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Rather than responding to the crisis of the moment, it's
taking on the more mature task of managing global governance.

John Kirton

Financial Post, Weekly edition, Sat 22 Jun 96

From June 27-29, the leaders of the world's seven most powerful market democracies and the European Union will assemble in Lyon, France, to launch their fourth seven-year cycle of annual summitry. It will be an unusually crowded affair.

After sessions devoted to interest and exchange rates, jobs, trade and development, the seven will add Boris Yeltsin's envoy for a Summit of the Eight now embracing the global issues of nuclear safety, environmental protection, and even information technology.

These eight will conclude with a two-hour, post-summit lunch with the heads of the world's four major international institutions -- the IMF, World Bank, United Nations and World Trade Organization -- to see if these behemoths can co-operate to reconstruct battered Bosnia.

Throughout the three days, everyone will focus on the real meaning of the June 16 Russian presidential election results, and what, if anything, the G7 might do to ensure that the democratic and market revolution in Russia, triumph in the second round.

At Lyon, the G7 will exhibit little of the youthful energy that punctuated its first 21 years. Most of the bold ideas offered in the preparatory process -- more fixed exchange rates from France, tough labor standards on trade from the U.S., and a bold thrust toward freer multilateral trade from Canada -- have fallen victim to economic common sense in the first two cases, and U.S. electoral sensitivities and French protectionist pressures in the latter.

Lyon will thus deliver only a few clear-cut products. Most notably, it will complete a process begun at the 1988 Toronto summit by agreeing to alleviate the multilateral debt of the severely indebted low-income countries, through creative use of the IMF's hoard of gold.

Having reached adulthood, the G7 has now moved from responding to the crisis of the moment to assuming the more mature, mundane tasks of managing global governance as a whole.

Amidst the anxieties aroused by globalization, it will internationally confirm the course on several critical policies -- the deficit reduction courageously pursued by federal Finance Minister Paul Martin and Ontario Premier Mike Harris; the employment and social security reforms of the Chretien government; and the need to keep interest rates low and remain vigilant against currency speculators.

It will work to ensure a permanently reformed Russia, the continued modernization of other transition economies, and that developing countries rely, where possible, on private capital inflows, export markets, and domestic resources, rather than international welfare cheques. It will set the direction for the critical first ministerial meeting of the new World Trade Organization, being held in Singapore in December.

Perhaps most important, it will continue to struggle to have the world's entrenched international institutions, designed and operated to meet the needs of the mid-20th century, renewed to cope with the challenges of the 21st.

To this quest for global good governance, Canada will contribute its full share. For despite his country's middling economic performance, his government's plummeting popularity, and a now-chronic national unity preoccupation, Prime Minister Jean Chretien brings to Lyon some formidable strengths. He leads a country poised to become a G7 growth leader, the only member on track to enter the new century with no overall government deficit, and an electorate still strongly committed to the G7 as an effective forum for pursuing the global good. Chretien also arrives wearing the halo of Halifax -- the warm memories his colleagues and media observers retain of a summit well hosted, where leaders felt loved by the locals, and where their work was judged frugal, fruitful, and focused on future priorities.

To build on the momentum, Canada has undertaken the most aggressive, systematic, and thus far productive, followup in G7 history.

Some of its results should be revealed in a report card on UN reform released at Lyon. Its message will be that, even among such apparently lost causes as the United Nations Conference on Trade and Development progress has been made, but that the world is still only at the start of a very long road to renewal.

Starting with the opening Thursday night dinner, when the leaders huddle alone to ponder the Russian election returns, Chretien must protect two overriding Canadian interests.

The first is to prevent any G7 colleague, possessed by the ghost of Charles de Gaulle or Richard Nixon, from leading a last-minute, election-fed charge to open the core G7 to the Russians, before their country can meaningfully contribute to the collective economic management that Canadians cherish.

Only when Russia and other potential claimants join Canada, and perhaps in the foreseeable future, India, as real market economies, democracies, and major economic powers, should a serious dialogue begin.

The second overriding interest is to demonstrate to francophones in Quebec how a united Canada's membership in the G7 is essential in advancing their vital values.

A good start for Chretien is to repair his, at times, touchy relationship with Jacques Chirac by generating some Lyonnaise limelight in which the French president can bask.

Here Chretien can offer support in the many areas (beginning with Bosnian peacekeeping) where Canada generally agrees with France.

But the stakes also demand vigorous, visible prime ministerial action on other measures: to target adequate official assistance for sub-Saharan Africa and the struggle against desertification; to ensure agreements for global environmental protection are monitored, complied with and strengthened; to maintain a peacekeeping presence in Haiti; and to prevent a new round of genocide in Burundi.

Beyond these imperatives there are two areas appropriate for prime ministerial leadership.

The first is to make Bill Clinton, Bob Dole, Congress, and U.S. industry aware, as Trade Minister Art Eggleton is skilfully doing, that they cannot act unilaterally against their allies to restrict trade and investment in Cuba, Iran or Libya, and still obtain the multilateral agreement on investment and other disciplines they desire.

The second is to mobilize the memory and methods of Brian Mulroney's impressive G7 initiative on South Africa to show the murderous generals in Nigeria that their assault on basic principles of good governance and democratic development will unleash a punishing response from the powerful club created, and still committed, to defend those fundamental values.

DNOTE (Ed. note) John Kirton is an associate professor of political science at the University of Toronto and co-founder, with Professor Peter Hajnal, of a leading source of information and analysis on the G7 at

This information is provided by the Financial Post.

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