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The Significance of the Houston Summit
John Kirton, Director, G7 Research Group
1991
The fifteenth annual meeting of the heads of state and government of the world's seven major industrial democracies and the European Community (EC), hosted by the United States in Houston, Texas from July 9-11, 1990, took place at a time of exceptional instability and opportunity in global affairs. The coming down of the Berlin Wall in November 1989 and the coming together of the two Germanies in its wake destroyed the forty year old bipolar system created by the cold war and secured by the superpowers, and permitted the creation of a new international order incorporating the Soviet Union and even the People's Republic of China. The looming December 1990 deadline for the completion of the Uruguay Round, the most ambitious round of multilateral trade liberalization negotiations ever held, and the continuing deadlock among the West's major trading countries over the critical issue of agricultural subsidies suggested that the emerging post-cold war order might well dissolve into a multipolar trade war. Such a war would end the extraordinary prosperity enjoyed by the North in the 1980s, endanger the still-fragile economic and political reforms in the East, and eliminate the chance for the South to grow and trade its way out of its persistent poverty and crushing debt. Finally, accumulating scientific evidence about the destruction of the earth's climatic balance, forests, and other environmental life-support systems called for countries of all ideological stripes to unite as never before to combat the new generation of common enemies threatening the global community.
In the face of this historic challenge of defining the character of and managing the transition to the post-cold war order, the older institutional networks in world politics proved remarkably ineffective. Despite the new enthusiasm of the Soviet Union for the United Nations system, that institution failed to assist in ending the division of Germany and Europe; to incorporate the rising powers of Germany and Japan into the permanent inner sanctum of the Security Council; to dislodge an increasingly indebted United States from its unique veto position in the International Monetary Fund; to spawn effective action to preserve the global atmosphere; or even to convince the United States to pay its almost three-quarters of a billion dollars in accumulated arrears. The North Atlantic Treaty Organization (NATO) at its London summit of early July 1990 proved unable to define a new non-security focus for the organization or to resolve differences over the wisdom of extending aid to the Soviet Union, even as the Organisation for Economic Co-operation and Development (OECD) and the General Agreement on Tariffs and Trade (GATT) failed to narrow entrenched differences between the United States and the European Community over trade and agriculture. The Eurocentric system based on the European Community, the Conference on Security and Co-operation in Europe (CSCE) and such new institutions as the Group of 24 and the European Bank for Reconstruction and Development (EBRD) also could not mobilize the resources required to repair adequately the ravaged economies and environments of Central and Eastern Europe and the Soviet Union. And the system of regular bilateral summitry between the superpowers, revived in 1985 and reinforced by the Bush-Gorbachev summits in Malta and Washington, left unanswered the questions of what order would replace the decaying bipolar system, and how the two declining behemoths could bring that order to life.
These failures presented those preparing the Houston Summit with an unusually large challenge, which they moved to meet with determination and innovation. At their first meeting held in Key West, Florida in January 1990, the personal representatives of the Heads (known in Summit parlance as "sherpas") reoriented the forthcoming Summit from that forum's standard focus on macroeconomic policy coordination, microeconomic adjustment, and North-South relations, to focus centrally on the new challenges of East-West relations, agricultural trade, and global environmental protection. At the second sherpa meeting, held in San Francisco, the Heads' political directors assembled four months earlier than usual to review thoroughly the novel political and security situation unfolding in Europe and integrate their conclusions into the main Summit preparatory process. By the third meeting, in Paris, attention turned to the deep divisions between an impatient United States and a reluctant European Community on eliminating agricultural subsidies, and between an entrenched United States and its enthusiastic Summit colleagues over far-reaching action to protect the world's atmosphere. And by the fourth and fifth sherpa meetings, held in Newport and New York (the latter eight days before the opening of the Summit), the specific issue of providing aid to the Soviet Union, left unresolved by earlier NATO and EC summits, was taken up by the seven-power Summit as a priority concern.
It remained for the Heads themselves at Houston, in their two days of bilateral discussions preceding the Summit, and in their three days of meetings all together, to forge a consensus to advance international action on these basic issues of global security, economy and ecology. The pre-Summit bilaterals produced some movement on environmental issues, as President Bush and Canadian Prime Minister Brian Mulroney agreed to open negotiations on a North American acid rain accord, and Chancellor Helmut Kohl of Germany indicated to the President that he would not push his Summit partners to adopt Germany's extreme policy of a 25 per cent reduction of emissions of carbon dioxide by the year 2005.
