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A Japanese Perspective on the Role and Future of the G-7

Hisashi Owada

The economic summit, which started in 1975 with the meeting of heads of state and government of six major economic powers of the West at the Chateau de Rambouillet, is going to celebrate its twentieth anniversary session with the Naples Summit in the summer of 1994. Furthermore, it will have gone through three full cycles among the seven partners by next year, if another session is held in line with past practice.

In recent years, however, there has been mounting criticism in the official circles of some participating governments and elsewhere about the way in which the summits are run. There has even been skepticism about the utility of the summits themselves.

Against this background, it seems quite opportune to engage in the intellectual exercise of taking stock of the results of the past summits, reviewing their achievements and failures and offering perspectives about the role of the summit and its future, as assessed from the vantage point of the respective participants with their different perceptions and expectations about this process.

The Objectives of Summitry

It would not be appropriate in an essay of this kind to try to go back to the genesis of the economic summit or to trace the historical evolution of the summit process in all its details. Indeed, it would be futile to get into such an exercise when literature of excellent quality is already available for this purpose.

Suffice it to confirm here that what later came to be known as the G-7 summit came onto the scene at a time when the industrialized world was suffering from a number of major economic troubles emanating from the cumulative effects of (a) the collapse of the Bretton Woods monetary system following the Nixon announcement of August 1971; (b) the first enlargement of the European Community in 1973; and (c) the first oil crisis of 1973.

Against this background, there emerged from the beginning two different approaches to what came to be known as the G-7 summit. One approach was typically represented by one of the founding fathers of the G-7, French President Valery Giscard d'Estaing, who conceived of it as an occasion on which the leaders of the major Western economies take to heart their economic and political responsibilities and exchange views on possible lines of concerted action.

The other was typically represented by the US Secretary of State, Henry Kissinger, who not only stressed the link between economic relations and security cooperation but also called for a permanent machinery "periodically to follow up our policy directions set out at the summit and to review what further decisions may be needed". What is striking is that there were from the beginning these two different schools of thought about the scope of subjects to be dealt with and about the basic set-up in which the summit process should proceed.

At the same time, it is also noteworthy that in spite of these differences of approach, which will have some substantive significance for consideration of the future of the summit, there was virtual consensus among the participants that the summit would be a sort of "club of the leaders of like- minded countries". This fact is important as a starting point for consideration of the basic purpose and structure of the summit.

The raison d'être of the summit, from the time of its inception to the present day, has been to provide a forum-in a non-institutional sense-for the leaders of like-minded countries or countries with common purposes and common perceptions of the world order to get together to share their thoughts and their consciousness of the problems concerning them in such a way that policy convergence or policy coordination on a voluntary basis can emerge.

If this line of philosophy is to be accepted as the basis of the summit, the following three major purposes should be identified as objectives to be pursued at the summit:

Evaluation of Past Summits

When judged by these criteria, the past summits from 1975 to the last one in Tokyo in 1993 can be described variously as relative successes and failures, depending upon how each of them fared in relation to the tasks that they were expected to tackle at the given moment.

A personal assessment of the summits has led me to the conclusion that from a Japanese perspective, the most successful summit in the history of the summitry was the 1978 Bonn Summit. The following list tentatively suggests the five most significant summits to date.

Each of these will now be examined separately in light of its respective tasks, in order to see how it compares with other, less successful summits.

Bonn Summit I (1978)

At the time of Bonn I, the industrialized world was still in deep trouble in the aftermath of the first oil crisis of 1973, from which it had not completely recovered. The previous year, what was described as the "locomotive theory" had been advanced at the 1977 London Summit, by which the three economies of the United States, Germany and Japan were to pull forward the economies of the countries lagging behind, so as to give the world economy a new boost. Unfortunately, the London Summit did not come to much in terms of concrete results, mainly because the "locomotive theory" remained largely a catchword without substance, and because there were no concrete commitments on the part of the governments.

By comparison, the Bonn Summit succeeded where the London Summit had failed, not so much because the catchword was modified from "locomotive theory" to "convoy theory", as because the major participants succeeded in agreeing upon tangible policy measures based on mutual sacrifices on a scale not seen before. Japan decided to bear its share of responsibility by accepting the annual economic growth target of 7 percent in an effort to boost its economy in a way which would contribute to the growth of the world economy. Germany took a similar action by accepting an additional 1 percent growth target in the same direction, while the United States agreed to accept a comparable sacrifice in limiting the volume of its oil import, which was contributing to the deterioration of the balance of payments situation in the US current account. The commitment was quite painful for each country, as was typically demonstrated in the case of Japan where there was quite a domestic uproar against Prime Minister Fukuda for having accepted such a sacrifice in the midst of a tight budgetary situation in which such an additional stimulus could only be carried out through huge deficit financing.

