost of capturing carbon dioxide from fossil fuel combustion plants. However, these initiatives are widely viewed as inadequate by most in the environmental field who feel that at this point in time action is more important than research.

It is unclear what consideration the G8 members will give to the US's decision to drop the Kyoto Protocol during the Summit. On one hand, the European countries and Japan are fuming at the US's decision and want to discuss the issue, especially since it is of high public and media interest. However, the US will no doubt push for the Kyoto issue not to enter the agenda and will argue that it recently discussed climate change in Bonn. The G8 may therefore agree to disagree, and not allow the issue to be a major part of the agenda.

INTERNATIONAL FINANCIAL INSTITUTIONS

Treasury Secretary, Paul O'Neill, has indicated that International Financial Institutions (IFI's) are a "key priority'' for the Bush administration. The administration's position on IFI's largely keeps in the spirit of the Meltzer Commission Report, released in March 2000. Like the Report, the new administration aims to make IFI's more focused on their core missions. In the case of the IMF, this mission would be crisis prevention; through spotting vulnerabilities in developing countries and by promoting sound monetary, fiscal, exchange rate, and financial-sector policies. The administration has also professed a desire to discourage markets, and particularly speculative investors pushing "hot money", from relying on bailouts. Thus, the function of the IMF would be to monitor global economic conditions and to deal with international financial system disruptions as soon as they are detected.

In terms of the World Bank, Bush has recently proposed that it, along with other lending institutions, dramatically increase the share of their resources provided as grants rather than loans to poor nations. Specifically, he has suggested that up to 50% of the funds provided by the bank be delivered in the form of grants for education, health, nutrition, water supplies, sanitation, and other human needs. The question remains as to whether these grants will be issued in the form of tied aid, thus limiting the recepient country's ability to control the focus of such expenditures. Despite the fact that the World Bank will certainly require more money from rich nations in order to fulfill this proposal, Bush's proposals do not include an offer to boost US contributions. Look to Bush to seek support among other G8 member leaders for his suggested reforms of the World Bank and other lending institutions.

US administration in recent months has also stressed that more steps must be taken at the IMF and the World Bank to increase accountability to taxpayers and shareholders. In particular, the Bank should be held accountable to clear performance-based targets. Secretary O'Neill has warned that the US would be reluctant to renew its capital support for the World Bank without such progress. In terms of the IMF, the Bush Administration has reacted positively to the new Contingent Credit Line (CCL) as well as to changes in the lending policies implemented in November 2000 that raised the interest rate charged for large loans and shortened loan maturities. It is likely the new administration will continue to promote these policy changes and lending instruments because of their emphasis on pre-qualifications and higher interest rates, which are believed to create stronger incentives for countries and private investors to make responsible decisions.

NATIONAL MISSILE DEFENSE

Gaining support for the National Missile Defence plan will be a priority for the United States at the Genoa Summit. President George W. Bush has highlighted the NMD as one of his administration's "most important objectives," and gaining international acceptance for this global undertaking is vital to its success. Critics argue that the NMD violates the 1972 Anti-Ballistic Missile Pact and therefore risks sparking a new arms race that could destabilize the current global military climate. China and Russia strongly oppose the NMD and last year signed a pact of condemnation against the US one week before the G8 Summit in Okinawa. Other G8 countries have for the most part remained neutral on the NMD, mostly in anticipation that the US will release more details in the near future. Britain and Canada have tentatively suggested that they will support the plan, while France is currently opposing it and Japan is remaining neutral.

Critics of the NMD are becoming stronger domestically in the US. The recent change of power in the Senate that occurred when Senator James Jeffords resigned from the Republican Party allowed Democrat Senators Carl Levin and Joseph Biden, both outspoken opponents of the NMD, to take control of the Senate's Armed Services and Foreign Relations Committee. This is seen as a serious setback to the NMD proposal. Greater international support is therefore required for the US to regain the momentum needed to successfully achieve the NMD plan.

TERRORISM

The United States will use the upcoming G8 Summit in Genoa to garner further support among members and allies for signing and ratifying the Twelve Major Multilateral Conventions and Protocols for Combating Terrorism, of which it is a full signatory. It will attempt to advance broader international cooperation against terrorism at the Summit along four U.S. policy tenets: First, to make no concession to terrorists and strike no deals. Second, to bring terrorists to justice for their crimes. Third, to isolate and apply pressure on states that sponsor terrorism to force them to change their behaviour. Fourth, to bolster the counter-terrorist capabilities of those countries that work with the United States and require assistance.

The U.S. will also use the Summit to enforce UNSCR 1267, enabling sanctions against the Taliban Government of Afghanistan and will contemplate alternative instruments for marginalizing terrorist activities emanating from the region. This move is pursuant to the Okinawa G8 Summit Communiqué section 81 and has been augmented by the U.S.-Russia Working Group on Afghanistan. In Genoa, the U.S. will also seek to expand its bilateral dialogue with member states including Germany and like-minded states that led to the apprehension of bombing suspects of U.S. embassies in Nairobi and Dar es Salaam. The U.S. will also seek to deepen its existing dialogues with the U.K., Canada, Russia, India and Israel on broad tactical issues of intelligence sharing, law enforcement and anti-terrorism training.

Prepared by Anju Aggarwal, Nicol Lorantffy, Jonathan Papoulidis and Michael Malleson, University of Toronto G8 Research Group, June 2001.

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