The first day of the Summit itself was dominated by political issues. Germany, supported by France, Italy, and the European Community, sought large-scale, immediate Summit financial assistance to the Soviet Union, an initiative that was opposed by the United States, the United Kingdom and Japan. Japan, supported by the United States but opposed by France and Canada, sought Summit permission to lift the restrictions on cooperation with China agreed to at the 1989 Paris Summit as a means of protesting the Chinese government's murder of students in Tienanmen Square.
On the Summit's second day, attention turned to trade and agriculture. Propelled by aggressive briefings from U. S. Agriculture Secretary Clayton Yeutter and Special Trade Representative (USTR) Carla Hills, attending their first Summit alongside the usual trio of finance minister, foreign minster and Head, the United States pushed for a firm and far-reaching commitment to end agricultural subsidies. To maintain the pressure on their partners and their media, the United States also introduced into the Summit a quasi-official pressure group-cum-conference on trade liberalization, led by former USTR Bill Brock. The European Community, supported by its continental loyalists France and Italy, were taken aback by the American onslaught but refused nonetheless to negotiate away fundamental features of European agriculture and European institutional solidarity.
Throughout the final night of the Summit the sherpas worked with determination to produce a final text that their Heads could approve the next day. In addition to the agricultural subsidies question, much of their time was taken by continuing divisions over global environmental issues. In the end, however, they succeeded in delivering a draft Economic Declaration that contained few square brackets (indicating areas of outstanding disagreement) save for a few on environmental issues.
This Economic Declaration, which is the central document of the Houston Summit, was unveiled by host President George Bush at noon on the Summit's final day. It was distinguished in the first instance by its length, for at sixteen single-spaced pages and eighty-four paragraphs, it was the longest Declaration (final communiqué) in Summit history. Indeed, its length led President Bush to dispense with the Summit tradition of reading the document verbatim as his fellow Heads sat approvingly on stage, in favor of presenting a much shorter summary statement.
The very length of the document signaled the comprehensiveness of the Summit's concerns, and its willingness to venture into new subject areas, often with considerable specificity. The leading subject of the Declaration was the environment, which alone consumed three and a half pages (almost one quarter of the total) and thirteen paragraphs. Trade came second, with just over two pages and twelve paragraphs. Third place saw a three-way tie, as reform in Eastern and Central Europe, narcotics, and international monetary developments garnered nine paragraphs apiece. The remainder of the communiqué, in addition to its opening and closing sections, dealt with developing nations (seven paragraphs), third-world debt (seven), the Soviet Union (six), economic efficiency (two), the international economic situation (two), direct investment (two), and export credits (one).
It is striking that the relatively new Summit issues of the environment, narcotics, Eastern and Central Europe, and the Soviet Union, traditionally dismissed as social or political, dominated the Economic Declaration, together commanding half of the pages devoted to specific issues. In contrast, the classic Summit trilogy of money (including the international economic situation), trade, and developing countries (including third-world debt) together took just over one third of the communiqué.
The most remarkable feature of the Houston Economic Declaration, however, was the extent to which its delicately-worded and hard-fought compromise passages reflected substantial movement forward on the critical issues that the Summit faced. In welcoming the dramatic changes toward freedom in the Soviet Union and Eastern Europe during the previous year, the Declaration opened less with a proclamation of victory than with a commitment to help. Pledges of concrete material assistance dominated the sections on Eastern and Central Europe. While the Summit did not approve collective aid for the Soviet Union, it did agree to let individual members contribute, and initiated a Summit study mission to report by year's end on the specific needs of the Soviet economy. Finally, by noting General Secretary Gorbachev's message to the Summit, and promising to convey the results of the Houston meeting to him, the Heads moved toward integrating the Soviet Union into the institutionalized international economic system, and into the emerging global concert that the seven-power Summit embodied.
In the field of trade and agriculture, the results represented a substantial advance on the OECD ministerial meeting several weeks before. On the critical issue of agricultural subsidies, paragraph 21, reflecting American and Canadian concerns, reaffirmed the long-term goal of market-oriented agricultural trade, while paragraph 22, reflecting European and Japanese interests, acknowledged differing farming conditions across countries, mandated a common instrument of measurement, and pledged equitable reductions that took into account concerns about food security. Moreover, in subsequent sections the Heads agreed to use the report of the relevant GATT Agricultural Negotiating Group in the search for consensus, to personally ensure the success of the Uruguay Round negotiations and, upon the completion of the Uruguay Round, to address the concept of a far more ambitious international trade organization.
