Transcript
MR. RON NESSEN: Good morning and welcome to the Brookings Institution. I'm Ron Nessen and I want to welcome you to this press briefing on the G-8 summit meeting taking place next week in Genoa, Italy, and our scholars will discuss and answer your questions about the issues and background to be discussed at the G-8 Summit.
Before we begin, I just wanted to mention that this forum is being taped for web cast on the Internet. You can get audio and video streaming of the event if you go to the main Brookings home page at Brookings.edu, and click where indicated, this should be up and ready to go by this afternoon. You will also be able to find a transcript of this event, in case you can't read your notes, it also should be on the web site by this afternoon, or at least no later than first thing in the morning. The web site is as Brookings.edu.
I also want to mention that today Brookings is launching a new section of its web site on globalization issues, globalization in the broader sense. The URL for this is http://www.Brookings.edu/globalization. And you'll find links there to Brookings scholarship and research on many globalization topics, including, among others, trade and investment, merging economies, global environmental issues, and international health concerns. Some of these, of course, will be discussed in general, and will be discussed here this morning by the Brookings scholars.
This new globalization section of the web site will be updated and added to continuously with links to current issues on globalization and the latest writings by Brookings scholars.
I'm going to introduce you to the moderator for this morning, who will, in turn, introduce the panel. Jim Steinberg, actually officially comes on the payroll September 1st as the new vice president and director of the foreign policy studies program here at Brookings. For the past year, he has been a senior advisor to the Markle Foundation, and I'm sure most of you know his extensive background in the government, including deputy national security advisor to President Clinton from 1996 to 2000; director of the State Department's policy planning staff from '94 to '96; and deputy assistant secretary of state for intelligence and research in '93 and '94. So, Jim will be your moderator today, and will introduce you to the rest of the Brookings scholars on the panel.
Jim.
MR. STEINBERG: Thank you very much.
Let me join Ron in welcoming you here to this Brookings G-8 Preview. As most of you know, the G-8 is really quite a unique event, and it grew out of a very informal summit called the economic summit in 1974 at Rambouillet. And over the years it has grown both in size and scope and ambition to now encompass the full range of issues that preoccupy the leaders of the eight leading economies of the world. The center piece, of course, is the leaders meeting, which will take place this year from the 20th to the 22nd of July in Genoa, and preceded by a meeting of the foreign ministers on the 18th and 19th, which is part of the broader apparatus of the G-8 process as well as a finance ministers meeting which took place last week.
In addition to the formal activities of the summit, there's also an important opportunity for these key leaders to talk with each other both collectively and individually throughout the summit. And there will also be, in the course of this, some bilaterals that President Bush will have with key leaders there which become an important part of the overall developments that take place during these meetings.
To discuss this all for you today, we have a very distinguished group of briefers, who are not only a distinguished group of scholars, but also have extensive experience of their own in the process of summit preparation and the summits themselves.
To give you an overview on this, we will begin with Lael Brainard, who is a fellow here in economic studies and foreign policy studies at Brookings. Lael, as many of you know, was the deputy national economic advisor to President Clinton, and she was the Sherpa to the 2000 Okinawa Summit. For those of you who don't know, and I suspect all of you do, Sherpa plays the key role as the personal advisor to the individual leaders, and is the one individual other than the leader, him or herself, who is in the room when these discussions take place. So, it's a really unique view on the workings of the G-8 summits.
And next we'll hear from Erica Barks-Ruggles, who is a guest scholar here at Brookings, and the author of Meeting the Global Challenge of HIV/AIDS, a Brookings policy brief. And Erica was also a former member of the NSC staff, and so also had her chance to see the preparatory work that goes into the development of the G-8 summits.
Then we'll hear from Phil Gordon, who is a senior fellow in the policy studies program here, and the director of our center on the United States and France. Phil also served on the NSC staff, and he will give you a perspective, particularly from the view of the perspective of the European leaders who will be there, as well as the potential bilaterals that President Bush will have some of his European counterparts.
Then we'll turn to Fiona Hill, who is a fellow in foreign policy studies here, and the author of The Caucasus and Central Asia. She will focus on both the perspective of President Putin coming into the summit, the evolution of the G-7 to the G-8 has been one of the more important developments of the last decade and it's always one of the more interesting dimensions to see how the Russian leader comes, and what his agenda is, and how he sees his objectives at the summit. And she will give a perspective on how the Russians will be approaching the summit, and also the potential bilateral issues that will come up between President Bush and President Putin.
And, finally, if there are any other issues that don't get covered, I'm happy to try to answer your questions particularly on some of the regional political issues. As most of you know, I was the Sherpa in 1998 and 1999, so we have a surfeit of Sherpas here, and hopefully we'll give you some insight into how this all takes place.
The proceedings, each of the briefers will brief first, and then we'll take your questions afterwards. So, if you will allow each of them to go through their remarks, and then I will moderate the discussion afterwards.
So, let me begin with Lael.
MS. BRAINARD: Thank you.
Let me just spend another minute kind of elaborating a bit about the G-8, and then talk a little bit about what I think the Bush administration may be hoping to achieve, and what the prospects are going into the summit. Jim already described how the agenda has expanded over time. In terms of a structure, the G-8 is somewhat anomalous. It has no direct operational responsibility, and there's no real standing infrastructure.
So, what the G-8 can do is really use its collective weight in primarily the international institutions to move those institutions in certain directions because of the importance of these particular countries as shareholders and as lenders, in particular. So that when agreement is reached, the collective weight can matter either at the World Bank, at the IMF, and occasionally the OECD, the WTO, the UN and elsewhere.
The general rhythm of the meetings is that the G-7 leaders meet first, and that's a very informal meeting. The G-7 continues to meet to discuss the world economy, and also because they have a special role as the creditors and the major shareholders of the big international financial institutions, and so they will look at the reform issues, and I'll talk about substance in a second.
The official G-8 agenda then begins that evening with a dinner that focuses on regional issues, and I'll run through the list really quickly, and if you want to get more into those, you can do that in the question period. The kinds of topics that are likely to be on the agenda, but this is a little bit hard to predict are the Balkans, the Middle East, Africa, Indonesia, North Korea, and conflict prevention. Those are kind of stalwarts that come up year after year, but frequently the dinner gets over taken by events if there is some big crisis that kind of happens just in advance.
The next full day features meetings that address the other areas of the G-8 substantive agenda, which I will go through in somewhat greater detail, usually followed by a social evening, and then it culminates with a morning meeting the following day, which is really to talk about next steps, the future evolution of the G-8.
In terms of the president's agenda going into the G-8, President Bush has already had his first get to know you meetings with all of these leaders. And so the bar this time I think is higher. The question now is whether President Bush can exert leadership on the world stage and begin to move the world agenda to his agenda. Now, in terms of the substantive issues on the table, the first is the world economy. And I think the thing that is notable, and is likely to be notable here, is that that is the area that was the central mandate of the G-7 to begin with when it was originally conceived. And my guess is that there will be very little coming out of this meeting at all on that front. And I think that's a great shame. For the first time in many years, the G-8 leaders are meeting at a time when all three of the main engines of the world economy are sputtering, and alarm bells are sounding in a number of emerging markets.
But looking at the outcome of the G-7 finance ministers meeting, which has already taken place, you can see a little tweaking to the tone in terms of how much optimism there is, but really very little in terms of what are we going to do about it. So, I wouldn't expect a lot more there.
