The incredible shrinking G7

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Renata Dwan is deputy director at Chatham House.

When the G7 was formed with little fanfare in 1975, the group of industrialized nations accounted for more than 80 percent of global GDP. And yet, its remit was narrow and profile low key. It took ten years before the seven advanced economies even signed a joint agreement and issued statements on their discussions.

The group gathering this week in Cornwall, England is far more ambitious — and far less powerful. Representing just 40 percent of global economic power and 10 percent of the world’s population, it faces hard questions about its ability to actually deliver solutions to global challenges.

At this weekend’s summit in Cornwall, the G7 leaders of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States will declare their intent “to work together to beat COVID-19 and build back better.” The group has already produced a slew of ambitious announcements, from accelerating vaccine development to combating the climate crisis and reforming global taxation. The question is whether they can actually deliver.

It’s no longer the G7 but the G20, in which China participates, that now serves as the premier forum for international economic cooperation. Even the eventual success of the G7’s most significant pre-summit initiative, a minimum global corporate tax rate, will ultimately depend on the agreement of that far larger — and far less democratic — group.

The U.S. and the U.K. have started to frame the G7 as a values-driven group, defending the international order against illiberal or authoritarian challengers. This prompts even more questions. China’s economic, technological and military power, and its increased assertiveness on the global stage, will be rising behind Cornwall’s beaches as the summit backdrop.

There is no consensus among the seven on how to best respond to the challenge China presents to international rules and norms, and where — or how — to confront, compete or cooperate. Germany, in particular, resists being forced to choose between China, its biggest trading partner, and the U.S.

Meanwhile, in the wake of tensions at home and abroad over racism, inequality and crises of trust in democratic institutions, asserting the superiority of democracy also risks rebounding on G7 members and their guests. It also stands at odds with G7 populations’ own assessment of their democratic performance. G7 leaders may want to take their cues from their foreign ministers and commit instead to strengthening open societies, shared values and free and fair markets.

At its most effective, the G7 sets policy direction, champions proposals and builds coalitions of support for action in broader international forums. Managing multilateralism — not democracy — is the group’s business. 

Over the years, the group has driven effective change by putting its political heft and financial resources behind multilateral processes, such as the World Bank and IMF’s Multilateral Debt Relief Initiative for the poorest countries or the 2015 Paris climate agreement. On occasion, it has launched and led initiatives, including the creation of a Financial Action Task Force to tackle money laundering and the Global Fund to Fight AIDS, Tuberculosis and Malaria.

The ingredients for successful G7 action are a specific policy idea, committed leadership, concrete targets and funding. The willingness to work with partners and through multilateral bodies is essential. A relevant G7 is not so much about cooperation among democracies, as it is democracies cooperating for global ends.

There are some promising items on the agenda this weekend. A potential commitment to halt international financing for new coal plants could pave the way for a successful COP26 climate meeting in November, if Japan can be persuaded to fully sign up and if coal-dependent visitors Australia, India and South Africa can shrug off any embarrassment. Commitment to cooperation in digital services and data standards could signal intensified engagement among G7 members and the EU in the next six months.

On the other hand, the British Prime Minister Boris Johnson is calling for a G7 commitment to “vaccinate the world” by the end of 2022 — but there is no plan to tackle vaccine-funding shortfalls beyond the G7’s initial pledge of $7.5 billion for programs like COVAX. And G7 members remain divided over the U.S. proposal to accelerate vaccine technology sharing through patent waivers.

There’s a lot at stake for the G7 this week. The scale of global health and climate crises, in the face of international tensions, makes its work more urgent than ever. It’s stated intention “to make 2021 a turning point for multilateralism” has set itself a high bar. But in order to deliver, it will have to find ways to turn those ambitions into practical action. Failure to deliver would mark yet another step for the group toward irrelevance.



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