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"The Course of Summitry"

The World Today 48, No. 2 (February 1992): 27-30.

Nicholas Bayne

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Summit themes

Leaving aside foreign policy issues, six themes stand out among the subjects treated so far in the third septennium. There are two traditional - trade and debt: two transnational - the environment and drugs; and two historic changes - Eastern Europe and the Soviet Union. These are the subjects on which the summits have devoted most effort or had most impact.

Trade. International trade has been discussed at every summit since 1975. Helmut Schmidt, one of the founding fathers, saw the main rationale of the summits as deterring the leaders from protectionist policies. The general obligation on the leaders, when they meet, to recognise the external impact of their domestic policies has certainly been beneficial in this area. But the summits have found it hard to exert direct influence on the outcome of the successive negotiations in the General Agreement on Tariffs and Trade (GATT) to remove trade restrictions. The gap between the high-level strategic exchanges at the summit and the complex, detailed and technical discussions in Geneva has proved too wide to bridge.

The first Bonn summit in 1978 was able to give a vital impetus to the closing stages of the Tokyo Round, with trade negotiators meeting on the margins. But a similar impact on the Uruguay Round 12 years later has proved elusive. The timing has been unhelpful, with the summits in mid-year trying to influence negotiations which reach their climax six months later. There are far more key players in the Uruguay than in the Tokyo Round. The agenda is much wider and includes agriculture which, though long overdue, has made agreement far more difficult.

At both Houston and London the leaders made great efforts to ensure a successful conclusion and especially to overcome the problems with agriculture. At Houston they agreed a formula for launching the agriculture negotiations, which had eluded the ministers of countries belonging to the Organisation for Economic Cooperation and Development (OECD) six weeks before. But the formula proved too ambiguous and the agreement too fragile to survive further treatment at Geneva. Continued differences over agriculture frustrated the conclusion of the Round in 1990 and prolonged it through 1991.

At London the British hosts wanted to avoid the mistakes of the previous year. We provided time for a full debate of all the issues, not just agriculture, among the leaders. We did not seek to solve specific problems, but stressed the importance of concluding by the end of 1991. With this in mind, the leaders committed themselves to remain personally involved and to intervene with each other to resolve differences. This provision has been fully used in the closing months of 1991, with frequent contacts, both face-to-face and by telephone, between John Major (as G7 chair), Ruud Lubbers (for the Dutch Presidency), Bush, Kohl, Mitterrand and Delors. But even these have so far not contrived to bridge the gaps, especially on agriculture, and the Round has once again gone into extra time.

Debt. International debt issues first came onto the summit agenda in the early 1980s. At first sight, there is no reason why they should not have passed to the G7 finance ministers, as economic policy coordination has done. But summit timing works in favour of influencing debt issues, just as it has worked against influencing the GATT Round. The summit falls halfway between the IMF's Spring Interim Committee and its autumn Annual Meeting. It therefore provides a good occasion for giving an impetus to proposals launched over the previous year and intended for conclusion at the autumn meeting.

This had already happened at the Toronto summit in 1988, which gave a key push to debt relief proposals for the poorest countries, known as 'Toronto Terms'. Early in 1989 the American Treasury Secretary launched the 'Brady Plan', promoting debt reduction for countries heavily in debt to commercial banks. This was highly contentious at the IMF spring meetings. But these differences were ironed out in time for the Paris summit to give its blessing and thus ensure their adoption by the Fund in the autumn.

By the middle of 1990 it was clear that the relief provided by the Toronto terms was inadequate for the poorest debtors. Mr Major. then Chancellor of the Exchequer, proposed an enhanced package at the Commonwealth Finance Ministers' meeting - immediately christened 'Trinidad Term'. As Prime Minister and host to the 1991 summit he had an excellent opportunity to move these proposals forward. The London summit encouraged the Paris Club of creditor governments to work for prompt implementation of measures going well beyond Toronto terms. Although the Americans had serious difficulties, the Paris Club was able, before the end of 1991, to agree 'Trinidad, packages for Nicaragua and Benin, and others will no doubt follow.

