Japan Institute for National Fundamentals

Speaking out

Yujiro Oiwa

【#519】Remember Significance of G7 Summit

Yujiro Oiwa / 2018.06.13 (Wed)

June 11, 2018

     German Chancellor Angela Merkel described U.S. President Donald Trump’s talks with six other leaders at a Group of Seven summit in Italy’s Taormina last year as not very unsatisfactory but very difficult. At this year’s G7 summit in Charlevoix of Canada, Trump’s confrontation with the other six leaders grew clearer with their divide on trade issues failing to be bridged. Unprecedentedly, the U.S. president refused to endorse a G7 communique even after its release. The G7 committed a serious blunder to allow the Shanghai Cooperation Organization led by China and Russia as a counterweight to the G7 to gain momentum.

Beginning of end?
     The Trump administration, which is enhancing an inward-looking attitude under its “America First” foreign policy, has forced the annual industrial summit to reach a turning point after its continuation since 1975. Pessimists see the beginning of the G7 summit’s end.
     The G7 countries’ share of nominal global gross domestic product has fallen to less than 50% from a peak close to 70% in the second half of the 1980s. In the meantime, the number of participants in the SCO that held its own annual summit last week in parallel to the G7 summit has increased steadily, indicating that even Iran, located at a key point under China’s Belt and Road Initiative, could join the SCO.
     The Trump administration’s disrespect of multilateral agreements and Britain’s confrontation with Germany and France over Brexit have affected international cooperation, reduced the G7 club’s economic influence on the world further and heightened geopolitical risks. This should be recognized as a grave threat that could destabilize the global economy and financial markets.

Policy coordination is significant
     The industrial summit was launched as the 1971 Nixon Shock and the 1973 first oil crisis prompted leaders of industrial countries that share common belief in peaceful problem solution to comprehensively discuss policy coordination on the global economic problems.
     Later, the annual G7 summit has grown more significant for the members’ policy coordination in dealing with security and diplomatic problems during the Cold War and post-Cold War eras and recent global problems involving development, environment, climate change and energy.
     The raison d'etre is growing for the G7 summit in which G7 leaders sharing such basic values as freedom, democracy and human rights form consensus through unfettered discussions to counter the challenge to the existing international order by China accelerating maritime expansion notably in the South China Sea and the East China Sea and Russia adopting hardline foreign policy.
     In the meantime, political and economic differences between the G7 countries have widened further. Accordingly, their policy priority orders are different. If each country strengthens the tendency to put itself first, however, G7 policy coordination may be set back further, resulting in the global economic shrinkage and political unrest. The G7 countries other than the United States are urgently required to enhance their solidarity without being swayed by President Trump and reconstruct the G7 summit framework. Japan has a great responsibility for doing so.

Yujiro Oiwa is a JINF Planning Committee Member and Professor at Tokyo International University.