1. Canada's G7 Diplomacy, 1975-1996: Implications for Taiwan

Since its admission to the G7 in 1976, Canada has traditionally viewed the Summit as a forum whose potential exceeded its initial explicit purpose -- that of fostering economic coordination. Smaller than the UN, with a majority concentration of the world's economic and political power, the G7 was an institution uniquely suited to meet the challenge of global governance. As the G7 empirically embodies the characteristics of a modern concert system, Canadians saw their participation in the G7 as an unequaled opportunity to promote core national interests and values within a global arena.1 Thus, the G7 was seen as an important institution to foster and promote the spread of democratic governance and human rights. Indeed, this purpose was clearly expressed at the conclusion of the 1976 Puerto Rico Summit, by Prime Minister Pierre Trudeau, who captured the essence of Canadian aspirations with his statement :

[T]he success of these conferences are…not to be judged by the solution of individual economic problems or by the setting up of new institutions or by the agreement on any particular resolution. The success will be judged by whether we can influence the behaviour of people in our democracies and perhaps even as important the behaviour of people on the outside who are watching us, in a way in which they will have confidence that our type of economic and political freedom permits us to solve problems.2

This Canadian perception of the purpose and potential of the Summit has clearly shaped the issues that Canada has pursued at the G7. As well, the potential of the G7 to advance national interests and values has increasingly shifted Canadian attention away from the United Nations and Atlantic institutions toward those of the G7 (where the power lies and from where successful issue management has come). Moreover this potential has increased Canada's desire to make the G7 a collective success, especially as the G7 uniquely admits Canada as an equal in its own right to the institution's central management core. Within the G7, the decline of American pre-eminence and emergence of alternative centres of leadership, together with growing institutional capacity, fixed membership, and broadening agendas have enabled Canada to increasingly practice “the diplomacy of concert”. More specifically, within the G7 Canada has increasingly succeeded in: securing a presence as a full member of all G7 groups; participating equally to assert Canada's distinctive interest-and- value-based priorities, positions and program initiatives; practicing coalition diplomacy with any member as interests direct; prevailing with these coalitions to produce the Summit's collective results; and doing so in ways that produce acclaim at home and effective implementation and compliance by members and outsiders alike. Its effective equality is evident in its ability to veto items antithetical to its interests, secure Summit endorsement of key interests and initiatives (as on South Africa and high seas overfishing), and be looked to for leadership on areas of comparative national advantage (such as relations with Ukraine). (3)

Yet successful summit diplomacy and the optimal functioning of the G7 as an institution is, in Canadian eyes, based in many ways on the exclusivity of G7 membership. The concentration of power within the Seven as well as its restricted size allows it to act quickly to avert or ameliorate financial or political crises. The restricted size also allows Canada, as the G7's smallest member, to make its voice heard and, by forming coalitions within the G7, to affect the decisional outcome of the Summit at the highest level.

Canada thus resisted a series of attempts to expand the G7 to embrace other middlepowers such as Australia, whose candidacy the Japanese promoted in the 1970's and the Reagan administration in the 1980's. Canada readily accepted a role to mediate differences between the United States and France at the 1989 Summit, and thus to contain the desire of President Mitterrand to involve many developing world leaders in the Summit's deliberations. Canada also did not participate in the immediate pre-Summit meeting which the United States and Japan held with Indonesia, chair of the Non-Aligned Movement, in 1993. Finally, while Prime Minister Chrétien was initially predisposed, along with his French and German counterparts, to favour full Russian participation in the G7, he readily adjusted to the more reserved views of the United States, Britain and Japan.

At the same time, Canada has long sought to increase the global legitimacy and effectiveness of the G7, and the strength of its own voice at it, by systematically consulting with middlepowers and international organizations in advance of, and as a follow-up to, the annual G7 discussions. It did so most extensively when it hosted the 1995 Halifax Summit, in recognition of the fact that its Summit emphases on achieving a broad reform of international financial and other institutions would require the understanding and consent of countries well beyond the G7 and OECD. (4) This was particularly the case for items such as a strengthening of the financial reserves available for an emergency response to currency crisis, where the formidable exchange reserves of the Asian tigers would be required to supplement, through the New Arrangements to Borrow (NAB), the traditional mechanism mounted by the G10 through the General Arrangements to Borrow (GAB). (5)

Throughout the years, Canada has proven to be an unusually active participant in both the preparations for the annual Summit and in the discussions at the leader's table, enjoying increasing success in shaping and setting the Summit's agenda. From the start Canada was allowed to lead among the G7 on issues of importance and particular national interest and capability, beginning with energy and arms control (where Pierre Trudeau broadened the economic topic of energy on which he was assigned the lead in 1976 to include the political-security issues of nuclear energy and nuclear proliferation). Canada has also pressed to broaden the Summit's agenda to embrace political-security and transnational-global issues more generally, and has traditionally pursued initiatives centered around the issues of democracy and human rights, multilateral trade liberalization, international financial system management, north-south relations, the environment, arms control and regional security.