Nevertheless, there is no denying that this package of mutual sacrifices, demonstrating the political determination of the leaders to seriously tackle the economic difficulties of the time, helped to restore confidence in the world economy in the subsequent years.

The other major achievement of the Bonn Summit was the progress achieved towards the virtual conclusion of the Tokyo Round of the GATT negotiations. Impressive last-minute negotiations took place in Bonn among the major negotiators, Robert Strauss of the United States, Nobuhiko Ushiba of Japan, and Wilhelm Haferkamp of the European Community, all of whom were physically present in Bonn and engaged in serious negotiations for mutually acceptable concessions in consultation with their leaders. Again the sense of crisis inherent in the situation, the willingness to share the responsibility and the spirit of mutual sacrifice to cope with the situation prevailed. This marks a remarkable contrast to the situation at the 1992 Munich Summit exactly two cycles later: held during the most critical moment in the Uruguay Round, it failed to address the difficult but crucial issues squarely, and invited the cynical criticism that it reduced itself to a summit at which the summiteers chose to sing "My Way".

Tokyo Summit I (1979)

The 1979 Tokyo Summit was a truly painful experience for Japan in terms of both substance and procedure. The world economy was adversely affected by the second oil crisis of 1978-79, and the economic dislocation emanating from the sudden and excessive hike in oil prices was exacerbating the problem of how to recycle the dollar in the world economy. The cure for this was thought to lie in cutting down the demand for oil by the industrialized world as a whole. The Europeans had not been able to agree among themselves on the quota for each member at the EC summit in Strasbourg that had preceded the Tokyo Summit by one month, while the Americans and the Japanese were reluctant to accept too restrictive a ceiling to their consumption of oil.

This time also, mutual sacrifice eventually prevailed, but in a much more disruptive way. After his arrival in Tokyo, French President Giscard d'Estaing tried to form a new alliance with US President Carter for a mutually acceptable total aggregate of G-7 oil imports, to be allocated to each G-7 member on the basis of import performance by each for the previous year.

With the tacit consent of the British, the Germans and the Americans, President Giscard d'Estaing made a bombshell proposal to the summit plenary session without prior consultation with all participants. Japanese Prime Minister Masayoshi Ohira, who was in the chair representing the host country Japan, was caught by surprise with a proposal which he, as the representative of Japan, could not accept. Equally startled was Prime Minister Giulio Andreotti of Italy, who vigorously protested and threatened to leave the conference room if the proposal was going to be forced upon Italy.

Basically, what was proposed at the Tokyo Summit may have been necessary to save the world economy under the objective circumstances of that moment; what was achieved was positive in that it brought about a deal by which all the G-7 countries, to varying degrees, were urged to accept mutual sacrifices.

On the other hand, the way in which this result was achieved, and particularly the process through which this proposal was brought to its conclusion, was not commendable: the result-however legitimate it may have been-was forced upon some member countries without going through the more harmonious process of persuasion and mutual acceptance of the necessary sacrifices through consensual convergence.

In this sense, the Tokyo Summit was rich and substantive in terms of achievement, but was poor in terms of progressing towards consensual policy coordination.

Williamsburg Summit (1983)

The Williamsburg Summit of 1983 was a successful summit, not so much in terms of tangible achievement in extracting mutual sacrifices as in terms of gathering forces for a united front in combatting a commonly perceived crisis. For that reason, it should be included among the more significant summits.

It should be recalled that at the Versailles Summit of the previous year, an overly ambitious approach had been attempted to some of the more controversial issues like economic sanctions against the Soviet Union, but was not very successful in an environment lacking a shared sense of crisis and having little incentive to accept mutual sacrifices. In the wake of this fiasco, a new atmosphere came to prevail in Williamsburg. All participants felt that it was important to engage in an exercise of fence-mending to restore the sense of solidarity. In fact, the damage done to the solidarity of the Western alliance as a result of the divergence of interest revealed in the political schism between France and the United States at Versailles was real and dangerous. Thus it was important for the G-7 to reassert its solidarity in a broad context of alliance for the security of the West. The Williamsburg Summit did just that on the strength of the spirit of cooperation that prevailed-admittedly not requiring too much mutual sacrifice against the menacing background of an approaching danger caused by the Soviet decision to deploy SS-20s in Europe and Asia. The slogan that "security is indivisible" succeeded in uniting the interests of all G-7 members, thus producing a commendable result in Williamsburg as one of the most politically oriented summits in history.

