G7 Canada The Charlevoix Summit by Global Governance Project

JUNE 2018 | G7G20SUMMITS.ORG

Welcome to Quebec

Canada as host seeks enduring commitments on international priorities

Equality for all

Five global themes coalesce into a progressive agenda

Dynamic solutions

The G7 is tasked with building a more peaceful and secure world

Setting new standards Sustainability is at the heart of everything we do at AkzoNobel. It’s vital for the future of our company, our society and our planet. We have a passion for paint which drives our innovation and helps people to overcome the challenges they face every day. Whether we’re developing paint that keeps buildings cooler or coatings that make the shipping industry more efficient, we’re always striving to embrace a more sustainable way of working. That’s why we’ve been top of the Dow Jones Sustainability Index for five out of the last six years. And we’ll continue to use our ambition and imagination to deal more efficiently with the world’s limited resources. Because sustainability is clearly good for business.

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The Charlevoix Summit

Editor in Chief: John Kirton Editor: Madeline Koch Managing Editor: Emily Eastman Art Director: Steven Castelluccia Contact: 20-22 Wenlock Road, London N1 7GU, United Kingdom. Tel: +44 207 6085137 Email: Connect@G7G20Summits.org @GloGovProj www.g7g20summits.org G7 Research Group Contributors: Ella Kokotsis David Welch Brittaney Warren Julia Kulik Courtney Hallink Tasnia Khan

G7 CANADA: THE CHARLEVOIX SUMMIT - JUNE 2018

Produced and distributed by The Global Governance Project, a joint initiative between GT Media Group Ltd, a publishing company based in London, UK and the G7 Research Group based at the Munk School of Global Affairs and Trinity College at the University of Toronto, Canada. www.g7.utoronto.ca The Global Governance Project is a vital function for private and public sector organisations in support of their governance responsibilities. To carry out executive duties effectively, we must have access to unbiased, objective and independent opinion, based on actual policy set at and influenced by the G7 summits and their leadership.

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Contents

LEADERS' VIEWS

Justin Trudeau, Prime Minister of Canada

Emmanuel Macron, President of France

Jean-Claude Juncker, President of the European Commission

Donald Trump, Angela Merkel, Shinzo Abe, Theresa May and Paolo Gentiloni

EDITOR'S INTRODUCTION

John Kirton, director, G7 Research Group

GLOBAL PERSPECTIVE

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Patricia Scotland QC, secretary general of the Commonwealth

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Contents 1

THE GENDER GAP

INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH

G7 performance on economic growth

G7 performance on gender equality

Returns on investment in women and girls

Women and the future of work

Strengthening climate-gender synergies at Charlevoix

How investment in growth produces results for all

A call to action: the B7 Summit recommendations

JOBS OF THE FUTURE

G7 performance on labour and employment

Harnessing technology and investing in people to prepare for the jobs of tomorrow

From digital skills to digital citizenship: the stakes of 21st-century education

Renewed commitments on sustainable growth

Reflections on the most urgent economic issues facing the G7

Confronting the US-China split in the world trading system

Enhanced international tax coordination works

Reversing the nationalisation of global finance

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ENHANCING THE ENVIRONMENT AND CLIMATE CHANGE CONTROL

5 STRENGTHENING SUSTAINABLE DEVELOPMENT

66 72

AND SECURITY

G7 performance on development

G7 performance on climate change, clean energy and oceans

Environmental preservation: the greatest challenge of our time

6 PEACE

G7 performance on security

100

A multifaceted approach to the sustainable development agenda

The G7: collective action for a greener future

Prioritising global healthcare and reaching consensus on health targets

Unlocking and mobilising funds for climate action

Food for peace: the correlation between hunger, conflict and migration

Leave no one behind: the international issue of internal displacement

102

The global system: taking stock of challenges in the world order

106

Security in Asia: the end of normalcy

Circling back: G7 and the next revolution

At the intersection of climate and health

A better future: fresh starts in the world's metropolises

Clean energy for all

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A STRONGER G7 SYSTEM

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Lessons from the past for Canada's G7 summit

111

Nation states: back from the sidelines in an era of anti-globalism

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LEADER'S VIEW

Canada’s G7: a better, more hopeful future 8

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LEADER'S VIEW

The Right Honourable Justin Trudeau Prime Minister of Canada

hen Canada assumed the G7 presidency this year, we put forward a progressive agenda that reflects our values. At the G7 summit being held in Charlevoix, Quebec, on 8 and 9 June, Canada will guide the world’s advanced economies and leading democracies towards real progress on five key themes – investing in growth that works for everyone; helping people prepare for the jobs of the future; advancing gender equality and women’s empowerment; working together on climate change, oceans and clean energy; and building a more peaceful and secure world. Together, we will work to support economic growth that benefits everyone, strengthen the middle class around the world and leave our citizens with a better, more hopeful future. We live in a time of great change. While automation, technological breakthroughs and global free trade have delivered prosperity, the benefits have not always been felt equally. As leaders of the G7, we share the responsibility of working together to stimulate economic growth that benefits everyone, and in particular those most at risk of being left behind. We are determined to grow the middle class, create good jobs and address rising income inequality. We will not accept a future that works for the few. We are at our best, and our economy at its strongest, when everyone has a fair shot at success. In 2017, Canada led the G7 in economic growth. We will continue to work with our G7 partners so that everyone – in Canada and around the world – can contribute to, and share in, the benefits of an increasingly integrated global economy. Creating growth that works for everyone starts with removing barriers that hold people back. Today, half of our population and workforce still do not have equal opportunities to men. Making sure women can participate in the economy is not just the right thing to do – it is the smart thing to do. Over the past 40 years, the rising number of women participating in Canada’s workforce has accounted for about a third of our country’s real gross domestic product per capita growth. GREATER EQUALITY FOR GREATER GROWTH These numbers speak for themselves: equality leads to growth. That is why Canada has made gender equality and women’s empowerment a central theme of our G7 presidency. We are determined to apply a gender lens to all of our discussions, and make sure everyone’s voices and perspectives – regardless of their gender or identity – are taken into account. Recognising that girls’ education has a key role to play to resolve global challenges, we will also promote women and girls’ education in crisis and conflict situations. By ensuring girls and women have equal access to quality education and meaningful opportunities for the future, we can grow strong economies that work for everyone.

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We are also making sure that our G7 presidency is as open and as transparent as possible. That is why we are engaging international and domestic stakeholders, as well as Canadians from coast to coast to coast, to help us build an agenda that is meaningful and relevant to them. Over the past few months, Canada has gathered G7 ministers in Montreal, Toronto and Whistler, British Columbia, to tackle some of the most pressing issues we face. We will continue to meet with stakeholders from across the country while connecting with Canadians directly online. Canadians can be confident that their ideas will shape the leaders’ discussions in Charlevoix, and that we are tapping into the best and broadest advice from around the world. As part of our outreach efforts, we will welcome the leaders of countries outside of the G7 and our multilateral partners to support ambitious joint initiatives. Through our commitment to protecting the world’s oceans, we will work with coastal countries and heads of international organisations to address threats facing our oceans and our coasts. We will focus on working to eliminate ocean

“By ensuring girls and women have equal access to quality education and meaningful opportunities for the future, we can grow strong economies that work for everyone” plastic pollution. We also know that the economic and environmental health of our coastal communities, as well as our global food supply, is under threat from more frequent and severe weather patterns, from illegal, unreported and unregulated fishing, and from plastics in our oceans. Together, we must find ways to address these threats, adapt to our changing climate and protect our oceans for generations to come. We face significant challenges as a world today, and none of us can solve these problems alone. As leaders of the G7, we will work together to respond to the complex and evolving global security challenges we face, and build a more peaceful and secure world. We will continue to champion human rights and democratic principles around the globe. Our world is interconnected, and we must work together to create meaningful solutions to the problems we face as a planet. I look forward to welcoming leaders to beautiful Charlevoix where we will showcase the best Canada has to offer, as we work towards a future that puts people first and delivers progress for everyone. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

LEADER'S VIEW

France’s priorities for the G7 10

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LEADER'S VIEW

Emmanuel Macron President of France

7 host Justin Trudeau’s invitation to the Charlevoix Summit provides an opportunity to respond to challenges that are growing increasingly urgent. We are facing the inequalities created by globalisation, threats that hang over our planet, assaults on democracy and the destabilisation of the international community by new forces. Under such circumstances, it is our responsibility within the G7 to reaffirm the strengths that unite us. First and foremost, this group of countries was founded on shared values and a love of freedom. The G7 has defended democracy, human rights and respect for the rule of law ever since it was created. Today, thanks to the resolute action of Canada, the G7 is able to respond to interference with our democracies and the unprecedented virus of fake news. The G7 is a forum for reflection on our joint future, which of necessity involves a multilateralism that is stronger, more effective and more responsible. We must avoid any isolationist temptations, for it is an illusion to believe that we can stop change by shutting out the world. We need to give the international community new meaning and reinvent our multilateral institutions focusing on results. The G7 must continue to stand indomitable in the fight against terrorism on all fronts: keeping track of terrorist combatants and their networks and making sure that their funding sources dry up, relying on the Financial Action Task Force set up by the G7 in 1989, and tirelessly fighting the terrorist propaganda on the internet that sows the seeds of fanaticism. The G7 also provides an effective framework for coordinating our foreign policy activities and working together to bring about peace, notably in Syria or the Sahel. ACTION AT THE SOURCE We must not lose sight of the fact that any sustainable response to violent conflicts and extremism must attack their root causes and give our youth new opportunities. This is why we are committed to defending the objectives of sustainable development by remaining especially vigilant when it comes to youth employment, education and advancing gender equality, a theme that the Canadian presidency has rightly identified as a crosscutting priority for the G7. The greatest threat to our societies and future generations involves the very future of our planet. The implementation of the Paris Agreement on climate change, which was adopted in 2015, is a vital necessity and must be supported by the G7 in the lead-up to the 24th Conference of the Parties in December in Poland. We must now urgently commit to a viable trajectory for the transition to low-carbon economies and to slowing the disturbing pace at which biodiversity is disappearing, for we have no Planet B. The G7 bears a major responsibility in this area. It can also highlight the immense economic opportunities

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of this transition to green economies. We must show ourselves to be innovative and entrepreneurial. This is why I welcome the initiative taken by Canada to put ocean conservation on the agenda for the Charlevoix Summit. We must rethink globalisation and build intelligently regulated market economies. At Davos, I stated my wish to develop, jointly with our international partners, a globalisation designed to protect, share and invest, a globalisation our people can identify with. I salute the commitment of the Canadian G7 presidency to advancing a model of inclusive growth. To achieve this, we must have free and fair trade. In the face of legitimate concerns regarding trade imbalances and aggressive trade practices, we must cooperate, strengthening multilateral regulations and making the World Trade Organization more effective. We must also understand the impact of the digital economy on employment and take steps to make sure that everyone can benefit from the technological boom, while at the same time protecting private life and personal data. This is why artificial intelligence is central to the

“We must not lose sight of the fact that any sustainable response to violent conflicts and extremism must attack their root causes and give our youth new opportunities” work done by the G7, as we strive to find the right balance between innovation and ethics, and come together to anticipate the evolution of the societies and economy of tomorrow. Beyond these major matters, the responses made by the G7 assume even greater legitimacy when they bring together non-state actors and civil society in the broad sense; this is the key to success. Canada has succeeded in securing exemplary participation by youth, women, non-governmental organisations and the academic community throughout the preparations for the Charlevoix Summit. Because the G7 must make progress on the major issues of the moment, because the questions requiring its attention are major, because it is necessary to defend the achievements of multilateralism, I see the scope of the task that will fall to France in 2019, when it will in turn chair this group. A century after the end of the Great War, let us not repeat the errors of the past; let us remain vigilant, moved by a desire to take collective, pragmatic and effective action. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

LEADER'S VIEW

A shared future in a fairer and more global world 12

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LEADER'S VIEW

Jean-Claude Juncker President, European Commission

his year’s summit in Charlevoix is a crunch moment for the G7. The same could probably have been said before each of the previous 43 summits; after all, the first meeting in 1975 was held against the backdrop of an oil shock and financial crisis that shook the world’s economy. Since then, through good times and bad, through boom and bust and through peace and conflict, the G7 has always been a beacon of stability. Our partnership is one built on trust, friendship and shared interest. By working together, we make ourselves and the world around us stronger, both individually and collectively. What is good for all is good for one. As we meet in Canada in June, the need for G7 leadership is more important than ever as the world around us changes and threatens to splinter. The case for global cooperation has never been more acute. Our economies are more intertwined than at any point in history. We share the same challenges, from the pressures of climate change to migration, all the way through to cybersecurity and the impact of new technologies on our lives and societies. And yet despite this, there is a growing trend for protectionism, nationalism and questioning of the global system. We must tackle this head on in Charlevoix, because we ignore it at our peril. This will be the European Union’s message in June. We will stand up for a global economy that is open, transparent, fair and governed by clear rules. It makes sense for us: a third of our national income comes from trade with the rest of the world. And for every billion euros in exports, 14,000 jobs are created in Europe. But we primarily believe in trade because it helps us improve lives and make society fairer. This is why we are working with like-minded G7 partners to show that trade is not only good for business, but is first and foremost good for people. Our trade agreements with Canada and Japan show the way. They help ensure the benefits of trade are felt by all, while enshrining gold standard protection on food safety, regulatory standards and environmental protection. This is the trade that we believe in, built on rules, trust and reliable partnerships – just like the G7 itself. It helps us create a fair and level playing field – and it is what makes it a win-win for all. As tempting or popular as they may be, unilateral, blanket decisions on tariffs go against what makes global trade work for so many people, businesses and countries around the world. A FAIRER WORLD FOR ALL This commitment to making a global world fairer for all should be the central focus of our discussions in Charlevoix. Prime Minister Justin Trudeau’s priorities for

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Canada’s presidency of the G7 will help ensure that we stay focused on this. In particular, I look forward to the discussion on the digitisation of our society and the future of jobs. These are issues we are all grappling with. For us, new technologies should not mean new values. This is why, for instance, new rules on the protection of data have recently come into force to help ensure that Europeans all have the same rights online as we do offline. I am delighted to see this becoming the benchmark for companies and countries all around the world. But we must also recognise that the digital transformation is a worry for many. Many of today’s jobs did not exist a decade ago. Most children entering school now will end up in jobs that do not yet exist, using technology that is not even yet developed. This uncertainty causes anxiety, and the nature and quality of work is already significantly changing. It is our duty as global leaders to help our workforce adapt

“There is a growing trend for protectionism, nationalism and questioning of the global system. We must tackle this head on in Charlevoix, because we ignore it at our peril” to changing job requirements and to develop the skills they need to thrive in the new labour market. In Europe, we now have a pillar of social rights to make sure that people come first, while our recent strategy on artificial intelligence focuses on new skills and retraining to make sure that all workers can adapt and thrive in the new world of work. These are the issues that should unite and bring together the G7. It is a global hub founded on trust, openness and shared values. We meet every year because we share the belief that protectionism does not protect and that isolationism only isolates. More than ever we must fall back on this, on what unites us and what has been successful. The G7 must once again live up to its responsibility, making the world fairer and setting the benchmark for others to follow. There is no better time or place than Charlevoix to make this happen, and with Trudeau at the helm I have no doubt that we will.

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LEADERS' VIEWS

These leaders’ views have been adapted from various speeches and interviews that reflect their opinions regarding the agenda and work of the G7

Donald Trump United States

“

merica hopes for a future in which everyone can prosper, and every child can grow up free from violence, poverty and fear … America First does not mean America alone. When the United States grows, so does the world. American prosperity has created countless jobs all around the globe, and the drive for excellence, creativity and innovation in the United States has led to important discoveries that help people everywhere live more prosperous and far healthier lives. As the United States pursues domestic reforms to unleash jobs and growth, we are also working to reform the international trading system so that it promotes broadly shared prosperity and rewards to those who play by the rules. We cannot have free and open trade if some countries exploit the system at the expense of others. We support

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free trade, but it needs to be fair and it needs to be reciprocal. Because, in the end, unfair trade undermines us all. The United States will no longer turn a blind eye to unfair economic practices, including massive intellectual property theft, industrial subsidies and pervasive state-led economic planning. These and other predatory behaviours are distorting the global markets and harming businesses and workers, not just in the United States, but around the globe … The United States is prepared to negotiate mutually beneficial, bilateral trade agreements with all countries. This will include the countries in the Trans Pacific Partnership, which are very important. We have agreements with several of them already. We would consider negotiating with the rest, either individually, or perhaps as a group, if it is in the interests of all.”

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LEADERS' VIEWS

Angela Merkel Germany

“

ermany is challenged by two events, which are a result of globalisation – the euro crisis, which we have now largely overcome, and the migration of recent years. But Germany wants to be a country that continues to play its part in the future in order to solve tomorrow’s problems by working together in the world. We believe that isolation is not constructive. We believe that we need to cooperate and that protectionism is not the right answer. And we believe that if we think things are not being run fairly and mechanisms are not reciprocal, then we should seek multilateral solutions, and not unilateral responses, which ultimately only serve to further isolation and protectionism.”