Environment. Since the second Bonn summit of 1985, environmental issues had begun to find a place in the leaders' discussions and a brief mention in the declaration. But the French decided to make the environment a principal theme of the Arch summit, where it occupied two full sessions of debate and a third of the very long economic declaration.

The Paris summit identified the environment as a long-term challenge facing Western governments which affected all areas of policy-making. It raised the priority of environmental protection in domestic policies and encouraged work by international institutions, notably the OECD. The Houston summit carried the debate into specific international issues, such as global warming, bio-diversity and the preservation of both forests and oceans. London concentrated the debate yet further, by focussing the leaders' attention on the UN Conference on Environment and Development, due in Rio in June 1992.

The environment is clearly a worthy summit subject. The leaders can give impulses to domestic policy, which involves the whole range of government. They can stimulate international institutions, especially in the UN family, to develop the cooperative solutions required by global environmental problems. But as summit discussions have moved from the general to the specific, they have revealed underlying differences between the Europeans and the Americans on the nature of the problem and the urgency of action, especially on global warming. This limited the progress that could be made at London last July: and the value of the impulse generated there will only be revealed at the Rio conference itself this June.

Drugs. The fight against illegal drug trafficking and addiction had begun to concern the summit leaders in the late 1980s, especially as the international effort did not seem well organised. Each of the last three summits has addressed the subject, developing innovative solutions to specific problems. The Paris summit established a task force against the laundering of drug money, which has now drawn up disciplines which apply in all major financial centres. Houston was most concerned at the cocaine threat from the Western hemisphere and launched a new task force, now at work, to check the movement of chemical precursors used in drug manufacture. London shifted attention to heroin, the main hard drug of abuse in Europe and Asia, and asked the Customs Cooperation Council to improve methods of intercepting drugs in transit. All three summits encouraged the creation of better anti-drug cooperative machinery, especially in the UN. While the drug menace continues unabated, the summits have served to mobilise more effective international action against it.

Central and Eastern Europe. The summits had not treated East-West relations since the pipeline dispute of the early Reagan years. But the easing of Soviet policy towards Eastern Europe, and the consequent moves towards democracy in Poland and Hungary, brought these issues onto the agenda of the 1989 Paris summit at the last moment. They were discussed only at the final sherpa meetings, a week before the summit, as part of the non-economic preparations, and feature in the political rather than the economic declaration. The key decision of the Paris summit was to create the 'Group of 24' to coordinate assistance to Poland and Hungary, with all OECD countries as members and the European Commission in the chair. This was the first time the Commission had been given such responsibility in a group going wider than the EC member states. After some initial uncertainty over relations with other institutions, such as the IMF and World Bank, the G24 has become an established and valued part of the machinery for mobilising help for Eastern Europe.

When the leaders met again at Houston a year later, the scene in Eastern Europe was transformed. All the former Warsaw Pact countries were moving towards democracy and market economies and were being brought into the ambit of the G24. The European Bank for Reconstruction and Development (EBRD) had been created and most East European countries were building up relations with the IMF. The Houston summit celebrated the return of democracy and pledged financial and technical support for reforming countries.

By the London summit the Central and East European countries were into the hard task of transforming their economies. In spite of support from the G24, the fiscal and monetary stabilisation needed in these countries had led to unemployment and loss of growth, aggravated by the collapse of their markets in the Soviet Union. Their first concern, therefore, was to improve their access to Western markets, seen also as a condition for attracting direct investment. The leaders at London committed themselves to this: and the EC, after difficult negotiations, concluded Association Agreements for this purpose with Poland, Hungary and Czechoslovakia later in the year. But encouragement of reform in Central and Eastern Europe, both political and economic, will remain essential for many years to come. The future of these countries will continue to preoccupy the summits, whatever happens further East.

Copyright ©, The World Today / The Royal Institute of International Affairs. Reproduced by permission of The World Today.

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