Tokyo Summit III (1993)

The most recent summit in Tokyo-the 1993 Tokyo III-was not one of those spectacular summits accompanied by a lot of fanfare, but it is suggested that this summit can be counted among the more successful summits in the recent history of summitry in terms of its actual achievement.

There were three major tasks that the leaders were expected to tackle at the Tokyo Summit:

Assisting Russia. The first problem was not an easy issue on which to build a truly meaningful consensus. In a world in which the security concern born out of the East-West tension as a unifying theme had disappeared and in which each G-7 member tended to shape a future Russia in its own image and suited to its own particular geopolitical interests, convergence of policy perspectives towards Russia among G-7 members was difficult. Most of the European members of the G-7, taking one extreme view, wanted to see the issue of assistance to Russia almost as a case of "no option", inasmuch as the failure of Russia under President Yeltsin would mean catastrophe for Europe, whether or not the prospect of assistance to Russia was sufficiently viable.

The Japanese, on the other hand, standing at the other end of the spectrum, tended to look at the situation in a more detached manner, arguing that a lot of money could simply be wasted unless the conditions for success existed and that the assistance being offered were well spent. The Americans, particularly under the Bush Administration, had started off by taking a prudent approach not dissimilar to that of Japan, but as criticism mounted in the country that the approach was too inactive for a situation in which an historic window of opportunity for transforming the world was opening up, the new Clinton Administration changed the political stance of the former administration and became much more engaging in offering assistance to Yeltsin as the representative of democratic forces in Russia.

In this setting, the 1993 Tokyo Summit presented almost a classic case of how to work out a common strategy among the G-7 by transforming the policy divergence based on cognitive divergence into a policy consensus based on knowledge of the situation in Russia. This transformation called for substantial in-depth dialogue among G-7 experts at the sherpa level and a strategic discussion among the G-7 members at the ministerial level, rather than yielding to an easier temptation to stage a political show of support without much substance-with a view to working out tangible measures which could be truly effective Organizing a conference of the G-7 plus 1 at the level of foreign and finance ministers in Tokyo in April, rather than an emergency meeting of the G-7 plus 1 at the summit level as advocated by some European leaders, was crucial in this respect for the success of the Tokyo Summit.

Coping with the deepening recession. The second problem of how to cope with the prevailing sluggish economic performance throughout the industrialized world proved to be even more difficult.

Nevertheless, the fact that the Tokyo Summit succeeded in identifying and registering in the Economic Declaration the respective policy prescriptions that the three regional components of the G-7 -- Europe, North America and Japan-- should pursue was no mean achievement, although it was more on paper than in reality, as it has yet to be implemented. Even this somewhat modest result has nevertheless come to be appreciated as a significant achievement, especially when compared to the meager results of the Munich Summit of the previous year, which failed to cope with the challenge under similar circumstances.

Providing impetus to the Uruguay Round. The Tokyo Summit also succeeded where the Munich Summit had tailed, in preparing the ground for a successful conclusion of the Round. For the previous few years, in particular since the 1991 London Summit, summiteers had been suffering from a serious credibility gap as far as the Uruguay Round was concerned. This was because they had been making strong verbal pledges in the declarations to bring the round to a successful conclusion in the course of the year in question, while no serious efforts to that end on their part were forthcoming in the summit itself or subsequently.

At the Tokyo Summit, the G-7 members tried their best to realize an important partial breakthrough in one of the major areas of the negotiations, so that this, together with the firm personal commitment of the G-7 leaders, would give credible momentum to the subsequent negotiating process. The area chosen for this purpose was that of market access, for which intensive negotiations took place on the eve of the Tokyo Summit in very much the same way as occurred at Bonn 1. A tripartite package of mutual sacrifices on the part of the European Community, the United States and Japan saved the day, opening the way to a final conclusion of the Round in December.

Thus the 1993 Tokyo Summit, as a process of achieving a common strategy on an important issue through mutual sacrifices, should be rated as one of the more successful summits in the history of summitry.

Houston Summit (1990)

The Houston Summit took place in an atmosphere of relative calm on the economic front. Although the US economy was still very slow on its way to recovery, Japan and Europe were booming with very robust economic performances and there were not too many controversial economic policy issues for the summiteers to debate. By contrast, the fall of the Berlin Wall and the collapse of the Soviet empire in Central and Eastern Europe in the preceding months had brought about an enormous sense of euphoria and optimism for the political future of the world. In this setting, it was natural that the Houston Summit-taking place as it did just one month before the Gulf crisis came to shake the world and change this optimistic outlook-was permeated with high hopes and expectations towards a new international order.

