Scholarly Publications and Papers
Help | Free Search | Search by Year | Search by Country | Search by Issue (Subject) | G8 Centre

Canadian Foreign Policy and the Seven Power Summits

Timothy Heeney

Country Study Number One
Centre for International Studies
University of Toronto
May 1988

[Previous] [Document Contents] [Next]

This has been widely hailed, both then and now, as the first "failed" summit. There were no new leaders at Versailles. But the world-wide recession was reaching its lowest point which put these leaders under enormous domestic pressure. Thatcher was also in the midst of a war in the South Atlantic which preoccupied her throughout the summit.President Reagan's monetary policy, particularly its very high interest rates, was the focus of much of the debate, but the Americans refused to budge. In an effort to avert discussion from its monetary policy the USA tried to shift the talks to the issue of East-West economic relations. But here the focus of debate was again on US policy and its attempt to stop the Soviet-European gas pipeline. One participant has described the general atmosphere of this summit as "all show", but differences between the leaders could hardly be concealed.(72)

The communiqué was very short due to the French desire to return to a more streamlined summit and there was no political communiqué. But there was some limited progress made in the area of international monetary policy. Preparations for the summit had highlighted the beginning of what was to be an issue at many summits to come - the 'convergence vs. intervention' debate.(73) The French were the strongest proponents of coordination or Intervention while the Americans steadfastly believed in cooperation or convergence.(74) They agreed to disagree but decided to set us a group of finance ministers (later named the G-5) to meet regularly to conduct "multilateral surveillance". The G-5 would become an integral part of the summit process from this point onward, one which Canada and Italy would not be a part of until 1986. There was little else of substance agreed to at Versailles and the summit as an institution came under heavy criticism in the media due to the lack of clear progress made on any issues.

According to Prime Minister Trudeau Canada had a difficult summit", but at least it had been invited to this first meeting of the second cycle.(75) The most significant development since the Ottawa summit was Canada's membership in the first ministerial, permanent "son of summit" institution, the trade ministers Quadrilateral. Putnam and Bayne claim that this group was established at the Ottawa summit. But Robert Johnstone, the senior civil servant in charge of trade in Canada Department of External Affairs, attributed it more to the American Bill Brock who formed it independently of the summit process.(76) Regardless of how it was formed, Canada was a member, although Mr. Johnstone claims that we would have been a member even if we were not a member of the Summit.(77) Since its inception, however, this semi-official group has become closely linked to the summit because of similar membership.(78)

Prior to the Versailles summit, Trudeau was under extreme domestic pressure due to the severity of the recession. He hoped to use his status as one of the most senior statesman of the summit (only Schmidt had been to more) to pressure the United States to lower interest rates. According to Canadian media reports, Trudeau "led the battle'' against US monetary policy, but this was not confirmed.(79) What did get some international press coverage was Trudeau's attempt to mediate the dispute on East- West economic relations. UPI reported that Trudeau had to step in on a ''supercharged" session on this issue to act "as referee".(80 )A member of the Canadian delegation was quoted as saying that "our policy is to emphasize areas of cooperation and policy coordination, since Canada gets hurt when the big guys start to throw chairs."(81) Another "senior official" was quoted as saying: "[Trudeau] feels somewhat the guardian of the summit tradition, and is impressed by the need to maintain constructive dialogue."(82) At this summit he was not particularly successful although there was an informal agreement that the USA would stabilize the dollar in return for some restrictions on European trade with the Soviet bloc.(83)

Trudeau also failed to promote serious follow-up discussion on North-South issues, probably because of the recession. He did not show enough interest in exchange rate reform to be included in the G-5. The United States also used Canada as a prime example of how government subsidies can distort trade by referring to the recently completed sale of subway cars to New York City by Bombardier, a Canadian firm which received government assistance.(84) This did not help Canada's reputation as a responsible summit member. Nor did recent establishment by Canada of the internationally unpopular Foreign Investment Review Agency (FIRA) and National Energy Program (NEP). Canada narrowly pulled through Versailles, as did the institution of the summit itself.

Source: Centre for International Studies, University of Toronto.

[Previous] [Document Contents] [Next]

G8 Centre
This Information System is provided by the University of Toronto Library and the G8 Research Group at the University of Toronto.
Please send comments to:
This page was last updated .

All contents copyright © 1995-99. University of Toronto unless otherwise stated. All rights reserved.