University of Toronto

G7 Information Centre
G20 Information Centre

Munk School of Global Affairs

The G8-G20 Partnership

John Kirton
Director, G8 Research Group
Co-director, G20 Research Group

Article prepared for Studia Diplomatica 2010. Version of August 19, 2010.

Introduction

Now that the Group of Twenty (G20) summit has arisen as the self-proclaimed permanent, premier forum for international economic cooperation, a lively debate has erupted about its relationship with the old Group of Eight (G8) and the role of each body in the years ahead. Many in the “replacement” school argue that the G8 will and should fade away fast, leaving the G20 assume all the broad agenda and far-reaching functions the former has long had. Those from the antithetical “redundant” school assert that the new and diverse G20 may itself fade away along with the galvanizing economic crisis that gave it birth, leaving the G8 with its inner Group of Seven (G7) finance ministers to continue as the global steering group that counts. Given the demonstrable durability of international institutions, it is more likely that both will govern for the foreseeable future, in a relationship that could take several forms. Here some see rivalry and others see mutual coexistence by dividing up the global policy agenda and governance functions, or active cooperation that brings the comparative advantage of each body to bear to meet the growing challenges of an interconnected, complex, uncertain world (Kirton 2009).

After the first two years of G20 summitry, the dominant trend is toward a synergistic cooperation between the two Gs that will strengthen each in the medium term. The great and growing demand for global governance is pulling the system in that direction. The old G8 great powers and new G20-only systemically significant ones are supplying needed global public goods by working together in this way. However, reaping the full potential of this G8-G20 partnership will take smart, strategic leadership from the coming hosts and chairs of both the G8 and the G20, starting with France as host of both summits in 2011. If those hosts provide leadership properly, in the longer term the G8 and its G20 creation could become one, united above all by the values of open democracy, individual liberty and social advance that the G8 has successfully pioneered since its start in 1975 and that the G20 has increasingly adopted since its start in 1999.

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G8 Governance Success

The G8 and G20 partnership rests in the first instance on the fact that few international institutions, even informal, plurilateral, globally relevant, summit-level ones, tend to die or even fade away. Many of today’s informal plurilateral institutions show impressive longevity, with the oldest, the Commonwealth, dating back more than a century. The G8, born in 1975, is the post–World War Two pioneer of such bodies of global relevance and reach. After 36 years in operation, it is unlikely to disappear soon.

Moreover, over that period the G8 has shown a substantial and strengthening performance on all six dominant dimensions of governance in which such bodies are expected to perform: domestic political management, deliberation, direction setting, decision making, delivery on commitments and the development of global governance. It helps its leaders from the United States, Japan, Germany, the United Kingdom, France, Italy, Canada, Russia and the European Union manage their domestic politics, discuss critical issues, set principled directions and take clear decisions to deal with them. It has an improving and now respectable record in delivering its commitments, by inducing its members to comply with them at a 75% level within the year after they are made. It has also become, from its summit centre, a full-strength governance system, with a broad array of G8-centred bodies at the ministerial, official and civil society levels. With its perfect attendance record from its members’ leaders at its annual summit over 36 years, there are no signs that it is a global governance system on the wane.

Among the many achievements of G8 governance, several stand out. The first and most fundamental was the peaceful destruction of the Soviet Union, bloc, empire and ideology and its replacement by democratic alternatives in much of the world beyond the Middle East. Well before this Cold War victory, the G8, in 1978, initiated the campaign against global terrorism, with a new regime to stop skyjacking, when the multilateral organizations constructed in the 1940s remained absent from the field or supportive of the so-called “freedom fighters” on the other side. In 1979 the Tokyo G7 Summit invented global climate change governance by producing the most ambitious and effective control regime the world has seen to this day. Even when the United Nations took over, ultimately to produce the failure at Copenhagen in 2009, the G8 made steady advances in getting all consequential carbon powers to contribute to the cause. By then, the G8 had expanded to embrace the Group of Five (G5) of China, India, Brazil, Mexico and South Africa, as well as the Major Economies Meeting (MEM) and Major Economies Forum (MEF) with even more members. In development, the G8 in 2005 eliminated the debt of the deserving poorest, pledged to double aid official development assistance by 2010 and did much to meet that pledge, even during economically contracting times. In health, in 2001 the G8 launched the Global Fund against HIV/AIDS, Tuberculosis and Malaria and in 2010 raised billions of dollars to help the UN meet it lagging targets to save the lives of millions of poor children and mothers in the world. In 1999, in political security the G8 initiated the war that saved Kosovo from an erupting genocide and in 2009 condemned Iranian leader Mahmoud Ahmadinejad by name for his holocaust denial.

