Overview

For many world leaders, the G-7/8 Summit represents one of their big, guaranteed scenes on the world stage. For the President of the United States, however, the G-7/8 Summit is but one scene in an on-going role, where the U.S. has grown used to playing the star.

The U.S. population has grown used to their leader receiving constant world-wide media attention—the summit will not draw the American public's attention as it will the attention of the populations in other G-7/8 countries.

While the Summit may not substantially raise President Clinton's profile at home, his administration will still use the summit to gain consensus or discussion on a number of key and national agenda items.

The President, plagued by ongoing scandals at home, may use the Summit to score some much-needed points with his Democratic party as congress heads into an election in the fall. His inability to win support from the Democrats for fast-track negotiating authority, is a clear indication that he has some relationship-building to do. While the American public does not seem to mind the series of scandals surrounding the President, the Summit will be a good place to see whether or not his world leadership position has been undermined.

He has already taken steps to help polarize the electorate and aid his party. He is making a public push to raise the minimum wage by one dollar an hour. He argues that with the strength of the economy there will be limited negative impacts and the U.S. can help the working poor. He has also stated his goal to redirect all of the surplus from paying off the deficit to repairing the Social Security Net.

Summit Issues for United States

Education and Employability

While the major theme of the summit is "employment" the U.S. is faced with the unique situation of almost full employment (excluding inner cities and some rural areas). Given this situation, the U.S. will probably not discuss the issue in terms of employment. They will instead discuss their three-part economic strategy to promote smooth adjustments to structural change. The first is deficit reduction. The second is on-going investment in education and training, with a special focus on technology enablement. And the third has been a strategy of free and fair trade where they have "worked vigorously to tear down barriers to American goods abroad."

In reviewing this strategy, the U.S. can claim success. The will have a zero deficit coming up in 1999, and have successfully implemented bills to provide billions of dollars to set up employment programs, training programs, make technology available in the classroom, help the disabled, welfare to work and so on.

The final communiqué will definitely include a firm commitment towards increase each country's ability to adjust to structural economic change. Stronger language around increasing children's access to technology and creating a workforce that embraces a life-time of learning may also be included.

Fighting Crime

The second major agreed upon focus of the summit is planned to be fighting crime. G-8 countries recently announced a series of measures aimed at deterring and apprehending traders in illegal substances throughout the world. As the rest of the world has gone global, so has crime. But the police forces have not built enough trust to share information and combat crime together.

Historically, the U.S. has always lead this discussion, and they will probably heavily push this issue again at this year's summit. The President just declared April 19-25 National Crime Victims' Rights Week. The week is to reflect on all of those individuals who have been impacted by crime, but there is a special focus to remember those impacted by last year's Oklahoma bombing tragedy. The President has also recent launched a new bill controlling the sale of modified military arms. He has also recently reviewed the US's certification process of "ally or enemy" in the US war on drugs. With this initiative to try and cut off supply, he has also tried to cut off demand by launching a $195 million anti-drug media campaign as well as $143.5 million to help communities rid the streets of drugs.

Fighting crime in general is a theme that all governments can embrace. Determining how countries should go about this is a completely different process. Such measures could include increasing training of officials in environmental enforcement, fighting illegal trade and raising public awareness. Some discussion will also occur around the battle against cross-border crime.

African Development

With the recent visit of the President, America has rediscovered Africa. In the Denver summit, President Clinton tried, unsuccessfully, to make Africa one of the top issues. Given his recent high profile in selected countries within the continent, President Clinton will definitely bring the topic to the table with greater success in this summit.

Of the G-7/8 countries, France and Britain have long held an interest in Africa dating back from colonial days. The recent rediscovery of Africa by the States has probably made these colonial powers uncomfortable—France especially did not look kindly on the U.S. presence in an area they considered strictly their own. Clinton actually had to call Chirac mid-trip to avert any sense of U.S./French rivalry.

The U.S. initiatives to open up trade with their recent African trade act will be of limited benefit to Africa, given their current minor levels of trade. They have also forgiven debts of the most-democratically-reformed countries, when they did not have that much debt. Britain and the US have also worked together to conduct multi-lateral debt relief to the poorest Africa nations.

Expect Africa to become some form of commitment where the G-7/8 countries to illustrate that they are not just some rich boys club. Expect careful wording to the effect of encourage on-going development, stepping around the issue of best approach—whether it is trade or aid like some countries like France prefer.

Trade & Investment

With the Uruguay round—the precursor to the World Trade Organization—celebrating their 50th(?) anniversary, the G-7/8 Summit making a commitment to begin the "millennium" round of trade negotiations would seem a logical platform.