The single most important subject for policy coordination among the G-7 was what kind of common strategy to adopt towards China after the brutal suppression of freedom at Tienanmen Square by the Chinese authorities in 1989. This was a delicate enough issue in that it could develop into an explosive controversy in very much the same way as had occurred with the issue of economic sanctions against the Soviet Union at the Versailles Summit, depending upon the consensus achieved by the G-7 in their common approach on China after the unanimous condemnation and adoption of sanctions at the Summit of the Arch the previous year. Here again, as in the case of economic sanctions against the Soviet Union at Versailles, there was the problem of cognitive divergence among the members of the G-7 about the essential nature of what had happened at Tienanmen and the way to deal with China. In addition, differences in the evaluation of China from a politico-strategic point of view, stemming from a divergence of views on the geopolitical implications of China for the region and the world among the G-7 members had the tendency to create different approaches towards China at that juncture.

What the Houston Summit succeeded in achieving was the convergence of these differences of view to a minimum by producing a large degree of consensual knowledge, allowing for consensus in policy approaches towards China. The result was a policy of not letting China isolate itself from the international community, while continuing to impress upon the Chinese leadership that the repression at Tienanmen Square was totally unacceptable and could not be condoned. This policy mix of insistence on the basic norms of conduct and encouragement to proceed on the policy of reform and openness in the international setting had two aims: to induce China to take to heart the lessons of Tienanmen Square and not to repeat the same mistake; and to persuade it to continue to pursue the course of promoting economic and political reforms and to carry on with efforts to make Chinese society more open to the outside world.

To this extent, the Houston Summit was one of the more meaningful summits, inasmuch as a policy coordination at the summit level was carried out.

Major Items on the Agenda for Future Summits

In light of these past experiences in summitry, it may be appropriate here to touch briefly upon what the major items on the agenda for the Naples and subsequent summits should be. Of the many important issues which should be discussed in this context, only five major fields have been selected as most pertinent: macroeconomic policy coordination, Russia, development strategy, post-Uruguay Round trade policy, and political questions.

Economic policy coordination

In recent years, it has almost become a cliché that the postwar economic coordination mechanism symbolized by the Bretton Woods monetary system, which used to serve quite effectively for macroeconomic policy coordination, has ceased to function properly since the introduction of the floating exchange rate system and is now on the brink of collapse. On this basis, it is sometimes argued that we should no longer expect effective global policy coordination in the macroeconomic field through the policy coordination process of the G-7.

It is submitted that fact is otherwise and that precisely because the Bretton Woods system is losing its effectiveness, policy coordination at the macroeconomic level, especially among the major industrial economies, is more imperative than ever. Deepened economic interdependence has rendered autonomous economic policy making by one country alone almost obsolete. The major industrialized economies now need to broaden the scope of economic policy coordination both at the macroeconomic level and at the macroeconomic level, including structural policies.

The summit, needless to say, provides the single most important forum in which to meet such a requirement of strengthened and broadened policy coordination. One example is "the double strategy" which was set forth at the Tokyo Summit last year. This strategy is meant to address the task of reducing unemployment through a combination of macroeconomic and structural policies.

Assistance to the Russian reform effort

According to conventional wisdom, the end of the Cold War seems to be the cause for all the structural changes that are being witnessing in the international community. But this is only partially true. Conversely, what triggered the collapse of the totalitarian regime, led by the Soviet Union, was its systemic inability to adapt to the gradual but steady structural changes which the international community has been undergoing for the last two centuries. In this light, the end of the Cold War has been the result of such structural changes rather than their cause. The totalitarian politico-economic regime of the Soviet Union, lacking as it was in the flexibility which can only stem from freedom and creativity, and trapped within the mentality of the Cold War structure based on a balance of power centering on military might, could not cope with the qualitative changes in the international community, including the progress in scientific and technological fields, the development in the means of communication and transportation, and the deepening process of interdependence. The regime which placed inordinate emphasis on an artificially maintained political power and military might collapse as a result.

It is against such a background that integration of Russia into the international community as its constructive partner is so important as an item on the agenda of future summits. Under Yeltsin, Russia has been undertaking arduous reform efforts and engaging in a systemic metamorphosis of its economic-system, its political system and its external policy orientation. If Russia succeeds in transforming itself, not just reforming itself, on all these three fronts, a Russia transformed will become a copartner in our joint efforts to build a better world. On that basis, the G-7 countries should be in full support of such Russian reform efforts, to the extent that Russia is trying to become such a constructive partner. For this to succeed, however, it is essential that our assistance be tailored to their progress in that direction. The G-7 should continue this line of policy as long as Russia is engaged in reforms.

