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A security official picks up a flag after wind blew it over during the G7 Finance Ministers summit in Whistler, British Columbia, Canada, May 31, 2018.  REUTERS/Ben Nelms - RC1C003FD610
Order from Chaos

What to expect at the G-7 summit

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Editor's Note:

On June 4, the Brookings Foreign Policy program held an on-the-record media briefing ahead of the G-7 summit in Quebec on June 8-9. Below are the five scholars’ remarks on that issue, edited for clarity.

Joshua Meltzer, Senior Fellow in the Global Economy and Development program: Just when you thought that it couldn’t get a whole lot worse, it keeps getting worse. In some way, that’s not particularly surprising. Unfortunately, with the failure to extend waivers to the EU, Canada, and Mexico, regarding new U.S. tariffs, Section 232 tariffs on steel and aluminum are going to come into effect. I think Trump has been using tariffs as sticks, essentially, to get others to do what he thinks is necessary. It was clearly never going to work, certainly not with the EU—but that that waiver is now expiring is to be expected.

With Canada and Mexico, however, I actually was a little bit surprised. I thought that in the context of the NAFTA negotiations—which according to all reports seemed to be going quite well—and the push last month to try to meet the summer trade deadline that House Speaker Paul Ryan had set for actually getting a trade agreement through Congress, that there was some progress there. The fact that Trump would be prepared to put tariffs on Canada and Mexico signifies that they’ve come to the conclusion that they’re actually a fair way off from concluding NAFTA, or somehow that this would actually get it over the line. If it’s the latter, that’s clearly not going to be the case. In fact, we’re probably in a period of more difficult politics and a harder slog on NAFTA than we recently thought.

All of this is part of the context of the G-7 discussion. Secretary Treasury Steven Mnuchin is doing his best to play the free trade hand in the administration, fielding claims about U.S. leadership, for instance. I wouldn’t want to overstate what these tariffs mean more broadly for trade, since we’re clearly going through a particular moment. I also think that the G-7 leaders are clear-eyed about China, including on whether it has the genuine willingness or capacity to take on the type of role that the United States has played. Overall, I think the United States will still be central to a lot of major trade issues, but it’s just going to be very difficult given the politics of the moment.

Geoffrey Gertz, Post-Doctoral Fellow in the Global Economy and Development program: I agree that tariffs are going to be the big issue at the upcoming G-7 meeting. It certainly was the biggest issue at the most recent meeting of the finance ministers. The other G-7 members are very upset at the United States right now, and I think Canada in particular is very upset. It was clear from Canada’s rhetoric when the most recent steel and aluminum tariffs came into effect that there was a lot of anger at the tariffs themselves.

There’s particular anger at the national security justification. The Canadians are very upset at the idea that they are in any way perceived as being a national security threat to the United States. They view that as a ridiculous position and beyond the pale, far beyond the actual economic impacts of any of these tariffs. The Canadians have been putting a lot of effort into managing U.S. trade relationships since Trump came into power, and they’re getting a bit tired of it. They’re not quite sure where to go next. As Josh was saying, NAFTA talks seem to have hit an impasse. While we might have been close to a deal maybe a month ago, now it’s looking like that could be much further off. Again, I think the Canadians had a very emotional response to these tariffs, and are going to make those feelings known.

Having said that, I’d be surprised if any big announcements come out of this meeting. I don’t think we’re going to solve this trade problem at the meeting this week. I still think that ultimately, a negotiated settlement will happen, but it’s going to take a longer time than we have at the moment. I wouldn’t expect this problem to be resolved.

The other big question on the agenda is going to be the China trade relationship. Also last weekend, Wilbur Ross was in China, looking for a U.S.-China trade deal. That didn’t happen, and those talks are ongoing. Really, from the rest of the G-7’s point of view, the obvious strategy is that the G-7 should be working together to come up with a joint strategy towards China. I think the EU and Canada are very tired of having to deal with the American trade tensions rather than having a longer-term, more focused view of what are we going to do about the China trade question, which I think is the bigger, long-term question that the G-7 needs to reckon with.

Samantha Gross, Fellow in the Cross-Brookings Initiative on Energy and Climate: To continue on the theme of anger at the United States, Canadian Prime Minister Justin Trudeau would definitely like to avoid the G-6 +1 kind of outcome that we saw at the last G-7 meeting in Italy, with the U.S. abstaining from the overall statement on climate change. However, that’s going to be a difficult thing to pull off given the stance of the Trump administration right now.

Trudeau is also in a really difficult position on this front. It’s been a signature issue of his administration, but he’s getting a lot of flak from his political left right now over the Canadian federal government buying the Trans Mountain Pipeline expansion, the pipeline that goes from Edmonton out to the British Columbia coast and carries not entirely, but primarily, oil sands products. This has been a bit of a challenge for his administration right now, and may affect what he can do domestically.

