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Commentary

Canada's Election Impact on the U.S. G7 Summit in 2010

John Kirton, Director, G7 Research Group
November 11, 2019

As those in the world's leading democratic powers start to contemplate the 46th annual G7 summit, which the U.S. president will host in 2020, some may well start to wonder what impact the recent federal election in neighbouring Canada will have on the prospects for success there. Identifying an answer now has two firm starting points — the summit timing and priority agenda the United States announced in mid October, and the clear message Canadians sent on October 21, 2019, to Prime Minister Justin Trudeau in re-electing him for a second term, but with only a minority mandate now. Together these suggest that the 2020 G7 summit will be a success, in an open, progressive, ecologically enhancing way, rather than the divisive failure over populism, protectionism, isolationism and nativism that many fear.

The U.S. Approach to Its 2020 G7 Summit

The United States has long been scheduled to host the annual G7 summit in 2020, in keeping with the equal rotation among its members established during the summit's first cycle from 1975 to 1981. Yet, as host, the U.S. president chose the time and the place of the summit, with all knowing that it would take place in the lead up to the spresidential and congressional elections on November 3. In his public remarks at the closing of the 2019 French-hosted summit in Biarritz on August 26, 2019, President Donald Trump announced that the 2020 summit would take place at the Trump National Doral Miami, and extolled the many virtues he saw for this choice. His choice was confirmed on October 17, 2019, when his acting chief of staff Mick Mulvaney announced that it would indeed take place at there, adding the dates of June 10–12.

The choice of a three-day summit followed the decision of France in 2019 to move the meeting back to three days from the two-day gathering that had prevailed for many years. The June date strongly suggests that Trump intends to use his summit as a key part of his re-election campaign, which would be moving into high gear for the final five months at that time. The Miami location in the heart of Florida would optimize the visibility Trump needs in what could be a critical swing state for his Republican Party on November 3. It would do better in this regard than the other resort settings U.S. presidents have selected to host the G7 in the past: Republican Gerald Ford with the El Dorado Beach Hotel in Puerto Rico in the election year of 1976; Republican Ronald Reagan at Colonial Williamsburg in the pre-election year of 1983; Republican George W. Bush at Sea Island, Georgia, in his re-election year of 2004; and Democrat Barack Obama at Camp David, Maryland, in his re-election year of 2012.

Moreover, Trump's emphasis on Doral having separate houses for each of the visiting leaders and their delegations, and its expansive golf course facilities, suggested that he, even more than his Republican predecessors, planned a highly informal summit, replete with many bilateral meetings and special events of various sorts. This was confirmed when Mulvaney detailed the key relevant facilities as "a long list of the accommodations on site: the ballrooms, bilateral rooms, the number of rooms, the photo ops, the support hotels that are there, the proximity to cities and airports, helicopter landing zones, medical facilities, et cetera." It was the antithesis of the original concept and reality of assembling G7 leaders alone for a frank, intimate "fireside chat" as in 1975 or around the host leader's dining room table as in 1977.

The priority agenda outlined by Mulvaney reinforced the signals that the summit would be a key part of Trump's re-election bid. It would centre on the economic issues where the United States leads the G7 in its performance, where its record at home has been very strong and where, the polls show, this is a subject that Americans approved of their president's management.

As Mulvaney announced: "The focus of the event will be on global growth and challenges to the global economy, specifically dealing with things like rejuvenating incentives for growth and prosperity, rolling back prosperity-killing regulations, ending trade barriers and re-opening energy markets." He immediately added: "So taking a lot of what we have been doing here domestically with such success and trying to encourage the rest of the world to get on board as we sit here and our economy does so well." He then stated, with more self-confidence than diplomatic modesty, "you look all across the world right now, and the rest of the world is either at or near recession. And we really do think that we have hit on a formula that works not only here but that would work overseas, where we take the G7 as the opportunity to try and convince other nations that they can have the same success by following the same model."

This agenda recognized the reality that global economic growth is already slowing and could reach critical levels or even recession by June 2020. Left implicit was the reality that a U.S. economy increasingly open and dependent on global growth would be dragged down by this, in ways that would endanger the president's re-election success. Yet the declared U.S. concern with lifting its partners' economies up gave this approach broader appeal. The central focus on boosting economic growth would take the G7 summit back to what many see as its foundation purpose, when the then named "Economic Summit" focused on restoring non-inflationary economic growth in the recessionary, inflationary and job-short years from 1975 to 1980. The formula for doing so — by having G7 partners adopt the one-size-fits-all Trumpian approach — is reminiscent of a confident President Bill Clinton's message at his Denver Summit of the Eight in 1997. But Trump was now taking this formula to new extremes.