Shinzo Abe Japan

photos: shutterstock.com

“

ince just after I became prime minister, I have held high the flag of women’s participation and advancement in society and positioned it in the very centre of my growth strategy. I have made all-out efforts to create an environment in which it is easy for women to work, including preparing childcare arrangements. The result of this has been 1.5 million more women joining the workforce, and in particular, among women in the age group typically raising small children, the labour force participation rate jumped 5% all at once … Japan has changed. It is possible to change society … Therefore, it should also be possible to change the world … Japan is determined to continue to raise high the flag of enhancing women’s participation and advancement in society and to demonstrate strong leadership around the world.”

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LEADERS' VIEWS

Theresa May United Kingdom

“

e are already seeing a series of commitments that can mark a breakthrough in the battle to save our oceans … The United Kingdom has pledged to ban plastic straws, stirrers and plastic-stemmed cotton buds. … I am pleased that Prime Minister Trudeau has indicated he will also make this a priority for the G7 in Canada this summer … We [in the Commonwealth] will play a leading role in shaping the future of global trade policy, using our unique perspective to help ensure that free and fair trade truly works for everyone. This includes stepping up efforts to share the technical expertise to enable small and developing states to benefit from the growth of free and fair trade. It means addressing systemic barriers to

women’s full and equal participation in the economy – including increasing opportunities for women to trade internationally and supporting the growth of more women-owned business. And it means investing in supporting our young people to gain new skills … I have been clear that nobody should face persecution or discrimination because of who they are or who they love. And the United Kingdom stands ready to support any Commonwealth member wanting to reform outdated legislation that permits discrimination, including against same-sex relations. We will continue to protect and advance our core values of democracy, good governance and human rights at the heart of fairer societies.”

“We will play a leading role in shaping the future of global trade policy, using our unique perspective to help ensure that free and fair trade truly works for everyone” 16

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LEADERS' VIEWS

Paolo Gentiloni Italy “We must not give in to the idea of a world destined to be split between a cosmopolitan digital elite and an army of precarious and underpaid local workers”

photos: shutterstock.com

“

he world is still as usual very complicated and unpredictable. There are many areas of risk and global threats, conflicts, instability, climate change, the rising of protectionism in economies. We have to manage crisis while at the same time go deeper and tackle the root causes of the phenomena causing crisis. I will give you one example: migration. Italy continues to save lives at sea. We are proud of this … Italy has also succeeded largely on its own to drastically reduce the flows of migrants across the Mediterranean Sea … This means that less and less people risk or lose their life. However, we are also engaged with an increasing number of European partners in a long-term effort with unprecedented support for the economic development of sub-Saharan Africa, including investment and institutional partnerships. In 2016, Italy was the third global investor in Africa and the first European one … Economic growth is not reducing inequalities – in many countries, including Italy, they are still widening,

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even if economic growth is there. They are reaching even more intolerable levels. Digital innovation, with its enormous and positive potential, is yet threatening both the quality and the quantity of available jobs. We must not give in to the idea of a world destined to be split between a cosmopolitan digital elite and an army of precarious and underpaid local workers. This is worrisome and frustrations are our main concern and driver: we aim at a stronger and more cohesive society. We strive for a freer and more secure world … To be able to embrace the increased technological changes artificial intelligence and all that science and business are bringing to us, we need to nurture at the same time the sense of time and community, the sense of how much we owe to each other and to our history, to our roots. Our history and our roots are not synonymous of protectionism. Our history and our roots are the tools that we use in global and international cooperation and dialogue. Looking at the recent past increases our desire and optimism for the future.”

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ADVOCACY

TD Bank Group

Agents for positive change TD Bank Group has firmly aligned its ambitions with the UN Sustainable Development Goals. Now, the group is championing close connections between corporations and the communities they operate in to drive inclusive change, as group president and CEO Bharat Masrani explains 18

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You recently told a graduating class of university students that “the world has never been safer, healthier or more prosperous”. Yet you also believe that challenges, left unchecked, could undermine the future prospects of national economies. What are the dynamics at play? The world has made significant progress in recent decades. We are living longer and healthier lives. More than one billion people have been lifted out of extreme poverty. We have seen quality of life improve, as more and more households access clean water and electricity. There have also been significant strides to protect and promote human rights. However, many of the forces that have underpinned our progress – liberalisation of trade, knowledge transfers and the proliferation of innovative technologies – have also brought about significant change and disruption. That’s one reason why some perceive globalisation as a cause for inequality. One of our defining challenges for the G7 is to find ways to maximise the benefits and minimise the risks of these forces. G7G20SUMMITS.ORG

ADVOCACY

TD Bank Group You lead one of the largest financial institutions in North America. Describe how some of these forces impact the business world. Look at some of the ways innovative technologies are impacting the lives of customers and colleagues. They’ve helped drive innovation and create new business opportunities, as well as enabled individuals to gain greater control and flexibility in the way they make a living. At the same time, many people experience dramatic fluctuations in their month-to-month income. This volatility can make it hard for families to gain control of their finances today, let alone plan for the future. In the working world, some roles are being automated or are now simply considered outdated. And while we also see the creation of new, rewarding careers, there are people who may not have access to resources or opportunities to acquire the skills necessary to adapt and thrive. They could end up permanently underemployed or even unemployed. Many people describe all this change as part of a modern-day industrial revolution. Is it any different from previous ones? Economies have undergone significant change before, spurred on by advancements that boost productivity and competition. But my sense is the pace of change has never been faster. And when I talk to customers and colleagues, family and friends, it seems like every facet of their lives is being impacted. As always, we must find ways to adapt. That’s how people, organisations and economies endure. But I worry about those who feel like they are on the outside looking in at the majority of people who are benefiting from change. They may give up on themselves and their communities. You cannot grow economies when people stop participating in them. The G7 understands that and deserves credit for championing inclusive growth as a strategic imperative. You have also described exclusion as a “corrosive force” on society… Precisely. In building a more prosperous world, exclusion is public enemy number one. We’ve seen social ills stem from such sentiment. It can also be politicised, and lead to policies that could exacerbate some of the challenges that cause people to feel uneasy in the first place. Protectionism is G7G20SUMMITS.ORG

an example. Our focus would be better spent on making free trade agreements even better for participating countries. What role should corporations in the G7 play in supporting a more inclusive economy? Most business leaders understand their success very much depends on the long-term success of the people and communities in which they serve. As just one example, TD recognises that the transition to a low-carbon economy is fundamental to our economy’s future prospects. Of course, this transition cannot undermine the standard of living and quality of life that Canadians enjoy. Still, as a way of bringing about positive change, our bank has targeted $100 billion, in total, in our business towards initiatives in low-carbon lending, financing, asset management and other programmes by 2030. Initiatives like these are ways that corporations can make a positive impact. Is there a model for corporations to bring about positive change? I wouldn’t want to be that prescriptive. But let me talk about some of the ways we are helping to create a more inclusive future. We align our people and resources to help promote and foster innovation for social good. That is a key driver behind The Ready

Commitment. We are targeting $1 billion in total by 2030 in four areas: financial security, a vibrant planet, connected communities and better health outcomes across our North American footprint. To influence positive change, we often start with a premise that problems aren’t solved until we acknowledge they exist. For instance, we know there is a need to help employees develop skills for their next role and prepare them to understand and navigate the new technologies impacting their current one. But the effects of the changing workplace are far from being fully understood. That’s why we have teamed up with a Canadian think tank, the Public Policy Forum, to better understand the implications of a changing workplace on employees and employers, as well as policymakers. Finally, TD understands we are part of something larger than ourselves. Our internal actions – breaking down barriers, for instance, that impede women in their advancement into leadership positions – send important signals externally. Our size and scale also enable us to be a positive change agent. That’s why we actively engage in global agendas. For instance, we are aligned to nine UN Sustainable Development Goals, and are a founding partner of a global privatesector–led collaboration to use employee volunteer programmes to contribute to the achievement of the SDGs. And we recently joined a UN Task Force examining climate-related financial disclosure. In all of this, collaboration is key. Big, positive social change is only possible if the public and the private sectors work together to focus on key issues, for better alignment on measurement, and, finally, for greater impact. Speaking of impact, what kind of outcomes do you envision in achieving more inclusive growth? We want everyone to have the opportunity to thrive in a changing world. They will feel more confident about themselves and their future as a result. That helps create the conditions for a more cohesive society. And that is a good thing, because I’m convinced that success – in whatever form – relies on forces that bring us together, not drive us apart.

Bharat Masrani

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EDITOR'S INTRODUCTION

John Kirton Director, G7 Research Group

A summit of significant, synergistic success: prospects for the G7 at Charlevoix

n 8–9 June 2018, Canada's Prime Minister Justin Trudeau will host the most powerful leaders of the world’s most powerful, economically advanced democracies, for the 44th annual Group of Seven summit, held in Charlevoix, Quebec. Coming to Canada for the first time as leader and to his second G7 summit will be President Donald Trump of the United States, as his mid-term congressional elections on 6 November approach and as his policies on trade, climate change, nuclear proliferation and much else rapidly evolve. British prime minister Theresa May, at her second G7 summit, will search for new trade deals with G7 countries as her Brexit deadline to leave the European Union looms. French president Emmanuel Macron will come to his second G7 summit and his first in the French-speaking world. The veteran will be Germany’s Chancellor Angela Merkel, who hosted her first G7 summit in 2007 and her second at Schloss Elmau in 2015, and who hosted the G20 summit in Hamburg in July 2017. Also attending are Japan’s Prime Minister Shinzo Abe, Italy’s Prime Minister Paolo Gentiloni and the European Union’s Donald Tusk and Jean-Claude Juncker. Bringing them together, physically and politically, is Canada’s prime minister, at the sixth G7 summit in Canada, his third G7 summit and his first as host. At Charlevoix, G7 leaders will focus on the five priorities that Trudeau has set from the start of Canada’s year as host: investing in growth that works for everyone; preparing for jobs of the future; advancing gender equality and women’s empowerment; working together on climate change, oceans and clean energy; and building a more peaceful and secure world. CANADA’S AREAS OF FOCUS The first priority of improving inclusive economic growth includes managing the global economy, fiscal and monetary policy, tax, trade, investment and infrastructure. The second priority of generating good jobs for all, including youth, embraces redesigning education to foster innovation, creativity and entrepreneurship in the digital age. The third priority is an overriding, cross-cutting one to enhance gender equality and empower women. The fourth priority includes controlling climate change as a current compelling threat, enhancing the natural environment and the economy together through clean technology and in other ways, and protecting the world’s vast oceans from plastic and other pollutants. The fifth priority of peace and security addresses several acute issues, notably nuclear and missile proliferation in North Korea, Iran’s nuclear and missile programme, the use of chemical weapons in Syria, regional security risks in Ukraine and the Baltic states, terrorism, and conflict in the Middle East and North Africa, Venezuela and Asia. It extends to crime and corruption, and also violations of democracy and human rights throughout the world, including via cyberspace. Development issues will be addressed, guided by Canada’s feminist international development policy launched in 2017.

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EDITOR'S INTRODUCTION To prepare for the summit, Canada has introduced several innovations. There have been unprecedented consultations with civil society, with a focus on youth, and with an expanded array of engagement groups for business, labour, women, youth, civil society, scientists and think tanks. Canada has created and integrally involved the Gender Equality Advisory Council to help guide the host and, through it, the G7 as a whole. To help spur synergies, Canada has mounted four clusters of ministerial meetings: for labour and innovation in Montreal, for foreign affairs and security in Toronto, finance and development in Whistler, British Columbia, and, after the summit, for the environment, oceans and energy on Canada’s Atlantic Coast. It has invited as guests the heads of the International Monetary Fund (IMF), the World Bank, the United Nations and the Organisation for Economic Co-operation and Development, and several leaders from coastal states to contribute to the discussions and results on the oceans priority. It intends to report the summit results in a compact communiqué and perhaps a chair’s statement, with the central commitments highlighted for all to see. The prospects are that this innovative process will produce a summit of significant, synergistic success, with central achievements across and among all its priority subjects. SPOTLIGHT ON EQUALITY The most prominent achievements will be on educating girls and combating gender-based violence, along with gender mainstreamed throughout the G7 agenda much more broadly, deeply and creatively than ever before. Also central will be climate change and oceans, led by action on preventing plastic pollution in the oceans, on reinforcing coastal resilience and on illegal, unreported and unregulated fishing. Further achievements will come on promoting democracy by reacting to foreign threats from cyberspace, on artificial intelligence to help secure and prepare citizens for the jobs of the future in the

“The most prominent achievements will be on educating girls and combating gender-based violence, along with gender mainstreamed throughout the G7 agenda much more broadly, deeply and creatively than ever before”

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JOHN KIRTON Director, G7 Research Group John Kirton is director of the G7 Research Group and co-director of the G20 Research Group, the BRICS Research Group and the Global Health Diplomacy Program, all based at Trinity College at the Munk School of Global Affairs in the University of Toronto, where he is a professor of political science. Kirton is also a non-resident senior fellow at the Chongyang Institute for Financial Studies at Renmin University of China and co-author, with Ella Kokotsis, of The Global Governance of Climate Change G7, G20 and UN Leadership. Twitter @jjkirton  www.g7.utoronto.ca

digitalising age and on inclusive economic growth. There might also be initiatives to mobilise development finance, from a wider array of stakeholders and in more innovative ways than before. Such success will be spurred by the security shocks arising from Syria’s use of chemical weapons on 7 April 2018, Russia’s nerve gas attack in the United Kingdom on 4 March 2018, the terrorist murders in Trèbes, France, in late March and in Paris in mid-May, North Korea’s proliferating nuclear and missile tests in the autumn of 2017, and the US withdrawal in May 2018 from the nuclear deal with Iran. These shocks are joined by smaller and earlier energy, environmental and gender ones, from the oil price spike starting in mid-April, the #MeToo movement for gender equality and the hurricanes devastating the Caribbean and south-eastern United States in September 2017. Also arising in the month before the summit were concerns about a new financial crisis, with Argentina seeking financial support from the IMF and Turkey and other emerging markets showing financial strains. Yet there was also the positive shock from the opportunity to secure the complete verifiable, irreversible denuclearisation of North Korea, with Trump’s historic summit with North Korean leader Kim Jong-un scheduled for Singapore three days after the G7’s Charlevoix Summit ends. Another spur for G7 success comes from the inadequacy of some multilateral organisations to counter the current threats, leaving the G7 to fill the gap. These gaps are led by a veto that paralysed the United Nations Security Council and the Organisation for the Prohibition of Chemical Weapons, a UN system with no robust, well-resourced organisation dedicated to gender equality, and a UN Framework Convention on Climate Change (UNFCCC) with an inadequate Paris Accord, from which the United States has announced its withdrawal. With more reliable, synchronous economic growth among its members, the G7 has enough globally weighty and internally convergent capabilities to produce the required response, especially on the Charlevoix Summit’s priorities. Its members will be united by the direct assault from the current shocks to their common principles, above all the G7’s foundational mission of promoting open democracy and human rights, its recognition that women’s rights are human rights and its core value of ecological conservation. To be sure, its success will be constrained by the limited domestic political cohesion in several members, notably the powerful United States facing mid-term elections and Japan, where public approval of the prime minister has declined. Yet the G7’s unique dynamic as its democratic leaders’ cherished club will be enhanced by Charlevoix’s isolated setting, the experience of its participants and the likeable informality of Justin Trudeau as its host and Donald Trump as its most prominent attendee. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

GLOBAL PERSPECTIVE

Global perspective: Commonwealth

Beyond G7 borders The Right Honourable Patricia Scotland QC, secretary general of the Commonwealth, explores the parallels between G7 and Commonwealth priorities, which seek to safeguard the future for countries large and small

he overlapping circles of international connection are this year being given added significance by the fact that in 2018 the presidency of the G7 is held by a Commonwealth country, and that a member of the G7 becomes chair in office of the Commonwealth. Indeed, the 2018 G7 meeting convenes in Canada little more than six weeks after the hosting by the United Kingdom of the Commonwealth Heads of Government Meeting, commonly known as CHOGM. The congruence of the themes for the two gatherings is just as striking, and shows how the synergy and influence of Commonwealth countries working

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together extends beyond the boundaries of our membership, accelerating progress and bringing benefits that are truly global in impact. The areas of focus chosen by Prime Minister Justin Trudeau for the G7 meeting in Charlevoix on 8–9 June are investing in growth that works for everyone; preparing for jobs of the future; advancing gender equality and women’s empowerment; working together on climate change, oceans and clean energy; and building a more peaceful and secure world. The theme for CHOGM, held in London and Windsor on 19–20 April, was ‘Towards a Common Future’, with the particular priorities of a more sustainable future, G7G20SUMMITS.ORG