The interesting thing is that the G-7 group has a lot of energy common interests, particularly around natural gas. The fact that U.S. natural gas production and exports are expanding, both to Canada through pipelines and everywhere else through liquefied natural gas (LNG), is actually very helpful to G-7 interests, but I wonder if we will find common ground with the other G-7 countries given everything else that’s going on around energy issues. My gut feeling is that the absolutely urgent will outweigh the merely important, and that we won’t get deeply into energy and climate issues at this G-7, especially given the challenges that the Canadians face at home, but it’ll be an interesting thing to watch how any sort of statement that comes out on energy and climate is handled.

Thomas Wright, Director of the Center on the United States and Europe and Senior Fellow in the Project on International Order and Strategy: It’s worth discussing the broader geopolitical context for the summit, because we’ve found in the past that these meetings have a formal agenda, but then whenever you get the seven leaders in a room, they talk about what they want—including the main issues of the day. I think that in that sense, the broader context—as others have notes—is about the tensions between President Trump and other countries.

I think the most prominent may be Japan. Prime Minister Shinzo Abe is coming to Washington later this week, just before the summit between Trump and North Korean leader Kim Jong-un. This is the second visit in a relatively short period of time. It’s entirely about Abe’s concern that Trump will not take into account Japan’s interests at the forthcoming summit with Kim Jong-un. That’s top of his agenda, and there’s considerable anxiety in Japan about that.

In France, President Macron will meet President Trump for the first time after really having gotten nothing from him regarding the Iran nuclear deal (the Joint Comprehensive Plan of Action, or JCPOA). Macron was in Washington a couple of months ago, trumpeting a very close, personal relationship with President Trump, but this decision on the JCPOA, while expected, was particularly harsh in terms of its scope. I think we’ll be watching that one closely, as well.

On the United Kingdom, President Trump will visit London in July. Relations with the U.K. are pretty bad at the moment. There have been a series of minor spats over various tweets by the president, but the broader problem is difficult negotiations on the free trade agreement between the United States and the U.K., and problems on the U.S. side in terms of negotiations at the World Trade Organization (WTO) regarding Brexit.

On Germany, Chancellor Angela Merkel has had problems in her relationship with President Trump. Meanwhile, the recent comments by the U.S. ambassador to Germany, Ric Grenell, probably won’t help in that regard. Finally on Italy: The new populist prime minister, Giuseppe Conte, will meet his fellow leaders for the first time. We’ll be watching closely to see how he gets on with President Trump and whether there’s any rapport between them, because of their populist roots.

Tarun Chhabra, Fellow in the Project on International Order and Strategy: Recall that the G-7 (originally the G-6) was founded to sustain an open international economic order, which includes combating protectionist tendencies. In that sense, these trains have been destined for collision. Trump’s long-established, and apparently unwavering, views about trade cut against the very raison d’être of the G-7. At the same time, the president seems to relish being there because he loves being the eye of the storm.

The Charlevoix G-7 is also a tragic, missed opportunity to put pressure on China. There’s a burgeoning bipartisan consensus in the United States, along with growing anxiety in Europe, that is coalescing around the need to crack down on unfair and unlawful Chinese trade practiceson non-tariff barriers, on intellectual property theft, forced technology transfer, and so on. The Trump administration could have used this opportunity to rally Europe and Japan around a common agenda to turn the screws on Beijing. Imagine if he had done that, and then went on to Singapore to somehow draw blood from a stone: some sort of plausibly verifiable, phased deal to denuclearize North Korea. He would command tremendous, bipartisan approval for his foreign policy, especially leading into the U.S. midterm elections in November. But Trump’s antipathy toward U.S. alliances is, unfortunately, just as entrenched as his protectionist views on trade. And the missed opportunity vis-à-vis China is historic.

I’ll also be paying attention to the role that National Security Advisor John Bolton plays in coordinating the G-7 leaders’ communiqué. Last year, the administration had been in office for only a couple months before the G-7 meeting in Sicily, and it was then-National Security Advisor H.R. McMaster, then-Secretary of State Rex Tillerson, and then-National Economic Council Director Gary Cohn in charge of the choreography. All three were working to smooth over the tensions with U.S. allies that Trump’s policy views naturally engender. Now, however, it’s Bolton, Secretary of State Mike Pompeo and National Economic Council Director Larry Kudlow, all of whom, for different reasons, may be less inclined to defy the president if he wants to throw a grenade into the G-7 discussions. They might also have some significant disagreements about the upside and downside of ticking off U.S. allies. Perhaps you’ll see a much shorter communiqué.

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