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Coming of Age: The European Community and The Economic Summit

Susan Hainsworth

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1986: TOKYO (May 4-6)

The EC was represented by Ruud Lubbers of the Netherlands in his capacity as President of the European Council, and by the President of the Commission, Jacques Delors. Thus, for the second time, the Community was represented at the summit by a Council President from a non-participant nation.

Significant institutional development economic summitry transpired at Tokyo. The growing influence of the national finance ministers in the international economic policy coordination process found its expression in the creation of the new Group of Seven (G7)finance ministers.

The original interpretation of the distinction between the G5 and the G7 was that the G5 would deal with macroeconomic and monetary intervention strategies, while the G7 would concern itself more generally with multilateral surveillance. Italy and Canada originally insisted upon the destruction of the G5 once the G7 had commenced operation, but their hardline stance was mitigated, and in the morning of May 5 1986 at Tokyo, the conceptual mandate of Group of Seven Finance Ministers was born.

Although it appeared that the G7 issue had been resolved, one serious and gaping omission remained, from the point of view of the EC: the President of the Commission of the EC had made his position known from the outset that he desired to obtain EC participation in this nascent forum of finance ministers. The (French) EC Commission President Delors, (Dutch) Foreign Minister van den Broek and (Belgian) EC Finance Minister de Clercq campaigned vigorously and adamantly for EC inclusion during the day of May 5 at the Tokyo meeting, narrowing their position to not permitting the creation of a finance minister's G7 if the EC were omitted. 76

The French were the only EC member state to speak out strongly in favour of EC inclusion in this new assembly; the Federal Republic did not specifically endorse EC inclusion, but neither did it come out explicitly against it. Despite express endorsement from Mitterand and Kohl's silent assent, the Commission was not included in the G7 due to an American veto on the grounds that the Commission did not possess legitimacy or authority in this domain.

As the afternoon session of May 5 was coming to a conclusion, the opposition of the United States and Japan remained firm. Japanese Prime Minister Nakasone, who chaired the session, abruptly halted the meeting, rejecting the EC bid with a peremptory "Iam sorry". 77

Jacques Delors, as a former French finance minister, considers economic and monetary affairs to be a special priority undertaking, and made every effort to assert the Commission's authority in this domain at the summit negotiating table. Delors was prepared to boycott future summits if the Commission was not admitted to the G7. However, the French President Mitterand managed to pursuade Delors that this argument was self-defeating. 78 Thus, despite support of the Commission from European summit members, the U.S. veto of EC inclusion in the G7 prevailed, reflecting a clear defeat for the Commission in the crucial macroeconomic and monetary decision-making domain.

At the Tokyo meeting, then, the exclusion of the European Community from the newly-created G7 represented a significant setback for the EC with regard to the credibility and legitimacy of its role in the collective management of the international economy and in international economic and monetary decision-making.

The Tokyo Summit successfully introduced discussion of agricultural trade subsidies onto the summit agenda, signalling an end to the protracted wrangle which had dominated previous summit discussions regarding the admissibility of this issue at summits. The introduction of agricultural subsidies at Tokyo was an indication that the U.S. had been able to override the EC Commission's preference not to open debate in this domain. As the Commission had not been supported by two of the largest EC member states and summit participants (U.K. and F.R.G.), it was easier for the Americans to overrule the Commission with regard to commencing summit discussions on agricultural trade subsidies.

Despite the disappointment for the Community in the macroeconomic and agricultural/commercial spheres, the powerful role played by the EPC in the political discussions at Tokyo was pivotal. The pinnacle of European foreign policy solidarity in the context of the summit occurred at the Tokyo Summit, in the political debate concerning terrorism. In this case, the united European preference for anti terrorist strategies founded upon diplomatic and police sanctions prevailed over the U.S. preference for economic sanctions or military attack. The European position upon this issue, which had been previously consolidated within EPC, was transposed virtually unaltered into the final summit political declaration. The unified approach which the Europeans had ironed out before their arrival at the summit permitted them to prevent any further U.S. military actions, and to exert almost exclusive influence upon the content of the summit declaration on terrorism. In turn, the summit declaration reinforced the action they were already taking to strengthen their own defences against terrorism, both nationally and collectively.79

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