GLOBAL PERSPECTIVE a fairer future, a more secure future and a more prosperous future. The close correlation between the ambition for collective action by members of the Commonwealth and those of the G7 is clearly seen in the adoption at CHOGM of the Commonwealth Blue Charter. It sets out the principles by which Commonwealth members will lead international efforts by sustainably developing and protecting their ocean, and heads of government have mandated the Commonwealth Secretariat to take this forward with an action-orientated delivery programme. This meshes with the commitment by Canada to work together within the G7 context on climate change, oceans and clean energy, including by hosting domestic and international discussions specifically focusing on advancing ocean priorities. These will bring together experts to discuss challenges and opportunities both domestically and internationally, to move towards zero plastic waste and mitigating marine plastic litter, including microplastics. At CHOGM, grave concern was expressed that without urgent action to mitigate climate change, reduce vulnerability and increase resilience, the impacts of climate change could push an additional 100 million people into poverty by 2030. Heads recognised that temperature and sea level rise and other adverse impacts

“We seek always to be receptive and responsive to the needs of all – especially the young, the marginalised and the vulnerable” of climate change are a significant reality and risk to many of the Commonwealth’s most vulnerable member countries. They renewed their commitment under the Paris Agreement to keep the increase in global average temperature to well below 2°C above pre-industrial levels, and pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels. Canada, both as a member of the Commonwealth, and with its G7 partners, acknowledges the urgent need to accelerate the transition towards a sustainable, resilient, low-carbon future. THE VOICE OF SMALL STATES Commonwealth commitment to inclusiveness means we have special concern for the needs of smaller countries, and those with economies at stages of development that render them less resilient to sudden economic shocks – whether these result from global market crises, extreme weather or natural disaster. Indeed, the Commonwealth collectively is recognised as being the voice of small states, and Canada and the United Kingdom will carry forward this advocacy to the G7. We seek always to be receptive and responsive to the needs of all – especially the young, the marginalised and the vulnerable. In a G7 public engagement paper on economic cooperation, Canada emphasises the need for the benefits of economic growth to be shared by everyone, and how this means championing innovative and gender-responsive solutions to address

common challenges such as growing inequality, the changing nature of work and persistent poverty. This reflects our Commonwealth understanding that when women and girls are given equal opportunities to succeed, they can be powerful agents of change, driving stronger economic growth, encouraging greater peace and cooperation and improving the quality of life for their communities. So by ensuring that gender equality and gender-based analysis are integrated across all themes, activities and outcomes of its G7 presidency, Canada is carrying forward the commitment made by Commonwealth heads of government in the 2018 CHOGM communiqué, to implement legislation, policies and programmes that mainstream and promote gender equality and the empowerment of all women and girls in social, economic and political life. There has seldom been a time when the dynamic of international connection has been more needed, whether among the advanced economies of the G7 or within the broader and vastly more diverse context of our Commonwealth members. Working as members of both groupings, Canada and the United Kingdom have the special responsibility and privilege of ensuring that, within our globalised and interdependent world, the needs and concerns of our smaller and more vulnerable Commonwealth countries are given consideration when leaders of the powerful G7 meet.

PATRICIA SCOTLAND QC The Right Honourable Patricia Scotland QC, who took office as secretary-general of the Commonwealth in 2016, serves the 52 governments and 2.4 billion people of the Commonwealth. Born in Dominica and a lawyer by profession, she became the first black woman and youngest woman ever to be appointed Queen’s Counsel in the United Kingdom. She is the only woman to be attorney general for England and Wales since the post was created in 1315. Twitter @PScotlandCSG ‫‏‬  thecommonwealth.org

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THE GENDER GAP

Monitoring G7 performance on gender equality Canada has signalled its progressive position on achieving gender parity, but can it unite the G7 in delivering global results, asks Julia Kulik, director of research, G7 Research Group

or many years, the advancement of gender equality at G7 summits has remained fairly siloed and issue-specific. After many calls for gender mainstreaming by experts, Canada’s G7 2018 presidency has committed to making advancing gender equality and women’s empowerment a theme that will be incorporated across all summit issue areas and included in all ministerial meetings. This builds on the G7’s recognition that gender equality is a fundamental human right and signals to the world that it is a top priority for Canada’s presidency, with the intention that the global community will follow suit.

This increase was likely due to the prioritisation of gender equality on the summit agenda for the first time. Since then, the number of gender commitments has continued to increase, including at Taormina in 2017 with 69 – the most to date. Taormina’s gender commitments covered a variety of topics including female entrepreneurship, health, poverty alleviation, and science, technology, engineering and mathematics (STEM). Further measures to determine the G7’s commitment to gender equality include assessing compliance with commitments. The G7 Research Group has measured 19 commitments over the 21 years the G7 has been making promises on gender. The G7 has averaged a compliance score of 75%, below the of unpaid care overall G7 compliance work worldwide average of 81%. Canada and is carried out by the United States tend to be women among the high compliers and Russia the lowest.

70%

A coordinated approach One way to determine the level of commitment by the G7 to advance gender equality is to take count of the number of collective, future-oriented, politically binding commitments made at each summit. The G7’s first gender-related commitment was in 1996, when leaders pledged to ensure that women benefit fully and equally from the recognition of human rights and fundamental freedoms. Until recently, G7 commitments on gender equality remained very sporadic and specific, often focusing on a different element each year. It was not until 2015 that the number of commitments increased significantly to 32 and included a wide range of policy areas, such as vocational training, sexual violence prevention, and female economic empowerment and inclusion. 24

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Gradual improvements According to the International Monetary Fund (IMF), gender equality in G7 countries has improved steadily since 1990, which coincides with the adoption of the Beijing Declaration at the Fourth World Conference on Women, a United Nations resolution that outlined principles to achieve equality between men and women. The IMF’s conclusion is based on the UN’s Gender Development Index, which measures gender gaps by accounting for disparities between women and men in three basic dimensions G7G20SUMMITS.ORG

THE GENDER GAP of human development: health, knowledge and living standards. According to this measure, many G7 members score fairly highly: Germany, Canada and the United States are among the top 10 worldwide. Russia is again the lowest ranked member at 49. Despite progress, gaps still exist in women’s labour force participation rates, which remain 17 percentage points lower than men’s. There is still a wage gap of 14% between men and women, and the number of men at the managerial level is almost double the number of women. On top of this, 70% of unpaid care work is carried out by women. These figures are, of course, all related. The need for consensus To improve compliance with their gender equality commitments and to advance gender parity at home and abroad, G7 members need to reiterate their commitment to women’s rights, including equal pay for equal work, land ownership rights, sexual and reproductive rights, and the elimination of violence against women. This is particularly important as the current US administration continues to signal a desire to roll back policy measures implemented to empower women. Beyond that, Canada has an opportunity to lead other G7 members in adopting a ‘gender-based analysis plus’ to government policies and gender-based budgeting. This encourages governments to assess how their policies influence their citizens differently depending on sex, gender, race, ethnicity, religion, age and disability. The Canadian presidency has set out a framework to make significant progress at the G7 summit, including through engaging relevant actors and experts. The real test, however, will be whether consensus can be reached as a group on these issues.

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JXyxyxyxyxcedis net exero beatur, arum imodis experatus sunt harit aditiistiist dolorepuditi cuptam is rerunt prem faces eos que consequis eariat fuga. Cori dione sum quas ent ad moluptatquia consenis poreruptium aut alique quae nest estis Director of research, G7 Research Group idionse quiditis si qui odi offici nisquam re num eostem. To ipsae pa dolupta tecatum Julia Kulik is director of research for the G7 Research Group, as well quae rero essit expella borehenda sitaquidi as for the G20 and BRICS Research Groups and the Global Health dolut perit restio. Itas elecept asperum sust Diplomacy Program, all based at the Munk School of Global Affairs at aut doluptatint acero el explis utem quas Trinity College in the University of Toronto. She has written on G7/8, quia nis ex entin et utem exeriamus esequi G20 and BRICS performance, particularly on the issues of gender solupta dolor sitature, nimagnam ad quam equality and regional security. Kulik leads the groups’ work on gender, et lit pos sint. women’s health, regional security and summit performance.  @xyxyyxy  www.yxyxyxyyx.xyx Twitter @juliafkulik  www.g7.utoronto.ca

JULIA KULIK

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JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

ADVOCACY

Malala Fund

The key to unlocking girls’ potential 26

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photo: marcia steyard

The inextricable link between solving social and economic problems and girls’ education has long been overlooked by leaders. Farah Mohamed, CEO, Malala Fund, calls for the G7 Charlevoix Summit to mark a new era of investments in girls

ADVOCACY

ast year, in recognition for her advocacy on behalf of 130 million out-of-school girls around the world, Malala Yousafzai became the sixth and youngest-ever honorary Canadian citizen. She used the occasion to ask Prime Minister Justin Trudeau, the Canadian Parliament and Canadian people to seize every upcoming opportunity for girls’ education — first and foremost, at the 2018 G7 summit. As in years past, economic stability, trade, security and energy policy will dominate G7 discussions this month. In the lead-up to these summits, international development advocates fight to get their issues on the agenda, but rarely do health, poverty or education gain prominence in meetings among leaders or in the commitments they make. For far too long, G7 leaders have overlooked the link between the problems they are trying to solve and girls’ education. Multiple studies prove that secondary education for girls is a key factor in growing economies, improving public health, reducing conflict and mitigating climate change. Consider international security. Education is critical to security around the world because extremism grows alongside inequality – in places where people feel they have no opportunity, no voice, no hope. PROTECTING OUR FUTURE LEADERS Today, more than 30 million children are refugees. Eighty per cent of them are out of school – the majority are girls. These young refugees are future leaders on whom we will all depend for peace. They understand that finishing school is their best chance to earn a steady wage, lift their families out of poverty and help rebuild their communities and countries. Despite evidence that educating children can prevent future conflicts, governments in both developing and donor countries have not prioritised refugee education. According to Education Cannot Wait, less than 2% of humanitarian funding has been spent on education since 2010. Girls’ secondary education is also the best investment in our economies. Millions more educated girls means more working women with the potential to add up to $12 trillion to global growth. Today, a poor girl in a developing country has just a 2% chance of completing 12 years of education. Without urgent action, G7G20SUMMITS.ORG

Malala Fund

“Malala Fund is asking leaders to commit at least $1.3 billion to get more girls in school – a first step in closing the global education finance gap”

a generation of children will enter their working years uneducated. As leaders continue to underfund education, we are headed for a global skills crisis. UNESCO estimates that, by 2020, the world could have 40 million job vacancies, but not enough educated workers to fill them. Business leaders such as Tim Cook and Melinda Gates are taking notice and speaking up for out-of-school girls. They understand that by not providing access to secondary education, we fail to prepare children for the future needs of the job market. In the coming years, developing and emerging economies will face a surplus of low-skilled workers and a deficit of professionals, leading to unemployment and major gaps in the labour market. While leaders have repeatedly committed to 12 years of education for all children, not one G7 country is currently allocating 15% of official development assistance to education, Bharat Masranias recommended by the Education Commission.

CLOSING THE FINANCIAL GAP Will this summit be a turning point? Prime Minister Trudeau has promised Canada’s G7 will include a gender equity agenda, established the Gender Equality Advisory Council to advise on progress and said he will push his fellow leaders for financial commitments to girls’ education. Together with other organisations, Malala Fund is asking leaders to commit at least $1.3 billion to get more girls in school – a first step in closing the global education finance gap. This year – and next year in France – Malala Fund expects G7 leaders to deliver for girls. It is past time for the G7 to recognise what Malala and girls around the world already know: they are the best investment in a safer, healthier, wealthier world.

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THE GENDER GAP

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Returns on investment Canada has woven gender equality into every aspect of its summit agenda. The Honourable Maryam Monsef, Canada’s minister of status of women, explains how when we invest in women and girls, everyone benefits

G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

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THE GENDER GAP

One of the realities all societies face is that women have historically been at a disadvantage in terms of work and career opportunities” Canada has made G7 history by establishing the Gender Equality Advisory Council

“We cannot all succeed when half of us are held back.”

hese wise words by Nobel Prize winner Malala Yousafzai perfectly articulate Canada’s rationale for making the advancement of gender equality and the empowerment of women and girls a top priority for Canada’s G7 presidency this year. A key theme of this year’s G7, gender equality, including the use of gender-based analysis, is being incorporated into all G7 work because we know that it is an essential prerequisite for building peace, reducing poverty, growing our economies and achieving sustainability both at home and around the world. Since being sworn in as a government with the first gender-balanced federal cabinet in Canada’s history, we have focused our domestic and international efforts on creating the programmes, policies and critical mechanisms that will help lead us ever closer to the goal of full equality. The progress we have made so far is very encouraging, but we are not slowing our pace. In fact, we are redoubling our efforts over the coming months. One of the realities all societies face is that women have historically been at a disadvantage in terms

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of work and career opportunities. In Canada, for example, women earn on average just 87 cents for every dollar earned by their male counterparts. Many more women than men work only part-time. Often, women do so because they bear a disproportionate responsibility for caregiving. Our government has responded by improving the Canada Child Benefit, which puts more money in the pockets of nine out of 10 families, and by creating better parental leave provisions for parents, including a new employment insurance parental sharing benefit to support a more equitable division of childcare in the home. These and other measures do not only help lift children out of poverty; they also give women the opportunity to pursue education, jobs and careers that they otherwise could not have pursued. Moreover, we are introducing proactive pay equity legislation and pay transparency measures later this year to help make sure federally regulated workplaces treat people of all genders equally. AN INCLUSIVE APPROACH Another critical area is making sure that our plans and actions as governments are truly inclusive. We must take into account the different impacts our decisions can have on women, men and JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

THE GENDER GAP

gender-diverse people. This alone, however, is not enough. We must also recognise that those impacts can shift and increase in severity when other identity factors intersect, such as race, ethnicity, age, or mental or physical disability. This is why our most recent federal budget – the first budget in Canada’s history to apply an intersectional gendered lens to all of its measures – included the introduction of gender-based analysis plus (GBA+) legislation to make gender budgeting a permanent part of Canada’s federal budget-making process. This is a very important mechanism to extend gender equality across the government. We have already been able to train well over 100,000 public servants, parliamentarians and staff on how to use this valuable tool. With it, we are better able to address systemic barriers to gender equality while producing concrete outcomes that actually improve the lives of women and girls. The government has also committed $100 million in programming to help strengthen the women’s movement in Canada. These funds will help women’s organisations from coast to coast to coast tackle deep-rooted barriers to equality, such as gender-based violence, gender-based economic disparities, the specific challenges faced by Indigenous women, and many others. Furthermore, we are also working to engage young Canadians, including our men and boys, on gender equality. Their voices and buy-in are essential to ensuring that progress is equitable and sustainable. PARTNERS IN G7 DISCUSSIONS Internationally, Canada has adopted the Feminist International Assistance Policy. We are committed to doing all we can to further the cause of equality, including increasing global efforts to support the most vulnerable women and girls. G7 members are united by their shared values and strong commitment to promote human rights and to help build a more peaceful and prosperous world. Canada’s G7 presidency has included the creation of the Gender Equality Advisory Council, unprecedented in the G7’s history. Made up of some of the world’s 30

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The Gender Equality Advisory Council offers cross-cutting solutions to the G7 on gender issues

wisest and most influential feminist leaders – including Malala Yousafzai – the council is bringing unparalleled insight, expertise, lived experience and leadership to ensuring that gender equality and women’s empowerment are integrated into all the work of the G7. Council members are key partners in our G7 discussions, and their help in identifying the most pressing issues facing the world’s women and girls, and practical solutions to solving them, is invaluable. Prime Minister Justin Trudeau has asked them to be bold in their work and recommendations to G7 leaders and ministers, and they are delivering. It is our aim that the 2018 G7 summit in Charlevoix will deliver concrete outcomes for the world’s women and girls, and will inspire a new international resolve to strengthen efforts to promote gender equality and women’s economic empowerment – and that this momentum will continue next year during France’s G7 presidency. Our government understands that when we invest in women and girls, we strengthen communities and the economy for everyone. Advancing gender equality is not just the right thing to do; it is the smart thing to do. Canada will continue to share that message at home, with our G7 partners and beyond.

