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Round Table Contents

Setting the Stage: Canadian Government Perspectives

Canada and the Halifax Summit

Gordon Smith

The Canadian government is now deep in the process of preparing for the G7 Summit in Halifax, and is trying to reach out to groups, particularly wellinformed ones, in order to bring forward as many ideas as possible.

The first point may seem obvious; but it is worth stressing. That is, to what extent is the Halifax Summit, as an event, an opportunity for Canada to influence the course of international events and to voice Canadian concerns on the world stage? Sustainable development and protecting the environment have already been identified as issues for the Summit. So the issue becomes, what role will the environment and sustainable development play, and what specific ideas or initiatives should be advanced under their general rubric?

Canada is chairing the Summit this year, as it does once every seven years, and this presents several opportunities for influence in the process. Certainly it is important for Canada to underscore the value of its membership in the G7 itself. Although Canada was not at the first G7 meeting in 1975, it has been at every one from 1976 on. At present, the G7 as an institution is under scrutiny, both from within and from outsiders, and it is important to take the opportunity at Halifax to put forward Canadian initiatives to build up the role that Canada plays in the G7. Canada is one of the smaller countries in the G7 and, therefore, it is particularly important for Canada to put forward ideas which underscore the value of Canadian participation to the other six members.

Second, as chair this year, Canada has an unparalleled opportunity to influence the substantive discussions at Halifax.

Third, as other countries seek consultations, Canada has the opportunity to strengthen its profile with nonG7 countries on issues such as trade and investment. Both the ASEAN foreign ministers and the Mexican government have recently asked for formal meetings. So, the next few months provide a period where Canada has a considerable international profile, which translates into international opportunity.

The preparatory process for the Summit is now well in hand. A lot goes on behind the scenes, particularly during the meetings of the "sherpas", the prime ministers' and presidents' personal representatives who meet three to four times before the Summit. The idea behind sherpas' meetings is not to prepare in detail the substance of the work at Halifax. It has been stressed by Prime Minister Chrétien and others that the leaders want to have the maximum opportunity for free and open discussion at Halifax, and do not want their conclusions to be precast by officials meeting months in advance. The sherpas will endeavour to create an environment conducive to such free and open discussion.

However, there are some countries that like to have the details of summits and communiqués arranged well in advance. One is constantly striking a balance. The Canadian objective is to ensure that the process is in place and that the framework for the meeting is right, and then to give the leaders the maximum opportunity to discuss what is on their minds.

The sherpas are an interesting group. They do not come from designated positions in the government hierarchies of various countries; rather they are named by the government leaders to reflect the prime ministers' or presidents' or chancellors' confidence in the individual. The result of this is interesting because it means that the sherpas are a mix of people who work either directly for the leaders, such as the president of France, or who come from finance ministries or foreign ministries; thus, some are political, and others are public servants. But that helps to enrich the process. There is also a whole structure of subsherpas from foreign and finance ministries, and political directors who will also be meeting prior to the Summit.

Russian involvement in summits has increased over the past few years. In 1994 in Naples, a formula for Russian involvement was set that will be repeated in Halifax: the Russians will be at the table for the second half of the Summit. Despite the fact that the Russians have told the media that they would like to participate in more than the second day of the Summit, the general view of the G7 is that such should not be the case. The Russians have also indicated that they would like to participate in more than a discussion of political subjects. Although this request depends on how "political" is defined, President Yeltsin has indicated that he wishes to participate in discussions of what he has termed global economic issues. However, the members of the G7 believe that the traditional economic focus of the meeting should not be opened up to Russian participation.

From a Canadian perspective, the 1994 Naples Summit was a success. There was endorsement in the communiqué of language that Canada proposed on trade, which helped to bring about a conclusion of the Uruguay Round. Canada also proposed, and offered to host, a conference on partnerships for the economic transformation of the Ukraine. That conference was held in Winnipeg in late October 1994, and is generally regarded to have been a success. In Naples, Canada also focussed on a variety of other issues, among them jobs and growth, and nuclear safety.

