The Canadian government has set a fulsome and ambitious agenda for the coming G7 summit at Charlevoix on June 8-9, 2018. When announcing the themes for the summit as Canada took the chair on January 1, Canadian prime minister Justin Trudeau, said: "Canada is proud to put forward a progressive agenda for the 2018 G7. The themes we have chosen for the year will help focus our discussions on finding real, concrete solutions to promote gender equality, women’s empowerment, clean energy, and economic growth that works for everyone."
More concretely, he selected five priorities. They are:
1) Investing in growth that works for everyone;
2) Preparing for jobs of the future;
3) Advancing gender equality and women’s empowerment;
4) Working together on climate change, oceans and clean energy;
5) Building a more peaceful and secure world;
This agenda would be ambitious even under normal circumstances, but normalcy is not the context in which the Charlevoix Summit will take place. The cascading pace of technological evolution will have profound transformational economic consequences, with artificial intelligence, blockchain and quantum computing racing toward the mainstream. At the same time, many people feel left behind, watching economic opportunity and even their existing jobs pass them by. This is all set against a backdrop of a changing climate and shifting weather patterns, growing instability in several regions, and revanchism by some leading to heightened global tension, the reinvigoration of old rivalries and assaults on the democracy that is the core unifying mission of the G7 club. The need for a coordinated response by G7 countries – and the corresponding need for a successful summit – could not be stronger. Whether this will happen remains uncertain, especially after the steep tariffs U.S. president Donald Trump unilaterally imposed a week before the summit on imported steel and aluminum from Canada and Europe, to join those he had earlier imposed on Japan.
Investing in growth that works for everyone
The G7 leaders have previously recognized the fact that excessive inequality can undermine growth, social cohesion and confidence in institutions, nationally and internationally. In the G7 Taormina Leaders' Communiqué, the leaders welcomed their finance ministers' Bari Policy Agenda on Growth and Inequalities as a framework to foster inclusive growth, "so that the global economy works for everyone." The Bari Agenda set out specific policy options that G7 members could pursue to make the tax system more equitable by "broadening the tax base, curtailing inefficient tax expenditures, and reducing tax wedges on labour [and] supporting the incomes of working families."
Perhaps more importantly, the Bari Agenda recognized that the Organisation for Economic Co-operation and Development (OECD) Task Force on the Digital Economy had been given a broad mandate to evaluate the implications of the rapid digitalization of the economy, and to "develop policy options to address related tax challenges."
Based on the work of the OECD Task Force, the G7 at Charlevoix should move quickly to establish a coordinated policy response to address capital mobility and aggressive tax planning as a mechanism for subverting payable tax in the digital economy and should use the additional revenues thus raised to limit excessive inequality. Many feel left behind in this globalizing, digitalizing economy, and the disquieting political implications of this sentiment are all too real. The G7 should treat this as a priority issue, and coordinate to better capture taxable revenues to fund a social policy response.
Preparing for jobs of the future
The discussion on jobs of the future almost invariably starts from the premise that advanced robotics, artificial intelligence (AI), big data, blockchain and 3D printing will lead to tremendous disruption in the labour market. The policy mechanisms that are typically touted as a response to this looming disruption are increased support for transitioning workers, improved social safety nets, advanced reskilling and retraining efforts, and education as a life-long endeavor.
In preparation for the leaders' Charlevoix Summit, the G7 ministers of employment and of innovation convened in Montreal on March 27-28, 2018. While they covered a wide range of topics, advances in artificial intelligence were certainly top of mind. In response, G7 innovation ministers decided to convene a multi-stakeholder conference to "bring together stakeholders including government, academics, specialists, and private sector partners to discuss future economic, legal, social, and ethical issues relating to the development and deployment of AI."