The one area that I do expect to be a centerpiece, and where there should be some action, follows up on the main definition and focus of the Okinawa summit last year, which was really looking at poverty reduction and development. And here, I think, the biggest concrete initiative is likely to be on the global health front. The G-8 is going to want to show concrete progress on this item, which was already their number one initiative at Okinawa last year. Since then, we've had Kofi Annan have a very important series of meetings on this, they defined targets, and already several of the G-7 have put money on the table.
The overall commitment could be over a billion, which is well short of the overall $7 to $10 billion goal, but yet a good down payment, and Erica is going to talk in greater detail about the issues that remain there.
Related to that, the broader poverty agenda. Okinawa for the first time had the G-8 leaders meeting with heads of representatives of the developing world, and that will be repeated again this year to sort of talk about development challenges. There will be several African leaders in attendance in particular who are likely to present the millennium action plan, which includes actions to be taken on the part of developing countries, but also the kinds of responses they would hope the industrialized countries would come up with, including, among other things, and that's the third big issue, is debt reduction. And as you know, this will be a major, major topic for protestors out in Genoa, as it has been for the past several years. There is a very well mobilized, and very effective group of NGOs around this area, most recently called Drop The Debt, an offshoot of Jubilee 2000. They are likely to be disappointed. There has been significant progress this year in delivering on the 1999 commitment to deep debt relief. I think 22 countries have received relief amounting to about $20 million in NPV turns. The problem, the first problem, is that a World Bank analysis calls into question the sustainability of the debt burdens even for those countries who have already had debt relief because expert growth has been sub-par.
And, secondly, over a third of the eligible countries aren't likely to come online any time soon because of recent existing conflicts. So, I don't expect there to be a lot of sort of praise on the part of the debt NGOs coming out of this meeting.
Fourth, there is a push to make some movement on the reform agenda at the World Bank in particular. The finance ministers talked a lot about this. The U.S. is pushing for a conversion of the loans to the poorest countries from a loan basis to a grant basis to try to get out of this vicious debt trap. And it would be terrific if they actually made progress this year.
And, finally, the digital opportunities task force, which was created last year to look at this issue of bridging the global divide has been convened with participation across the developing world, and the developed world, with participation by NGOs, the private sector, multilaterals, it's really a terrific group. And they have their first report that suggests a range of initiatives that they think would be meaningful in trying to bring the benefits of information technology to the development challenge.
Let me just talk briefly then about two other areas. The second big area of potential is trade. There's an enormous opportunity at Genoa for the Bush administration to reach agreement with Japan, Canada and the EU on the outlines of a launch for the WTO round, and this is sort of a last critical juncture before we go into the summer holidays to see whether this agenda can be teed up and then served more broadly going into the November WTO ministerial. It will be very difficult to achieve such an agreement. That would be a very big win. And to succeed in such an agreement must have as a central component a new deal for the developing countries, and so it's something that all of the trade ministers are working very hard, in particular Bob Zoellick and Pascal Lamy have had a lot of engagement on this issue.
But let me just put on the table, there are several constraints facing the Bush administration. First, they've got a major trade legislation pending on the Hill, which will make it a little bit more difficult to make any big concessions going into the negotiations. And, secondly, the big loss by the U.S. to the EU on the foreign sales corporation tax at the WTO will make building congressional support for this very difficult.
Finally, flashpoints, the perennial climate change, the G-8 is a slightly friendlier environment for this topic for the Bush administration than was the U.S.-EU meeting, because Canada, Japan and Russia tend to be close to America's position. Bush clearly got what he wanted from his meeting with Prime Minister Koizumi, there's been a marked softening in the Japanese prime minister's tone on this issue. But, as you know, there are currently discussions going on separately in Bonn where the Europeans are hoping to get agreement among sufficient numbers of countries to actually move forward on implementation of the Kyoto Treaty and Japan is the critical element to such an agreement.
And then the second contentious issue that will arise, but I don't expect a lot of news on is the issue of biotechnology and trade. This is something that the G-8 traditionally has discussions about. They sort of agree to disagree. But the most recent UN report suggesting that biotechnology has a vast potential for the developing world, I think, will strengthen the U.S. position going into these meetings.
Erica is going to speak next. Thank you.
MS. BARKS-RUGGLES: Thanks, as both Jim and Lael have mentioned, one of the main topics in Genoa will, of course, be health, including HIV/AIDS, but also TB and malaria, and the general context of health as an impediment to development. This is not a new topic for the G-8, which has recognized the importance of health and education to sustainable development and economic growth at the last several G-8 summits, as Lael mentioned, the prominence of this issue really increased at Okinawa. And so there will be an expected follow up.
At Okinawa, just to remind folks of what was promised, the G-8 leaders set actual hard targets, which is something that was a point of contention at Okinawa, for by 2010 reducing HIV/AIDS amongst people age 25 years and younger by 25 percent, reducing TB by 50 percent, and reducing burdens associated with malaria by 50 percent. They also pledged $4 billion towards this collective AIDS, TB and malaria effort, although much of that money was not new money, it was money that was being counted differently, but there was some new money associated with this.
The summit in Genoa could be the turning point in two areas specifically associated with HIV/AIDS, which will be the prominent issue of those three. First, it could possibly lead to an increase in funding, as Lael mentioned, of the global trust fund. And, second, it could also open up discussions on multilateral agreements on intellectual property rights, which have been the target of groups seeking to increase access to AIDS, drugs and treatments around the world.
First on the fund, the British and Italian governments have been pushing fairly aggressively since February on a global health fund. And as you all know, Kofi Annan, at the OEU summit on AIDS in April in Abuja, Nigeria, actually called for the foundation of what he called a global trust fund on AIDS of $7 to $10 billion per year. So far contributions to that UN fund have been fairly low. G-8 members that have contributed so far have contributed a total of $627 million, including $200 million from the U.S. pledged in May, $127 million from France pledged also in May, $200 million from Japan pledged last week, and $100 million from the UK. We haven't heard from the Germans, the Canadians, and the Italians so far, although they have been supportive of the rhetoric, they haven't put a dollar figure yet.
The total of $627 million does not include private donations, including $100 million from the Gates Foundation that was announced in June at the UN General Assembly Special Session on AIDS. Other contributors include Foundation Credit Suisse, the International Olympic Committee, et cetera. And that brings the total up to about a billion dollars, which is short of the $10 billion goal. And I want to emphasize that that's a per year goal. So you can see the gap is fairly large.
What happens or does not happen on further pledges to the fund of the G-8 will have a big impact on the UN's ability to build towards that goal. On Tuesday, the Italian finance minister called for the largest 1,000 corporations in the world to donate a half million dollars each, and for the industrialized nations to match that contribution dollar for dollar. It was unclear in his proposal, however, whether he was calling for that contribution to be to the UN fund or a separate global health fund, which has been kind of bandied about as a possible kind of sister fund to the UN So, again, that may impact on whether the UN is able to raise the money which they're trying to raise.
On the second issue of access to drugs and intellectual property rights, in May the U.K. published a report that was given to its cabinet on disease and poverty based on progress on the Okinawa goals. That report called for a clarification of flexibilities under the TRIPS Agreement, which would allow for compulsory licensing and parallel importation of medication under certain circumstances. The position in the U.K. report was a little bit more forward leaning than a European Commission report which was issued this spring which also called for an examination of how to increase access in drugs. This will be a topic of discussion, it's unclear whether it will be behind closed doors, or a little bit more public. Clearly, it will be a target for demonstrators.