Moreover, the substance of the U.S. model would offer to others highlighted economic stimulus through tax cuts for business and affluent individuals, through deregulation in financial, labour, social and ecological standards, through trade using American-first, protectionist instruments, and through energy security focused on developing the hydrocarbon oil resources where American production now leads the world. As no other G7 partners prefer such policies, the scene would be set for an acrimonious, divisive summit that would end without much collective G7 or global success. In doing so it would break the pattern established by the previous successful summits that Trump has attended: in Taormina, Italy, in 2017; in Charlevoix, Canada, hosted by Prime Minister Justin Trudeau in 2018; and even to some degree in Biarritz, France, hosted by President Emmanuel Macron in August 2019.

Canada's Post-Election Foreign Policy Priorities

The outcome will depend to some degree to the approach taken by the leader of the United States' next door neighbour. At first glance the prospects are not promising for a 2020 G7 success. To be sure, Trudeau hosted in 2018 a summit of substantial success. Yet a tired President Trump, once he departed Charlevoix, tweeted his repudiation of the communiqué to which he had personally just agreed. Moreover, Trudeau's election victory on October 21, 2019, strongly suggests that in 2020 he would bring a high-profile, self-confident, open, progressive, liberal foreign policy that would oppose that of Trump on all of the American president's economic priorities, and on Trudeau's broader priorities long part of the G7 agenda, notably climate change, immigration, foreign aid, gender equality and much else.

Yet a closer look suggests that much North American continental compatibility and cooperation and thus G7 success could well come. Trudeau, with his second mandate and a strong minority government that other parties would likely support for a long time, would bring a progressive approach that would converge with the preferences of the resistant Alberta and Saskatchewan provinces at home and a U.S. president adopting a more progressive approach by the time the G7 summit arrives in June.

Trudeau's re-election vindicated his central mantra since 2015 of inclusive, economic growth that would work for the middle class and all who wanted to join it. Tax cuts for 99% of citizens are a core part of this approach, and the Trump administration has hinted that it is planning another tax cut in 2020 — one now focused on the 99% who are the core part of its electoral base it needs to win next November. On macroeconomic policy more broadly, both Trudeau and Trump are happy to run increasing deficits, with no promise to return to balanced budgets at any future date. The only Canadian party to promise balance, Andrew Sheer's Conservative Party, lost the election, winning only 34% of the vote, 121 of the 338 seats in Parliament, and failing to grow beyond its rural, less educated, largely white, anglophone base centred in Canada's west. Both Trudeau and Trump believe debt sustainability could be enhanced by economic growth that outgrows fiscal deficits and both are backed by countries with low interest rates and triple A credit ratings to support this claim. All other G7 leaders agree, save for Germany's Angela Merkel, whose coalition government and party are now starting to think their insistence on surplus or balanced budgets as German and European growth plunges.

In general, despite Trudeau's mandate for progressive economic policy, and his need for support in the first instance from the social democratic New Democratic Party (NDP) for his parliamentary survival, Trudeau is unlikely to adopt any of the socialist policies that that radical elements of Canada's New Democratic Party (NDP) and the U.S. Democratic Party prefer but would be anathema to Trump and his Republicans. The NDP lost almost half of its seats in the October 21 election, won only one in Atlantic Canada and one in Quebec, and became largely a urban British Columbia party, having failed to defeat and Liberal incumbents there. The NDP will thus adjust to the Trudeau's centrist progressivism, rather than the government adjusting to the NDP's more leftist approach.

Investments in innovation and infrastructure have been and will likely be a core part of the Trudeauvian and prospectively Trumpian economic stimulus repertoire. They could even include the transboundary connections between them on which their intense bilateral trade — and Republican voters and workers in Michigan, Pennsylvania and Wisconsin and many other U.S. states — depend.

Part of this thrust could be new pipelines to get Canadian oil and gas through the United States to tidewater and market approaches, starting with the Keystone XL pipeline long strangled by regulatory delays in the United States. Another could be new electricity interconnections, of the sort recently started to take Quebec's abundant climate-friendly hydroelectricity to New York City to replace the power supplied from its aging nuclear reactors soon to shut down. Such an approach would appeal to the Quebec-only, still-sovereigntist Bloc Québécois, which surged to win federal seats on October 21, and the Green Party, promising a trans-Canada clean electricity grid and winning three seats, including its first in Fredericton, New Brunswick, in Canada's east. If presented as part of an energy infrastructure package in Canada, this could give Trudeau the political capital he needs to complete the twinning of the Transmountain Pipeline his government purchased to carry Alberta's oil to British Columbia's southern coast and from there to lucrative markets in China, Japan and elsewhere. The project's fate would then depend on opposition from some local Indigenous peoples, environmental non-governmental organizations and, above all, the Canadian courts, where success is far from assured. In all, Trump's fourth G7 priority of "re-opening energy markets" is one where the United States and Canada could have a common cause.

