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Trump’s expanded G7 could be good for Australia but bad for multilateralism

Posted By on June 4, 2020 @ 06:00

US President Donald Trump’s suggestion to reporters aboard Air Force One on the weekend that this year’s G7 meeting be expanded to include Russia, India, South Korea and Australia appears to be more than a presidential thought bubble.

The media has reported that Prime Minister Scott Morrison has been consulted over the initiative and is eager to participate.

The obvious interpretation of the US president’s invitation list is that it was designed as a snub to China, which is the major economic power conspicuously not included.

It’s also an affront to the G20, which describes itself as ‘the premier forum for international economic cooperation’ and includes all of Trump’s invitees, plus China and the six most significant emerging economies.

As host of this year’s G7 meeting, Trump can invite whomever he wants. Last year’s host, French President Emmanuel Macron, invited both Morrison and Indian Prime Minister Narendra Modi to his G7 summit in Biarritz.

However, Trump’s comments appeared to imply a permanent expansion to the G7, which he said was a ‘very outdated group of countries’, adding that he didn’t think it ‘properly represents what’s going on in the world’. He suggested it should be a G10 or G11.

Expanding the G7’s membership was considered in late 2008 and early 2009 as its members grappled with coordinating a global response to the financial crisis. France’s Nicolas Sarkozy and Italy’s Silvio Berlusconi were adamant that the G20, which had been established as a finance ministers’ forum in the wake of the 1997 Asian financial crisis, was not up to the job.

They urged a G14 or G15 that would include Brazil, China, India, Mexico, South Africa and South Korea, but not Australia. The G20 also included Argentina, Indonesia, Saudi Arabia and Turkey, which were smaller economies but were important for the global financial system.

Furious lobbying by then prime minister Kevin Rudd, particularly of US President George W. Bush and German Chancellor Angela Merkel, won the day for the G20. It was elevated to a leaders’ forum, with Rudd arguing that, alongside the other emerging nations, China would be more responsible and accountable than would be the case if its membership were simply tacked on to an essentially Atlantic institution.

The G20’s achievements during the financial crisis can be overstated: countries broadly pursued their own interests rather than the common global good in stimulating their economies, and their promises to eschew the protectionism that had deepened the 1930s depression were widely disregarded.

Since the crisis, the most ambitious attempt to use the G20 to stimulate the global economy came with Australia’s chairmanship in 2014 when members committed to structural reforms to boost economic growth. Again, the promises weren’t kept and monitoring of their performance was ultimately abandoned.

A virtual meeting of G20 leaders in March promised to ‘do whatever it takes’ to respond to the Covid-19 crisis but failed to include any concrete steps.

A meeting of G20 finance ministers held alongside the International Monetary Fund/World Bank meetings in April suspended US$11 billion in sovereign debt repayments for the poorest countries through to the end of this year, but there was criticism that this fell short of what was needed.

That agreement included China offering debt relief for the first time. China has also donated to an IMF-sponsored US$17 billion increase in the fund’s poverty relief and growth trust, which has also won support from Japan, the UK, France, Spain, Canada and Australia, although not the United States.

Perhaps the major contribution of G20 summits has been to provide an opportunity for meetings of major leaders on the sidelines that have brokered deals on issues of significance, such as Russian President Vladimir Putin’s initiative at the 2012 Mexico summit on Syria’s chemical weapons that forestalled military action by US President Barack Obama. Trump and Chinese President Xi Jinping used the G20 summits in Buenos Aires in 2017 and in Osaka last year to broker temporary truces in their trade war.

In an election year, the Trump administration has no desire for truces and is only interested in international summits to pursue its agenda against China.

A virtual meeting of G7 foreign ministers held alongside the G20 summit in March concluded without a statement because US Secretary of State Mike Pompeo refused to sign anything that didn’t refer to the ‘Wuhan virus’, while a meeting of G20 health ministers in April broke down due to bickering between the US and China over the World Health Organization.

It’s far from certain that this year’s G7 meeting will take place. It was originally scheduled for this month, but Trump wanted a physical meeting, not a video link, and decided to postpone it after Merkel said she wouldn’t fly to the US. He said at the weekend it could be held in September but may also be postponed until after the US election on 3 November. The G20 summit is scheduled for 21 November in the Saudi capital Riyadh.

It’s likely that the European G7 members, France, Germany and Italy, would oppose Trump’s proposed expansion of its permanent membership, notwithstanding their stance in 2008–09, as they don’t share the US desire to isolate China and would see the expansion as diluting European influence. England and Canada have already declared their opposition to Trump’s proposed invitation to Russia to rejoin the group, from which it was expelled in 2014 following its annexation of Crimea.

It may be that a great era of summiteering, which was closely linked to globalisation, is drawing to a close. Australia had a hand in the formation of APEC in 1989 and its elevation as an annual leaders’ summit from 1993. As well as its role in cementing the G20 as a leaders’ summit in 2009, Australia, under Rudd, was also instrumental in expanding the East Asia Summit to include the leaders of Russia and the US in 2011, to ensure there was a forum for all major powers with a stake in Asia’s future to come together.

Trump skipped the 2018 APEC summit and last year’s meeting was cancelled due to unrest in the host country, Chile. He has not attended East Asia Summit meetings and may now be cooling on the G20. There’s no shared vision on the future composition or mission of the G7.

As a geographically isolated nation with a small population and economy, Australia’s national interest has always been served by the strengthening of global institutions that facilitate dialogue and the setting of rules for international commerce.

Australia will always be the loser in a world where the exercise of power becomes the dominant medium for international relations.

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[1] has reported: https://www.theage.com.au/politics/federal/australia-set-to-be-part-of-trump-s-g7-expansion-20200531-p54y36.html

[2] concrete steps: https://foreignpolicy.com/2020/04/02/g20-helped-beat-ebola-but-not-coronavirus/

[3] fell short: https://www.bloomberg.com/news/articles/2020-04-18/guardians-of-global-economy-come-up-short-in-fight-against-virus

[4] Wuhan virus: https://www.businessinsider.com.au/g7-failed-to-reach-agreement-because-of-wuhan-virus-2020-3?r=US&IR=T

[5] bickering: https://www.theguardian.com/world/2020/apr/20/us-scuppers-g20-coronavirus-statement-on-strengthening-who