I don't believe that this is going to lead to any kind of wholesale renegotiations of TRIPS or any kind of thing like that that the activist community would like to see, but in the context that Lael mentioned of possible new WTO rounds, this issue is likely to be raised, and may lead to a broader interpretation of existing clauses within the TRIPS agreement, which allow for a national emergency to be declared, and drugs to be either compulsory licensed, or parallel imported into countries in need, especially in Africa. Even agreeing to such discussions is going to be controversial. The pharmaceutical industry will clearly oppose such discussions, so this may be a point that comes up.
Finally, there's also like to be further discussions in the G-8 on accountability, cooperation and structures to assure that HIV/AIDS assistance actually gets to the people who need it most. This has been a point of controversy around the UN fund because it hasn't been clear how the structure of decision making is going to be set up for who gets what money, and how our donors are ensured that that money is actually being used by people on the ground and not being put into people's pockets.
The Russians are also likely to raise AIDS in the context of their own rapidly growing HIV/AIDS population, but again that conversation is likely to be behind closed doors.
With that, I'll stop and turn over to Phil.
MR. GORDON: Lael and Erica have focused on what I think will be the core issues discussed at this G-8 meeting, so I thought it would be more useful for me to talk about the more general state of relations between President Bush and the leaders that he's going to see at this meeting, and ask the question where does he stand with these people, and what are some of the bilateral and regional issues that they'll discuss.
Remember, it was just about one month ago that Bush set off for the first time to meet with many of these leaders at the U.S.-EU NATO Summits. And it was said at the time, many of you were here, we had a briefing on that, and I said at the time that because there weren't many policy conclusions to reach, there weren't going to be any treaties to sign or deals to cut, the real criterion for the trip was whether he was able to establish a personal relationship with these leaders, whether he was able to avoid the alienation, which I suggested was similar to the Jeffords scenario at home, where he alienates potential friends by pursuing a hard-line unilateral course. And I think on the eve of the second trip to see many of these leaders, it's useful to ask how he did on the first one, and where those relations stand.
I think what one can say is, it's a mixed bag at best. To be sure, Bush mastered his dossiers well enough, and proved competent enough, and friendly enough to prove to these leaders that he wasn't, to quote a White House briefer, "a shallow, arrogant, gun-toting, Texas buffoon," and that was a quote. But that was always a pretty low standard to meet for an America president going to meet his NATO allies. And, again, although I think he met that minimal standard, there's still a long way to go, not only vis-a-vis the leaders he's going to meet with but particularly vis-a-vis European public opinion and press. And, again, I'm not referring just to the protestors who will be on the streets in general, but if you follow the European press, there's still an awful lot of skepticism about this president, and that inevitably affects the leaders themselves, because they have their own domestic politics, and the way they interact with Bush and how they score their own domestic points.
I think on the issues, it's also a mixed bag. The issues that we identified as key for Bush to discuss with these leaders, some of which will come up again now, on the last trip I think on certain issues, like the Balkans and the European Defense Force, he did quite well, and was quite reassuring to them. That is to say, underlying the in together, out together in the Balkans, which is precisely what they wanted to hear, rather than the continual questioning of the U.S. commitment there. And also the support, albeit somewhat qualified, for the European Defense Force. I think in both of those cases, he was reassuring and made some friends.
I think he even went beyond that on the question of NATO enlargement, which I would suggest was the only real policy he made on that last trip, while not being specific, he certainly implied in his Warsaw speech that the United States was going to support a very forward leaning NATO enlargement. And I think it's interesting to note that there wasn't a lot of European resistance to that. Indeed, it seemed to be welcomed, and it seems to me there's quite a lot of momentum behind that, and her really did show leadership even as he may have irritated some of the Europeans by implying that the EU-2 should go forward quickly with a wide EU enlargement.
On other areas, I think he was somewhat less successful. I think on missile defense, although the White House claimed a new understanding with the European allies, I think the comments of European leaders on the question since then don't really suggest that yet to be the case. They've actually been asking, so far, what exactly are you going to do. They've been reserving judgment until the administration can come forward with a plan, as many of you have seen, or are aware, this is now starting to come forward. The administration seems to be developing a plan. I'll mention it briefly at the end. But let's just say for now that the judgment is suspended, whether the Europeans are going to support the Bush missile defense plan as it comes out.
And then, finally, on Kyoto, which Lael referred to, I think it was worse than suspended judgment. I think that he arrived in Europe on the last trip without the sort of concrete proposals on climate change that the Europeans wanted to see. It's an important domestic issue in Europe, and I think that will be one of the most contentious things.
So, that's, I think, the climate in which this trip takes place, and some of these same issues will come up again, even if they won't be the highlights of the summit. And let me just tick off what I think, and I'll end with this. The key regional issues, and the stakes on those issues that will come up in the discussions, both generally and bilaterally with the European leaders.
Very quickly, Balkans, I think, again, the Europeans will look for evidence of a continued U.S. commitment. Secretary of Defense Rumsfeld said the other day regarding Macedonia, that we would support it with logistics and other support troops, but not take part itself. That was the minimum. It seems to have been enough to reassure the leaders, but they'll want to confirm that, and possibly even ask for a bit more.
Middle East will certainly come up in the regional discussions. The interesting thing about that is that whereas normally when things deteriorate on the ground, they also deteriorate between the U.S. and Europe. I don't really see that in this so far, and I think Europeans have been pleased, at least, that the United States has been getting involved, sending Powell to the region, and trying to follow up on the Mitchell Commission report.
Iraq, it seems to me, will certainly come up, because the leaders will want to talk to each other about where to go from here after the failure of the smart sanctions initiative that Secretary Powell embraced that was led by the British, but of course that was blocked by the Russians, and the question that will be asked there, I think, will be mostly a U.S.-Russian one. When President Bush looked into President Putin's soul, he didn't see that there was a veto sitting there on this Iraq initiative, and Fiona will talk about the Russian point of view on that. But I think the point of view here is, the question people have for bush about, well, what can you deliver more than having a friendship with Putin? Are you going to be able to get him onboard for missile defense and for things like Iraq.
North Korea will come up. I think Europeans are reassured that the Bush administration has pulled away from the initial rejection of all talks with North Korea. You will have noticed that the willingness to engage is much more qualified than it was in the Clinton administration, but it also is intended to be broader, perhaps touching conventional forces, which might be harder to get the North Koreans onboard for, and remember that the EU felt strongly enough about this to send its own people to North Korea after Bush cut off the talks.
And then, finally, whereas issues are concerned, I put back on there missile defense. If it wasn't going to come up before, it will now. Senior Pentagon officials are testifying on the Hill today, and they will outline plan that will be much more concrete than anything we've seen so far, including new testing sites in Alaska, and a pledge to try to deploy a system by 2005, and also the statement that we've seen come out that the administration intends to break with the ABM treaty within months, not years. So we're finally getting something concrete on this issue, and there is no doubt that this will come up. Europeans will have a lot of specific questions about what the administration plans to do.
To conclude then, it seems to be largely the same set of issues and questions as before Bush's first trip to Europe. He goes widely perceived in Europe as a unilateralist, and in some ways is going into a lion's den of allies critical of that, and wanting to be reassured that he's willing to take their views into account.