What the G-7 needs to do is coordinate its policies for Russia by pursuing close dialogue with Russia while intensifying Policy discussion within the G-7.

Development strategy

A new area in which the G-7 countries should get seriously involved at this juncture in history is cooperation for the developing world.

The end of the Cold War should mean not only the disappearance of East-West confrontation, but also the termination of the so-called North-South relationship of the old type. It is undeniable that, during the Cold War period, the issue of development fell victim to East-West confrontational politics, whereby the North-South problem was juxtaposed to the East-West problem against the historical background that most of the newly independent countries of the South had grown out of the former colonies of the West.

With the collapse of the Eastern bloc and the loss of legitimacy of the socialist ideology, coupled with the failure of the socialist economic model in most of the countries of the South, this structure has been destroyed. This provides us with a new opportunity to tackle the issue of developing countries free from ideological implications.

It was with this recognition that Japan proposed at the Tokyo III that the summit should reflect upon a new strategy for development. The strategy should be based on an approach which is sufficiently comprehensive in scope to allow all the relevant elements for development, including official development assistance (ODA), investment, trade and debt relief, to be considered in an organic way and, at the same time, sufficiently differentiated to allow different prescriptions to be devised to suit the specific characteristics of each country at a different stage of development. The G-7 must now consider how to "flesh out" this conceptual framework with actual commitment and support.

Post-Uruguay Round trade policy

The multilateral free trade system, which is an essential foundation for a vigorous world economy, should be fortified on the strength of the recent successful conclusion of the Uruguay Round negotiations. The GATT is going to be reorganized into the World Trade Organization with much more ambitious responsibilities, going beyond the traditional framework of trade in goods to cover new areas such as trade in services and intellectual property rights.

It is incumbent upon the leaders of the G-7 to bring new initiative to the promotion of international rule-making in these new areas in response to the expansion of the scope and the areas of international economic transaction. The agenda at hand includes policy implications of the relations between trade and the environment as well as of those between trade and competition. The pioneering work of the OECD may be capitalized upon here.

Political questions

There are no assurances that the international community is moving in the direction of a more peaceful, democratic and stable order as a result of the end of the Cold War. In fact, paradoxical as it may seem, the end of the Cold War and the disappearance of a confrontational structure based on the clash of ideologies has brought to the surface a plethora of national and religious conflicts which had hitherto been contained within the bipolar regime, as well as moves to seek regional hegemony in relation to resources and territory.

From Japan's perspective, these structural changes acquire an added special significance. Japan has become an important partner in this setting, able and willing to share the burden of maintaining the new emerging international order by playing a constructive role in collective engagement. However, when it comes to the concrete application of this philosophy, it is essential that fora exist in which this political will can be put into practice. Unfortunately, it has been a fact of international life that this willingness on the part of Japan to play a constructive role could not be effectively put to the test of practical application because of the lack of an institutional mechanism for implementation.

It is true that the G-7 meeting of finance ministers exists in the sphere of economic policy coordination to effect policy coordination at the macroeconomic level, specifically from fiscal and monetary viewpoints. However, even here it is doubtful whether sufficient policy coordination of overall management of the world economy has been carried out in a comprehensive way, encompassing both the macroeconomic factors in the fiscal and monetary areas and the microeconomic factors in the areas of trade, investment and employment. An approach featuring a much greater degree of integration is needed now, in terms of both the scope of the fields to be covered as relevant to the problem and the players involved in the process of coordination.

When it comes to the sphere of policy coordination in the political arena, the present situation would seem to require even more urgent attention. Japan is unfortunately outside most of the institutional machineries in existence for policy coordination among the major partners in the industrialized democracies, such as NATO, the WEU, the European Union (especially European Political Cooperation-EPC) and the Council of Europe. It has recently been admitted into the circle of the CSCE to a limited extent, but its participation in this institution has had only a marginal significance in view of the fact that the CSCE has not been sufficiently effective as a forum for genuine policy coordination and that Japan has been accepted only as a special guest-a factor which puts a severe limitation upon the country's capacity to have an impact on the policy process within the CSCE.