MARYAM MONSEF Canada’s minister of status of women Maryam Monsef was elected in October 2015 and was appointed Canada’s minister of status of women in 2017, after serving as minister for democratic institutions. She is informed by her years as a volunteer and community organiser. She was the vice-president of the YMCA in her district and served as director on various boards and committees working to advance social and economic justice. Monsef maintained her connection with her roots by co-founding the Red Pashmina Campaign, which empowers the women of Afghanistan through education. Twitter @MaryamMonsef  www.swc-cfc.gc.ca

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THE GENDER GAP

Women and the future of work Phumzile MlamboNgcuka, executive director, UN Women, says the G7 has a responsibility to ensure women and girls are equipped with the right tools to participate and succeed in the workplace of tomorrow G7G20SUMMITS.ORG

oday, there is digital transformation almost everywhere in the world. From cloud computing and artificial intelligence (AI) to blockchain technology, automation and the Internet of Things arising from smart vehicles and appliances – technological advances are transforming nearly every aspect of today’s businesses. These developments have significance beyond systems and devices, both reflecting and further influencing cultural changes within the workplace, marketplace and community. How do these transformations in professions, skills and workplace culture affect women? With employees increasingly seeking out flexible working arrangements, emotional satisfaction and → JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

THE GENDER GAP quality of life in their jobs, the new constant in the workplace seems to be change itself. It is up to all of us to ensure that women, men, girls and boys have the skills to adapt to these changes. If girls and women do not have access to, control over and full use of technology, they will simply be left behind. The World Economic Forum’s Global Risks Report 2018 noted the disruptions caused by intensifying patterns of automation and digitalisation, recognising them as potential drivers of growing inequality, especially when coupled with structural unemployment or underemployment. We have the opportunity to reverse these disruptions to instead serve humanity in its entirety, and particularly women and girls. BRIDGING THE SKILLS GAP Critical elements to tackle are the growing skills gaps between women and men in the workplace and marketplace, and the underlying root causes of those gaps. In the United States alone, up to 73 million jobs may be eliminated by 2030, but only about 20 million of the workers displaced will be easily transferable to other industries. This creates a skills mismatch that can result in a global talent shortage. For instance, Manpower reports that 83% of employers in Japan, 40% in Europe and 32% in the United States already have difficulties filling their job vacancies for reasons such as a lack of applicants and the fact that those who do apply do not have the necessary skills or experience. To bridge this gap, we need to incentivise new career paths, including for mid-career workers, and open up routes into the tech industry for those who are already users of technology but come from other fields, such as artists, sociologists, lawyers and workers with strong emotional intelligence, whose skills are complementary in increasingly AI-reliant workplaces. The next generation of workers must be better prepared to use technologies such as AI, advanced robotics and 3D printing as well as cultivating essential 21st-century skills, such as creativity, problem-solving, originality, empathy, adaptation and cultural and gender awareness. Education systems also need to adapt to the changing world of work, such as providing opportunities for multidisciplinary learning, where foundational or optional technology courses can be introduced to non-technology majors. An even more urgent gap to fill is that of training teachers to become competent users of information and communications technologies who can embed technology in all the subjects they teach. CRITICAL INVESTMENTS G7 governments have a vital role to play in addressing these issues, mainly by investing in skills development programmes and vocational training. Empowering self-employed women and women in vocational training was one of the key priorities for the German G7 presidency in 2015. 32

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We need vocational education that is offered virtually, both on- and offline or through blended options. UN Women is addressing this through our virtual skills school, WeLearn, which will work with companies to produce a pipeline of experienced and knowledgeable professionals by focusing on jobs of the future, 21st-century skills, entrepreneurship and gender-responsive procurement for companies to expand their purchasing from women-owned business. The significance of this intervention will depend on its scale. The more women we reach, the better. Open-source, accredited virtual education at the tertiary level also needs to be an option for training teachers, social workers, climate-smart agricultural extension officers, health workers and other professions where there is a demand for trained service providers in communities. The Commission on the Status of Women in 2017 focused on women’s economic empowerment in the changing world of work, including recommendations on strengthening science and technology education policies and curricula to ensure their relevance, and to enable entrepreneurial women to leverage science and technology for economic gain, including those in the informal sector. UN Women is engaging with the private sector to help close the skills gap, for example through the Women’s Empowerment Principles (WEPs). Endorsed by intergovernmental forums such as the United Nations General Assembly, the G7 and the G20, the seven principles holistically address key issues such as work-life balance and gender-responsive supply chain practices, and tackle the gender pay gap and sexual harassment in the workplace. There are currently more than 1,800 CEOs working to align their businesses with the WEPs. We continue to scale

In the United States alone, up to 73 million jobs may be eliminated by 2030, but only about 20 million of the workers displaced will be easily transferable to other industries. This creates a skills mismatch that can result in a global talent shortage” G7G20SUMMITS.ORG

THE GENDER GAP

PHUMZILE MLAMBO-NGCUKA

Executive director, UN Women Phumzile Mlambo-Ngcuka has been United Nations under-secretary-general and executive director of UN Women since 2013. From 2005 to 2008, she served as deputy president of South Africa. Prior to that she served as South Africa’s minister of minerals and energy and deputy minister in the Department of Trade and Industry. She is the founder of the Umlambo Foundation, which supports leadership and education. Twitter @phumzileunwomen  www.unwomen.org

up this initiative and call on companies to join us in making commitments, taking action, and monitoring and reporting on progress. PREPARATIONS FOR THE FUTURE To prepare women and girls for both current job market shifts and the changes yet to come, it is essential to promote inclusivity in innovation and the future of work. This is going to take close cooperation and dialogue among policymakers, social partners, the private sector, education and training providers, innovation analysts and other relevant actors. These are priorities that were identified during the G7 meeting of ministers of labour and employment in Turin in September 2017. Canada’s 2018 G7 presidency has identified three key priority themes related to this G7G20SUMMITS.ORG

agenda: investing in growth that works for everyone, preparing for jobs of the future, and advancing gender equality and women’s empowerment. UN Women, together with the European Union and International Labour Organization, has just kicked off the WE EMPOWER programme in G7 member states that will support the agenda’s implementation. The winners in the Fourth Industrial Revolution economy will be those who embrace the changes created by technology. The G7 has a critical role to play in ensuring that women and girls can access the skills and training needed to adapt to the challenges and opportunities that technology brings, so that the future of work is rooted in gender equality and economic opportunities, arrangements and protections that work for all people. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

Strengthening climate-gender synergies at Charlevoix

THE GENDER GAP

Gender is a cross-cutting priority at this year’s summit, offering a new angle on all agenda issues. The G7 Research Group’s Ella Kokotsis and Cindy Ou call for persistence and consistency in the G7’s approach to women and climate change

he importance of considering the various impacts of climate change on women and girls is increasingly critical. Women are often among the most disproportionately affected by the effects of a changing climate. This is particularly true in the developing world. The decrease in natural resources due to major climatic changes places additional burdens on women who typically have less access than men to educational, financial and employment opportunities. Auspiciously, in recent years, the G7 has increased its efforts to take a more gender-sensitive approach to economic, social and environmental issues, including those related to climate change. Several past G7 communiqués acknowledged the important links between women and social responsibility. This began in 2007 at the Heiligendamm Summit in Germany, where leaders called for women’s participation in social and economic development, followed by the link between gender and health at the 2009 L’Aquila Summit in Italy. However, none explicitly called for women’s participation in climate-related issues. DISCOVERING THE CORRELATION Only recently was the link forged between gender and climate, and then pushed to the forefront of the climate policies of both the G7 and the G20. This trend began in 2015, at the G7’s Schloss Elmau Summit in Germany. For the first time, the issue of women’s empowerment and gender equality was included throughout multiple sections of the communiqué, including those on the economy, development and food security. The following year, in 2016 at the Ise-Shima Summit in Japan, the G7 built upon this work, making an explicit and interdependent link between gender and climate change. The communiqué directly recognised women’s empowerment and gender equality as ‘indispensable’ for women’s equal participation as agents of change in all spheres of society. →

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JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

THE GENDER GAP

Ise-Shima was also the first summit where G7 leaders announced their commitment to take a gender-responsive approach to implementing the United Nations Sustainable Development Goals (SDGs) and to directly address climate change. But at the 2017 Taormina Summit, the link between gender and climate was not as explicit as it had been in 2016. The leaders did acknowledge the importance of a gender-sensitive and multidimensional approach to the development of economic, social and environmental policies, but excluded that critical link between gender and climate in their final declaration. For the Charlevoix Summit in 2018, Canada’s Prime Minister Justin Trudeau has identified gender and climate change as two of his five summit priorities.

Evidence suggests that the persistent push of same-issue commitments made at previous years’ summits has a very strong impact”

CINDY OU

Energy and compliance coordinator, G7 Research Group Cindy Ou is the energy and climate compliance coordinator for the G7 and G20 Research Groups and the Global Governance Program based in Trinity College at the University of Toronto. She was a member of the G20 Research Group’s field teams for the 2016 Hangzhou and 2017 Hamburg Summit. Twitter @g7_rg  www.g7.utoronto.ca

G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

ELLA KOKOTSIS

Director of accountability, G7 Research Group Ella Kokotsis is the director of accountability for the G7 and G20 Research Groups and has participated in field teams since 1996. She has consulted with the Canadian and Russian governments, and is co-author (with John Kirton) of The Global Governance of Climate Change: G7, G20 and UN Leadership.

He has positioned gender as a cross-cutting priority to be incorporated across the G7 agenda, and to be included as a priority issue in negotiations on climate change, oceans and clean energy. However, to bring this innovative and important synergy to life, the G7 leaders at Charlevoix should take several steps. A PRIORITY COME TO LIFE First, at Charlevoix the leaders could create an official body to ensure that their summit commitments on gender and climate find their way into official-level forums, working groups, experts’ groups and task forces created by the G7. These forums would ensure the continuation of the G7’s policy direction on the gender-climate connection. Second, Canada must continue to provide ministerial support following Charlevoix, beginning with the meeting of ministers responsible for environment, energy and oceans scheduled for the autumn. Engaging these ministers in this process is critical, as they identify the more salient issues, provide the necessary policy advice to the leaders and can mobilise the resources required to make real progress. Third, the G7 should continue to engage civil society, including non-profit organisations and non-governmental organisations, as well as intergovernmental organisations. Their involvement can be both formal and informal, and encompass lobbying, compliance monitoring, reporting or advocacy assessment, and information dissemination. These are all critical catalysts in moving this process forward. Finally, the evidence suggests that the persistent push of same-issue commitments made at previous years’ summits has a very strong impact. It will thus be important for France, when it picks up the G7 torch from Canada to host the 2019 summit, to keep the gender perspective as one of the standard metrics on which climate is considered and for the United States to do so too as the 2020 host. G7G20SUMMITS.ORG

G7 Research Group In the rapidly globalizing world of the 21st century, the Group of Seven major market democracies serves as an effective centre of comprehensive global governance. G7 members – the United States, Japan, Germany, the United Kingdom, France, Italy, Canada and the European Union – contain many of the world’s critical capabilities and are committed to democratic values. At its annual summit and through a web of G7-centred institutions at the ministerial, official and multi-stakeholder levels, the G7 does much to meet global challenges, especially in the fields of security, sustainable development and economics. The G7 Research Group is a global network of scholars, students and professionals in the academic, research, media, business, non-governmental, governmental and intergovernmental communities who follow the work of the G7, the G8 (with Russia) and related institutions. The group’s mission is to serve as the world’s leading independent source of information, analysis and research on the G7/8. Founded in 1987, it is managed from Trinity College, the Munk School of Global Affairs and the Department of Political Science at the U niversity of Toronto. Professional Advisory Council members, Special Advisors and participating researchers span the world. Through the G7 Research Group, Trinity’s John W. Graham Library has become the global repository of G7/8 documents, transcripts, media coverage, interviews, studies, essays, memorabilia and artifacts.

The G7 Information Centre at

www.g7.utoronto.ca The online G7 Information Centre (www. g7.utoronto.ca) contains the world’s most comprehensive and authoritative collection of information and analysis on the G7 and G8. The G7 Research Group assembles, verifies and posts documents from the meetings leading up to and at each summit, the available official documentation of all past summits and ministerial meetings (in several G7/8 languages), scholarly writings and policy analyses, research studies, scholarship information, links to related sites and the “background books” for each summit now published by GT Media and the Global Governance Project (g7g20summits.org). The website contains the G7 Research Group’s regular reports on G7/8 members’ compliance with their summit commitments, as well as other research reports.

BOOKS ON THE G7, G8 AND RELATED ISSUES FROM ROUTLEDGE Accountability for Effectiveness in Global Governance Marina Larionova and John Kirton, eds.

The Global Governance of Climate Change John Kirton and Ella Kokotsis

The European Union in the G8

The New Economic Diplomacy

Marina Larionova, ed.

Nicholas Bayne and Stephen Woolcock

The G8-G20 Relationship in Global Governance

The G8 System and the G20 Peter I. Hajnal

Marina Larionova and John Kirton, eds.

G7 RESEARCH GROUP Munk School of Global Affairs, 1 Devonshire Place, Room 308N, Toronto, Ontario M5S 3K7 Canada Telephone +1-416-946-8953 • E-mail g8@utoronto.ca • Twitter @g7_rg and @g8rg www.g7.utoronto.ca

INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH

G7 performance on economic growth With Canada prioritising investment in inclusive growth, the G7 Research Group’s Alecsandra Dragus takes stock of the G7’s historical progress in this area

romoting economic prosperity has been a focus for every G7 summit since its inception in 1975. As early as the 1978 Bonn Summit, the G7 recognised that global economic growth was necessary for the well-being of all economies. In preparation for the 2018 Charlevoix Summit, the Canadian presidency prioritised ‘investing in growth that works for everyone’ and ‘preparing for jobs of the future’ in response to new technological demands in the labour force.

An overview of the G7’s performance on these issues would help shape expectations for the future. COMMITMENTS ON GROWTH From 1975 to 2017, G7 leaders made 854 commitments on economic growth: 333 on trade, 259 on macroeconomic policy, 121 on financial regulation, 75 on labour and employment, 37 on reforming international financial institutions (IFIs), 21 on microeconomic policy and

TABLE 2: OVERVIEW OF G7 PERFORMANCE ON ECONOMIC GROWTH COMMITMENTS 1975–2017 Average

2011–2017

Assessed commitments

Average

2011

Assessed commitments

Average

2012 Assessed commitments

Average

Assessed commitments

Trade

63%

74%

84%

78%

Macroeconomic policy

85%

86%

95%

85%

Financial regulation

76%

87%

Labour and employment

74%

89%

Infrastructure

76%

88%

IFI/UN reform

60%

Economic growth total

70%

82%

85%

G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

89%

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TABLE 1: FIGURES FOR COMMITMENTS MADE AT RECENT SUMMITS Total 19752017

Total 20112017

2011 Deauville

2012 Camp David

2013 Lough Erne

2014 Brussels

2015 Schloss Elmau

2016 Ise Shima

2017 Taormina

Trade

333

Macroeconomic policy

259

Financial regulation

121

Labour and employment

IFI/UN reform

Microeconomic policy

Infrastructure

Economic growth total

854

276

IFI = international financial institution. Blank = not available.

eight on infrastructure (see Table 1). Of those commitments, 276 – almost a third – were made between 2011 and 2017. In this period, the G7 prioritised trade and macroeconomic policy with 94 and 78 commitments made, respectively, and paid intermittent attention to financial regulation (60) and labour and employment (35). Very few were made on IFI reform, microeconomic policy or infrastructure. The substantial growth in the number of commitments made during

2013 Average

STICKING TO PLEDGES There has been solid compliance with the commitments on economic growth assessed by the G7 Research Group (see Table 2). Compliance on 70 assessed commitments averaged 70%. One commitment on infrastructure led with a score of 88%, followed by an 85% average for the 15 commitments on macroeconomic

2014 Assessed commitments

80%

89%

84%

this period suggests an increased focus on economic growth.

G7G20SUMMITS.ORG

Average

73%

100%

75%

policy. There was lower compliance across eight financial regulation commitments (76%) and three labour and employment commitments (74%). The 39 trade commitments had the lowest compliance with 63%. From 2011 to 2017, compliance with economic growth commitments averaged 82%, an increase from the overall 70%, and compliance within each issue area except infrastructure, which remained the same, also increased considerably. →

2015 Assessed

commitments

Average

2016 Assessed commitments

91%

82%

88%

87%

Average

Assessed commitments

63%

IFI = international financial institution. Blank = not available.

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Finance ministers translate leaders’ commitments into country-specific actions that are ready to be implemented” The commitment assessed on labour and employment received the highest score at 89%, with the one on infrastructure following closely at 88%. The four commitments on financial regulation averaged 87%, whereas the 10 on macroeconomic policy averaged 86%. The eight assessed on trade received an average of 74%, above the overall average from 1975 to 2017. The European Union and Canada led with overall compliance scores of 91% and 89% respectively – well above the average of 82% for 2011–17. On trade, the EU led with 92%, followed by Canada with 85%. This pattern is reversed for macroeconomic policy: Canada took the lead with 93%. The EU followed with 90%. On financial regulation, Canada, Germany and the United Kingdom each achieved a complete score of 100%. France, Italy and the EU tied for second place at 84%. All G7 members had complete compliance with the commitments assessed on labour and employment. Germany, Italy, Japan, the United Kingdom, the United States and the EU also had perfect compliance on infrastructure commitments. MEASURABLE SUCCESS The impact of the increase in the number of G7 commitments and compliance performance from 2011 to 2017 may have had a positive effect on members’ economies as reflected by the overall expansion of growth. All G7 members experienced increases in their gross domestic product, although income inequality, on average, remained unchanged. The trend on a global scale is similar.

