Financial Post G7 Record

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Financial Post, Weekly edition, Sat 03 Jul 93, page S1. Editorial.

Keywords: Federal provincial relations Politics International finance Economic summits Canada Kim Campbell

Canada can be a leader at summit

The Ontario premier has accused Prime Minister Kim Campbell of holding the first ministers' meeting in Vancouver this weekend solely to use it as a ''photo opportunity.'' Perhaps Rae doesn't realize this is the first time a Canadian prime minister has hosted such a meeting prior to a G-7 summit. It's a positive precedent, since Campbell clearly recognizes it is in Canada's interests to have the provinces on board (or at least fully briefed) as she heads off to the Tokyo summit.

Campbell needs all the support she can get because this summit will be no picnic. Unlike past summits, where it often seemed the communique had been written before the leaders even met, Tokyo's communique is far from complete. Careful summit preparations have been built on shifting ground. Three conditions considered key to economic growth among the industrialized nations - deficit-cutting in North America, the trimming of Japan's trade surplus and the lowering of European interest rates - remain up in the air. And a successful completion to the Uruguay Round seems just out of reach. Just look at some of the recent pre-summit posturing.

With the passage of his deficit-fighting budget, U.S. President Bill Clinton said he would go to the summit like a ''400-pound gorilla.'' Such bravado is unlikely to pay off. Clinton and Prime Minister Kiichi Miyazawa are to meet ahead of the summit but there is little chance Japan will be bullied into a trade agreement with the U.S. that Japan quite rightly sees as ''managed trade.''

Edouard Balladur, France's prime minister, also has had harsh words for Washington: Either the U.S. lifts its duties on steel imports from France and other nations, or it puts in jeopardy ''a successful conclusion by the G-7 on trade agreements.''

Peter Sutherland, GATT's new director general, warned this week: ''It will be extremely difficult - even utopian - to deliver the Uruguay Round by the end of the year if the G-7 fails.''

The sad irony is that just when strong leadership is needed, most of the G-7 leaders are in no position to give it. They lack the popular domestic support needed to negotiate from a position of strength.

Campbell's aides have been saying she won't be introducing anything ''radical'' at the summit, but that doesn't mean she should be overly cautious. Campbell was the leadership candidate who said Canadians must ''redefine [our] self-image because it's no longer appropriate . . . Canada is a major power.''

If a ''major'' power, Campbell must therefore go to the summit with a firm set of policies. As part of the North American pillar, Canada needs to convince the other G-7 leaders that it has a ''national'' plan for deficit reduction, and the Vancouver meeting could give Campbell added credibility. On the microeconomic side, Campbell could join forces with British Prime Minister John Major to push for more concrete measures on tackling labor issues and job creation (Major pushed for this at the EC meeting in Copenhagen). Canada's international record gives us the clout to lead talks on reforming creaky but important institutions such as the UN and the World Bank.

Despite the political uncertainties dogging many of the summiteers, including Campbell herself, our new prime minister should not miss this opportunity to make a strong contribution in Tokyo.

This information is provided by the Financial Post.
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Revised: June 3, 1995

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