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G20 Governance Performance

The G20, which was created in 1999 as a group of finance ministers and central bank governors of systemically significant countries, has now held four summits in its first two years of leaders-level life: Washington in November 2008, London in April 2009, Pittsburgh in September 2009 and Toronto in June 2010, with a fifth scheduled for Seoul in November 2010 (Alexandroff and Kirton 2010). It has gotten off to a good start, strengthening its performance in several ways. The G20 has beaten the G8 in the frequency of its summit meetings — having four held and five scheduled within its first two calendar years, and now slowing down to take place once annually in 2011 and 2012. Its standout success has been to control and reverse the great global financial and ensuing economic crisis from 2007–09 by mobilizing more than $4 trillion in simultaneous stimulus from its members, preventing a protectionist spiral, mobilizing money for the international financial institutions and the developing countries that depend on them, and creating or saving an estimated 20 million jobs. At its fourth summit in Toronto on June 26–27, 2010, it successfully contained the new sovereign debt crisis erupting in Europe and kept the fragile economic recovery alive by credibly promising a smart package of fiscal stimulus now, exit soon and fiscal sustainability later by halving its G7 members’ government deficit and debts in the medium term.

Yet in terms of virtually all six dimensions of global governance, at this early stage the G20 summit remains far behind the G8 summit now. G20 summits, with less than a day for leaders to meet together, last about half as long as G8 ones usually do. With this compressed schedule and the more than 30 members and participants, G20 summits provide less visibility for each leader to use in managing politics back home and less time for free, frank, transparent, trust-inducing exchanges among leaders at the meeting. They set fewer directions by affirming democratic principles and norms. They generate only one third as many decisional commitments as G8 summits usually do, with Washington in November 2008 producing 95, London in April 2009 88, Pittsburgh in September 2009 128 and Toronto in June 2010 falling to a low of 70. G20 summits induce their members to comply with these commitments at a level that, while still positive, is well behind that of the G8; indeed, the G8 members within the G20 comply much more with the G20 commitments than the non-G8 members do. Finally, the G20 has done little to develop institutionally as a global governance forum. To prepare for the summits, it has held ad hoc meetings of ministers of finance along with central bank governors along with it annual autumn gatherings. But, beyond finance, it has held only a few ad hoc ministerial meetings, for labour and tourism, and it has created no ministerial institutions and done little to involve civil society beyond the business community.

As the G20 approaches it fifth summit in Seoul, several serious challenges await. Its success at Toronto in containing the crisis in Europe meant that key issues on the built-in G20 agenda were deferred to the Seoul Summit, where they must be solved if the G20’s own deadlines are to be met. The first, in the field of domestic financial regulation and supervision, is to agree on stronger rules for the quantity and quality of bank capital, liquidity and leverage. The second is to have the continental European countries decide which will surrender some of their now unduly large quota share at the International Monetary Fund (IMF) so the G20 can fulfill its promise to transfer 5 percent of the total to rapidly rising G20 members led by China, India and Brazil. The third is to proactively liberalize trade in multilateral or plurilateral ways, to advance beyond the G20’s success in staving off the protectionist spirals that severe economic downturns can ignite. The fourth is to fulfill its commitment, made at Pittsburgh, to eliminate inefficient fossil fuel subsidies, thereby securing more than half a trillion dollars in badly needed fiscal consolidation over the medium term and significantly reducing carbon emissions to control climate change.