Under these circumstances, it is easy to see that the summit process has acquired special significance for Japan as a continuous process for policy coordination of major world issues of common interest. Nothing could be farther from the truth than the allegation that this approach is tantamount to trying to create a venue for taking political decisions to be imposed upon the rest of the world, with the G-7 acting as a global political directorate. In fact, an examination of the past performance of the summit reveals a number of examples in which such policy coordination has served an extremely constructive purpose, without the summit designating itself as the political directorate of the world. Thus, the policy lines enunciated at the strong insistence of France at the time of the 1979 Tokyo Summit on the Middle East and international terrorism, and the common position taken by the G-7 at the Summit of the Arch in 1989 in the wake of the Tienanmen Square tragedy again on the powerful initiative of France served a highly useful purpose. Furthermore, the coordination of policy on China deliberated in Houston as a follow-up to the decision on sanctions of the previous year was truly instrumental in bringing about a coordinated approach based on consensual knowledge and assessment of China. Indeed, the case of China at the Houston Summit amply demonstrates the validity of the argument mentioned above that the summit process can serve a useful purpose in overcoming existing cognitive differences on facts and assessments, and in generating the kind of consensual knowledge needed to form a genuine basis for concerted action on a voluntary basis.

Some Organizational Problems of Summitry

Analysis of the past experience of summitry as summarized above will serve as a useful point of reference in examining the summit process from a functional point of view, with the aim of arriving at a critical assessment of the summit as a process and suggesting ways for improving its performance. From this perspective, a number of points emerge as relevant. The salient ones are considered below.

Validity of the summit

Given the mixed performance of past summits, the first and most fundamental point to consider is whether the summit-as a process for coordinating the policies of the G-7 countries-has either been so ineffective as to be discarded or has outlived its usefulness.

At present, the international community is undergoing great structural changes. The collapse of the Soviet Union in December 1991 symbolized the end of the bipolar structure based on confrontation between the United States and the Soviet Union. This has meant the disappearance of the basic framework which had shaped international relations since the end of World War II. However, this structure has yet to be replaced by a new concrete framework for peace and stability. Furthermore, there is no assurance that the realization of such a framework will be a simple task. But this does not mean that the validity of the summit, which was created as a device for policy coordination among the countries of the West in the era of bipolar East-West confrontation should be called into question.

The integration of the international community has generated a need to deal with global issues that affect all nations, notably the macroeconomic management of the world economy, but also major issues such as refugees, the environment, AIDS and other fatal diseases, and transnational crimes like international terrorism and drug smuggling. In the economic sphere, in particular, it has become impossible for the economy of any one nation to operate detached from the overall perspectives of the global economic management. In all these sectors, interdependence among the nations of the world is growing stronger and deeper.

In this new setting, the nature of the new international order that is to replace the old bipolar one cannot be unipolar as some people claim. Nor can it be multipolar, based on a balance of power. It can only be a world order of international cooperation among the major nations that have the will and the capacity to play a large-scale role in forming and maintaining such an order.

Within a system based on international cooperation, the advanced industrial democracies-within the trilateral structure of East Asia, Europe and North America-are being called upon to play the most crucial role. Even considering the economic sphere alone, the combined economies of Japan, the United States and Europe account for more than 70 percent of the world GNP. Furthermore, the triad of Japan, the United States and Europe has pursued the welfare and prosperity of humanity based on the common values of freedom, democracy, the rule of law and respect for human rights. Now that the Cold War has come to an end and the importance of building a world based on these universal values is strongly recognized, it is crucial that these core nations cooperate vigorously to strengthen the new international order. Herein lies the basic rationale and the intrinsic validity of the G-7 summit within the order based on pax consortis in an age of interdependence.

Composition and structure of the summit

If the validity of the summit essentially lies in its character as a forum for voluntary policy coordination among countries pursuing common policies based on shared values as described earlier (i.e. the philosophy of the club of likeminded countries), the question of membership and composition becomes a crucial issue in that it will determine the basic character of the forum.

From this perspective, the difference between the various fora for policy coordination should be clearly registered. In particular, it is important to keep in mind the essential difference in purpose and function between the United Nations and G-7 summitry, both of which can serve extremely useful purposes in the present setting, although in radically different ways. The United Nations, as a universal international organization including, in principle, all members of the international community and representing different interests, policies, creeds and ideologies is a forum for policy coordination and policy determination aimed at harmonizing these differences through debate. Its principal organ, especially in the field of maintaining international peace and security, is the Security Council, endowed with a strong executive power to act as the political directorate of the international community. Essentially all the major powers with the willingness and capacity to carry out this function should be represented in it, so that it can truly act in the name of the international community.