The last key thing I would want to mention, particularly in that regard is, don't forget he's stopping in Britain on the way to the G-8, and that's not coincidental. I think in this environment of worries about European critiques and American isolationism because of unilateralism, the relationship with Blair is absolutely critical. And Bush knows he can't have the sort of friendship and relationship with Blair that Clinton had, but he is also fully aware that without that, he does run the risk of being isolated at the G-8 and among the allies.
I think one of the other interesting things to watch is how close Bush and Blair can get, and how Blair balances his own need to continue the special relationship with Washington while pursuing his pro-EU course.
MS. HILL: Well, as Jim noted, the bilateral meeting between Bush and Putin is going to be a significant one, and obviously, as Phil just pointed out, after all that soul searching, and the atmospherics at Ljubljana, we're going to be expecting some pretty concrete achievements to come out of the next meeting here in Genoa.
Now, unfortunately, I don't think this is going to be a very easy thing for Bush or the U.S. to get Russia onboard on any of the issues that Phil has just outlined for us here. The thing to remember in going into this set of meetings in Genoa is that for Russia, the U.S. is actually not the most important of the G-7 countries from Putin's point of view for this meeting at this juncture. Putin is going to have an agenda for the whole of the G-7 group, that's likely to include the very sensitive issue of WTO membership. Lael mentioned that's going to be on the agenda, and for Russia that's actually a very big deal. So that's going to be an agenda for the whole of the group, not just for the U.S.
But Putin is also going to have some very specific items for some of the other members of the G-7 that are going to come up. And I just wanted to quickly highlight a few issues for you to pay attention to when you look at Putin's other bilateral meetings there, because the U.S., again, is not going to be the only meeting that Putin is going to have.
First of all, Russia has got some very serious overlapping economic issues with most of the G-7 countries on energy—energy development—and energy sales is the central issue right now for Russia's economic foreign policy. Germany, alone, has 40 percent of its natural gas supply now from Russia, and this is all going to increase over the next decade because Russia has very ambitious plans now to increase its exports of energy sales to Europe.
Italy as the G-7 chair is also a very significant partner for Russia in energy issues. An Italian company and the Russians have just launched a very ambitious project to transport gas across the Black Sea to Turkey. Although Putin has already met with Chancellor Schroeder of Germany several times, this is going to be his first meeting with new Italian Premier Berlusconi.
Genoa is also going to be Putin's first significant meeting with new Japanese Prime Minister Koizumi, and this is actually going to be also a very important meeting. The Japanese and Russians still have a lot of unfinished business to discuss, the most important being the fact that there still isn't a post-World War II peace treaty. President Yeltsin had actually made that his big thing with Japan for 2000. He said it would be signed in 2000. It still isn't. And so this is an issue that the Russians and Japanese are going to have to deal with in 2001.
But, beyond the bilateral meetings that Putin is going to have with other leaders there re two issues that I wanted to mention that are related to Russia that some significant attention should be paid to. And this links back to what happened before in the Bush Putin meeting at Ljubljana.
The first thing is that Mr. Putin is going to be bringing two silent partners in his baggage to Genoa, the first is China and the second is Iran. The G-7 meeting is going to be coming hot on the heels of a major meeting with Putin and Chinese leader Jiang Zemin in Moscow, which is going to take place July 15th to 18th. This is a visit in which the much anticipated 20 year friendship treaty between China and Russia is going to be signed. And if you'll remember before the Ljubljana summit Putin came to that meeting directly from a meeting in Shanghai and then of course he telephoned Jiang immediately afterwards to let him know what happened in Ljubljana and I can imagine we can have a similar scenario of phone calls between Putin and the Chinese leader after Genoa. So we're going to have China physically not present at the G-7, but they're very much there in spirit thanks to Mr. Putin and Russia.
Same with Iran, President Khatami of Iran has been in Moscow in the last couple of months, but the relationship here is more complex. And this also then links into U.S. sanctions policy, not this time towards Iraq which was obviously a shock recently, but also towards Iran. And it's more complex, because there are a number of other G-7 countries that have serious interests in improved relations with Iran, just like Russia, and especially on the energy front. Japan, France, Germany and Great Britain have all got serious interests in good relations with Iran, and in the last couple of months there's been some serious high level agreements on energy issues with Iran that may come into conflict with U.S. sanctions policy, a number of Japanese, French, and British companies, as well as Italians have all signed major oil deals with Iran recently. So again, Iran and China are going to become important players in this dynamic for this meeting, even though neither of them are going to be there.
Now, finally I just wanted to conclude with a second point on Russia related issues. The one thing that's not likely to be on the agenda is Chechnya. Lael mentioned that conflict prevention is going to be one of the regional issues that's discussed, but judging by recent events and Jacques Chirac's recent trip to Moscow in which this was conspicuously absent in some of the public discussions, I doubt that there's going to be a broad ranging discussion either in the Bush meeting or in the G-8 meetings about Chechnya. But, that ought to be certainly at the front of everybody's minds, if it's not at the back of their minds. You've seen the recent press that the situation in Chechnya is getting much worse rather than better. And it still remains a huge drain on the Russian economy, politically destabilizing and becoming increasingly unpopular with the Russian population. So I think the day of reckoning is drawing pretty close for Mr. Putin on Chechnya, and this is one thing we should bear in mind when we're looking at the tenor of the meetings in Genoa. So that's a bit on that point, and I look forward to questions.
MR. STEINBERG: I think you can tell from the remarks what a rich menu there is. And I think what we're going to do now is we're all going to try to put our mikes on and take questions where we are now. If you could raise your hand, we have mikes that will be brought to you. And if you have a particular scholar you'd like to address the question to that would probably be helpful, but we'll try to address it as best we can.
Q: I had a broad one for now, and that is I'm wondering if you can comment on what sort of change you see in Bush's approach to the G-8 as a vehicle for U.S. diplomacy, as compared to his predecessors.
MS. BRAINARD: I think it's a little bit hard to predict, because for one thing we are comparing somebody who is going to his first G-8 meeting with somebody we watched perform at the G-8 over eight years, and so in that sense I think it's a little difficult to make that comparison. I think the biggest difference that is discernable at this juncture is that President Clinton generally had a very activist approach towards the G-8. He saw this and the people that worked with him in the finance minister's realm, and in the foreign minister's saw the G-8 as a critical group that could really make a difference and get, once there was agreement, if we could persuade the rest of the world that these three priorities were important priorities that they could make that happen on the world stage.
And what I think we're seeing so far, and again it's hard to tell whether it's a difference in approach in terms of really believing that some of these multilateral institutions can be critical extensions of American power and American goals, versus acting unilaterally, or whether it's simply the difference between somebody who went through this process and learned and was more and more effective because of deepening relationships bilaterally and somebody who is just new on the scene. But, we don't see the Bush administration going into the G-8 with as well developed an agenda that they are trying to move the G-8 on. We saw that coming out of the finance minister's meeting, remarkably little came out often finance minister's meeting. Secretary O'Neil has now attended I want to say three or four of these. And we're not seeing that group, which has been such a powerful group in the past, being really used very much. And similarly, I think the Bush administration is very strong on the areas of the HIV/AIDS fund, very strong on wanting to move forward on trade, but these are not new areas, these don't bear a very particular new mark of a new president yet.