The same is true for Trump's third G7 priority of "ending trade barriers." Here he and Trudeau are already standing shoulder to shoulder to convince a Democratically controlled House of Representative to approve the new North American Free Trade Agreement (NAFTA), known in the United States as the U.S.-Mexico Canada Agreement (USMCA) and in Canada with the more pronounceable acronym of the Canada-U.S.-Mexico Agreement (CUSMA). This is the centrepiece of Trudeau's global progressive trade policies, with protections for labour, the environment, and now women and Indigenous Peoples built in. Those protections have been accepted by Trump, who badly wants a congressionally approved CUSMA to trumpet as his major economic success, rather than disappointing tax cuts, in his re-election campaign. But as with the original Republican-negotiated NAFTA from 1992, then adjusted by 1994 when the Democrats under Bill Clinton assumed power, Democratic House leader Nancy Pelosi will only sign off when stronger progressive provisions are added to the Trump deal. Trump and his fellow Republicans, reading the polls, should readily accept those provisions, while Trudeau quietly applauds and supports such steps. With Trump having just signed a limited bilateral free trade deal with Japan, which already has progressive agreements with Canada (under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) and Europe, the next step is to secure a bilateral U.S.-Europe deal so full free trade among all G7 partners can be proclaimed as a deliverable at the U.S.-hosted G7 summit 2020.

More complex calculations are required to unlock the underlying Canada-U.S. compatibility on Trudeau's central, freshly electorally endorsed priorities of climate change, gender equality and multicultural immigration.

Of these the easiest is gender equality. Inspired by Ivanka Trump in the White House and at the G7 summit itself, Trump supported Trudeau's major advances on gender quality at Charlevoix in 2018 and Macron's follow-up, focused on a review and improvement of relevant legislation in G7 and other countries, at Biarritz in 2019. With the growing evidence that gender equality and women's empowerment in the workplace and beyond drive inclusive economic growth, and with Trump's growing need to keep or secure more educated, suburban Republican women on his side in November 2020, he should be able to craft a G7 gender equality initiative that Trudeau and other G7 leaders will easily support and enhance. Trump will understand that Trudeau, whom he now likes and needs, is still prime minister because of the exceptional support he received from Canada's female voters, who will expect him to advance the cause visibly at the next G7 summit he attends, especially one so close to home.

Climate change will be more difficult, but considerable collective good can be done. The winning formula could be to start, but not stop, with Trump's emphasis in his public briefing at the end of the Biarritz Summit on clean air, clean water and clean energy, where he believes the United States leads the world on his watch. The strong and growing support among Americans, shown in public opinion polls, will give Trump a strong re-election incentive — despite the partisan polarization — to do more to control climate change, in ways that his and other U.S. voters understand and see directly benefit them. This could involve the immediate benefits for human health from climate change control through such measures as reducing air pollution, especially as Americans' life expectancy has now started to decline. It could mean framing climate change as a national security measure, as the U.S. military knows the country is extremely exposed to the harms that uncontrolled climate change will bring. The many commitments produced by the G7 environment ministers meeting in Halifax in September 2018, where the United States was represented by Andrew Wheeler, and in France in 2019 provide a firm foundation on which to build. There is much that can be done without holding all hostage to support for the inadequate Paris Agreement produced half a decade ago, which Trump has begun removing the United States from, and on which his mind will be difficult to change. Given that 64% of Canadian voters supported parties that promised climate change control policies as strong as or even stronger than the Liberal Party's and told pollsters this was a top issue in determining their vote, with a minority government Trudeau cannot and will not let this priority diminish. Many of the promises he made to Canadian voters on the campaign trail, such as planting more trees, are initiatives of G7-wide and global relevance that Trump could accept. Moreover, as deadly and destructive climate-intensified shocks are very likely to intensify in all G7 members by June 2020, and in the U.S. states that Trump needs to win in November, nature itself will spur the 2020 summit to success in controlling climate change.

Migration and multiculturalism will be the most difficult, especially as Trudeau cannot count on the support of his European, British and Japanese colleagues for his open, welcoming, inclusive approach. He will again argue that immigration is a source of economic growth and high levels are now necessary for the many G7 members with aging populations and even the United States where full employment has now arrived. By placing the emphasis on integrating immigrants and endorsing the Canadian immigration system that Trump has publicly praised, a useful way forward could be found.

Finally, soon after announcing his plans for the 2020 summit, Trump swiftly adjusted from his highly personal preferences to move into the established G7 norm. In response to widespread domestic criticism of his desire to host the G7 at a resort that he owns and his family operates, he said he would no longer use it as the summit site. He signalled that he could host it instead at Camp David, the secluded, highly secure presidential retreat that Obama had chosen at the last moment when he moved his 2012 G7 summit from his hometown of Chicago, which had been his original choice. Should Camp David be chosen, it would facilitate a personal, unscripted, informal, interactive, open dialogue among G7 leaders alone. In such a format Trump with his personalist approach would feel at home, and the other leaders would have the maximum time and opportunity to convince him that mutually adjusted cooperation would be in the interests of all. The format would be closer to that of successful summits at Taormina in 2017 and Charlevoix in 2018, rather than the far substantially less successful produced by the fragmented, Trump-centric format used at Biarritz in 2019.

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