ALECSANDRA DRAGUS Alecsandra Dragus has more than four years’ experience as a researcher and compliance analyst with the G7 Research Group. Her areas of expertise include climate change and information and communication technologies. She holds a bachelor’s degree from the University of Toronto, where she studied political science and Spanish. Twitter @g7_rg  www.g7.utoronto.ca

G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

82%

Average compliance on economy-related commitments from 2011 to 2017

IMPROVING RESULTS There are several low-cost measures that the G7 can implement to improve compliance. First, the G7 should consistently hold finance ministerial meetings before and after the summit. Finance ministers translate leaders’ commitments into country-specific actions that are ready to be implemented. They declutter the summit agenda, allowing leaders to focus on the most pressing issues. Second, when constructing commitments, the G7 should reference a wide range of institutions with larger memberships, include specific deadlines and connect inclusive economic growth with other issues such as climate change and gender. These tools have been shown to improve performance over a variety of issues. Third, the G7 should increase data transparency. Institutions lack the necessary data to accurately assess inequality. By making such data accessible, the G7 may feel more accountable and pressured to act. G7G20SUMMITS.ORG

The BRICS Research Group The concept of the “BRICS” refers to the large emerging countries of Brazil, Russia, India, China and South Africa. Today, the annual stand-alone summits of their leaders, which started in 2009, embrace a broad range of high-level issues requiring global governance, such as economics and finance, trade and investment, health, food and agriculture, development, energy, environment, climate change, social

progress, peace, security and international institutional reform. Led by Marina Larionova of Russia’s Center for International Institutions Research at the Russian Presidential Academy of National Economy and Public Administration and John Kirton of Canada’s University of Toronto, the BRICS Research Group aims to serve as a leading independent source of information and analysis on the BRICS institutions, issues and its members’ underlying interactions. Together with international partners from the BRICS countries, the BRICS Research Group focuses on the work of the BRICS and diplomacy within the group

as a plurilateral international institution operating at the summit level. Particular attention is paid to the relationship and reciprocal influence of the BRICS with other leading global governance institutions such as the G7, the G20 and those of the United Nations galaxy. Documentation from the BRICS and relevant research and reports are published on the BRICS Information Centre website at www.brics.utoronto.ca. The BRICS Research Group also conducts analyses of the compliance of the BRICS members with their summit commitments. It also publishes relevant scholarly works and books.

SELETED PUBLICATIONS: MBRICS and Global Governance

BRICS: A Very Short Introduction

BRICS in the System of Global Governance

BRICS: The 2012 New Delhi Summit

edited by Marina Larionova and John Kirton (Routledge, forthcoming)

Andrew F. Cooper (Oxford University Press, 2016)

Special issue of the International Organisations Research Journal, volume 10, number 2, 2015 https://iorj.hse.ru/en/2015-10-2.html

edited by Marina Larionova and John Kirton, with Yoginder K. Alagh (Newsdesk Media, 2012) www.brics.utoronto.ca/ newsdesk/delhi

INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH

t w o gr

Investment in produces results for all C

anada’s government is inspired by a simple but powerful idea: growth must benefit everyone. Making sure that every person has a real and fair chance at success is both the right thing to do and the smart thing to do – it is an essential part of building a strong and growing middle class today, and ensuring sustained economic growth over the long term. Canada has experienced the benefits of this inclusive approach first-hand. Over the past two years, hard-working Canadians have created more than half a million new jobs, the unemployment rate is at the lowest level we have seen in more than 40 years, and consumer confidence is on the rise. The resulting economic growth has made it possible for our government to continue to invest in the things that matter to Canadians, while making steady improvements to our bottom line. It is clear that investing in growth that works for everyone has delivered good results for Canada and Canadians, and that is why we made it a central theme of our G7 presidency this year. It is our hope

G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

Canada’s minister of finance Bill Morneau shares the success of Canada’s broad approach to development and growth – an approach other countries have a responsibility to replicate that by working together, Canada and our G7 partners will be able to advance solutions to the pressing challenges we all face, including helping our workers prepare for the jobs of the future, advancing gender equality, addressing climate change, protecting oceans, investing in clean energy, and building a more peaceful and secure world. For our part, we continue to look for new and innovative ways to ensure that everyone can contribute to – and share in – the benefits of economic growth. In particular, we know that Canada’s economic success is deeply tied to women’s ability to work and to earn a good living from that work. That is why our most recent budget included a special focus on creating more opportunities for Canada’s talented, ambitious and hard-working women. From giving women-owned companies the help they need to grow into world-class businesses to changes to employment insurance benefits to promote more equal parenting and make it easier for women to return to work, our government is committed to building a country that is more equal – and more prosperous. G7G20SUMMITS.ORG

INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH

We know that Canada’s economic success is deeply tied to women’s ability to work and to earn a good living from that work”

By bringing together G7 finance and development ministers, as well as central bank governors, we hope to explore ways to better support and empower the world’s most vulnerable and marginalised people – including women and girls – while working together to secure stronger economic growth for all. SHARED RESPONSIBILITY This year’s G7 themes reflect the challenges we all face in a rapidly evolving world, and signal our shared accountability. As Canada’s prime minister Justin Trudeau has said, “as G7 partners, we share a responsibility to ensure that all citizens benefit from our global economy and that we leave a healthier, more peaceful and more secure world for our children and grandchildren.” Investing in growth that works for everyone is central to that responsibility. Every person deserves an equal chance to contribute to, and share in, the economic success of our countries. Together, we can make that happen.

BILL MORNEAU Minister of finance

Bill Morneau was appointed Canada’s minister of finance in 2015. Before entering politics, he served as president of Morneau Shepell from 1992. He was a member of the Government of Ontario’s Pension Advisory Council, and in 2012 was appointed a pension investment advisor to Ontario’s minister of finance. He was chair of the board of Toronto’s St. Michael’s Hospital, Covenant House and the C.D. Howe Institute. Twitter @Bill_Morneau  www.fin.gc.ca/fin-eng.asp

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INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH

THE BUSINESS CONTRIBUTION TO GROWTH FOR ALL

A call to action The B7 Summit recommendations focus on promoting economic growth, sustainability and shared prosperity in the face of strained trading architecture, writes the Honourable Perrin Beatty, president and CEO, Canadian Chamber of Commerce

G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

n 5 and 6 April 2018, heads of the business federations of the G7 members, along with other business leaders, met in Quebec City. This year’s B7 Summit took place against the backdrop of a global environment of uncertainty. Rising protectionism, the growing divide between ‘haves’ and ‘have nots’, and the rising fear of technology’s potential to displace workers from their jobs are all placing an increasing strain on the global economy and its institutions. Delegates recognised that we are at a crucial juncture if we want to ensure that our collective economies continue to enjoy the type of growth the previous generation experienced. The B7 widely acknowledged that the role of business goes well beyond purely being an economic agent; it includes ensuring the benefits of growth are widely felt by our populations and that growth occurs in a sustainable manner. To achieve this objective, the B7 focused this year on three themes: generating inclusive growth, improving resource G7G20SUMMITS.ORG

INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH efficiency and scaling up small business. Participants collectively agreed on 18 recommendations for the G7 across these three areas. The B7 had a comprehensive discussion on the breadth of issues under inclusive growth, which includes economic growth based on equity, equality of opportunity, and the right to protection during market and employment transitions. Vital to the achievement of this goal is having economic policies that stimulate productivity. The B7 feels strongly that it is key for the G7 to deliver this through a rules-based international trading system. At this stage – perhaps more than at any other point – the architecture governing our trade system is under strain. The G7 must maintain its support for the World Trade Organization and its dispute settlement mechanism. Governments also need to work together to address steel and aluminium excess capacity and ensure a level playing field globally. Together, we must also embrace the digital age. The shift to an increasingly digital economy presents transformative opportunities. However, these technologies, and the transition to them, will need to be harnessed if we are to ensure the benefits are widely enjoyed. This means getting the regulatory framework right on key issues such as the free flow of data without unjustified data localisation, or the forced transfer of source code. But it also means recognising that we need a strong cybersecurity framework to ensure confidence and stability. Additionally, people need to be placed at the centre of the transition to the digital age. This means deploying disruptive technologies while also creating and supporting retraining opportunities for workers. The need for inclusive growth also extends to the scaling up of small businesses to help them thrive in the global economy. The capacity challenges faced by small and medium-sized enterprises (SMEs) make the issues of tax and regulatory efficiency significantly more acute. This means that for these businesses to thrive, governments must ensure that policies do not hinder SMEs’ ability to grow and innovate. This includes assisting them with the adoption of digital technologies and making public procurement opportunities more accessible. SMEs also face particular challenges when they look to grow beyond their borders and access international opportunities. G7 governments can address this issue by providing effective on-the-ground assistance and in-market expertise. RESOURCE STRATEGISATION Finally, it is critical that our resources be extracted and used efficiently and sustainably. Both the public and private sectors must partner to deliver research and development strategies that ensure close coordination of public funds and private capital. This collaboration between the two sectors needs to be complemented by market-based mechanisms for reducing greenhouse gas emissions that reflect national circumstances

SMEs face challenges when they look to grow beyond their borders and access international opportunities” G7G20SUMMITS.ORG

PERRIN BEATTY

President and CEO, Canadian Chamber of Commerce The Honourable Perrin Beatty has been president and CEO of the 200,000-member Canadian Chamber of Commerce since 2007. Previously, he was the president and CEO of Canadian Manufacturers & Exporters (CME). Beatty was first elected to Canada’s House of Commons as a Progressive Conservative in 1972. During 21 years in Parliament, he served as minister in seven different portfolios, including the Treasury Board and External Affairs. From 1995 to 1999, he was president and CEO of the Canadian Broadcasting Corporation. Twitter @PerrinBeatty  www.chamber.ca

and avoid distortions in the marketplace that discourage private-sector investment. Consequently, involving the private sector in domestic and international policymaking is essential. In the international context, trade and resource efficiency need to work together. The spread of affordable and efficient technologies through the reduction of tariff and non-tariff barriers will facilitate environmentally sustainable economies. Despite the plethora of challenges ahead, the B7 federations remain optimistic that at this critical juncture there are still important opportunities ahead. However, the B7 and G7 must work together with our citizens and other groups to deliver on these ambitious goals. As private-sector leaders, we look forward to working with the Canadian presidency to deliver a successful, and impactful, G7 in 2018. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH

Renewed commitments

he expansion of the global economy over the past year is set to continue and strengthen. Gross domestic product (GDP) in G7 economies grew by an estimated 2% in 2017 – the fastest pace since 2010 – and growth is becoming more robust and broad-based. At an average of 6%, unemployment has finally fallen below its pre-crisis level in G7 countries. As the recovery gathers pace, G7 members must focus on making sure that growth is self-sustaining and driven by strong productivity gains, that it benefits all and that it is more inclusive while tackling several far-reaching megatrends, from digitalisation to climate change. Confronted with these challenges, Canada has put forward a progressive and ambitious agenda for the Charlevoix Summit. Much needs to be done. Productive growth continues to lag behind past norms, thus hampering further wage growth. Inequality levels in G7 economies remain stubbornly high. The richest 20% earn almost six times more than the poorest 20%, and the top 10% of the wealth distribution hold a staggering 54% of total wealth, compared with the 2.8% held by the bottom 40%. Income inequality has also both a spatial and a gender dimension: household income can be up to 50% higher in the richest region of a G7 country compared to the poorest region, and the gender income gap has decreased but remains at a G7 average of 43%. Moreover, inequalities are multidimensional: they limit social mobility and impact the different facets of well-being, such as access to health, education and housing. This results in falling trust in public institutions and erodes social cohesion. And all this takes place in the context of deep transformation. To be sure, globalisation, digitalisation, demographics and climate change will

Angel Gurría, OECD secretary general, proposes an agenda through which the G7 can foster sustainable growth in a time of rapid change

keep transforming G7 economies at an increasingly fast pace. JOBS AT RISK Rapid technological change has led to an increase in employment rates in most G7 members, but it has affected the distribution of jobs, wages and income. This transformation has had positive impacts on productivity for many firms, in particular frontier firms. But it has yet to percolate to the rest of the economy in order to generate broader-based productivity gains. In the labour market, the share of high- and low-skilled jobs has increased at the expense of middle skilled jobs. OECD research suggests that in the next 20 years, 14% of jobs are at high risk of automation and a further 30% may experience significant changes. Meanwhile, despite countries’ efforts to meet their nationally determined contributions to reducing their greenhouse gas emissions under the Paris Agreement, levels are still insufficient to keep global warming well below 2°C relative to pre-industrial levels. Against this background, urgent and decisive action is needed. G7 members,

both individually and collectively, have an opportunity to lead a comprehensive policy response to these pressing and looming challenges. First, higher global growth provides an opportunity to make renewed progress on domestic structural reforms, with higher chances of bearing fruit more rapidly and generating growth that works for all. G7 members have undertaken encouraging reforms: Japan has increased access to childcare and France has reformed employment protection legislation and collective wage bargaining. These reforms should increase participation, access and mobility in the labour markets, thus enhancing productivity and inclusiveness. However, G7 members must do more and leverage the positive context to obtain quick wins that would reduce the risk of reform fatigue. G7 economies must strive to harness the sources of growth coming from the digital economy. By 2030, eight billion people and 25 billion active smart devices will be connected. Government action is necessary to realise the potential of transformative technologies, such as artificial intelligence or the Internet of Things, for much-needed

ANGEL GURRÍA

Secretary-general of the OECD Angel Gurría has been secretary general of the Organisation for Economic Co-operation and Development since 2006, having been reappointed in 2010. He served as Mexico’s minister of foreign affairs from 1994 to 1998 and minister of finance and public credit from 1998 to 2000. Gurría has participated in various international organisations, including the Population Council and the Center for Global Development. He chaired the International Task Force on Financing Water for All and was a member of the United Nations secretary general’s Advisory Board on Water and Sanitation. Twitter @OECD  www.oecd.org

G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

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INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH

INEQUALITY IN G7 ECONOMIES Wealth distribution

Total wealth

Inequality

RICHEST 20%

The top 10% hold 54% of the total wealth

10%

40% of the wealth distribution

54%

of the total wealth The top 10% hold a staggering 54% of the total wealth

The richest 20% earn almost

more than the poorest 20%

POOREST 20%

2.8%

total wealth held by the bottom 40%

Gender gap

43% G7 average

productivity growth and improved living standards. G7 policymakers must anticipate these transformations and the related disruption by prioritising skills development, preparing tomorrow’s infrastructure and adapting social security and labour market activation schemes to the future of work in order to make sure that no one is left behind. By focusing on preparing for the jobs of the future, Canada’s G7 presidency is striking the right chords. But, more generally, the Charlevoix Summit offers a unique opportunity for collective action at the multilateral level. A UNITED FRONT G7 members must avoid the temptation of protectionism and defuse the threat of a trade war, which is perhaps the most significant downside risk to the global economic outlook. The Global Forum on Steel Excess Capacity, facilitated by the OECD, can be part of the solution. Collective action will also be needed to level the playing field at the multinational level, including by making progress in the international tax agenda. G7G20SUMMITS.ORG

Last but not least, we need policies to avoid a collision course with nature and ensure the sustainability of our economies. Done properly, this will not only be good for the only planet we have, but also beneficial for the economy. Investing in Climate, Investing in Growth, published by the OECD last year, shows that balanced packages of fiscal and structural reforms geared towards climate change mitigation can increase GDP levels by up to 2.8% in 2050 compared to the business-as-usual scenario. Climate change requires collective action that recognises the interconnected nature of the environmental challenge. The G7, under Canada’s presidency, is showing strong leadership with a focus on addressing the question of plastics pollution. Every year, up to 13 million tonnes of plastic are dumped in the oceans, hampering their capacity to work as one of the Earth’s lungs. Developing the circular economy by boosting the market for plastic recycling not only makes economic sense but also helps us deliver on our climate and environmental agenda. The G7 Charlevoix Summit is an opportunity for G7 leaders, under the stewardship of the Canadian presidency, to renew their commitment to inclusive and sustainable growth while showing their determination to use multilateralism as the prime mechanism for resolving differences and building better societies for tomorrow. The OECD will continue putting its convening power, expertise and policy tools to support the G7 in this endeavour. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH

Interview with Robert Fauver

Reflections on the most urgent economic issues facing the G7 Q. What are the most important economic issues that G7 leaders should address at their Charlevoix Summit this year? A. There are a few major question marks in what is otherwise a promising outlook. First, there is the very difficult question of how we pull out of a zero interest rate policy. We have found in the United States that it was relatively easy to go into the zero interest rate policy framework. Pulling out is fraught with dangers as financial markets may misinterpret the moves of the central banks. Second, there is rising concern over where the international trading system is going. This is partly on the realisation, which several countries are slowly coming to, that perhaps China’s membership in the World Trade Organization (WTO) was premature. There is a rising realisation – in Japan, in the United States and maybe in Europe and elsewhere – that we moved too soon. This is partly brought to the surface by the undiplomatic comments of President Donald Trump. But it brings up many interesting questions, as the substance of many of the issues he raises are on target: intellectual property rights, cyber warfare, intrusion into markets through dumping, and several pricing mechanisms that undermine the framework and system. All of us who were free traders are coming to understand that there is something to the argument that free trade without some degree of fairness is not good for the world trade system. 48

Robert Fauver, former US sherpa, speaks to editor John Kirton about the issues surrounding growth within G7 economies and how leaders can act to overcome acute fiscal challenges There are various side issues, some more philosophical but still worthy of G7 leaders discussing among themselves, about where they would like the trading system to move over the medium and longer term. Third, when there is a synchronised economic upturn among the G7 members, as there currently is, how much pressure does this put on commodity markets? What is the potential effect on rising commodity prices? These three issues the G7 leaders could usefully discuss in order to establish a better understanding among their countries. Q. What are the major risks to the substantial, reliable economic growth now under way across all G7 countries? A. I am underwhelmed by the focus on economic issues of the current set of G7 leaders. Among the seven there are few leaders who have the experience or history of focusing on economic questions. This is partly because things are going well →

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ROBERT FAUVER Robert Fauver is president of Fauver Associates, LLC, an international economic consulting firm that specialises in Asia. He spent 32 years as a career public servant in the United States working in the Treasury, State Department, White House and National Intelligence Council. He served as under secretary for economic affairs at State and co-chaired the negotiations on the US-Japan Structural Impediments Initiative. He was President Bill Clinton’s sherpa for the G7 summits of 1993 and 1994 and special assistant to the president for national security and economic affairs. He designed the economic sanctions against India and Pakistan following their testing of nuclear weapons, negotiated the creation of the Asia-Pacific Economic Cooperation forum and led the yen-dollar negotiations that led to the beginning of liberalisation and Internationalisation of Tokyo’s financial markets.