MR. STEINBERG: Let me just add a couple of complementary thoughts on that. I think over time President Clinton increasingly saw the G-8 as a vehicle to deal with the new transnational issues, that there were not existing mechanisms in the international systems to deal with problems like international crime, like terrorism, like money laundering and the like. So he and the administration began to use the G-8 as a vehicle to create new institutions or quasi institutions. So, for example, in the mid-1990s the Lyons Group was created, which began to informally coordinate efforts to address international crime issues. The same was true in terrorism, following some terrorist attacks in the Middle East, it became a vehicle to try and create more than informal linkages among countries to deal with these transnational issues, the health issues, the development issues.
President Clinton saw this, as he saw these global and transnational issues increasingly dominating the international scene, the need for mechanisms to try to address it. I think we're seeing a hint now, and I agree with Lael it may be too soon to make a definitive judgment, that the Bush administration has a very different instinct about this, that there's a lot of talk now about getting back to the Rambouillet format, to an informal discussion, just the leaders, moving away from using the G-8 as a mechanism to try and address these issues, and trying to kind of, in effect, leave it to this chance to exchange views. That may reflect less activism on these issues, that may reflect a different view about how to address them, although I don't think we know what alternatives the Bush administration has for dealing with these issues, if they're not going to use the G-8 type vehicles. But, I think it is potentially a very different approach and philosophy that we're seeing about how you deal with the new globalization issues.
Q: Finlay Lewis, Copley News Service. I'd like to go back to the bilateral with the President of Russia, with President Putin. Yesterday a small group of us sat down with a senior administration official. She described herself as a formerly high priestess of arms control. And basically she described the upcoming bilateral as simply another stage on a long, evolving process of developing a new relationship, one that's sort of defined by a recognition that Russia is different from the Soviet Union, that we don't have hostile interests, that we have disagreements, but not hostile armies facing each other in Germany. And in that context the national missile defense issue sort of recedes in importance. I wonder if you could respond to that. Isn't this sort of an attempt by the administration to advance, to lower expectations for a meeting that actually is couched in the results of that first meeting, which were trust building and getting to know you. Doesn't he really need to come out of that convincing the watching public that he has something to gain beyond just simply atmospherics?
MS. HILL: I think what you just said there about lowering expectations is very important. As Phil was outlining, I know Phil will be able to comment on this too, obviously there is a major imperative right now to come up with some concrete results from this second meeting with Putin. But, as I mentioned in my comments, that's going to be very difficult. And I have to say that the comment you just relayed there is, in fact—I was a little heartened to hear it, because many of the people who are watching Russia in the analytical community in and around DC have been saying for some time that the U.S. has to get beyond arms control in thinking about the relationship with Russia. And in moving forward now that we don't have the adversarial relations that were shared by the Cold War, that we do need a new agenda for relations with Russia.
So I think the comments that you quoted there were very fair, that this is indeed the beginning of a process, a long process of thinking about what would realistically be on that agenda. And there are a lot of issues where the U.S. and Russia have a chance to become partners. I mean, some of the issues that Lael and Erica have outlined. As Erica mentioned, HIV/AIDS is becoming a singular problem for Russia. So there's an eminent interest in participating actively in these efforts to advance international health issues. And I think that this is something—we should see this as the beginning of a process, although there is going to be this imperative concrete achievement.
And maybe Phil would like to comment on the missile defense aspect.
MR. GORDON: Yes, I mean, first on the point of getting beyond the Cold War and a new relationship with Russia. First of all, I think there's an essential truth in what the administration is saying, but it's also a talking point for public opinion and European opinion, because we're doing these things, like enlarging NATO to the Baltic states and deploying a missile defense, and it's very useful to remind people, and try to explain to the Russians, there's no reason for them to object, because we don't see them as an enemy. Now, obviously the problem is Russia doesn't see it in the same fashion. But, vis-a-vis Europeans and the public, it is useful to say we are not doing this to constrain Russia or target at Russia, we are doing it because there are other threats out there and other interests, and this is a new world. The problem as I say is that Russia doesn't necessarily see it that way, so the question will be, will the administration have anything else to offer Russia to sweeten the pill and avoid a real crisis with Russia over these issues.
Q: I'm Jim Vail with CNBC. In terms of addressing the economy and the global economy, is there a trap that Bush is kind of going into in terms of finger pointing and saying, well, as soon as Europe comes out of their slump we'll come out of ours, and they're clearly saying, as soon as the U.S. turns around we'll all be able to come out of this global recession? And the finance ministers were also kind of that same idea that, well, it's not our fault it's their fault. And you had Britain saying, well, we haven't seen bottom yet, and you have the U.S. saying, we're coming out of it, here comes the recovery?
MS. BRAINARD: Yes, I think that confidence is a psychology, is a very important part of consumer spending behavior, investor's beliefs, and if you have a bunch of finance ministers pointing fingers at each other, and pointing fingers at the central banks, you get a very different feeling for how the world economy is being managed than if you have a group of people standing in a room together saying, we think there's a problem, we are going to address it, we're working together closely, we're taking measures that we collectively have agreed are important. So I do think that it matters that going into the finance minister's meeting, rather than kind of what can we do as a group, it was a little bit more, hey, we've done everything we can, it's their problem.
Now, to be fair to the U.S. position going into the finance minister's meeting, I think there was a little frustration that the Europeans had initially considered their position to be so strong that they really didn't see a lot of the signs, or they didn't want to acknowledge a lot of the signs. And the reality is truly that all three, the U.S., Japan, and the E.U. are all critical engines, critical players. So it is important for all three to be thinking about keeping their economy strong, in coordination with the other economies.
Q: (Off mike.)
MS. BRAINARD: I'm sorry, less likely to?
Q: (Off mike.)
MS. BRAINARD: I don't know if it's more difficult. I think that for internal reasons that each of the three are really struggling to keep their economies — either keep them moving, in the case of Europe, or to get them back on track in the case of Japan in the most extreme case, and of course in the U.S. The question is there's some disagreement, for instance, on how tightly the Europeans should be now enforcing their fiscal deficit targets, given the weakening that we're seeing, some disagreement as to whether the ECB is doing everything it can be doing. You know, some disagreement over the mix that the Koizumi administration is prescribing in Japan. But, there is clearly a sense among all three that getting their own economies back on track is a top priority.
Q: I'm Jim Lister from Korea Economic Institute, with a pair of institutional questions. First, do you see any prospect of Russia being the host of a future G-8 summit. And secondly, is there any possibility or any consideration being given to expanding the G-8 to make it some larger G number, say, with China?
MS. BRAINARD: I think Jim and I would probably answer the first question the same, which is members of the G-8 spend hours and hours and hours on this issue of what do we do about the Russians hosting an official summit, because you still do have the G-7 operating as a very effective group, and having a slightly different mandate again, specifically with regard to the international financial institutions. So it is difficult. The compromise that has been reached so far is that Russia has hosted special summits under a particular topic. That is likely in the near term to continue to be the kind of compromise. I don't know about the longer term.
In terms of expansion of the membership of the G-8, I think rather than seeing at least in the near term a change in the composition of that group, because there are some very tricky questions on the membership about for instance next country of course is China. The difficulty there is there's been a very strong criterion about democracy, which has limited the group to the G-8 as you currently see it. So rather than seeing an expansion of the existing group in the near term at least, what I expect to see is more proliferation of parallel fora, like on the financial front where we saw the creation of the G-20, which does include China, because it was an important presence in terms of the financial system. And so that, my guess is at least in the short term, you're more likely to see what you're more likely to see.
