Thesis: Canada and the Future of the G20

Parliament Hill, Ottawa (AWM)

In March 2011, I completed my Policy Analysis Exercise (PAE) at the Harvard Kennedy School, supervised by Joseph Nye. I learned a lot in researching it, and I am grateful to everyone who helped me. 

I wrote about the history of the Group of Twenty international meetings and Canada's role, in light of the 2010 G20 Toronto Summit. (Though I worked on G20 and G7 issues for a few years, I was not involved in the 2010 or 2018 summits.) Now, of course, much of the material is dated.

This project was very much like a master's thesis--but not quite.  I had hoped to take things in a more theoretical direction, but my degree program required me to keep it practical. Hence, my conclusions at the end are rather bland--a missed opportunity, I still think.

A hard copy is available at the Kennedy School Library; here is an electronic version: Canada and the Future of the G-20. The Executive Summary is below.

Executive Summary

This report represents the synthesis of twenty-eight interviews—half of academics, half Canadian policymakers—and literature-based research, to address the question of how the future evolution of the Group of Twenty leaders process (G-20) will affect Canada.

Current Situation
 
The creation of the G-20 leaders forum in November 2008 represented a major change in global governance. For the first time, leaders of major advanced and emerging countries met in a forum of equals.  Since its inception, the group has focused on addressing ongoing global economic difficulties.

Though it represents considerable power and influence, the G-20 is an organization that is very much in flux.  There remains a fundamental question about its central purpose: is it a forum for discussion of economic issues, or a more far-reaching group for action?  In this regard, the group enjoys numerous strengths, including its concentration of power, flexibility, possibilities for new coalitions, and the heavy involvement of leaders.  However, it also suffers from numerous weaknesses, including questionable legitimacy, duplication of the work of other organizations, institutional fragility, excessive formality, and the diverging views of its member states. Finally, there remain questions about the group’s size, which is at once globally representative and possibly too broad.

Future Evolution
 
The future evolution of the G-20 is difficult to predict. However, some changes seem likely, including a gradual expansion of the group’s mandate to non-economic areas. Future policy issues could include development, climate change, security issues, and global governance reform. The group will also face pressures on its membership, particularly with regard to the underrepresentation of Africa and the overrepresentation of Europe. Outreach will be important to maintain relations with non-members, but this should also extend to non-traditional bodies such as civil society, business, and national parliaments.
 
The G-20 will also need to maintain good relations with other bodies and organizations.  Chief among these is the G8, which will likely continue to meet in the near term.  However, to prevent charges that the two forums are competing, the G8 should gradually take on more of a background role.  Some members of the UN General Assembly have resented the role of the G-20, viewing it as a competitor. The G-20 should instead work to consult more broadly with the UN, as a way of reaching out to non-members.  Finally, the G-20 should continue to use the International Financial Institutions for the implementation of agenda items.

The question of whether to establish a permanent G-20 secretariat has emerged as an issue. While there are compelling arguments for and against—greater institutional memory and logistical support, versus the risk of institutional capture—it is arguably too early for the group to make a binding decision.

Canada and the G-20
Canada has long been an active member of the G-20, with former Prime Minister Paul Martin having played a leading role in the group’s initial incarnation as a finance ministers’ forum.  Canada’s hosting of the 2010 Toronto Summit also demonstrated Canada’s G-20 commitment.

Canada brings numerous strengths to the G-20, notably the country’s strong record of accomplishment on macroeconomic and financial issues.  This gives Canada credibility during discussions, as does Canada’s co-chairmanship of key G-20 working groups. Canada also benefits from its tried and true methods of government-wide consultation prior to summits and ministerials. However, Canada also has a share of weaknesses at the G-20, the most evident of which is the country’s smaller economic size.  Canada also lacks a natural bloc of allies and has faced criticism for defending the continued relevance of the G8.

While Canada could embrace alternative foreign policy strategies—such as focusing entirely on the US bilateral relationship or the G8, or embracing variable geometry—engagement with the G-20 remains the most viable strategy.


G-20 Priorities for Canada

Canada’s G-20 strategy should be five-fold:
  1. Promote Global Financial Health: as a highly open economy, Canada has a strong interest in a healthy global economy.  Moreover, Canada enjoys a good reputation on macroeconomic and financial issues within the G-20.
  2. Stay Engaged: Canada should remain highly engaged with the G-20 at all levels. No other forum groups so many key global powers that are so important to Canadian foreign policy. By continuing to co-chair working groups and by hosting G-20 events in Canada, the country can help to strengthen the broader G-20.
  3. Support a Multilateral World Order: Canada has long supported a world order based on multilateral institutions and international law.  The G-20, as a broad-based body, can work to strengthen this system, by encouraging great powers to cooperate and discuss major policy issues.  As a medium-sized country, Canada is highly dependent on a stable, multilateral world order.
  4. Be a Mediator and a Leader: Canada has traditionally played the role of mediator in international settings. In the G7 and G8, this has largely taken the form of attempting to bridge differences between the European Union and the United States. Canada should broaden these efforts, caucusing with other middle powers in and outside the G-20, to build coalitions and consensus.  At the same time, Canada must not neglect its own priorities, and, like every other G-20 member, should not hesitate to pursue its own interests in the broader forum.
  5. On a Secretariat, Urge Caution: The issue of establishing a permanent G-20 secretariat is likely to emerge in the near future.  Canada should stress that, as the G-20 is still evolving as a group, it is premature to decide to form a secretariat at this stage. The risk of institutional capture is too high.  Instead, the G-20 should focus on making better use of the Troika.