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INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH at the moment in their economies. Five of the seven, including the US, Canada, France and Japan, have not focused much on macroeconomic issues. I am not sure they are well positioned for such a discussion, although if appropriately briefed and brought up to speed, they could be. Q. How serious are the threats to current economic growth from a so-called trade war, growing government fiscal deficits and debts, or unduly rapid monetary policy normalisation? A. I reject the phrase ‘trade war’. It adds to the ongoing discussion a level of tension that is uncalled for. There is now a reflection on existing trade arrangements. If you look at the discussions on the North American Free Trade Agreement (NAFTA), there were clearly areas that needed updating, to say the least. Those discussions, which perhaps started from the wrong level of discourse, are now moving in a positive direction to correct some of the earlier errors or things left out. The level of discussion between the United States and some of our trading partners and China is near the level of the old ones over US-Japan irritations. This is more risky. China’s potential as a major economy is on the upswing, whereas we all knew to some extent that Japan in the 1970s and 1980s was on a downswing, so the magnitude of the US-Japanese disagreements were not going to upset the global economy. Today, China can affect macroeconomic conditions and set incorrect expectations for the global economy. Q: On trade, would it be good for the United States to join an appropriately modified Comprehensive Progressive Trans-Pacific Partnership (CPTPP)? A. It would be wonderful if the United States would re-enter the discussions and be accepted by the other members. But I am not sure the G7 has a role in regional trade discussions. I am not sure that we would find the Europeans anxious to join pushing the United States into what it might perceive as a trading bloc. On the sidelines of the summit, the Canadians and Japanese could move the process along. Trudeau could set the stage for that in his bilaterals with Shinzo Abe and Donald Trump, which could be an occasion for Canada and Japan welcoming the United States to join the CPTPP. Q: How serious is the risk of the growing fiscal deficits and debt in most G7 members? A. In the near term, it is not very serious. In the medium term, it is quite serious. In the longer term, it is devastating if not addressed. It is always humorous to see how political parties shift sides. In the United States, we now hear from the Democrats about how horrible deficit spending is, whereas the Republicans are now turning a blind eye. It is appalling that we returned to a trillion dollar deficit so quickly. We doubled the national debt in the eight years of the Obama administration. Many commentators took the view that this was dangerous. We are now back on track to doing more damage in a short period. 50

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The question is one of dynamic scoring. There is a clearly a view among most economists that tax reform can have positive impacts on future growth. So the outlook is not as stark as the latest Congressional Budget Office projection that is based on the assumption that tax reductions have no effect on growth. Still, trillion dollar deficits are outlandish and need to be pulled back. An increasingly small portion of US government total spending is discretionary. It is entitlements that capture the larger share of spending. Without entitlement reform, there is little that can be done to control the rising trajectory of US deficits. Q: Is there a risk that rising US interest rates might pull money out of emerging economies and bring the world an emerging market financial crisis? A. That is a good point. It has been a blessing in disguise for the emerging markets for almost a decade to have had zero interest rates in the established economies. That has brought a windfall in their low interest rate borrowings and access to funds that they would not otherwise have easy access to. The return to a normalisation of interest rates in the United States will make borrowing by developing countries either more expensive or less available. They will have to pay higher interest rates or decide to borrow less. It is not the speed but the unevenness of the normalisation and market reactions to that approach. We could move smartly towards more normal interest rates if there was a normal path of monetary policy and we stuck to it. One problem is that the Federal Reserve’s approach has been a bit ‘start and stop’. If markets started to react, they pulled back. Instead of committing to a path and sticking with it, the Fed added confusion to the markets as to how serious they were about returning to normal interest rates. It is more a question of the predictability than the speed of the movement. Russia’s wobbling economy has little to do with financial markets themselves. Q: What should G7 leaders do at Charlevoix to reduce the risks? A. This is hard to answer. Much of what we have discussed is more medium than near term. The focus this year should be less of direct policy relevance to today’s issues than structural in terms of medium-term developments in the global economy. Do their statements have much teeth or effectiveness if they are not attached to a set of policy changes?

8years Under the Obama administration, national debt doubled in the United States in this time frame

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We have convinced third-rate students to go to third-rate schools and get third-rate degrees and they come out and cannot understand why they cannot find first-class jobs.” The years in which they had significant effects were when G7 members made generalised commitments they all agreed and then identified specific policies or moves they each committed to. A market response in a stabilising way requires a concrete policy enactment. This year, G7 leaders could focus on globalised free and fair trade. They need to commit to working with the WTO to solve several current irritants. They could commit to sharing cybersecurity information to protect technology and protect business secrets from outside attempts to steal them. Thus there are a few things they could commit to that would be helpful now. Q: What could G7 leaders do to make economic growth more inclusive? A. It is most important to go back and read the communiqués on structural reform of the Organisation for Economic Co-operation and Development from the mid-1980s. Ministers realised that there were serious labour market rigidities in Europe that had negative effects on working-class incomes. Labour market rigidities needed to be reduced so that wages could rise according to the work ethic and productivity changes and not just to a broad set of overall policies. One factor in the increasing disparity of income levels has been the failure of wage growth in the lower sector of the economy. Incomes, whether from wages, bonuses or stock market wealth gains, have been market driven, whereas income levels at the low end have not. We G7G20SUMMITS.ORG

need to review social service policies to see if they stand in the way of the work effort. There also needs to be a commitment to broader education reform. We need to get away from the idea that everyone should go to college. We need to bring back the old idea of vocational training. Many jobs are going unfilled in the United States because of a lack of training in skilled blue collar jobs – in electrical and auto repair, and plumbing for example – that do not require college degrees. People think college is good for everybody. But students then come out of college without the skills that match the jobs that are open and cannot find employment. Any electrician or plumber will say that their hardest task is finding labour. Their incomes are quite good and comfortable, and yet they cannot find younger people to move into the professions. We need to take a broader view of education and not send people to college for the wrong reasons. We have convinced third-rate students to go to third-rate schools and get third-rate degrees and they come out and cannot understand why they cannot find first-class jobs. Q. How can G7 leaders shape their economic growth in ways that enhance gender equality? A. It is very difficult to target policies that will be pro growth, pro free market and pro income raising but that also target only a segment of the population. It is very difficult to develop macro-level policies to do this. You can work on legal policies to eliminate discrimination and to training ethics in individuals. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH

Gary Clyde Hufbauer from the Peterson Institute for International Economics outlines the G7’s role in easing trade frictions between two of the world’s superpowers

Confronting the US-China split in the world trading system

rade and investment relations among the three great commercial powers – the European Union, the United States and China – remain regulated by the World Trade Organization (WTO). However, the United States has sidelined the WTO rulebook as it aggressively pursues bilateral negotiations with China. At the G7’s Charlevoix Summit on 8–9 June 2018, leaders should confront the prospect that the ties of the WTO, as among the three great powers, are near breaking point. Conflicts are centred in US-China relations, but the EU is more than a bystander. Erupting frictions between the United States and China will likely affect the commerce of not only Europe but also many other countries.

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INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH The United States harbours four large grievances with the way China manages its domestic economy and external commercial relations: • China’s large current account surplus with the world, and its bilateral surplus with the United States; • China’s practice of forced technology transfer, through mandatory joint ventures and other measures; • China’s support of state-owned enterprises (SOEs) through monopoly privileges and opaque subsidies; and, • China’s ‘great digital wall’ that excludes foreign content and compels localisation of servers and digital analysis. Apart from the current account surplus issue, the EU shares these grievances, although with less intensity. Sceptical of WTO rules, the Trump administration has turned to self-help. REACTIONS AND THREATS When US trade representative Robert Lighthizer issued his investigation of Chinese technology acquisition practices in March 2018, US president Donald Trump announced tariffs of 25% on $50 billion of imports from China. When China promised to reciprocate, Trump threatened tariffs on an additional $100 billion of Chinese imports. With the president’s blessing, Congress is drafting legislation that will enlarge the mandate of the Committee on Foreign Investment in the US to screen outward investment and technology transfers to adversary countries, notably China, to ward off diminished US superiority in critical technologies. An enthusiastic Trump has already implemented some of the provisions by executive order. Finally, in anti-dumping and countervailing duty cases, the US Commerce Department, led by Wilbur Ross, will gladly use ‘best information available’ to support dumping and subsidy cases against Chinese SOEs.

GARY CLYDE HUFBAUER Gary Clyde Hufbauer left his position as Reginald Jones senior fellow in January 2018. He is now a nonresident senior fellow living in New Mexico. Before joining the Peterson Institute for International Economics in 1985, he was the Marcus Wallenberg professor of international financial diplomacy at Georgetown University. From 1977 to 1980, Hufbauer served in the US Treasury Department. He holds an AB from Harvard College, a PhD in economics from King’s College at Cambridge University and a JD from Georgetown University Law Center.

Meanwhile, the strong US economy presages a widening current account deficit with the world and a growing bilateral deficit with China. In 2019, drawing on existing statutes, Trump might further restrict imports from China and other countries without new legislation from Congress. China objects to US measures, but the prospects for WTO adjudication are dim. Other WTO members have refused to negotiate US grievances over the functioning of the Appellate Body, and consequently the United States is blocking new appointments. By the end of 2019, the Appellate Body will likely not have sufficient members, which will effectively close the dispute settlement system. WTO mechanisms for resolving commercial disputes between members, including between great powers, will then cease to function. EASING THE STRAIN How can the G7 at Charlevoix take the edge off such looming tensions? First, other G7 members should make a gallant effort to persuade the United States that restricting imports product by product or country by country will not meaningfully reduce its global trade

25%

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deficit. However, exchange rate changes can help: other G7 members should welcome a weaker dollar, measured on a trade-weighted basis, so long as the global US trade deficit exceeds 3% of gross domestic product. The same forbearance could apply, in future, to other G7 members with outsized trade deficits. Second, the G7 could recommend the WTO launch negotiations to address US grievances with the Appellate Body. Conditioned on progress at the negotiating table, the United States could assent to the appointment of new Appellate Body members. Third, the G7 could call for fresh WTO negotiations that establish rules for SOEs, digital commerce and intellectual property. Chapters of the new Comprehensive and Progressive Trans-Pacific Partnership provide good models. With just a few modifications, the rules could be embraced by the entire WTO membership. These ambitious understandings would not, however, resolve thorny issues regarding technology. Democrats and Republicans insist that the United States must retain superiority in military equipment and ‘critical technologies’ – software, computer chips, new materials, robotics, biotech, artificial intelligence and more. In China, president Xi Jinping and his Chinese Communist Party leaders equally insist that China must achieve technological parity with the United States. Nothing the G7 does can smooth over this irreconcilable difference. But if the G7 makes incremental progress on lesser but still difficult issues, perhaps technology frictions can be postponed to another day.

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Enhanced international tax coordination works Consensus on tax rights is crucial to avoid fractures in the international landscape, as Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration, explains

ince the adoption of the base erosion and profit sharing (BEPS) package in 2015, countries are taking action on many fronts, including on actions that go beyond the four minimum standards. The first results of the ongoing peer reviews are becoming available: more than 11,000 tax rulings identified and being exchanged, and over 160 preferential tax regimes reviewed and being amended or abolished. An important step was reached in June 2017 with the first signing ceremony of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS, also known as the ‘BEPS multilateral instrument’. With 78 jurisdictions having signed to date, it covers more than 1,200 bilateral tax treaties that will be updated to implement several BEPS measures. The instrument will come into force in July 2018. The OECD has delivered on the G7 Bari Declaration of May 2017: its Model Mandatory Disclosure Rules for CRS Avoidance Arrangements and Opaque Offshore Structures set out model mandatory disclosure rules that target promoters and service providers involved in arrangements designed to circumvent reporting under the Common Reporting Standard or aimed at providing beneficial owners with the shelter of non-transparent structures. ADDRESSING THE CHALLENGES AHEAD Although tax sovereignty is a core feature of national identity, the scale of interconnectedness and cross-border activity means that when governments act alone, this sovereignty may be only nominal. Unilateral action can never provide a complete solution. The work on tax and digitalisation is now a priority, and an area where greater coordination

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is needed to avoid rules emerging that may lead to increased compliance burdens and double or multiple taxation. To protect sovereignty, a consensus-based solution is needed. In March 2017, the G20 finance ministers mandated the OECD to deliver an interim report on the tax implications of digitalisation. This report, Tax Challenges Arising from Digitalisation – Interim Report 2018, was agreed in March 2018 by the Inclusive Framework on BEPS. DIGITAL ANALYSIS The report analyses the main features frequently observed in certain highly digitalised business models and value creation in the digitalised age, as well as implications for the existing international tax framework. It describes the complexities of the issues involved, countries’ different positions regarding these features and their repercussions, and how these stances drive their approach to possible solutions. Countries’ perspectives fall into three groups. The first considers that reliance on data and user participation may lead to misalignments between where profits are taxed and where value is created. However, these countries think that such challenges are confined to certain business models and do not undermine the principles underpinning the existing international tax framework. Consequently, they do not see the case for wide-ranging change. A second group takes the view that the ongoing digital transformation of the economy and trends associated with globalisation challenge the continued effectiveness of the existing international tax framework for business profits. For these countries, these challenges are not exclusive or specific to highly digitalised business models. Finally, a third group considers the BEPS package to have addressed double non-taxation, although it is still too early to assess the impact. These countries are generally satisfied with the existing tax system and currently see no need for significant reform of the international tax rules. G7G20SUMMITS.ORG

jurisdictions are signatories to the BEPS multilateral instrument

160 preferential tax regimes have been reviewed since 2015

1,200 bilateral tax treaties will be updated to implement several BEPS G7G20SUMMITS.ORG

In addition, the report discusses interim measures that some countries have indicated they would implement, believing that there is a strong imperative to act quickly. There is no consensus on the need for, or merits of, interim measures, with several countries opposed on the basis that such action would give rise to adverse consequences. The report describes, however, the framework to avoid potential undesirable effects of such short-term measures. The Inclusive Framework, to be updated in 2019, is seeking a consensus-based solution by 2020. Beyond the international tax rules, digitalisation can improve tax administration across the world. Given the availability of big data, international cooperation could be enhanced regarding the information on users of online platforms, as part of the gig and sharing economies. New tools can be developed, and the tax consequences of technology can be better understood, particularly regarding cryptocurrencies and blockchain. The dialogue now goes to the heart of international tax rules – countries have agreed to review fundamental questions about who can tax what, why and how much. Without consensus on these tax rights, the international landscape risks deep fractures that would be painful, difficult and costly. It is therefore important to keep the global community together to face the important challenges ahead. On these issues, as for others such as tax crime and illicit financial flows, support from G7 members is needed to reach solutions that work for all. The G7, a small but diverse group of countries, represents a wide range of viewpoints and can serve as a building block for a consensus-based solution.