In contrast, the G-7 summit is not and should not be a world-wide forum of a similar nature. Assuming the basic character of the institution as advocated above, its raison d'être is different from that of the United Nations. In order to perform its functions properly, G-7 summitry does not have to aim at universal representation like the United Nations; the G-7 summit is expected to carry out quite different functions from those assigned to the United Nations in this respect.

Hence it would be wrong to argue that Russia or for that matter, China would be automatically qualified and should be considered for membership in the G-7 summit, simply on the grounds that Russia or China, as one of the most prominent major powers, should not be excluded from the pulpit of the world political directorate.

The integrity and homogeneity of the forum could be jeopardized by the inclusion of elements which represent different value preferences and different policy goals, if it leads to a situation in which the forum might be rendered totally ineffective for achieving the purposes for which it was established.

Another problem to be carefully looked into in relation to the composition and structure of the summit is the problem of what some regard as dual representation on the part of the countries of the European Union. The history of participation of the European Community as a separate entity has developed gradually, precisely because of the controversial nature of this problem of dual representation. At the initial Rambouillet Summit no separate representation was considered for the European Community. It was at the third summit, London I in 1977, that partial participation by the European Community Commission was allowed on a limited basis, on the ostensibly legitimate ground that one of the most important issues to be discussed at that session, namely trade, fell within the exclusive competence of the European Community.

Furthermore, since the 1982 Versailles Summit, the participation of the head of government of the country holding the presidency of the European Community at the time of the summit has become accepted. Thus a somewhat anomalous situation of dual representation for those summit members who belong to the European Community would seem to have come to prevail in a double sense: the four countries-France, Germany, Italy and the United Kingdom-are represented both by their own heads of state or government and by the European Community, which in turn is represented both by the president of the Commission and by the president of the Council.

It might be argued that this anomaly is not critical, given that the G-7 summit is not a decision- making body in which such dual representation would generate inequity. However, even if the G-7 summit is not a formal decision-making forum, this situation can still pose a problem in that the texture of the membership often determines the general sense of the conference. One US participant in the summit once remarked that the problem with the summit is that there is some times a tendency for the "tail to wag the dog instead of the dog wagging the tail" because of Europe's numerical domination of the scene.

Organization of the summit

Another complaint about the summit that one hears increasingly frequently is the problem of "bureaucratization" of the summit process. The personal representatives of the summiteers have come to be nicknamed "sherpas" because they lead the way to the summit throughout its preparatory process. As a result, the actual summit, when it is reached, is little more than a ritual to endorse the lengthy work of the sherpas in the form of a declaration written in "officialese".

To cope with this trend, it has been suggested by one of the summiteers that the preparation of the declaration may not be necessary and that the meeting of the sherpas should be reduced to a minimum, leaving the greatest latitude for free-wheeling discussion among the summiteers. This suggestion would seem to be based on a misunderstanding of the process and dangerous in its implications.

First of all, the basic point about an excessive bureaucratization of the preparatory process of the summit is well taken, although this tendency has in fact deteriorated only in recent years. What used to be necessary pre-summit groundwork for policy coordination of substance by the personal representatives of the summiteers in order to reflect the views of their leaders has now become a huge bureaucratic process for linguistic adjustment of the declaration, in an effort to smooth over the policy differences of substance. In this sense, the summit as a process for genuine policy coordination should be revived and improved.

Nevertheless, a word of caution seems to be necessary against some of the more radical proposals for reform with regard to the organization of the summit. It has been suggested that the summiteers should be left entirely free to engage in a "fireside chat" in Rambouillet, just as friends discuss problems without any prior preparation. The assertion is that what is important in the summit process is the development of personal rapport among the leaders of the industrialized world, and that therefore the less preparation by the sherpas the better, and so forth.

But this extremist view is based on a misunderstanding of history, on a somewhat naive understanding of the many complex issues afflicting the present day world, and on an overly simplistic view of the summit process. First, it is not true that the Rambouillet Summit, which may have retained some of the flavor of the "fireside chats" of the "Library Group" of the previous years, was conducted without much preparation. It was a most elaborately prepared summit. Second, and more importantly, many of the problems that the summiteers are expected to deal with, particularly in the economic field, are so complex in their nature and their technical aspects that they are difficult to grasp, let alone coordinate meaningfully. Such problems have to undergo careful and structured analysis before being presented to the high table of the summiteers for substantive policy coordination and decision. To have a fireside chat to promote personal rapport among summiteers is one thing; to promote policy coordination in a substantive sense in order to move things ahead is quite another. There is nothing wrong with the former approach to the summit, except that holding a summit for that purpose is a rather expensive undertaking and would certainly not be commendable from the viewpoint of cost- effectiveness.

