By George Friedman
Last week’s G-7 summit was a mostly drama-free affair. The confrontation between U.S. President Donald Trump and Canadian Prime Minister Justin Trudeau came only after the summit ended. Members of the G-7, including the United States, issued a joint communique in which they agreed on the need for free and fair trade. The U.S. withdrew its support, and a war of words between the heads of state of two staunch allies ensued. Putting their spat in perspective requires an understanding of what the G-7 actually is.
What we now call the G-7 was meant to be an organization of the leading industrial countries in the world. It originated in the 1970s in response to the Arab oil embargo, which had hit the industrial world hard. It hit back by forming an entity that represented the major industrial powers that were struggling with high energy prices.
What the group was supposed to do remains unclear. What’s clear is that it accomplished very little. It didn’t speak with one voice, nor did the supply and demand of oil give the group much leverage over OPEC. So the group convened a summit and issued communiques, and what had been a response to a specific event became an annual meeting.
Without a specific purpose, it has become a meeting of the world’s major economic powers. Except that some of the leading economic powers in 1973 are no longer the leading powers in 2018. Its members – the United States, France, Germany, Japan, Italy, Canada and the United Kingdom – are relatively unchanged. But Italy now has the eighth-largest economy. Canada has the 10th-largest economy. Russia, now the 11th-largest economy, was part of a G-8 for a while, but it was banished because of its behavior in Crimea. But most important, China and India boast the second- and seventh-largest economies in the world and yet are not members.
If the G-7 were constituted by the top seven economies in the world, it would probably hold different meetings with different agendas. Not having China and India at the table, after all, makes any decisions taken on economic matters of limited importance. Their inclusion may not make the G-7 any more viable as anything more than a forum for discussion, but the bigger point is that like many institutions of its ilk, the G-7 is frozen in a time that no longer exists. During the Cold War, its members arguably did represent the bulk of the world’s industrial. But it remains a fundamentally Euro-American creation, consisting of Euro-American agendas that dominate the event out of the sheer number of leaders there.
That agenda, of course, is provincial. It fails to represent the complexities that a contemporary global power like the United States is concerned with. This year’s summit was a case in point. For the Europeans and Canada, this meeting was an end in itself, a forum to jointly voice their displeasure about tariffs. For Trump, it was merely a pit stop on the way to Singapore and the North Korea talks. That was probably also the case for Japanese Prime Minister Shinzo Abe, for whom North Korea is not as distant an affair as it is for the Europeans. They have opinions, but they have little skin in that game. Again: Had China and India been invited, North Korea may have been a more prominent item on the agenda.
Which is not to say that trade tariffs don’t matter. They do. But they matter in different ways to different countries. And this goes to the heart of one of the biggest problems facing the G-7: The consensus, such as it is, sought by its members is getting harder to reach. It’s difficult enough when the group’s purpose is clear and its membership appropriate. But they aren’t. The international order changes, and if institutions like the G-7 are to be useful at all, they have to change with it. And until the G-7 adapts to the times, episodes like this weekend’s between leaders will continue to pop up regardless of who’s in the White House.