The fifth and most important challenge is to reduce the inevitable second thoughts in Washington and other consequential capitals that, as in 1944–45 or 1975 they could do a better job by starting from scratch to create a brand new G with a different composition, to enhance the responsiveness effectiveness and legitimacy that some feel the G8 and G20 lack. In this regard, both the G8 and G20 are in the global governance game together, playing on the same side against those who would abandon the tried and true for a new coalition of their own.

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Shaping the G8-G20 Relationship

As the demand for global governance is great and growing, its supply is likely to be met by both bodies of proven performance, rather than by any new one that might emerge. Thus far the G8 and G20 have won the war of international institutional competition rather well. To be sure, on climate change and clean energy, the successful MEM/MEF summits that arose as a core component of the G8 summits in 2008 and 2009 disappeared from the 2010 one, even with the failure of the UN’s Conference of the Parties (COP) at Copenhagen to deal effectively with climate change. But the G20, with Saudi Arabia as a member, has taken up the cause. The traditional preference of France and a few others for a G13 — the G8 and the G5 — is voiced far less frequently now, even as France’s turn to host both the G8 and G20 summits in 2011 draws near. The G20-inspired group of Brazil, Russia, India and China (BRIC) has held two summits, but did not on the margins of the Toronto G20 one. Its members also belong to the G20 and in Russia’s case the G8 too. It continues to express support for the G20 itself.

Moreover, both the G8 and the G20 are similar in their membership and participation, top-tier plurilateralism, informality, summit dominance and global governance orientation. They are thus better seen as two parts of a single global governance system, rather than as separate entities with different missions, agendas and characteristics, competing to win. They will increasingly need to define and develop the relationship to enrich the partnership between the two.

In this process, signs of rivalry remain. There is an ongoing desire on the part of several, largely Asian-Pacific members for G20 summits precede G8 ones each year, to avoid any impression that the old G8 club is predefining or dictating to the newer, broader G20 one. While these concerns are understandable and in some respects reasonable, the G7/8 has prevailed, holding its June 2010 summit before the G20 one, and holding the G7 finance ministers meeting in late April 2010 just before the G20 ministerial at the semiannual meetings of the World Bank and the IMF in Washington. France, in 2011, has scheduled the G8 summit in its normal summer slot preceding the G20 in its normal autumn one. With the two summits spaced about six months apart, both come first in different ways, and global governance capacity is doubled for those problems that cannot wait another six months. There has been only minor competition over issues each group wishes to take up. A tussle among the leaders’ personal representatives (sherpas) over which group would speak about the Haitian earthquake on January 12, 2010, was the major case to date.

Passive mutual coexistence has been more evident, especially in dividing up the global policy agenda. Under the Canadian formula for 2010, the G20 focused on finance and economics and the G8 on social, development, political and security concerns. It is striking was how easily the G8 in 2010, if not in 2009, agreed to abandon its finance and economic agenda to the G20. Also striking are the refusal and reluctance of the G20 to take up many social and all political and security issues in any direct way. Indeed, the G20 has made only minor, if increasing, incursions into the food, health and human security issues at the heart of the recent G8’s agenda. At the same time, leaders at both the G8 in Muskoka and the G20 in Toronto had serious discussions on a shared agenda that included finance and economics, trade and investment, Haitian relief and climate change. For its Seoul summit, Korea intends to highlight development and the Millennium Development Goals (MDGs) and increase civil society involvement in G20 governance in several ways. It is difficult to imagine that G20 leaders meeting on the conflict-ridden Korean peninsula, with North Korea’s missiles trained on them, will deal with their agenda without the security influences and implications in mind.

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Skewed Synergy in Operation

The future will thus feature the active synergistic cooperation that fosters a genuine partnership between the two groups. Such cooperation has arisen from the start, led largely by the G8.