PASCAL SAINT-AMANS Director, CTPA

Pascal Saint-Amans has been director of the Center for Tax Policy and Administration (CTPA) at the Organisation for Economic Co-operation and Development (OECD) since 2012. He joined the OECD in September 2007 as head of the International Co-operation and Tax Competition Division in the CTPA. In 2009, he was appointed Head of the Global Forum Division, created to service the Global Forum on Transparency and Exchange of Information for Tax Purposes. Before joining the OECD, he was an official in the French Ministry for Finance for nearly a decade. Twitter @PSaintAmans

 www.oecd.org/ctp

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INVESTMENTS IN INCLUSIVE ECONOMIC GROWTH

Reversing the nationalisation of global finance

he G7 summit in Taormina in May 2017 represented a turning point in global governance: the G7 leaders clearly confirmed their shift to nationalism with respect to relevant global issues, in particular climate change and also financial regulation and coordination. A few days before the leaders gathered, G7 finance ministers and central bank governors met in Bari, where they focused on issues mainly in the domain of international economic coordination, particularly how to reduce the evanescence of taxation for information technology companies and how to safeguard stability and enhance growth through coordinated public and fiscal policies. Neither the finance ministers nor their leaders have felt the need to improve coordination in the global financial regulatory system, and positions are still too far apart. In particular, the weakening of financial regulation and coordination in G7 countries, led by the United States and the United Kingdom, does not facilitate the mission of globalisation to benefit all. The 2018 Charlevoix Summit hosted by Canada will unlikely reverse the nationalistic path of financial globalisation, since G7 leaders and their policies have mostly not changed since 2017, except (maybe) in Italy. However, nationalism cannot win on a playing field dominated by technological innovation that is radically changing the inner structure of the economies and banking systems in the G7. The evolution of financial technology – fintech – and cryptocurrencies (which are neither money nor means of payments) is attracting increasing quantities of capital because of the need to get rid of the banking system and its stringent rules that aim at safeguarding stability but inevitably reduce freedom and anonymity. Cash and deposits are rapidly moving out of the regulated banking system and into wallets filled with $20,000

90%

of contracts are cleared in one clearing house in the United States

Individual state approaches to enhancing growth through fiscal policies need to change tack as technology makes its mark on the world’s financial system, writes Chiara Oldani, professor of monetary economics, University of Viterbo bitcoin (see figure) and the cryptocurrency Ethereum, increasing banks’ need for capital and then further diminishing their stability. The Chinese government, worried by fraud and capital flight, intervened in February 2018 to block any trading of cryptocurrencies. But in the absence of any coordinated intervention on innovative financial infrastructure, the Chinese decision will probably be ineffective. History repeats itself. The phenomenon of deregulated financial products, such as derivatives, was considered to be at the root of the financial meltdown of the 2008 global crisis, and a few players in the market have been found guilty and paid for their errors (such as Lehman Brothers, Fannie Mae and Freddie Mac, Northern Rock, and Greece). The introduction of a centralised counterparty system in the over-the-counter derivative markets after 2010 reduced the risk but increased concentration, because 90% of contracts are cleared in one clearing house in the United States. The goal of stability collides with the America First policies of the US and Brexit in the UK. The deregulation of the financial system promoted by the American and British leaders for different reasons, and the easing of monetary policies in Japan and in Europe, will further sustain inflated asset prices in G7 members in 2018. In 1996, Alan Greenspan described the behaviour of investors in the US stock market as irrational exuberance; similarly, after many years of cheap money, today’s market expectations are still very high. In this complex framework, only G7 and G20 central banks and the Financial Stability Board can try to smooth these explosive forces, by persuading the markets that inflation can finally hit, interest rates should normalise to positive values, and asset prices should reverse to sustainable levels.

Bitcoin price in US dollars 2017-18

$15,000 $10,000 $5,000 $0 01/2017

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CHIARA OLDANI

Professor of monetary economics Chiara Oldani is professor of monetary economics at the University of Viterbo ‘La Tuscia’ and the director of the G7 Research Group’s Rome office. Her research currently focuses on over-the-counter financial derivatives and the complex web of counterparty risk, widely considered a major precipitating factor of the global financial crisis. Twitter @chiaraoldani  www.unitus.it

Cash and deposits are rapidly moving out of the regulated banking system and into wallets filled with bitcoin” G7G20SUMMITS.ORG

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JOBS OF THE FUTURE

G7 performance on labour and employment Brittaney Warren, director of compliance, G7 Research Group, considers mechanisms the G7 could utilise to support and grow employment through the digital jobs revolution

he future of work is one of the five core themes of the G7 Charlevoix Summit. Central to this issue is the rapid and exponential technological change that characterises the new industrial revolution. This has been framed by the G7 as simultaneously a threat and an opportunity, as digitalisation will both displace and create jobs. Those trained in science, technology, engineering and mathematics (STEM) will be on the winning side, as will those in the traditionally female-dominated caring economy. G7 host Canada has recognised that including women in the workforce is key to minimising unemployment, and it will thus frame the discussions at Charlevoix through a gender lens, notably via the pioneering Gender Equality Advisory Panel. But how well will the G7 perform on labour and employment at Charlevoix? Taking a detailed look at past commitments and compliance can help answer this question. THE LINK BETWEEN TECHNOLOGY AND EMPLOYMENT Since the G7 was created in 1975, it has made 75 core collective, politically binding, future-oriented labour and employment commitments. It has also made several related commitments that refer to employment but focus on other issues, such as human rights, education, development and gender.

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Of the 75 core commitments, only five link technology and employment. Four of these were made in the 1980s and 90s, and the fifth was not made until the 2017 Taormina Summit. Similarly, of the related commitments only two made the tech-employment link: both in the 1980s in reference to the Working Group on Technology, Growth and Employment. One was on economic growth and technology, and the other was on the environment. The G7 has evidently not paid much attention to supporting workers’ adaptation to technological change, even in the clean energy sector. On the link between gender and employment, however, there has been more progress. At Taormina last year, G7 leaders produced the stand-alone Roadmap for a Gender-Responsive Economic Environment. It contained 20 commitments dedicated to gender and employment. The commitments addressed three issues: unpaid care and domestic work, work-life balance and equal pay, and the promotion of women and girls seeking careers in STEM fields. COMPLIANCE ON COMMITMENTS The two labour and employment commitments selected for assessment by the G7 Research Group averaged a compliance score of 78%. Four related commitments were also assessed, with an 80% average. Average compliance with all six commitments was 79%. G7G20SUMMITS.ORG

JOBS OF THE FUTURE

One of these commitments was made at the Lyon Summit in 1996 and had commitments compliance of 67%. One made on labour was made at the 2012 and employment Camp David Summit, with since 1975 compliance of 89%. One, with a development focus, was made at the 2013 Lough Erne Summit and had 61% compliance. Two were made at the 2015 Schloss Elmau Summit, both with 75% compliance: one was on macroeconomic policy and the other was on supporting women entrepreneurs. One commitment was assessed from the 2016 Ise-Shima Summit. It was also on gender and sought to encourage women in STEM careers. Here, average compliance was 82%. The G7 Research Group has also monitored four employment-related commitments made at the 2017 Taormina Summit. One was on harnessing the job-creation opportunities offered by the transformation of the energy sector and clean technology, and one was on improving working conditions by implementing sound labour market policies; both scored 69% in the interim compliance report. The G7 is doing better on its gender and youth commitments. With the Taormina commitment on encouraging women’s participation in the private sector, interim compliance was a high 81%. And the one on providing youth in Africa with adequate skills for a ‘prosperous and safe future’ had an interim compliance score of 88%. BUILDING ON PLEDGES To improve compliance with their commitments, G7 leaders at Charlevoix

BRITTANEY WARREN

Director of compliance and lead researcher on climate change Brittaney Warren is director of compliance and lead researcher on climate change for the G7 Research Group, the G20 Research Group and the BRICS Research Group, based at the Munk School of Global Affairs in Trinity College at the University of Toronto. She has published on the effective use of accountability measures in summit commitments, on the G7 and G20’s compliance and governance of climate change, and on the G20’s governance of digitalisation. She has worked in Spain and Peru, where she was involved in a project dedicated to women’s economic empowerment. Twitter @brittaneywarren  www.g7.utoronto.ca

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can employ effective accountability measures that they directly control. The G7 Research Group has found several mechanisms that tend to increase compliance, such as referring to a core international organisation in a commitment, producing more companion commitments on the same subject at the summit and holding related pre-summit ministerial meetings. Therefore, at Charlevoix G7 leaders should make more companion commitments on job creation in the clean energy economy, support the work of the International Labour Organization on women and youth, and build on the work done by their labour and innovation ministers who met in Montreal in March to help prepare for the Charlevoix Summit. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

JOBS OF THE FUTURE

Preparing for jobs of tomorrow In order to achieve inclusive job growth, we must harness technology and invest in people, writes Guy Ryder, director-general, International Labour Organization

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JOBS OF THE FUTURE

ince the G7 leaders met in Taormina last year, discussions of the future of work have continued to expand. It remains a critical task for all G7 governments to ‘support all of their citizens to adapt and thrive in the new world of work’. Therefore, I strongly welcomed the decision of the Canadian presidency to adopt ‘Preparing for jobs for the future’ as one of the major themes for the G7 in 2018. Already, a joint session between G7 employment and innovation ministers in Montreal in March has provided a forum to discuss the link between technological innovation and the potential for decent work. Over the past few years, the debate about how new technologies will impact the world of work has evolved considerably. The ‘doom’ scenario of massive job losses no longer dominates the debate. Instead, a more balanced – perhaps more realistic – analysis has emerged that recognises the job-creating potential of digitalisation, as well as its potential to alter a significant proportion of the work performed today. In addition, inequality is on the rise, the gender gap in labour force participation remains stubbornly large and high youth unemployment persists. So what do we need to do? First, we must reject the ‘techno-determinism’ that also characterised earlier debates. We must recognise – as G7 ministers did in Montreal – that public and private policies hold the key to how we harness the unprecedented changes that are unfolding in order to achieve inclusion, equality and security. Three policy principles deserve special emphasis. First, we should invest more in people as we do in technologies. Investing in people means that we need strong policies and financial support to facilitate the myriad transitions and cushion the risks that workers will experience throughout their working lives. A NEW APPROACH TO SKILLS Given the constant and accelerating pace of technological change, workers will need to upgrade and adjust their skills continuously over their working lives. This requires new approaches for managing the different transitions that individuals will face as they enter the labour market and interrupt their working lives to reskill and re-engage. This life-cycle approach raises fundamental questions about the respective responsibilities of governments, workers and enterprises in making choices about when and how to reskill and retrain. Moreover, it requires solid financing – and creative approaches for identifying sources of it, perhaps from the new technological dividends that are so keenly anticipated. In parallel, we need to invest more in social protection systems to support workers who may need time out of work to gain the new skills they require. As G7 ministers recognised, social protection systems must accommodate workers

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GUY RYDER

Director-general, ILO Guy Ryder has been directorgeneral of the International Labour Organization (ILO) since 2012, having held various senior positions in the organisation from 1999 to 2002 and again since 2010. He leads the organisation’s action to promote job-rich growth and to make decent work for all – a keystone of strategies for sustainable development. He has a background in the trade union movement and is the former general secretary of the International Trade Union Confederation. Twitter @GuyRyder ‫ ‏‬ www.ilo.org

in non-standard forms of employment, including the platform economy. Second, we need to push harder than ever for gender equality. Women’s work should be fully recognised and the gender pay gap closed. More broadly, the conventional measures of economic growth, as reflected in our national accounting systems, do not recognise the value of unpaid work within the household, which is predominantly undertaken by women. ENDING WORKPLACE HARASSMENT We are also witnessing unprecedented international attention to sexual harassment and violence. One area of focus during the ministerial discussion – ending violence and harassment at work – highlighted the clear link between women’s economic empowerment and safe workplaces. The International Labour Organization (ILO) is leading international efforts to address violence and harassment at work through a standard-setting initiative that will begin this year and culminate at our centenary conference in 2019. Third, we need to strengthen social dialogue and tripartism at this critical juncture in order to develop a future that we want. Although employers’ organisations and trade unions face tremendous pressures, innovative ways of organising both employers and workers (sometimes using new technologies) are emerging, especially in G7 members. We also see new regulatory methods emerging as a result of social dialogue, especially in the areas of training and social protection. The Charlevoix Summit is an opportunity for G7 leaders to discuss all of these challenging issues, which the ILO’s Global Commission on the Future of Work is also pursuing. The commission’s final report at the beginning of 2019 will also guide the ILO as it begins its second century, ensuring that the future of work leaves no one behind. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

JOBS OF THE FUTURE

From digital skills to digital citizenship:

the stakes of 21st-century education

Audrey Azoulay, director-general, UNESCO, says the G7 must refocus its attention on education for the digital age and makes the case for including e-systems in modern learning

ll societies are undergoing rapid, exponential change, in large part due to the technological revolution that is disrupting the way in which we work, live and interact with each other. This trend threatens to deepen exclusion and inequality – both within and between countries. It can only be countered by investing in what best prepares individuals to shape their future: education. Education is the thread linking the themes of Canada’s G7 presidency, from jobs of the future and inclusive growth to environmental sustainability, gender equality, and peace and security. The evidence is irrefutable: education has a transformative power to alleviate poverty, to improve health, to nurture the talent and innovation needed to find solutions collaboratively. It is a leading determinant of economic growth, employment and earnings in our knowledge-based economies. Reorienting education systems is a priority everywhere, in order to prepare students to face the challenges of accelerating globalisation, changing labour markets, migration, and transnational environmental and political upheaval, as well as technological advances.

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To be ‘future ready’, education systems need to anticipate shifting skills needs and create more flexible lifelong learning pathways that equip learners with the necessary knowledge, skills, values and attitudes. Digital skills have moved from ‘optional’ to ‘critical’, whether they are basic functional skills or advanced skills for information and communication technologies professions. PREPARING FOR A NEW ERA OF WORK Although new technologies will likely reduce the number of routine jobs, digitalisation has the potential to generate new jobs through the Internet of Things, robotics and applications of artificial intelligence. Some observers predict that more than two thirds of jobs that will exist in 2030 have not yet been invented. An estimated 95% of the global population now lives in an area covered by at least a basic 2G mobile network, meaning that developing countries could even leapfrog over some stages of economic development. Yet even across the member countries of the Organisation for Economic Co-operation and Development, over half of all adults have no or limited digital skills, including among the younger generation often considered ‘digital natives’. G7G20SUMMITS.ORG

JOBS OF THE FUTURE Education systems must ensure that all learners – especially women, the poorest and most marginalised – gain a minimum level of digital skills. This calls for comprehensive support to all levels, from developing quality early childhood education and care to modernising higher education and further developing adult education. Investing in teachers and their continuous training to keep apace with innovative teaching methods is imperative. UNESCO’s annual flagship event, Mobile Learning Week, which in March 2018 focused on the theme of ‘Skills for a Connected World’, is one key opportunity to share best practices from around the world. But education is about much more than merely providing people with the skills and knowledge to secure employment. It must enable people to live diverse, fulfilled lives and contribute to their societies. Digital skills need to be complemented by transversal ‘soft skills’ – communication skills, interpersonal skills, problem-solving skills, creativity and critical thinking – vital for navigating a world of complexity. Our education systems must nurture the global citizens of the future: a generation respectful of cultural diversity that is able to understand different world views and safeguard our environment. THE POWER OF EDUCATION UNESCO has been at the forefront of advancing the understanding and practice of global citizenship. It has long advocated for education as the most effective long-term response to prevent the spread of violent extremism, including through our digital literacy programmes. Despite the recognition of the importance of education, 263 million children, adolescents and youth worldwide are out of school, and of those in school, some 617 million are not achieving minimum proficiency in reading and mathematics. Furthermore, a lack of investment in education at the global level is jeopardising development prospects. Donors have been shifting their priorities away from education: the share of education in total aid fell six years in a row, from 10% in 2009 to 6.9% in 2015. Effective education and training systems are essential in delivering on the United Nations Sustainable Development Goals that were universally adopted in 2015, uniting countries around a global plan for a more just, equitable and peaceful future. UNESCO is fully committed to working with G7 leaders to ensure that education and skills are at the forefront of political agendas. The visit of prime minister Justin Trudeau to UNESCO’s headquarters in April 2018 displayed Canada’s leadership and commitment to global cooperation in this area. By championing increased public aid to education and innovative financing tools that work together to maximise learning opportunities, particularly through harnessing the potential of digital technologies, the G7 would send a clear message of collective responsibility for education as a global public good, a human right and the main tool for building more resilient societies. G7G20SUMMITS.ORG

Some 617 million children in schools around the world are falling short of minimum proficiency in reading and mathematics

AUDREY AZOULAY

Director-general, UNESCO Audrey Azoulay was elected director-general of UNESCO on 15 November 2017 for a four-year term. A graduate of France’s École Nationale d’Administration and of the Paris Institut d’Études Politiques, she has worked in the culture sector since the start of her professional career, focusing on the funding of French public broadcasting and on reforming and modernising France’s film support system. She has also served the European Commission, providing her expertise on issues concerning culture and communication. Twitter @AAzoulay ‫ ‏‬ www.unesco.org

JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

ENHANCING THE ENVIRONMENT AND CLIMATE CHANGE CONTROL

G7 performance on

At a time when the world’s oceans are warming, emissions are rising, and the threat of environmental degradation looms large, is the G7 doing enough? Brittaney Warren, director of compliance, G7 Research Group presents the figures 64

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ENHANCING THE ENVIRONMENT AND CLIMATE CHANGE CONTROL

limate change, clean energy and oceans will be key priorities at the G7 Charlevoix Summit on 8–9 June 2018, and will be reinforced at the G7’s environment and energy ministers’ meeting. Given the compounding, urgent threat of climate change and environmental degradation, it is crucial that G7 leaders make quality commitments and comply fully with them. Despite the challenges brought by climate-sceptical US president Donald Trump, the G7 can improve its commitments and compliance, given its past performance and vulnerabilities to the very visible impacts of climate change within G7 members themselves.

