Europe and the Emerging Powers at the G8 Summit: "Taxation without Representation"

Never let it be said that diplomats are good at math. At July’s G8 Summit in Aquila—where one might expect, say, eight heads of state to show up—44 heads of government and international organizations will arrive to sample the Italian cuisine, communiqués and confusion. Amidst the confusion, a major opportunity is being missed.

Over the past eight years, the major European states consistently bemoaned the Bush administration’s disdain for the multilateral order the United States built after World War II and from which Europe has profited since. Europeans were frequently frustrated by President Bush’s reticence about formalized cooperation, even with America’s traditional allies. That the second Bush term saw a quiet return of the United States to such institutions as the UN was modest compensation.

In the lead up to the Obama administration, Europe’s policy elites set their sights on a revitalized multilateral order. In European policy coordination sessions, the issue of strong multilateral institutions often rose to the top of the agenda. Europeans sensed—correctly so—that Barack Obama’s foreign policy strategy would be multilateralist in its essence, if not in every tactical choice. So far, the administration’s rhetoric, stance and action on the international cooperation agenda has been balm to Europe’s multilateralist soul.

Europe’s capitals understand that revitalizing multilateral cooperation is not just about American coming home to the institutions it founded. The world has changed, most importantly in the increased clout of the “rising powers”—above all China, but also India, and on some issues and in some (important) regions Brazil, Mexico, South Africa and the Persian Gulf states. Bringing these actors into a constructive role in the management of global problems necessarily means giving them a seat at the table. This leaves two choices: broad expansion of the G8, the UN Security Council and the IMF board to accommodate all of these powers and the existing members; or narrower, more manageable expansion—with over-represented Europe giving up some seats to make room for the emerging powers. Abstractly, most Europeans accept the latter as the right choice. The move toward common European foreign policy structures makes this choice all the more logical.

At the IMF and the Security Council, intra-European disputes make this negotiation hard. Will the Dutch consent to give up voting shares at the IMF in favor of a coordinated European position, in order to make room for China? Sure, on the same day that the UK and France give up their permanent seats in the Security Council to make way for a common European seat. Europe has yet to come to grips with the fact that it will have to negotiate with itself on how European seats at the various tables are distributed—no one else accepts the idea that just adding more seats is a viable alternative.

The G8 should have been easier. There’s an established group— the Outreach 5— of emerging powers with which the G8 has agreed to consult. Just adding the 5 to the 8 would create a serious, manageable body to deal with key issues. An alternative was the G-20. The last act of the Bush administration was to call together the financial G-20 to help manage the financial crisis. One of the first big foreign policy moves of the Obama administration was to lead the negotiations at the second G-20 meeting (in London) and then invite the G-20 to come to Pittsburgh to continue the work. The G-20 has a solid core of sensible and geographically spread countries that would make the right starting point for building the political relationships between the rising and the existing powers we’re going to need to tackle major problems ahead.

Europe’s moves to date? The Dutch and Spanish gate-crashed the first G-20 meeting, which made the British feel compelled—for reasons of regional balance—to invite the Thais and Ethiopians to attend the London meeting, resulting in a meeting of 23. (Yes, 20 plus 4 should equal 24. But there are only 19 states in the G-20. Don’t ask. See first sentence.) G-20 inflation has continued, and now 28 or 29 states claim membership in the group. For Aquila, Italy also decided to invite Egypt to join the “Outreach 5” without asking the five states in question, who unsurprisingly rebuffed the proposal. Officials in the Obama administration who at first looked favorably at the G-20 as the next step for the evolution of the G8 now look askance at it’s burgeoning numbers and chaotic management.

For all the superficial absurdity of the “who’s in, who’s out” game being played now with seats at the world’s top tables, there’s a serious point here. Both the U.S. economy and increasingly also U.S. national security are interdependent with a globalized world. American job opportunities are shaped by fiscal decisions in China; Americans’ health is affected by the management of infectious disease in Mexico and Asia; and America’s security is directly connected to the viability of states and the virility of terrorist and criminal organizations in far-flung corners of the world. This is not a world the United States can manage by itself—it is a world of “problems without passports” that demands extensive, ambitious international cooperation to tackle them.

This is not about seats at the table—it’s about how we build the tools we need to protect American security and American jobs. Is there any doubt we need better stabilization and peacekeeping to deal with fragile states? A job for the Security Council, surely. But India—arguably the most important contributor of forces to UN peacekeeping—doesn’t have a seat at the Security Council and has no intention of continuing to carry the load for a system in which it has no vote. Is there any question that we need better management of the global financial system, to prevent the next crisis? Yes, a job for the International Monetary Fund. But China’s voting rights on its board no longer match its role in the global economy, and Beijing isn’t going to consent to rules it has no power to shape. Americans should recognize the problem. It’s the modern, globalized version of “taxation without representation.”

Issue by issue, the absence of mechanisms that link the western and emerging powers is a direct block on building more effective tools to manage the global economy and global security. And that means the American economy and American security are more vulnerable. It is time to get serious about forging new modes of cooperation to manage global problems. That means making decisive changes to the governance of key global institutions, not just inviting dozens of states to participate in meetings in an ad hoc way. Bringing the rising powers into the G8 is the right first move. At Aquila, Europe is off to a bad start.