It was the G8 summit and G7 finance ministers that formally created the G20 finance ministers’ forum in 1999. The membership was decided jointly by the finance ministers of two G7 members, the United States and Canada (Kirton 2001, 2010d). Much of the G20 summits’ work has been guided by the G7 finance ministers actions at the meeting they held at the peak of the 2008 financial crisis in Washington in October 2008. Here G7 finance ministers tore up their prepared communiqué to produce a new one that served as the guide for what the G20 did.

The countries that have thus far hosted the G20 summits have largely assigned the same individual the task of serving as sherpa for both the G8 and the G20, ensuring at this coordination level on a G8 core. There has been substantial, strengthening, reciprocal, reinforcing recognition in their communiqués. The G8, at its 2009 L’Aquila Summit, often referred explicitly to the work of the G20 summit, offering the G20 both leadership guidance and followership support. The G20 increasingly reciprocated at Washington, London and Pittsburgh.

The sequence of co-evolving summitry shows how this reciprocal, reinforcing relationship has taken shape (Kirton 2009). The G8 leaders all chose at L’Aquila in 2009 to hold subsequent G8 summits, and do so not just in Canada in 2010 to complete the standard G8 hosting cycle but also in France in 2011, where a new, now eight-year, hosting cycle would naturally begin. U.S. president Barack Obama, attending his first G8 summit at L’Aquila, agreed with this decision. He did so even though at the G20 summit a few months earlier in London — his first such encounter — he had noted publicly at the end that there might be too many summits in the world. At the G20 Pittsburgh Summit, which Obama chose to host in September 2009, he and all the other G20 leaders knew that there would be G8 summits in 2010 and 2011, yet agreed that their newly proclaimed permanent G20 summit would hold two meetings in 2010, in Canada in June and again in Korea in November. They would thus participate in two G20 summits a year for two years in a row. Obama also announced he would host a G20 summit-like gathering on the topic of nuclear non-proliferation in Washington on April 12-13, 2010. The very busy new president had clearly quickly come to prefer Gx-style, plurilateral summitry as his favoured global governance approach.

Moreover, the leaders at Pittsburgh agreed that the first meeting of their newly, permanent body would meet in June 2010 in tandem with the G8, on the temporal and geographic platform already established by the G8. As hosts of the next G20 summit, the Pittsburgh leaders chose Canada as it was already the G8 host, with Korea to co-chair twice in 2010. In so doing, they predictably, if slowly, moved from a G8 to a non-G8 member as G20 chair and host. However, they selected as their first non-G8 member to chair and host not big and booming China or India, but democratic Korea on the Pacific Rim, very close to a Japan that would host the Asia Pacific Economic Co-operation (APEC) leaders at almost the same time. The preference for tying G20 hosting to established plurilateral summits, and to the democratic Pacific powers of Canada and Japan as hosts, stands out. The G20 followed the 2010 formula for 2011, choosing as their host, France, the country already scheduled to host the G8. They further revised the G20 finance ministers’ long-established hosting rotation to make it consistent with the new G20 summit one and thereby for two years running with the G8 one.

Alignment at the G8 core has also occurred in the form of convergent similarity. At their first meeting in 2010, the G20 sherpas agreed that for the G20 summits to work well, they must become much like the G8 summits have long been. This included an assured annual frequency, a leaders-driven dialogue, a focused agenda and no secretariat.

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The Path to a Fused Future

These strong trends toward G8-centred partnership are likely to continue into the medium term.

The first driver is the comparative capabilities of the two clubs. G8 members have a large presence in the G20 and globally, as they contain many capabilities that count. The G7 members control the private sector capital, financial centres and comprehensive expertise on financial regulation — a core component of the agenda of the G20. They also control the executive boards of the IMF and World Bank, and thus many G20 issues addressed at or through the Bretton Woods twins, such as the Framework for Strong, Sustainable and Balanced Growth (agreed to at the Pittsburgh Summit), peer review for financial regulation, trade finance, development and reform of the international financial institutions (IFIs). The G8 has played a large leadership role within the G20, even if the cleavages within the G20 seldom occur along G8 versus non-G8 members lines.