Although there is a debate about the economic impact of AI, and the timeline associated with its widespread commercial adoption, most believe that the economic effect will be significant. If Prime Minister Trudeau is to make good on his promise to find concrete solutions to these issues, the G7 will need to do much more than conference convening. Right now, states are racing to develop this technology in competition with one another, and in the absence of a global regulatory framework that can meaningfully ensure coordination on the legal, safety, security and ethical implications. The G7 has an opportunity to dig into these very difficult policy issues, but it is not clear if they will seize it.
Advancing gender equality and women's empowerment
The G7 leaders last year considered the issue of women's economic empowerment and ultimately adopted the G7 Roadmap for a Gender-Responsive Economic Environment. This was a laudable initiative in many respects, although the document contained no specific references to women and trade.
Trade remains a key aspect of women's economic empowerment. Yet women and female-owned enterprises continue to face barriers to engaging in trade and accessing global markets. In December 2017, 121 member states and observers of the World Trade Organization recognized this fact when they signed the Declaration on Trade and Women’s Economic Empowerment. The signatories committed to share information, gather data and develop best practices to encourage female entrepreneurship and remove barriers for women's participation in trade and the international economy. Engaging more women and their businesses in international trade is increasingly seen as a prime way to stimulate economic growth across the globe.
Charlevoix presents the G7 with an opportunity to reinforce these international initiatives and to help fulfil its existing economic, trade and gender equality commitments by acknowledging the need for women and female-owned businesses to become more engaged not just in their respective national economies, but also in the global economy. If Trudeau is to fulfill his overriding promise to mainstream gender throughout the entire G7 agenda, at his G7 summit he must really make trade work for women and women work for trade.
Working together on climate change, oceans and clean energy
The political realities surrounding climate change make it exceedingly unlikely that a united G7 will have much to contribute directly under the label of climate change. With the U.S. withdrawal from the Paris Agreement, and its turn back to coal use, the ability of the G7 to move collectively on climate change policy coordination has been importantly undermined. However, this does not mean all is lost.
Canada has been working quietly behind the scenes to negotiate a zero-plastics-waste charter as a potential G7 outcome. The content of the potential charter is not yet entirely clear, but early indications are that it will address potential targets for reductions in plastic waste, a collaborative mechanism to partner with industry to develop less environmentally impactful products and assistance for developing states to improve waste disposal systems to keep excess plastics out the water. It is hard to argue against a desire to keep plastic out of the ocean – after all the Great Pacific Garbage Patch now covers a surface area twice the size of Texas or three times the size of France. Moreover, the U.S. as well as Canada are among the countries with the longest coastlines in the world. Therefore, given the importance of the plastics charter, and the other existing political exigencies, if the G7 wants to reach consensus, it should start with plastics. But it could also add actions to making coastal communities more resilient, with support from a U.S. with vivid memories of how Hurricane Katrina devastated New Orleans and Houston, and how Hurricane Maria hit Florida, all states vital to Republican Party fortunes in the fast approaching mid-term elections on November 6, 2018.
Building a more peaceful and secure world
G7 foreign affairs and security ministers met on the theme of building a more peaceful and secure world from April 22-24, 2018, in Toronto, Ontario. This group delivered a document on Defending Democracy – Addressing Foreign Threats, which noted "foreign actors seeking to undermine democratic institutions and processes through coercive, corrupt, covert or malicious means constitute a strategic threat, which we commit to confront together." This group also committed to providing advice to the leaders in time for the Charlevoix Summit. The importance of this could not be overstated, as there is "mounting evidence of Russian interference in at least 19 European nations" and the case of the United States is clear.
Cold War politics had previously been part of the agenda for this group and at the core of its raison d’être since its start in 1975. The G7 stands as a bastion for the liberal democratic values that have become the hallmarks of western civilization. Those values are under threat from an old adversary. If these G7 leaders cannot stand in solidarity on this – especially with the work already done by their foreign affairs and security ministers – then it is not clear that can stand together on anything.
This piece originally appeared as a Council of Councils Global Memo