In preparing the Halifax Summit, Canada must provide hooks on which the G7 can build. The principal subject for discussion by the leaders at Halifax will be the review of the Bretton Woods Institutions. When President Bill Clinton visited Ottawa in the middle of February 1995, he and Prime Minister Chrétien discussed at some length the functioning of the international monetary system. Their concern has been the capacity of the system to deal with shocks, a general issue that was brought into sharp relief by the Mexican peso crisis. Perhaps the more recent failure of the Barings Bank in the UK will also raise questions about the way in which the international monetary system is or is not working. But from the perspective of the Canadian Prime Minister, there is a particular focus on the International Monetary Fund (IMF) within the context of the Bretton Woods Institutions.

There will also be an examination of the World Bank and where the World Bank is after 50 years. There are any number of reviews that have been conducted on the IMF and on the World Bank, examining whether the relationship between them is as it should be, and whether the institutions should be modified to accommodate the enormous changes in the world over the last 50 years. The G7 also proposes to look at how the World Bank relates to UN institutions such as the United Nations Development Programme and, under the same institutional heading, to look at the organizations that exist internationally for the environment, to see whether there should be any change in the structure of those organizations, or changes in the relationships between them.

All of these issues have an institutional dimension. As well, feeding into the Halifax Summit is the desire to look at a number of issues, including the environmental agenda, in a substantive way. This means revisiting biodiversity and, above all, climate change and nuclear safety, where it will be necessary to review the situation with respect to Chernobyl and other reactors of that nature which are particularly dangerous.

These are some of the references in the Naples communiqué that are affecting Canadian preparations at this point. There has already been a meeting of the seven sherpas to go through all this, and there will be another in March, by which time there will have been prepared a variety of papers to help define more clearly what issues the leaders will discuss.

In a broader context, based on the sherpa meeting in February, in Ottawa, the overall question is: does the international system have the capacity to meet the challenges ahead? In other words, rather than getting the leaders to look at reform institution by institution--IMF, World Bank, WTO--would it be more effective to set out issues or challenges and ask whether the institutions are equipped to respond to those challenges? These challenges are now being defined.

One of the major challenges is to promote economic growth. A second challenge is poverty, debt and related problems, all of which are tied explicitly to the question of sustainable development. Migration is an issue of increasing importance and can be linked back, through its root causes, to sustainable development. Yet another challenge will be to further international trade liberalization, examining the agenda flowing out of compromises reached during the Uruguay Round, and defining issues of trade and environment.

Political directors will be focusing on managing international conflicts and tensions, particularly in systemic terms. They too, will have a special reference to migration. There will also be discussions of the capacity of the international system to manage a range of issues in the area of international crime, from money laundering to drug trafficking.

So, at present, the governments and the sherpas are trying to define what the issues will be, and to develop sensible initiatives.

One point which is critical is that the leaders of the G7, or in this case the sherpas, do not pretend to speak for everybody in the world on the issues they identify. The sherpas speak for the seven countries, and in doing so set out certain ideas to generate and push debate in the international community. It is very important that nobody thinks that these seven individuals or countries believe that they, alone, have the right to deal with issues, such as the reform of the IMF and the World Bank, which concern a broad number of countries which, as members of those institutions, have their own concerns.

Sustainable development is certainly among the subjects that will be put forward for debate in the

preparatory process. For Canada, sustainable development is a very important issue. However, it is unclear where it is on the agendas of other countries. It is not apparent at the moment that sustainable development is being pushed particularly hard in the other G7 countries, and, while it is still early at this point, Canada has mentioned sustainable development more than the other six countries combined.

There are a variety of other areas that require more attention. National environmental plans on climate change and biodiversity need to be reviewed further to the commitments that were made at UNCED. The issue of nuclear safety may be outside the ambit of the NRTEE; however, the closer to Chernobyl one is, the bigger an issue it is. And the Europeans in particular, but not only the Europeans (the issue was discussed at the February meeting between President Clinton and Prime Minister Chrétien), want action, and want it quickly. However, there is a price tag attached, and it is related to sustainable development. Nuclear safety does not mean simply shutting down Chernobyl (from the Ukrainians' point of view) and other dangerous reactors. The shutting down of these reactors must be done in such a way as to provide assurance that future energy needs will be met. This carries a large price tag.