The second driver is the difficulty of a sharp division of labour over the agenda in a club led by leaders who can — and will — talk about anything they want, and whose comparative advantage is to cover and combine the entire governance agenda in a coherent and synergistic way. So many subjects, including development, microfinance, food security, energy, climate change, health and the human security subjects of terrorist finance, money laundering and corruption are already on the agenda of both groups (Kirton 2010a, 2010b, 2010c). Moreover, so many other issues, such as the climate-health connection and the nuclear energy–nuclear proliferation link, inherently unite the two groups, as the G8 experience has shown. Finally, the demands of each body to mobilize new funding packages, to rescue deeply indebted countries and meet the MDGs will require tradeoffs and cooperation from largely the same donor pool. With integration so functionally and financially linked, active coordination will have a powerful thrust.

The third driver of G8-centred cooperation is the likelihood that the G8’s defining principles of open democracy, including accountability and transparency, will continue to diffuse through the G20, even with a financially rich, non-democratic Saudi Arabia and China as equal members of the enlarged club. This diffusion took place within the G20 finance ministers from 1999 to 2004 (Kirton 2005a, 2005b). The selection of the hosts for the first five G20 summits and the move for internal leadership from a rotating troika to a pentarchy composed of all democratic polities should propel this trend. Democratic diffusion could be furthered in 2012 when a new, younger, more internationally experienced and aware leadership comes to power in China. Should that happen, and should the G20 summit come to operate much like the G8 one, then the two groups may become one in the long term.

The outstanding question is who will host the G8 summit in 2012. President Obama could well see strong advantages in hosting the G8, as America is due to do that year, at the usual time in mid-summer in the lead-up to the U.S. presidential and congressional elections in November. It worked for George W. Bush in 2004 and for Ronald Reagan in 1983.

If the United States hosts its preordained G8, it will partner with Mexico, its neighbour in the North American Free Trade Agreement (NAFTA) and the G20 host in 2012. Russia and Turkey will likely to host in 2013 and 2014, with Russia due to host the G8 in 2014. If so, by the time the G20 hosting gets to China sometime later, that country could have a regime recognizably more politically open than now. The long-term path could thus bring the G8 and the G20 together in one united, open political club.

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The Canadian Contribution

In deepening this democratization partnership, Canada can play an important role. This role flows first from Canada’s capabilities, starting with its overall rank and continuing with its top-tier possession of the specialized capabilities that count for issues on the G20’s agenda and in the changing world at large. As Fareed Zakaria rightly recognizes, “Canada is becoming a major power,” as a benign neighbour of America with better broadband, health care and automotive manufacturing, a troop contributor to the American-led, UN-endorsed mission in Afghanistan and a core part of the global British Empire in its illustrious past (Zakaria 2008, 29). As an emerging energy superpower and an emerging clean energy superpower, as Canadian prime minister Stephen Harper has accurately proclaimed, and number one in the world in windy coastlines and fresh water, conveniently located Canada has the capabilities a vulnerable America most needs. They include the world’s largest supplies of uranium and oil reserves second only to those of a distant, non-democratic, terrorist-afflicted Saudi Arabia. Canada has a democratic tradition dating back to the Magna Carta of 1215, and has been unscarred by invasion, serious civil strife or civil war for almost two centuries now. It also led the G8 in 2009 and 2010 in overall growth in (GDP) gross domestic product. Canada adds top-tier capabilities in finance as one of the world’s leading financial centres, has a permanent seat on the executive boards of the IMF and World Bank, and is a major contributor to the regional development banks. On the eve of the G20’s Pittsburgh Summit, Canada unilaterally contributed C$2.6 billion in callable capital to the credit-strapped African Development Bank.