MR. STEINBERG: I agree with Lael, but I think there's a bit of a wild card here, because it's the nature of the dynamic of these meetings that there's a lot of kind of thought and analysis that goes into the rationale for these decisions, and why it might be awkward to have a full summit in Moscow, for example. But, there's also what happens in the room. And there comes a moment when the eight leaders are there and President Putin says, this is really important for me to do it, and I don't think you can rule out the possibility that in that kind of setting that they will simply decide because of the balance of the moment at some point that it's important in terms of sending a positive signal to Russia. And for the reasons that Phil and Fiona talked about, I could imagine, although I'm not predicting it, that the Bush administration would say look, we're talking about this new relationship with Russia, why not do something like this, particularly given their now more focus on this as a more informal type meeting. I think Lael is most likely to be right. But, this is one area where I could imagine a potential surprise.
Q: Hi, Miles Pamper from Congressional Quarterly. Two questions, one do you see any concrete financial pledges, or increased pledges for instance on HIV/AIDS from the U.S. coming out of the summit, or is that constrained by the fact that the surplus is rapidly disappearing? The second thing is on trade. You mentioned that the administration's negotiating position is going to be limited effectively by Congress, on the FISC issue and on the negotiating authority legislation. What's the reverse of that? Does the administration need to make progress on the possibility of a new WTO round to get anywhere on the legislation on the Hill?
MS. BRAINARD: On the first issue, new pledges, there is legislation up on the Hill, sponsored by Frist and others, that actually would kick in a second year of contributions to the fund which is a very sizable increase. And my guess is that the surplus we've already spent it 15 different ways, and we've already spent it 3 different ways. So I wouldn't imagine that linkage to be too direct there. I think there is a lot of congressional sentiment in favor of expanding our contributions and the Bush administration seems to be squarely behind it. I don' know if there will be announcements in Genoa, because that would be putting the carriage before the horse. But, I would expect there's a lot of momentum behind this.
On the second issue of trade, my own personal view is that it's very hard to go forward with a request for a negotiating authority unless you have something very concrete to drive it, to get the supporters who can see the trade benefits, kind of up on the Hill thing, this is important to us. Right now the fast track request lacks that kind of immediacy. There are too abstract negotiations, which are likely to conclude far into the future, and the opposition is mobilized, but I don't see as much activity on the part of supporters as you'd like to see. So yes, I think there is a kind of two-way dynamic going on there. And I do think it will be very difficult to win this fight unless there is for the supporters something worth fighting for.
MS. BARKS-RUGGLES: On the contributions issue, I agree with what Lael said, I just want to add that I think part of this will depend on the dynamic in the foreign minister's meeting, which is right before the actual leaders summit, because Powell has been fairly forthcoming, and has been one of the drivers inside the administration to increase funding for this, and he committed at the UN General Assembly session on AIDS at the end of June that the $200 million was "seed money," and he said that U.S. contributions would come further as they learned how the support would be used. And so I think it's going to be incumbent upon the UN to clarify the fund, and how it's going to be set up, how decisions are going to be made, how money is going to be dispersed, and how accountability issues are going to be reported back to donors. So I don't see that there's going to be an immediate announcement as Lael said, but I think that there is going to be a lot of rhetoric around this, and I think the Italians and the British are going to be pushing very hard behind the scenes, and I think Powell will be in agreement with that. And so you might see that dynamic actually bubbling up a little bit in the leaders summit, and you may get vague commitments, but I don't think you're going to see a dollar amount increase in the United States, although you may get a commitment for further increases.
Q: Thank you. I'm Dave McIntyre from DPA with a question for Phil Gordon, I think. You mentioned that the details coming out today on missile defense are setting the president up for some tough, specific questions next week in Genoa. How important is Saturday's interceptor tests, and the success or failure of that to his credibility, given that the administration has said they're going to go ahead whether the thing works or not.
MR. GORDON: I don't think it has the potential to derail what they've planned. First of all, I don't want to make any predictions either, but this test better work. I mean, they've had nine months to prepare it. It's easy as far as these things go, in terms of the standards and the numbers of decoys they could use and so on. If this one doesn't work they have a real uphill struggle, probably more with Congress than with allies. It would be the Senate Democrats who have already expressed skepticism about buying a lemon, or about spending money on things that don't work who would really be the obstacle if this test misses.
But, even if it were to fail in one way, first of all they would no doubt explain that it was actually a useful failure, because we learned things about the system from it. But, secondly, we would be reminded that all systems fail in the early stages, and this is very complicated. That's why we need to test. I mean, one of the clever things about the plan that seems to be coming out is it's focused very much on testing, which is a good way to rebut those critics who say don't move ahead until something works. They'll say, okay, that's why we're spending more money on testing, and this Alaska system would be a more realistic test, and that way it's going to help us make it work. So I think either way they argue we move forward. If it works, this proves that missile defense technology works, and let's move towards deployment. If it doesn't work, this proves why we have to develop more realistic tests and spend much more money on testing. I don't think it can derail the plan.
Q: Paul O'Neil has raised some specific criticisms of the World Bank, and has been critical of the Clinton administration's policy regarding economic bailouts, et cetera. First of all, how do you see the G-8 summit addressing the specific proposals regarding IFIs, and then the evolving Bush policy about, and the relationship with the IMF, World Bank, et cetera, bailouts.
MS. BRAINARD: Yes, I think with regard to financial stabilization programs, it's a little bit hard to predict, because on the one hand most of the people who are in the kind of crucial operating positions in the Bush administration do have a very different view. They're much more concerned about moral hazard, much more cautious about putting official money on the table. On the other hand, we've had two test cases now, Argentina and Turkey, and a couple of things are noticeable. A) the U.S. administration, Secretary O'Neil supported those programs. And secondly, at least in the case of the Turkey program, the administration's statement was framed in terms of the strategic importance of Turkey, so it didn't have economic — the sort of dominant rationale was not economic at all, which seems very contradictory to at least the initial critique of the IMF, the way the IMF programs have been used. So I don't know quite how to read it, but my guess it that it suggests perhaps the Bush administration is not going to be as different as they might have postured themselves to be going into it.
With regard to the multilateral banks more generally, and the world banks, there were a list of particulars that were agreed by the finance ministers, and some of Secretary O'Neil's recommendations go beyond that. The one big ticket item, which I mentioned earlier, is this issue about converting concessional lending into grants, which is very squarely in line with the whole debt reduction issue, and in fact is something the previous Clinton administration and Secretary Rubin, Secretary Summers had also been strong advocates of. If that were to go forward that would be a big change of policy, that would be a big outcome of the G-7, G-8 meeting, but it's not clear that will happen.
Q: Thanks, John Omicinski with Gannett News Service. How has the character and importance of these meetings changed recently with the sort of days of rage that they attract, Montreal, Gothenburg, Seattle. I mean, what's going on with the meetings, are they being over powered here, over shadowed? I'll leave that to anyone.