Painful progress on substance, combined with substantial movement on process, also characterized the environmental sections, notably on the central issue of global warming. The Heads identified climate change, ozone depletion, deforestation, marine pollution and biological diversity as the key environmental priorities. They declared that continuing scientific uncertainty should be no barrier to immediate action. And although they failed to set a common standard and schedule for reducing the emission of the greenhouse gases that generate global warming, they did pledge to negotiate a framework convention on climate change by 1992 and to begin work on implementing protocols as quickly as possible.
Of equal importance was the Summit's Political Declaration, "Securing Democracy", and its accompanying "Statement on Transnational Issues". These documents were issued as usual on the second day of the Summit. Together they marked the emergence of the Summit as a major, fully global, security institution, and the end of French resistance to this evolution. The first paragraph of the Political Declaration directly acknowledged the importance of the Summit as a forum for discussing the critical security challenges of the coming years. The remainder of the Declaration proceeded for the first time to review regional security issues throughout the entire globe, and to deal directly and often in detail with an unprecedentedly large number of individual countries. In particular, Paragraph Four delivered a hard-fought and delicately worded compromise which allowed the resumption of loans to China, while underscoring the importance of human rights, basic human needs, and environmental concerns. The "Statement on Transnational Issues" mandated improved cooperation to counter terrorism, presciently highlighted the unconditional opposition of the G-7 to the taking of hostages, strengthened G-7 efforts to control the spread of chemical weapons and missile technologies, and added biological weapons to the list. Moreover, the Statement produced the first Summit pronouncement ever on the spread of nuclear weapons and, succeeding where the United Nations had failed, secured the agreement of France to the nonproliferation regime.
In assessing the significance of the Houston Summit, as codified in the documents that follow, two central questions arise. Did the Summit signal a shift in power among its participants in a way that eroded or enhanced the ability of the group to serve in the new era as an order-shaping concert? And did the Summit's decisions make a difference to the subsequent course of world affairs once the Heads returned home?
Media commentators sensitive to the question of which countries won or lost at the Summit were quick to proclaim that Houston marked the advent of a three-power world, in which Germany and Japan had joined the United States as leaders in partnership. Yet despite the attention devoted to this trio, there was ample evidence that the other participants made their presence felt. Indeed, the United Kingdom, with its mediatory efforts on agriculture and emphasis on narcotics; France, with its emphasis on human rights in China and aid to lower-middle income countries; Canada, with its support for France on these issues, its consensus proposals on aid to the Soviet Union, and its initiatives on marine pollution and conservation; and the European Community, as America's primary antagonist on trade, were all vital to making the Summit a meaningful and ultimately successful meeting and a united and effective club.
The task of making conclusive judgements about the long-term impact of the Houston decisions would begin only after 1990 ended, when the report of the Summit-mandated group on the economic needs of the Soviet Union was received, when the final, early-December Brussels negotiating session of the Uruguay Round was completed, and when the results of the November meeting of the Second World Climate Change Conference were received in individual capitals. But the early signs were promising. Taking advantage of its Summit mandate, Germany moved to provide limited economic assistance to the Soviet Union, which agreed in turn to allow a rapidly reunited Germany to remain a full member of NATO. The United States and the European Community backed off their firmly-held positions and began exchanging proposals for agricultural subsidy reduction that discernably if imperfectly reflected the concerns of the other side. And in the environmental field, to take one example, the European Community, in accordance with its Summit commitment, voted for the first time in half a decade to abide by the quotas set by the Northwest Atlantic Fisheries Organization (NAFO) on rapidly dwindling fish species.
The several thousand journalists who had warmed to the Summit experience in Houston gave almost no credit to the Summit for these steps forward once they had returned to their respective posts and routine preoccupations. But in the less glamorous, often invisible, persistent, and cumulative way in which international order is constructed in critical times, the influence of the Houston Summit was nonetheless very much felt.
Professor John J. Kirton of the University of Toronto originally prepared this study as an introduction to The Seven-Power Summit: Documents from the Summits of the Industrialized Countries, 1975-1989, compiled and edited by Peter I. Hajnal (Millwood, N.Y.: Kraus International Publications, 1989.
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