Second, Canada is a great connector within the G20. Economically, it stands between the large, old, relatively closed, established members and the new, smaller, open, emerging ones, and between resource-rich and manufacturing-service intensive ones. Geographically and demographically, Canada both an Atlantic and Asia-Pacific country and a member of the Arctic and Americas communities as well. Demographically, Canada is increasingly an Asian-Pacific country as Chinese is the third largest language spoken at home (after English and French). Internationally, Canada is a founding and leading member of the global, plurilateral Commonwealth and Francophonie that together embrace half the countries in the world, and of the summit-level transregional institutions of the APEC forum, the North Atlantic Treaty Organization (NATO), and Organization for Security and Cooperation in Europe (OSCE) and the regional Summit of the Americas (SOA). Canada is thus particularly sensitive to the concerns of emerging and outside economies, as a country that was not initially a member of the G8. Canada is also a country that has been excluded from permanent veto membership in the Permanent Five members of the UN Security Council, along with half its G8 partners and all but one of its non-G8 G20 partners.

Third, Canada has long had a vision for the G20, starting even before Canada co-created the institution with the United States in 1999 (Summers 2008). It included elevating the forum into a leaders’ level club (Martin 2005). It recognized the need to give the emerging powers, especially in Asia, an appropriate large and equal place at the centre of global economic, social and related governance through a club where open dialogue, learning, consensus and resulting commitment and compliance became the norm. It continues now with a desire to focus the G20 on taking the tough decisions and making it accountable for delivering on those decisions to produce real results.

Fourth, Canada was selected to co-chair the fourth, first permanent G20 summit in June 2010 due in part to the convergence of holding the G20 summit together at almost the same time and place. But it also reflected Canada’s exceptional commitment to and competence in hosting past G8 summits and its contribution to the first three summits the G20 held. Here its leading role on exit strategies and open trade and investment stood out. It also showed as early as the summer of 2009 that it was willing to share the hosting and chairing with Korea, where Canada’s G8 and G20 sherpa, Len Edwards, had served as Canadian ambassador before. Its formula for success in producing the twin summits of the G8 and G20 in June 2010 reinforced its reputation on both sides of the partnership (Kirton and Koch 2010).

Fifth, Canada has a longstanding commitment to good governance, freedom, democracy, human rights and the rule of law and thus to the G8. This is reinforced, in the experience of Canada’s prime ministers, by the G8’s configuration as an informal compact club of equals where anyone can carry the day on the basis of the quality of the arguments advanced. Both features could come to characterize the G20, especially if the opening G20 2010 sherpa consensus for future G20 summits takes hold. A Canada with such confidence in its own capabilities, convictions and conversational persuasiveness, would thus not be overwhelmed by any simple logic of the country having less airtime in a summit group of 20 members than it does in a group of eight, especially as that has not been Canada’s experience in the G20 thus far. It knows what counts is not how long or how often a leader speaks, but how much all the other leaders listen and learn from what that leader says. Canada would thus be a country that would welcome a long-term fusion of the G8 and G20 into a fused, effective, open political, global governance club.

With these assets Canada can now bring the G20-G8 partnership closer to its democratic future by joining with willing partners in Europe and Asia, to take critical initiatives that the G20 now badly needs. Two stand out.

The first concerns accountability, which Prime Minister Harper properly proclaimed as the “defining future” of both the G8 and G20 summits, but where little was done in the latter case. While it may be difficult to get all G20 governments to agree to conduct monitoring of their compliance with G20 commitments as a collective, Canada could invite willing G20 partners to join it in financing third-party monitoring by respected independent institutions across the G8. Such monitoring would help improve G20 efficiency and effectiveness, its legitimacy in the eyes of the many who doubt that it will deliver what it has promised for them, and help deepen a culture of accountability within all its members countries and international organizations alike.

The second concerns forging the economic-security connection in a controlled, proactive way by having G20 foreign ministers meet at the annual opening of the UN General Assembly, either immediately before or after the G8 foreign ministers hold their traditional dinner there. They would discuss only those issues that concern foreign ministers already on the agenda of the G20. Particular attention could be given to how the G20 at its forthcoming summits could work with the UN and its special session on the MDGs to advance these goals, including through additional financial contributions for MDGs four and five. With low transaction costs, a UN nest where many such informal meetings take place among the foreign ministers already there, and with an agenda where the G8, G20 and UN are pulling together in the same direction, this should be an easy, low-risk experiment to pull off.

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References and Bibliography

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