Canada's singular concern with using the G7 to promote the global spread of democracy and human rights was evident in 1987, when Prime Minister Brian Mulroney pushed alone, with ultimate success, for a statement of G7 concern over the rising repression in defence of apartheid in South Africa. At the 1988 Toronto Summit, Mulroney persisted in this goal, highlighting the importance of a concerted G7 effort to put an end to this form of institutionalized racism, and thus associating the United States, Britain, Europe and Japan with a more hard-line approach. Mulroney, along with his foreign minister, Joe Clark, brought this issue to both the ministerial and leader level, creating a strong consensus among the Seven for action, evidenced by a G7 endorsement recommending specific and wide-range reforms to the government of South Africa. This momentum was reinforced the following year at the Paris Summit where strong G7 disapproval of South African policies was registered, exerting concerted pressure on that country's government for reform.

Similarly, at Paris Canada led the Seven in a public condemnation of the PRC's massacre of student protesters in Tienanmien Square. Prime Minister Mulroney combined with host President Mitterrand, against the resistance of Japan and the United States, to achieve an endorsement of high-level sanctions aimed at China, including the suspension of bilateral ministerial contacts, and the suspension of arms-trade and World Bank loans to China. The two continued their emphasis at Houston in 1990, where, despite a relaxation of sanctions, the G7 continued to express collective concern and thus exerted a deterrent effect on future PRC action.

The issue of multilateral trade liberalization is another of Canada's traditional emphasis within the G7. With the most open economy of the G7, with its trade overwhelmingly concentrated on G7 partners, and with a desire to diversify its trade from a pre-eminent United States, Canada has long looked to the G7 and its trade ministerial Quadrilateral (operating since 1982) to prevent protectionist pressures at times of recession in the global economy, to provide impetus to launching and completing rounds of multilateral trade liberalization, and to managing bilateral trade tensions between its two largest trading partners, the United States and Japan. (6) From 1985 onward, Canada, with the co-operation of the United States and the United Kingdom, sought with some success at the Summit to contain the use of agricultural subsidies. Canada has also provided effective leadership in trade over the initial opposition of the United States. In 1993 the United States initially resisted Canada's proposal, advanced at the spring preparatory meeting of personal representatives (or "sherpas") in Hong Kong, to use the Summit to secure and endorse the market access agreement that would lead to the long-awaited conclusion of the Uruguay Round. Nonetheless, by pressing forward with its proposal, and securing an agreement to bring the Quadrilateral trade ministers to Tokyo Summit to conclude such a deal, Canada was able to use the G7 to obtain the completion of the Round in early 1994. (7) As host of the 1995 Halifax Summit, it also organized the process, including the presence of the trade ministers on site, to defuse a looming U.S.-Japan dispute over automotive trade. (8)

Another Canadian emphasis, of growing prominence as the globalization of the 1990's intersected with the openness of the Canadian economy, was financial system management and reform. As an early pioneer of floating exchange rates, Canada has long found the G7 regime of multilateral surveillance and selective intervention in foreign exchange markets superior to the more formal regime and fixed rules of the IMF, especially after Canada's admission to the G7 Finance Minister's group at the Tokyo Summit of 1986. Jean Chrétien, as a former Finance minister who had participated in the 1978 Summit, sought to have the 1995 Halifax Summit he hosted focus on reforming the international financial system created in 1945, and to explore ways to make national currencies and payments balances less subject to the trends of the markets and those who drove them. Against European opposition he persisted with the former emphasis. The Mexican peso crisis of December 20, 1994, which threatened to spread to attack the Canadian dollar and caused Taiwan to hold an emergency cabinet meeting to consider the implications for its currency, catalysed widespread support for this Canadian emphasis. (9) The subsequent collapse of Barings Bank encouraged Canada to add to the G7 agenda the issue of prudential surveillance, and the way in which poor regulation of national banking and securities systems can create financial crises of systemic proportions.