The summit certainly provides an opportunity to promote the former, but that cannot be its central purpose. In order to pursue the latter as the central purpose of the summit, it is advisable as well as inevitable to engage in an elaborate, though not necessarily lengthy, process of discussion over substance at the sherpa level with a view to sorting out problems, digesting the relevant factors and offering a policy direction for coordination among the leaders. If we are to be serious about the summit process as one of the few precious processes for viable policy coordination in a world in which pax consortis based on a system of genuine cooperation among the major partners of the industrialized democracies is the order of the day, we must pursue a more structured approach to many vital issues through the summit process, while avoiding a bureaucratic strait-jacket involving spending much time on preparing a document which basically lacks substance.

Institutionalization of the process

Another problem closely linked to that of the bureaucratization of the summit, but not exactly identical to it, is the problem of the institutionalization of the summit as a system.

As already seen, the first summit at Rambouillet was more a product of convenience and spontaneous wisdom than the result of a long thought-out process of deliberation. It was not even designed to be continued. After the success of the initial meeting, however, the summit gained momentum as a continuing process and a degree of international recognition for the useful results it achieved, in particular at Rambouillet, Bonn I and Tokyo I.

At the same time, the collapse of the Cold War structure of the international system, in which bilateral confrontation allowed a superpower in each of the two camps to establish its own order based, respectively, on pax americana and pax sovietica, calls for a new look into the problem of international order and the mechanism to maintain it. In this new setting, a kind of new international order based on pax consortis is inevitable; in fact, it is the only viable international order in this period of transition, however imperfect and fragile it may be. Based on this assumption, it is submitted that the G-7 summit is the only practicable process that can provide the essential machinery needed to maintain this pax consortis through cooperation among the major participants from the industrialized world. Consequently, it needs to be reinforced as even more relevant rather than discarded as outdated or ineffective. But if this process is needed as a framework for collective engagement in the management of the international economic and political order, concrete means must be devised to strengthen it and make it a forum for genuine policy coordination, rather than reduce its effectiveness by making it less structured and by turning it into a mere salon for fireside chats among leaders.

The way to achieve this is not easy, not simply because of the technical and logistic difficulties to be overcome, but largely because there may be a philosophical divergence in views about the purpose of the G-7 summit. If the philosophical debate on the advisability of having the summit as a forum for policy coordination is set aside for a moment, it seems beyond doubt that its achievements in the field of macroeconomic management (particularly during the initial cycle of summitry) and its remarkable degree of success in policy coordination on the issue of assistance to the former Soviet Union in the political field more than amply demonstrate both the utility of the G-7 process as a standing mechanism for coping with problems of this kind and its viability as a process for facilitating policy coordination among the G-7 countries.

If this general assessment is accepted, some kind of institutional improvement to make the G-7 process more effective would seem advisable. It is not the intention here to suggest a further institutionalization of the G-7 process in any formal sense. Its formal institutionalization through the creation of a permanent secretariat and other institutional arrangements could make it more bureaucratic and less flexible, to the detriment of the cause which the G-7 process is meant to promote. What is probably required is what might be called "an informal institutionalization" of the G-7 summitry, by making it a more continuous process of consultation rather than a festive event that takes place once year. To be avoided at all cost is a repetition of the major mistake of the Munich Summit, in which the whole gathering was unfortunately turned into a midsummer night's pageant almost without substantive achievements.

In this regard, two concrete proposals are offered here for making this informal institutionalization feasible without inviting the danger of too much bureaucratization:

Intensifying voluntary cooperation on the basis of a common consensus views based on shared interests will be essential for the preservation of common values


It is clear that 20-year experience of the G-7 summit is at a turning point. The suggestion voiced by a number of summiteers for a reform of G-7 summitry not only understandable but positively welcome. However, the direction in which this reform should be carried out will have to be gauged and assessed most carefully on the basis of an objective assessment and careful analysis of the performance of past summits. It will also be important to evaluate the validity and utility of the summit in the context of the new evolving realities of the international system. If an international order based on the concept of pax consortis is the only viable alternative to the disruptive disorder of disintegration, then more thought must be given to the mechanism needed to put that philosophy into practice, so that states may not pursue their own narrowly defined self-interests to the detriment of the common interests of the international community. What we should guard against is the danger of straying into a negative-sum game when nations should be engaged in a search for an effective framework in which they can jointly play a positive-sum game.

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