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Comparing Canadian and Japanese Approaches to the Seven Power Summit

Charles McMillian

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In the longer view of history, of course, these Economic Summits have a short lineage just two seven-year rotations among the seven participating countries (Markedly, Canada was not invited to the first meeting in Rambouillet in 1975.) They do not have the historic aura of the most famous international economic meetings, such as that at Versailles in 1919, or at Bretton Woods in 1944. Yet by the same token, few may appreciate how little attention political leaders ever paid to economic policies until very recently. Why is this the case?

For one thing, the impact of international economic affairs on the domestic economy is of relatively recent origin. Until the last decade, the US and even the Japanese economy were operating in the closed framework of the economics textbook with world trade amounting to less than ten percent of their G.N.P. Even today the US government has the responsibility for economic affairs widely dispersed both within the Executive Branch and between the Executive and Congress. Moreover, economic affairs in government policy- making is a direct outgrowth of the Keynesian-inspired increases in the level of government spending in all market economies. (Government spending in Britain at the height of Victorian Britain was well under ten percent of G.N.P.) Today, government deficits help to determine the exchange rate levels, the balance between savings and investment, and fiscal policy. As a consequence, economic science plays a central role in almost all aspects of government policy-making and increasingly elevates the role of economic issues in foreign policy. Foreign policy in 1988 is largely economic policy.

Government Deficits: Seven Summit Countries
(as % of nominal GNP/GDP)

1985 1986 1987* 1988**
United States 3.3 3.5 2.4 1.8
Japan 0.8 0.9 0.9 0.2
West Germany 1.1 1.2 1 .S 2.0
France 2.6 2.9 2.7 2.5
United Kingdom 2.7 2.9 2.7 2.7
Italy 14.0 12.6 12.6 12.2
Canada 6.6 5.4 4.9 4.6
Note: * estimated **projected
Source: OECD Economic Outlook, June 1987

It may come as a surprise to learn, therefore, that, except in wartime, the standard practice in British, Canadian and Japanese governments for most of the first fifty years of this century was that the Prime Minister paid relatively little attention to economic policy per se that was the sole preserve of the Finance Minister. Moreover, earlier Prime Ministers rarely attended international conferences. Britain s second-longest serving Prime Minister of this century, Herbert Asquith, never attended an international conference in his capacity as First Minister.

In 1988 a British, a Canadian, or a Japanese Prime Minister, regardless of political stripe or personal conviction, must preside over the formulation of an annual budget, an international Economic Summit, a regular meeting with the American President, an annual trip to one or more trading partners, visits to or from leaders of one or more major recipients of foreign aid, not to mention trips to and meetings with one or more international organizations or agencies, from NATO to the U.N., from the GATT to the IMF or OECD. This is a new pattern in modern government. To paraphrase, if war is too important to be left to the generals, economic policy has become too important to leave to the diplomats or to the economists.

Apart from the substance of the Economic Summits, the dominant feature of the two days of meetings is the press coverage. Rarely do 7,000 members of the world media congregate in one city radio, T.V., newspapers, syndicated columnists, financial writers and, of course, photographers. Combined with the quite unbelievable degree of security and support staff, there are literally about 10,000 people attending each Economic Summit who are at once intimate observers and unwelcome intruders. Toronto, like Tokyo, will witness the spectacle of its downtown core taken over by this visiting horde of media and security personnel, awash in the paraphernalia of telecommunications, from the ubiquitous walkie-talkies to full metal limousines. Obviously the chances for trivialization are high; the likelihood of touristic and culinary criteria ranking above agreement on trade issues is not insubstantial. (ABC paid the City of Venice about $60,000 to light up St. Mark's Square for its nightly news broadcast.)

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