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G7 Finance and Development Ministers Issue Co-chairs' Summary

Brittaney Warren, G7 Research Group
June 3, 2018

On June 1, 2018, G7 finance ministers and development ministers met in Whistler, British Columbia, against the backdrop of a trade war instigated by U.S. president Donald Trump, rising inequality and rising global temperatures that demand sustainable financing, to discuss how to make growth work for all. This was the first time that G7 finance ministers met with their counterparts responsible for development. This inclusion resulted in a shift from the traditional focus on security-related financial issues, such as terrorist financing, sanctions and tax evasion, to inclusive and development-focused growth. Indeed, at Whistler, financial security issues centred on mobilizing private capital for sustainable development, building economic resilience against extreme weather events and women's economic empowerment.

These issues were expressed within a Joint Chairs' Summary rather than in a collective consensus communiqué. Issuing a chair's summary at the finance meetings is rare. The last time such a document was issued was also under Canada's watch during its 2010 presidency, when G7 finance ministers and central bank governors met in Canada's coldest, newest and predominantly Inuit territory of Nunavut on February 6, 2010.

The political climate today echoes 2010 in some ways. The Nunavut meeting also took place among a volatile backdrop instigated a few years earlier by the United States. The world in 2010 was still reeling from the 2008 U.S.-led global financial crisis and faced "extreme weather event" shocks. The world's least developed and arguably the poorest countries, Haiti and the Dominican Republic, had just suffered a 7.0 earthquake and two large magnitude aftershocks, with hundreds of thousands of Haitians displaced and some 300,000 killed. The ministers and governors issued a stand-alone document supporting Haiti's recovery and development. Moreover, in 2010 the political roles mirrored those of today, but were flipped the United States was led by a progressive democratic president, Barack Obama, while the host country Canada was led by a right-wing Conservative prime minister, Stephen Harper. Although not publicly expressed by the ministers and bank governors, a key point of consensus among the leaders in 2010 was gender. The Muskoka Summit raised USD7.3 billion for disbursement over five years for maternal, newborn and child health. Should the leaders at Charlevoix mobilize funds for a cause, they will likely be for girls' education.

Yet one key difference stands out. Where the 2010 chair's summary did not contain any commitments, the 2018 one contained three. In Whistler the Canadian chair, Bill Morneau, reported in his summary that G7 finance and development ministers had made the following three collective, future-oriented, politically binding decisions:

The first of these commitments was made in the first sub-section on sustainable development. The other two were made in the section on women's economic empowerment. No commitments were made under the section on extreme weather events. This section concentrated on disaster risk management, particularly for least developed countries and small island developing states. It included a call for international financial institutions to develop gender-responsive disaster risk financing mechanisms.

Thus while tensions between the U.S. and the rest is not unfamiliar, there is a precedent for co-operation, if not complete consensus, within the G7 club when tensions are high. During times such as these, a predetermined consensus communiqué may be out of reach. Thus at Charlevoix, the leaders may mimic the G7 finance and development ministers to produce a chair's summary rather than a collective declaration, with or without collective commitments.

However, the G7 has proven in the recent past that it is willing to move forward on issues with or without the approval of the United States. At the 2017 Taormina Summit, six of the G7 leaders plus the European Union declared their support for the Paris Agreement, leaving the U.S. behind. They did so in a politically binding commitment in a collective communiqué, which saw the U.S. singled out in a footnote as excluded from the commitment. Given the antagonism by the United States against its key allies and the resulting erosion of trust, its long-time friends may choose to issue some tough love at Charlevoix and extend their G6+1 on climate to include other pertinent issues, as the finance ministers have just done on trade in their stand-alone Chair's Summary on June 2.

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Brittaney WarrenBrittaney Warren is Director of Compliance and lead researcher on climate change and the environment for the G7 Research Group, the G20 Research Group and the BRICS Research Group, based at the Munk School of Global Affairs in Trinity College at the University of Toronto. She has worked in Spain and in Peru where she conducted field research on a sustainable development project with women living in extreme poverty. She has published on the effective use of accountability measures in summit commitments and on the G7 and G20's compliance and governance of climate change and digitalization. Follow her at @brittaneywarren.

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