Financial Post, Weekly edition, Thu 15 Jun 95, page 14

Leaders should break down barriers at Halifax summit

For example, Halifax marks the first time the G-7 will examine our aging international institutions and consider their reform. The draft communique reveals that representatives of the seven leaders have been able to come to an understanding on international financial institutions such as the World Bank and the IMF, calling for greater coherence and coordination among the two as well as reducing unnecessary overlap.

The same can't be said, though, for the section on the United Nations which is cluttered with square brackets. This is due in part to the reluctance of some G-7 members (in particular France) to name names of UN agencies that could be axed. Apparently there is also no agreement on whether the G-7 should endorse a follow-up process for UN reform.

The draft states that ''to remain relevant, multilateral institutions must reduce costs; and be both responsive and transparent.'' This speaks to the UN and its bloated bureacracy as it approaches its 50th anniversary this year.

For example, many countries can happily exist with only one department of agriculture. Why do we need three UN agencies - Food and Agriculture Organization (FAO), International Fund for Agricultural Development (IFAD), World Food Program - all effectively doing the same job?

And with the creation of a shiny new World Trade Organization, agencies such as the United Nations Conference on Trade and Development look increasingly rusty. The same can be said for the UN's Economic and Social Council, UN Industrial Development Organization, and the Regional Economic Commissions.

If the G-7 leaders want to ensure the UN remains ''relevant,'' they should target such organizations and call for the kind of program review their governments increasingly are engaged in at home. The message should be clear: no more blank cheques for the UN.

Trade is another topic on which there is no advance agreement. In fact, the trade section in the draft communique was blank except for the words ''New text to follow.'' This isn't surprising considering the ongoing auto dispute between two G-7 members - the U.S. and Japan.

While the dispute itself will officially be kept off the Halifax table, the summiteers mustn't squander this opportunity to show leadership on liberalizing global trade.

They could begin by reaffirming their commitment to building a strong WTO and rules-based system of freer trade. Renouncing unilateral, punitive trade measures (hello there Mickey Kantor) in favor of using the WTO's dispute- settlement mechanism would be a good first step.

At the same time, the G-7 could help maintain the momentum of trade liberalization by signalling that non-tariff barriers will be the next big item on the trade agenda. The real barriers to market access are now hidden inside nations' borders (hello there Kazuo Asakai) - for example, complex and inhibiting standards and regulations, restrictive procurement practices, licensing procedures and investment restrictions.

The G-7 should also urge that the unfinished business from the Uruguay Round be wrapped up. Negotiations on financial services and telecommunications are continuing, and services, agriculture and government procurement are scheduled for talks.

Most important, however, is to prevent any slippage back into protectionism. This is an inherent danger in a world of regional free trade. The G-7 summit is one place where all three major regions - European, Asian and North American - are represented. What better place to define global regimes for trade?

One way to bridge such regionalism is the creation of a transatlantic free trade zone that Prime Minister Jean Chretien has been pushing for the last six months. As International Trade Minister Roy MacLaren has explained, such an agreement would be a natural fit because of Europe's and North America's shared commitment to open markets and the rule of law. As a result, their relationship could be deepened quicker and easier than between other regions. Chretien should use his position as G-7 host to include this proposal in leaders' discussions.

Critics of the G-7 like to say that since everything is decided in advance, why bother holding the meeting in the first place? However, as the leaked draft clearly shows, views can be shaped by discussion and policies can evolve during summits.

In other words, there can indeed be value in these gatherings.

	This information is provided by the Financial Post.
	Please send comments to: g8@utoronto.ca Revised: June 3, 1995

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