MR. STEINBERG: I do think they're having an impact. I think that the leaders—and I think some of it is positive, and some of it is a bit troubling. It's positive in the sense that there are — the G-8 has always had, particularly G-7, a very strong bias towards the benefits of globalization, the benefits of trade, the benefits of sort of expanding liberalization in the international system. And it's almost been kind of a credo of the group when it gets together, because you have the leading market economies who have deep commitment to market capitalism. And I think the positive consequences of the protests and the demonstrations is that it has made the leaders take more seriously the fact that, although, and I certainly agree with it, that overwhelmingly the benefits are there, that there are also negative consequences that need to be addressed.
And I think that has helped shape and broadened the agenda to deal with some of these consequences, and also made them more sensitive to the fact that there are a lot of people who aren't in the room who are being affected by the decisions that they take, most notably the developing countries. So in that sense I think in terms of broadening the agenda, sensitizing them to the needs to show both domestically in their own countries and internationally that there is a sensitivity to the people who are not necessarily the short term beneficiaries of globalization, that those issues are on the table.
The bad side is that there is a certain element of, I think, intimidation, frankly, about these efforts that lead the leaders to look for things that they can do to try to undercut what's going on in the streets which tend to some extent detract from what ought to be their priorities. And it certainly becomes a preoccupation of the host to try to figure out how to deal with this and the consequences of that kind of management. So I think it's a mixed impact, but it is definitely having an impact on what goes on inside the room.
Q: Are these going to be less attractive pretty soon for a country to have, because of the immense expense of security?
MR. STEINBERG: I think, again, it's mixed. I think it's a tremendous burden, but I also think there's kind of a strong sense that you see also at the IMF-World Bank meetings, a desire not to be intimidated, and a desire to say that we can't let the agenda of the international community be held hostage to these events. So I think there will be a strong resistance to allow this to deflect from what they feel are the necessary sets of activities. Of course, I mean, it's hard to predict, how long this will become a feature, whether this has now become a permanent fact of life, or whether this is something that could change over time. But, I don't see any strong inclination in any of these international meetings to simply say, well, we give up, we give in, they've won that particular argument. I don't know if you have a different view of it.
Q: Yes, it was mentioned a few times in passing, but I'm wondering if some of you could elaborate on what we might see coming out of the summit regarding Iraq, if there will be pressure put on Russia to back down from its opposition towards smart sanctions or if we'll see a new direction entirely.
MR. GORDON: Well, I mean, I think the shortest answer is yes. I'm sure we'll see pressure put on Russia to the extent this comes up. Remember, you had at the Security Council consensus for the new initiative among the other four, the Chinese and French were also on board for the British initiative. So I would expect the Americans and the British — the French may not use much political capital with the Russians, but they won't oppose it either, to really talk to Putin and say, this is the sort of thing we're looking for if we want a new relationship, ad to try to make the case that it's in Russia's interests, and so on. So yes, there will be pressure. Will that pressure yield anything? I think almost certainly not.
There's no reason to believe that Putin will give in at the summit when he wasn't willing to give in. This is one of the things he has — just as I was saying Americans have these things that they want Russian acquiescence on, Putin needs to keep in his pockets reminders that that's not for free, and surely Iraq falls in that category. He wants to say, we can negotiate these things, but I'm not just going to give in across the board. And since this is important to us, he's going to hold it in his pocket until he gets something for it.
MS. HILL: Can I also stress on this, this is actually a very important issue for Russia, because this goes to the central issue of Russia's economic foreign policy, because what's at stake for Russia here is future investment in Iraq oil and gas fields. And it's also kind of clear that Russia is not alone in this, but for Russia there's very high stakes, and Russia already has a lot of future agreements with the Iraqi government for its involvement in the development of oil and gas once Iraq goes fully online. So Russia's incentive is to push for the lifting of all the sanctions, certainly not to sort of go along with the U.S. on smart sanctions. So I don't think the U.S. has a great deal of leverage here, there's not a great deal that the U.S. can offer Russia to try to kind of sweeten the pot for Russia, in terms of making changes here. This is too much of a high stakes [issue] for Putin.
Q: Hi, what sort of discussion do you expect on currency relationships? Is this an increasing cause for concern among the G-8 members?
MS. BRAINARD: I think there is some concern about potential currency misalignment, but expect no discussion among the leaders. This is one area where the finance ministers and the central bank heads tend to guard this area very, very closely. And there is some recognition on the part of many of the heads of state, as well that this is an area where central bank independence tends to be the best policy, and reinforcing that is sort of good all around.
There may be some sort of glancing references to it as they discuss privately the state of the world economy. But, the tradition is really not to get into that particular topic.
Q: (Off mike) — Washington Independent Writers. When it comes to issues like biotechnology and genetic engineering and climate concerns, how knowledgeable do you think these leaders are regarding science and health in contrast to their knowledge of politics and business.
MS. BRAINARD: Well, I've observed several of these leaders, as has Jim, of course some of them are new so it's hard to generalize. A few of them have spent a great deal of time, particularly on the biotechnology and climate change issues, on the science and can speak knowledgeably about it. But, the dominant tone of the conversation tends to be more about the complicated politics surrounding it.
One of the arguments that has kind of gone back and forth, particularly on the biotechnology front between the U.S. to a lesser degree the U.K., strongly the Canadians, vis-a-vis, for instance, the French, is this notion that science should be this sort of touchstone of the debate, as opposed to the view that is more reflected in the sort of political landscape in France, which is that consumer concerns, environmental concerns are important regardless of the science. And that's where the whole issue of the precautionary principle comes in, which the Europeans think is extremely important, and would like to see increasingly dominate at the WTO, for instance, and more generally. Whereas, the U.S. position, the Canadian position going in is that these decisions should be made on the basis of sound science. And so you do tend to have that debate play out, but it's more at a level of this sort of politics versus science, as opposed to a deep discussion of the science itself.
Q: I'm Ron Hutcheson with Knight Ridder. I have two questions, the first is, do you expect the talks in Bonn on global climate change to spill into this meeting at all. And the second is, what is Putin looking for from Bush on trade? That seems to be an area where both presidents are eager to make some progress.
MS. BRAINARD: I would be surprised if the discussion in Bonn did not spill into the Genoa discussions. This is a very high stakes negotiations for the Europeans, and they are right in the middle of trying to move forward on Kyoto implementation. The members who are represented in this room are sort of the key, decisive factors as to whether or not the Europeans will be able to move forward, as they wish. So it would be really astonishing if that ongoing negotiation weren't discussed in some detail in the meeting.
And on the trade front with Putin —
MS. HILL: I think there's two main things that if there is a discussion on trade Putin is likely to bring up. The first is WTO membership. Obviously the Russians have been pushing really hard for a speedy accession to the WTO, but with some significant concessions. Some of the recent discussions have suggested that it might take five to ten years for the Russians to bring their legislation in line with WTO requirements. And obviously the Russians don't want to wait that long, especially when some of the other former Soviet states are already members of the WTO, like Kyrgyzstan. Obviously the Russians don't want to have a direct comparison made between them and some of their neighbors. So they're pushing very hard. They already feel that they've got the support of the Italians. The Berlusconi government made a number of very positive noises after the finance ministers' meeting about support for Russia's quick membership in the WTO. So I'm sure that Bush will be expected to come forward on this, too, by Putin, if that's their discussion.
And then the other issue may well be lifting some restrictions against Russian trade, that still kind of fall into the antidumping laws that the U.S. has on steel, and other issues. And also the Jackson-Vanik restrictions on technology exports and imports that are still in effect. That's a very sore point for the Russians, but of course that then also falls into the middle of sensitive domestic political issues for the United States. So I'm not sure there's likely to be any successful outcome on that.