A further Canadian emphasis has been on north-south relations. Beginning in 1988, Canada secured Summit agreement for a one-third reduction of the debt burden of the poorest, and supported British-led efforts to extend the degree of relief in subsequent years. Canada also strongly supported the efforts of France, as host of the 1996 Lyon Summit, to focus the G7 on the development agenda.

Another of Canada's traditional G7 concerns is environmental protection. Beginning in 1985, Canada, along with Germany, advanced environmental initiatives within the Summit forum. At the Canadian-hosted Summit in 1988, Prime Minister Brian Mulroney firmly established the environmental protection and sustainable development agenda that was to dominate the Summit agenda at Paris in 1989 and form a core element in subsequent years. During the 1990's Canada used successive Summits to secure an endorsement for its desire to curtail high seas overfishing off Canada's coasts and elsewhere. It thus secured the international legitimacy that helped its unilateral action in the spring of 1995 conclude a United Nations Convention on High Seas Overfishing and Straddling Stocks.

Canada has worked from the start to give the G7 a political-security agenda, and thus to move the global management of this policy arena away from the United Nations Security Council and the veto powers that control it. The first Summit Canada hosted, in 1981, produced the first freestanding Political Declaration from the G7. It also gave the initial impetus to the Missile Technology Control Regime, which has become a constraint on PRC action and influence. In 1983, Pierre Trudeau, working with François Mitterrand, forwarded Canada's non-proliferation objectives by securing Summit endorsement of the principles that propelled his 1983- 4 peace initiative aimed at superpower arms control. More recently, Canada obtained from the Halifax Summit acceptance of the principle that multilateral development assistance should not be directed at countries which maintain excessive military expenditure.

As a Pacific power, Canada has also worked with Japan and the United States to have the Summit give attention to and assume responsibility for Asian issues, including those of Asian security. It has thus readily endorsed G7 action on Indochinese refugees in 1979, the peace process in Cambodia, and assistance for the Korean peninsula. (10)

These traditional Canadian emphases at the G7 have coincided well with Taiwan's interests. Taiwan shares Canada's interest in having the G7, rather than the United Nations Security Council, serve as the effective centre of global governance, especially in the political-security field. Such an architecture embeds the shared social purpose of democratic values at the core of the governance institution and replaces Japan for the PRC as the voice of the Asian region and the broader non-western world. Moreover, it lessens PRC leverage on the West, as the PRC has skillfully employed its veto power, and ultimate agreement to abstain on UNSC votes (over Haiti, Iraq and Bosnia), in order to extract concessions from other members in other areas.

Moreover, Taiwan has a vital interest in the G7 affirming and extending the principle of democratic governance and human rights on a global basis, and in collectively applying its concern to PRC behaviour in particular. The strategy of the PRC depends critically on its ability to deal with western major powers on an individual basis, by promising them the economic rewards through commercial contracts that are at a premium in the post European Cold War period. (11) The action of the G7 in speaking collectively about human rights concerns, doing so at the highest levels, and in a forum that attracts widespread publicity, represents a setback to this strategy.

In the economic sphere, the openness of the Taiwanese economy and its extensive affiliations with G7 members in finance and trade create a strong Taiwanese interest in stable global economic management through a forum in which the PRC is uninvolved. The G7-incubated creation of the New Arrangements to Borrow provide Taiwan, with its substantial foreign exchange reserves, with a potential source of influence within the G7. At the same time, as the magnitude of the 1997 Asian currency crisis demonstrates, it is to Taiwan's advantage to have a global rather than merely regional mechanism for currency stabilization and one that does not depend unduly on the financial contribution of the PRC. It is thus noteworthy that Canada, along with the US and Japan, was a participant in the November 1997 meeting of Asian deputy ministers of finance that constructed the "Manila mechanism" to support the currencies of and banking system reform of Asian economies in the immediate leadup to the Vancouver APEC leaders meeting. (12) Similarly, as Table A indicates, the prominent place G7 countries occupy as Taiwan's trade partners gives Taiwan a substantial stake in an open, rules-based trading regime constructed and managed on a global rather than merely regional basis. (13)

In the security sphere, Taiwan shares with Canada an interest in using the G7 to contain the vigorous arms race in Asia. To be sure, there has been no action on earlier proposals for G7 military chiefs of staff to meet yet the gathering of G7 policy planning directors during the Gulf War, the role of the G7 in assembling financing to mount the coalition effort, and the widespread expectation that Canada would participate militarily alongside its G7 colleagues in any military effort on the Korean peninsula, all directly support Taiwan's essential security concerns. (14)