There are a few other areas which have a particularly Canadian dimension, and which might be worth pursuing in the leadup to Halifax. One is fisheries. Canada is on the brink of a serious confrontation with the Europeans with respect to halibut and turbot stocks off the Grand Banks, which are regulated by the North Atlantic Fisheries Organization (NAFO). The issue of how one manages fishing in order to ensure conservation and appropriate economic use of the resource is extremely important to Canada, and the present international regime is not satisfactory for dealing with some of the difficult issues that arise.

The second issue worth mentioning is forests, and the question of sustainable forestry practices. Until adequate codes can be agreed upon, countries, including Canada, are liable to face trade barriers against exports which are grounded upon nonenvironmental concerns, although such concerns are often represented as being environmentally motivated.

There has been a recent development in Ottawa which is interesting in this context. Flowing from the government's foreign policy review, there has been a small reorganization within the Department of Foreign Affairs and International Trade to create a Global Issues Bureau. This charge is based on the following line of thinking: international relations used to be fundamentally about political and security issues. Most foreign ministries now spend more time on economic and trade issues than on the classical political and security issues. Certainly that would be the case in terms of the resources of the department in Ottawa. But now there is a third wave of issues being introduced with which many foreign ministries are not equipped to deal. These issues include population, migration, the environment (e.g., climate change), cooperation on international crime issues, and cooperation on international health issues, essentially all issues of the global commons. The system must develop the capacity to respond to these global challenges.

A number of groups are responding. Recently, a major study was released by the Commission on Global Governance, headed by Prime Minister Ingvar Carlsson of Sweden and Sir Shridath Ramphal, the former Head of the Commonwealth. Another major study is being prepared for the UN SecretaryGeneral, Boutros BoutrosGhali. So there are a lot of materials, not only concerning the 50th anniversary of the Bretton Woods Institutions, but concerning the entire UN structure, which evaluate the capacity of the international system. At the domestic level, the Canadian government is making a contribution through the Global Issues Bureau, which will provide a focal point for these issues within the Department of Foreign Affairs and International Trade.

There are a number of G7related activities occurring in preparation for the Summit. There will be a G7 environment ministers meeting in late April or early May; there was a meeting in February in Brussels on the information superhighway; and there is an OECD ministerial and a meeting of the Quad Trade Ministers (Japan, US, Canada and the European Commission) coming up in the next few months. All of these meetings will be focussing on elements of the substantive agenda for Halifax.

These are the preparations as they are now in place, and they are on track. Nevertheless, there are two items that could potentially derail the preparations. What is notable about Summits is how many of them get thrown off track by some event that occurs which then preoccupies the leaders at the time of the Summit. There are at least two possibilities for such events to occur prior to Halifax. The first possibility concerns Russia. What is going to happen in Russia? Will the Russians get Chechnya behind them? If they do not, to what extent will that be a problem in terms of the participation that is envisaged for them? If they do, can one then envisage a generally and continuously expanded Russian participation (something which that country still wants)? The general view of many is that President Yeltsin has been weakened by the conflict in Chechnya. So there is a question mark about Russia at this point.

The second issue that might deflect attention away from the Halifax agenda, one which may seem remote, is an outbreak of war in the former Yugoslavia. There is a high probability that the UN Forces will be removed from Croatia. If they are, serious fighting could break out, and this raises a question which the SecretaryGeneral of the UN himself has raised, as to whether it would be possible for the UN Forces to stay on in Bosnia. Nobody knows where this is going to come out. Consequently, a weather eye must be kept out for both of these issues in the leadup to Halifax.

Gordon Smith is Deputy Minister of the Department of Foreign Affairs and International Trade, and the Prime Minister of Canada's personal representative for the Halifax Summit.

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