Q: What are the kind of minimum requirements for the Bush administration? You mentioned raising the bar a little from the last meetings. But, what are they looking for? Does he need to mention the European central bank and interest rates, does he need more people on board for missile defense? Does he need to mention the steel complaints, or can the administration come back with a T-shirt that says, I went to the G-8 I Genoa and all I did was sign this lousy communiqué?
MS. BRAINARD: I can speak to a part of that. I think that they have sort of set expectations a little bit low, at least on the G-8 topics as opposed to some of the bilateral issues, so that if there's a very robust outcome on the HIV/AIDS initiative, that will be a good thing. Now, the reality is, I think the aspirations on trade are quite a bit higher, and quite a bit more difficult to reach. So, I think that issue will be soft pedaled, but that would be a very, very big win.
With regard to mentioning the ECB and interest rates, no, I don't think — in fact, I think it would be very unusual for him to want to say to anybody that he had mentioned it or raised it because it does seem like a more technical issue that belongs in the realm of finance ministers.
Steel is something that Secretary O'Neill raised quite a lot at the finance ministers meeting, which is in itself quite unusual. I don't know whether this is something that President Bush is going to want to come back and say he's mentioned. It is virtually a certainty that he will make no progress on steel if, in fact, he sets that as a goal for himself. But, the other kind of a goal is defense, not looking like there was a piling on, for instance, on climate change, or on unilateralism, or on trade. And so that is probably as important coming home.
MR. STEINBERG: And I think going back to the earlier discussion we has about the philosophy, I think what you will hear, it will be something for you all to listen to when the administration briefs in advance, is the sort of notion that, well, you shouldn't expect anything because we don't really think that that's the purpose of these meetings. That this is not an institution, this is not a decision making forum. This is a place of leaders to, in a private and informal setting, to exchange views, and that we, the Bush administration, would like to see this become that kind of vehicle. And that makes it easier to say, well, we don't have a specific agenda objectives, because this is not a forum that makes those kinds of decisions and has initiatives. I think that will be sort of a key test as to what tone they set going into it, but I would not be surprised if that kind of was the general approach that they try to shape public expectations going into it.
MR. GORDON: Remember, after the last meeting when asked about the same thing, Bush said, hey, did you ever see a unilateralist sitting around the table like that and exchange views. In other words, the standard was so low that the discussion itself was meant to accomplishment. And I think that's fine once at the first meeting, you may get away with it twice at the second meeting, but over time all of these meetings become the whole goal is to have a discussion, then I think it starts to corner in terms of perceptions.
MR. STEINBERG: Over here?
Q: (Off mike.)
MS. BRAINARD: What kind of role should Japan take, is that your last question, on Kyoto? I think for Prime Minister Koizumi probably in terms of his domestic politics, this is a good group to be seen with, and getting some endorsement of his reform program would be a very good thing. Coming out of the Bush meeting, that was an extremely high priority. He got very, very high praise. And my guess is that he would want to have that echoed more generally because the program itself is actually a fairly bitter pill to take, and it's going to be difficult to sustain domestic support.
My guess is that his preference on the Kyoto issue would be to keep as low profile as possible, because Japan is really in the hot seat right now, and it's not a very comfortable place to be.
MR. STEINBERG: Okay. I guess we have a couple more right in the middle.
Q: Yes, Mary Mullen with the Bosnia Support Committee. I just wanted to ask about human rights, and the fact that the United States was removed from the Human Rights Commission. Would this be discussed? Is this going to be an important issue?
MR. STEINBERG: I would be surprised. I think that this is probably — it's certainly been a matter of private diplomacy between key, particularly friends and allies of the United States, to try to understand why this happened. And I would, in particular, imagine that vis-a-vis the Europeans, that the administration is going to look for ways to try to reassure or assure in the future that you don't have a situation where there are multiple EU candidates that make it a choice between the EU members voting for themselves and voting for the United States. And I don't think that that particular issue is one that's likely to come up in the G-8 context.
I think that the place where you'll see some discussion of human rights related issues is in Africa, because I think that there's going to be a tremendous amount of focus on Africa, not only on the development issues that Lael talked about, but I think in terms of conflict prevention, in terms of trying to deal with some of the specific ongoing conflicts in Africa, and I think that will be an area where there is potentially some discussion of a human rights dimension as well.
I think the other thing that potentially could come up because it's always sort of in the background there is the international criminal court. And some effort to stand by the Europeans to try to see whether there's some opportunity to soften the administration's position on that, but the tendency of in these meetings is, when leaders feel that there's not a significant chance to get a breakthrough, they don't tend to dwell on issues that are ones in which there is just sort of the kind of sense that it would be unproductive to get into it. So, I would guess, at best, it would be a glancing conversation, and not a deep and substantive opportunity to try to change the administration's mind on that question.
Q: Al Millikan again. From your evaluation of previous summits and conferences, when what is pronounced publicly is made, is this very much in tune with what has really gone on privately in discussion, or are there things which are going to be discussed that probably won't be made public that you think that we should be aware of?
MS. BRAINARD: Well, the one thing that I'm sure you've seen before and you will see again this year is, there is a public statement, which is the communiqué or the chairman's statement. That document is very contentious, it's carefully negotiated. It takes hours and hours and hours, and you really have to be incredibly deep on the details of international bureaucratic kind of language to see the changes from year to year on some of these subjects, especially on subjects that are very contentious, where there is simply a standoff and there is no movement.
So that's usually kind of what is given to the press to kind of summarize the outcome. What you will find is that when topics are discussed in the meetings that are more contentious, you will be able to discern that because the press conferences coming out of the meetings have slightly discordant tones, or if there is a topic that, for instance, the French President Chirac feels he needs to say something strong on biotechnology, and feels like he needs to tell his people that he said something very strong on biotechnology, you will see that kind of reflected in a very different tone in the U.S. press conference remarks than in the French. But it wouldn't be discernable anywhere else. So that's really your best clue as to where there were topics that were discussed that were really contentious, but don't appear actually in the communiqué.
MR. STEINBERG: Another area where you get some very interesting discussion that never appears is when leaders talk about problems that they're facing back at home. Because they feel a very strong bond with each other, they're all politicians, they're all, at the end of the day, although these international issues are extremely important, for them the dominant issues are, what are they dealing with in terms of their own domestic challenges.
And, you often hear, I mean, particularly sometimes from the Russians, but sometimes from others, quite an interesting account of what they are trying to go through to deal with their own challenges, and that is something that I think the leaders value a lot, because it gives them some insight, and sort of allows them to see each other in the ways that they have to deal with their own problems that almost never makes it into the communiqué.
But I think that that part of it is always very unpredictable, because it will turn out that something touches off a bit of conversation, and they can go and spend quite a bit of time trying to deal with it. I remember a couple of years ago in Birmingham there was a really fascinating discussion about the problem of corruption in developing countries, and how do you help leaders deal with that problem. And it went on for about an hour. It was not a topic that was on the agenda or in the communiqué, but because they connected it a lot to sort of the challenges they have in terms of campaign finance, and the like, and it was very personal to each of the leaders. And so it stimulated a lot of interest and lively discussion.
All right. Well, thank you all very much.
(Applause and end of event.)