Historically, the U.S. has been the world's trade and investment champion. In this summit, however, they will be noticeably silent—or at the most, express lofty, vague goals toward trade and investment some time in the unspecified future. This change in approach can be attributed to a number of reasons.

The Multi-lateral Agreement on Investment (MAI) has effectively been declared dead by the OECD and they are not talking about transferring the ownership of the negotiation to the WTO.

The U.S. continues to sponsor Russia's membership into the G-7/8, but Russia does not yet have a strong enough economy to make strong commitments about trade and investment.

President Clinton failed to get fast-track authority in the fall, as both Democrats and Republicans refused to support the initiative. Fast-track authority allows the President to negotiate agreements on behalf of the United States. The complete package is then brought to Congress where they either vote whether or not to accept the deal, without the right to add numerous amendments which would otherwise bog down and essentially eliminate any chance of a deal being accepted.

At the recent FTAA negotiations, President Clinton mused aloud how Americans have yet to see the benefits of trade agreements. These musings do not bode well to the future of open trade agreements.

Any commitments to trade and investment in this summit will probably be very vaguely worded.

Iraq and Saddam Hussein

Although Secretary-General Kofi Annan signed an agreement with Iraq, it will not make the Iraq problem go away. In a recent report to the Security Council, the U.N. Special Commission, claimed that the inspection program has been so disrupted that they have had "virtually no progress in verifying disarmament." While this lack of progress will not result in immediate air strikes, the lack of progress also means that the sanctions against Iraq will not be lifted.

Both the U.S. and Britain are maintaining a military presence in the Middle East. In February the G-7/8 reaction to the U.S. desire to bomb Iraq ranged from Britain's complete support backed up with a military presence, Canada's limited support which required Canadians stay out of any direct field action, to Russia who openly suggested that the action might cause a world war. Both France and Russia would like to see the sanctions against Iraq lifted.

Expect the U.S. to bring Iraq up at the Summit and work to gain more of a consensus around what should be done to hold Saddam in check.

Asian Crisis: Financial Institution Reform and Japanese Leadership

Expect the US to bring their perspective of the Asian Crisis to the Summit with their ideas of how to avoid the problem in the future. These ideas will probably focus on two main areas: reforming Asian financial institutions and slamming Japan's (lack of) leadership.

Most observers tend to think the worst of the Asian crisis is over. The one last issue to address is Indonesia where the dictator leader is clinging to currency board concept to avoid the full impact of their economy's devaluation. Unlike Hong Kong, they probably do not have sufficient reserve capital to maintain their dollar. When there is enough international pressure, or they run out of capital, the too will need to reform their financial institutions. The US will probably push the G-7/8 countries to make some statement to pressure Asian countries (and other world-wide countries with similar potential problems) to move towards a more transparent banking-model.

The second major area the US will focus on will be on Japan's leadership. The US feels that Japan should provide a stronger stimulus package with more tax cuts to encourage Japanese consumers to stop spending and start saving. They also feel that Japan should open up their economy more to allow other Asian countries to export their way out of their recessions. The US is extremely concerned that Japan's stagflation will fall into a full-blown recession and will end up devaluing the Yen. If this happens, the world economy will be negatively impacted.

While opening up the Japanese market-place would help the other Asian countries, it would also have direct impacts for the US. From the US perspective, if Japan does not open up their economy and devalue their Yen Japan will import less US goods and export more Japanese goods (which will now be cheaper) to the US. This will increase the American trade deficit with Japan—a long standing sore point between the two governments.

Expect the US to slam Japanese leadership—but unless this criticism is followed up with "teeth" of some kind, expect Japan to ignore them.

World Peace Initiatives

The US President has continued to maintain a high profile in the various peace initiatives being undertaken world-wide.

He stayed up all night to give assurances to key negotiators for the Northern Ireland peace pact.

His Secretary of State, Madeline Albright has set up meetings for May 4 with Benjamin Netanyahu & Yassar Arafat. There have been recent positive signs that these stalled Middle East talks might start up again with British Prime Minister Tony Blair's assistance.

Kosova remains an on-going problem in Serbia. The President continues to exert influence to achieve peace in this area. Over the next year, other issues are sure break out around the world.

Although the US will want to positively influence the May 22 Northern Ireland referendum, they will not want to appear to voters as outside interference. To avoid the perception of interference and to recognize that the Mid-East process has no guarantees, expect the commitment move to a higher, more generic level where G-7/8 countries will endorse an overall movement to world peace.

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Prepared by Paul Skippen, University of Toronto G8 Research Group, May 1998.

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