PROMISES MADE The G7 made its first collective, future-oriented, politically binding commitment on climate change in 1985 when it agreed to “address … climatic change” and protect the ozone layer. Since then, it has made 332 climate change commitments. On energy, the G7 made its first commitment at its first summit at Rambouillet, France, back in 1975. Its first clean energy commitment came at the 1978 Bonn Summit, where leaders promised to “bring into use renewable energy technologies … within one year”. This, along with a reduction in oil imports, would diversify the energy mix in response to the oil crisis of 1973 and the looming one of 1979. Since then, the G7 has made 453 energy commitments, with 50 referring to “renewable energy” and others emphasising clean energy technologies and energy efficiency. On oceans, the G7 made its first commitment at the 1986 Tokyo Summit. It was on maritime security. The first environment-related oceans commitment was at Venice in 1987. Since then, the G7 has made 89 commitments on oceans. Of these, half were dedicated to protecting the oceans, with just four connecting this to climate change. HIGH COMPLIANCE These commitments matter only insofar as G7 members comply with them after they are made. The G7 Research Group has assessed 98 commitments on climate change, clean energy and clean oceans for compliance the year after each commitment was made. It found that average compliance was 74%. On climate change, with 83 commitments assessed, compliance G7G20SUMMITS.ORG

BRITTANEY WARREN

Director of compliance and lead researcher on climate change Brittaney Warren is director of compliance and lead researcher on climate change and the environment for the G7 Research Group, the G20 Research Group and the BRICS Research Group, based at the Munk School of Global Affairs in Trinity College at the University of Toronto. She has worked in Spain and Peru, where she conducted field research on a sustainable development project with women living in extreme poverty. She has published on the effective use of accountability measures in summit commitments and on the G7 and G20's compliance and governance of climate change and digitalisation. Twitter @brittaneywarren  www.g7.utoronto.ca

averaged 73%. On energy, with 20 commitments assessed, it averaged a high 81%. On the 12 clean energy commitments, compliance was 79%. The four commitments on clean oceans had compliance of 75%. Here, the two commitments on ocean observation had compliance of 88%. The one that referenced water pollution and climate change had 65%, and the one that referenced wave and tidal energy had 61%. The G7 thus substantially keeps these promises it makes. THREATS TO BIODIVERSITY On climate change, and its key driver of energy, the G7 saw strong success in its invention phase, during which time the greenhouse gas emissions of the G7 and other members of the Organisation for Economic Co-operation and Development declined for five years in a row. However, in the G7’s second and third phases, the emissions of the European Union members of the G7 declined, but those of the non-EU members rose, leading to a net overall rise. Meanwhile, the world’s oceans have warmed dramatically, leading to massive coral bleaching and acidification, compounded by overconsumption, dead zones and plastics pollution leading to biodiversity loss. Thus, although G7 commitments and compliance brought benefits at the start, they have not been nearly enough. To improve, G7 leaders and ministers can employ proven low-cost accountability

measures that they directly control. These include making more same-subject commitments, holding an environment ministerial meeting and mobilising the core organisations through which the G7’s commitments will be implemented. They also need to make more timely, well-tailored and ambitious commitments. Here, G7 members should: •

Raise the ambition of their nationally determined contributions under the Paris Agreement by committing to divest from the fossil fuel economy and to invest in a circular economy;

•

Support the Arctic Council on mitigating black carbon and resource extraction as the ice melts;

•

Support the Food and Agriculture Organization’s work on climate-smart agriculture;

•

Support the Financial Stability Board on climate-related financial disclosure;

•

Preserve natural infrastructure and carbon sinks, namely forests and oceans; and,

•

Mainstream climate change, clean energy and clean oceans into all issues and ministerial meetings that this year’s G7 will address.

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ENHANCING THE ENVIRONMENT AND CLIMATE CHANGE CONTROL

The greatest challenge of our time A

chieving a more sustainable future for generations to come requires tackling climate change, improving the health of the world’s oceans and transforming the way we produce, transport and use energy. The interconnected world that we live in requires us to work with international partners to develop truly global solutions. That is why our environmental priorities for the G7 this year focus on acting on climate change, securing innovative and sustainable finance, building coastal resilience and stopping the flow of plastics to the oceans. Climate change is the greatest global challenge of our time. Today, it affects our coastal communities through rising seas, extreme weather events and coastal erosion. In Canada’s Arctic, these impacts are magnified, as the area is warming at three times the rate of the rest of the country. An important priority for our G7 presidency is building resilient coastal communities in the face of extreme impacts from climate change. Key actions for building this resilience include advancing climate risk insurance, supporting the role of women in climate and disaster risk management, and working with small island developing states to better plan and reconstruct. We are also standing with G7 members to combat climate change and take concrete actions to reduce emissions, transition to a low-carbon economy and protect the environment we share.

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We are at a critical juncture in preserving and restoring our environment, where coordinated efforts are both urgent and essential, writes the Honourable Catherine McKenna, minister of the environment and climate change

90%

of all plastics are thrown away instead of being reused or recycled

8bn

The annual environmental cost of this throwaway culture

PLASTICS IN THE OCEANS Plastic waste and marine litter pose an increasingly serious threat to our oceans and marine life. As the impacts of marine pollution increase, we have an even greater responsibility to act now to protect the oceans and waterways for future generations. Throughout our G7 presidency, we will show leadership in advancing action in Canada and across the globe to prevent marine litter from polluting our oceans. One of these actions includes a zero plastics waste charter that we are promoting through the G7 presidency. Globally, less than 10% of all plastics are recycled and kept in the economy, so more energy is used and additional greenhouse gas emissions enter the atmosphere to create new plastics. By not reusing and recycling plastic, we are throwing away an estimated $120 billion in value every year and causing around US$8 billion in environmental damage at the same time. To take action on this issue, Canada is developing a domestic approach with provincial and G7G20SUMMITS.ORG

ENHANCING THE ENVIRONMENT AND CLIMATE CHANGE CONTROL territorial governments, industry, Indigenous peoples, stakeholders and all Canadians to keep plastics within the economy and out of landfills and the environment. We are looking at this issue over the course of the entire lifespan of plastics – from the way we design the plastic itself, through the production process, to waste-management solutions. We know that solutions do not lie in government alone. Hand in hand with governments at all levels around the world, with industry, with Indigenous peoples, with civil society and so many other stakeholders, we can truly be the change. Our government has been actively engaging our partners to inform the priorities for Canada’s G7 presidency, especially with young people – those with the greatest stake in the future of our planet. I have engaged with youth on sustainability and climate action through my Climate Campus University Tour, and I look forward to engaging in a discussion with all G7 environment and energy ministers and the youth winners of the G7 Oceans Youth Innovation Challenge to hear their solutions for promoting global ocean health. I have also heard numerous recommendations from sustainability leaders, businesses, investors and entrepreneurs at the G7 Clean Innovation Business Summit to discuss the role G7 collaboration can play in generating concrete clean innovation opportunities and creating a more favourable investment environment. By working together domestically, internationally and with civil society, we will arrive at more comprehensive solutions for the issues that we will discuss. I look forward to moving the dialogue towards the implementation of our G7 commitments, from Charlevoix to our fall meeting of environment and energy ministers. THE DISPROPORTIONATE EFFECT ON WOMEN Canada has also appointed the Gender Equality Advisory Council of experts and advocates from around the world for the G7. The council is ensuring that gender equality and women’s empowerment are integrated across all themes, activities and initiatives. In the world’s poorest and most vulnerable communities, women and girls are particularly at risk when it comes to climate change. When resources become more unpredictable and scarce during extreme weather events, women and girls spend more time and effort attending to basic needs such as growing food and collecting water and fuel. Supporting the leadership of women and girls is critical to achieve meaningful results to tackle climate action, mitigation, and disaster reduction and adaptation; to combat climate change, move to clean energy, and protect our oceans. The economy is stronger, and the environment is better protected, when women are fully engaged in solutions to chart the path forward. In May, I hosted a summit of women climate leaders to help accelerate global momentum for climate action, where the role of women as powerful agents of change on climate change issues was on full display. I am constantly in awe of the amazing power and passion G7G20SUMMITS.ORG

of women who are leading change around the globe. And I look forward to a lasting legacy for continued dialogue on gender equality in the G7 in the years to come. Canada and its G7 partners recognise the urgent need to accelerate the transition towards a sustainable and resilient future. In 2018, the G7 is poised to play a pivotal role in advancing the global trajectory on climate change and to taking concrete steps on the important issue of ocean health and plastics. It is a true privilege to be able to play a leadership role during this important time in history.

CATHERINE MCKENNA

Canada's minister of the environment and climate change Catherine McKenna was elected as the first female member of Parliament for Ottawa Centre in 2015 and appointed minister of environment and climate change shortly thereafter. She helped negotiate the Paris Agreement and secured Canada’s first plan with provinces, territories and Indigenous peoples to address climate change and grow a clean economy. Before entering politics, Catherine practised competition and international trade law, and was senior negotiator with the United Nations Peacekeeping Mission on the Timor Sea Treaty. She co-founded Level Justice, a charity that levels the playing field and increases access to justice for marginalised communities worldwide. Twitter @cathmckenna

JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

ADVOCACY

AkzoNobel

Pioneering solutions to the world's pollution problem

Keeping in mind its vision to create everyday essentials that make people’s lives more liveable, AkzoNobel has developed smart paint designed to contribute to cleaner air in the world’s most polluted cities

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ADVOCACY

AkzoNobel What are some of the most pressing challenges that we face today? According to the United Nations Chronicle, energy consumption and pollution are two critical issues faced by urban communities, which account for half of humanity or 3.5 billion people. About 60–80% of the world’s energy, which is a dominant contributor to climate change, is consumed by cities. The air quality in cities has deteriorated to such an alarming level that about 92% of the world’s population breathes unsafe air and more than seven million people die annually, according to the World Health Organization. What can we do to change the situation? In the 2030 Agenda for Sustainable Development, the UN has established 17 Sustainable Development Goals with a comprehensive list of targets to be achieved by 2030. Individual countries are expected to take ownership and establish national frameworks to implement the actions. As a leading global paints and coatings company with a strong commitment to sustainability, AkzoNobel supports these goals, which are in line with our purpose to create everyday essentials to make people’s lives more liveable and inspiring. We are at the top of the Dow Jones Sustainability Index rankings for the fifth time in six years. At AkzoNobel, we believe that we can address some of these challenges with the innovative solutions that we have developed. With a focus on India and China, we highlight the major problems faced by these two populous countries and the solutions that we can offer. INDIA While India’s economy continues to expand at the world’s fastest growth rate of about 7.5% annually, millions of its citizens are exposed to increasingly unhealthy air. The latest air quality report from WHO in May 2018 has announced that the world’s top-10 most polluted cities are all situated in India. Residents in India’s capital, New Delhi, which has been ranked the sixth most polluted, are taking the brunt of the health crisis due to vehicle emissions and burning of crops and woods. The air has become so smoggy and severely toxic that Delhi’s government had to declare a public health emergency and school closures last year. It also unveiled 26 new programmes with a budget of $8.2 billion to clean its air, with initiatives such as electric buses and G7G20SUMMITS.ORG

The world's top-1o most polluted cities are all situated in India

At AkzoNobel, we believe that we can address some of these challenges with the innovative solutions that we have developed” vehicles, tree planting and switching from coal-fired to electric or gas ovens. How can AkzoNobel help Indian cities combat pollution? We have developed an air-cleansing paint based on photocatalytic technology that can degrade major atmospheric pollutants such as nitrogen oxides and sulphur oxides. These gases not only pose health implications themselves but also contribute to the formation of PM2.5 particulate matter that can penetrate deep into lungs and the bloodstream, causing diseases such as stroke, heart disease, lung cancer and respiratory infections. With sunlight exposure and moisture, our paint will generate radicals that can decompose these pollutants. A large-scale field trial is currently being planned to quantify the efficacy of our paint in improving the air quality in Delhi. To help improve air quality in India through reduction of the emission of volatile organic compounds, we have

launched our strategic programme called Waterway. Our aim is to drive the transition of solvent-based products currently offered in our portfolio for wood care and metal care applications to water-based products with equally high quality and performance. We can help to mitigate soil pollution in India by controlling the release of biocide used in our paints. Biocide is a film preservative added within the regulatory compliant amount in an exterior paint to help protect building facades against the growth of fungus and algae, which is especially important for tropical and subtropical climates in India. Conventional types of biocide may not be able to release effectively from the paint over its lifetime and they may also be washed off by rain and can contaminate the soil. Encapsulating the biocide allows for its controlled release at its optimum level, therefore safeguarding our paint for better durability in terms of film protection while minimising the environmental impact due to soil pollution. Our researchers also continuously strive to explore biocide-free or low-biocide solutions. Public urination has been a major issue in India. The government has launched a nationwide campaign called Swachh Bharat Abhiyan to promote public cleanliness. To address this problem, we have developed a superhydrophobic coating with extreme liquid repellency that can protect walls by resisting the adhesion of urine, spit and other stains. Our product will be able to help

JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

ADVOCACY

AkzoNobel

“Our Human Cities initiative is our commitment to regenerating and energising urban communities across the world. We use our products and expertise to help cities deliver a stronger sense of community purpose, pride and happiness” PAMELA PHUA

Managing director, Vietnam, Singapore and Indochina and director, research & development Pamela Phua has more than 20 years’ experience in research, development and innovation (RD&I) in the coatings industry. In her current role as director of RD&I for AkzoNobel, she drives new technology development and product implementation across the South East, South Asia and Middle East regions. Ms Phua was instrumental in setting up the global research and laboratory operations for AkzoNobel Decorative Paints (Global Exterior Wallpaint Expertise Group) in 2011. In her global capacity, Ms Phua implements the functional and product innovation strategy for exterior wallpaint. She spearheads the RD&I functional excellence, standards and capability and the efficient delivery of processes as the approved standards and processes across the globe.

Her efforts enabled AkzoNobel’s businesses to roll out new products and services across the region in a fast and coordinated manner, supported by an agile supply chain, efficient sourcing and robust quality control. Some leading innovations launched by Ms Phua and her team include interior and exterior emulsion paints such as Dulux Weathershield Powerflexx, Dulux Pentalite, Dulux Wash & Wear / Easyclean, and Dulux Catylac / Inspire. Her expertise and experience has been instrumental in setting up industry standards in Singapore. She is the technical chairperson for the Singapore Paint Industry Association and a committee member in the Chemical Standards Council of Singapore. She has helped to set up several Singapore Standards, including SS345, SS150,

G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

SS500 and SS494. She is an industry consultant to regulatory bodies such as Spring Singapore, Singapore Green Label, the Housing and Development Board, Singapore Green Building Council, National Environment Agency and the Singapore Institute of Architects. She is also an A*Star certified auditor for accredited testing laboratories in Singapore. Ms Phua has taken part in various series of the United Nations Climate Change Conferences, the most recent being COP23 in Bonn, Germany in 2017 where she shared innovative solutions to combat challenges around climate change and contribute to developing smart cities for a better tomorrow.  pamela.phua@akzonobel.com

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ADVOCACY

AkzoNobel transform and maintain the cleanliness of many cities and towns across India, thus providing the communities with more liveable neighbourhoods and inspiring, comfortable surroundings. CHINA According to the International Energy Agency, China has surpassed the United States as the world’s biggest energy consumer in 2009. This has definitely taken a toll on air quality due to China’s predominantly coal-based energy production. Key major economic zones such as Beijing and Shanghai have been marred with pollution and notorious thick choking smog in recent years. In China, buildings account for a large part of the country’s energy consumption. To promote building energy conservation, the Chinese government has developed a sophisticated policy system in recent years. These include building energy codes that state the minimum standards for the energy efficiency of building components such as the envelope, heating, ventilation, air conditioning, and the power system. These codes are mandatory for residential and commercial buildings in urban areas, and voluntary for rural residential buildings but are promoted through incentives. How is AkzoNobel going to contribute positively to better the country’s energy efficiency and adapt in this storm of policy changes? We approach this by providing solutions for suppressing heat outflow in winter with our Thermal Insulation Decorative Board systems and reducing the heat gain in the building in summer through our Keep Cool offerings. Thermal insulation decorative boards are prefabricated boards constructed in the factory setting where the insulation and decoration layers are assembled together. These boards are made with a controlled quality unlike the traditional Exterior Insulation and Finish Systems, which are highly subjected to the reliability and quality of workmanship. They can be easily secured on the exterior façade of a building just like a jigsaw puzzle with a smart system of bracket and screws. The system also incorporates air-vent plugs to prevent moisture build-up that leads to cracking and peeling issues we see in traditional insulation systems. Factory fabrications also allow us access to a much wider technology platform such as UV-curing systems and sol-gel processes, G7G20SUMMITS.ORG

Buildings in China account for a large part of the country's energy consumption

The Chinese government has developed energy codes for buildings to reduce pollution

which would have been prohibitive to use in conventional exterior wall paint. This solution essentially allows us to provide a better and higher-quality alternative to building insulation and hence effective energy management. Another contribution from AkzoNobel concerns the energy savings brought about by specialised coatings. Other than improving our existing Keep Cool offerings to chase the ever tighter standards, we have also extended our Keep Cool offerings to Texture products in China. Keep Cool coatings reflect heat by reflecting in infrared (IR) and near infrared radiation of the solar energy. This is achieved by careful pigment management and the use of special IR-reflective pigments. With less heat build-up on the building façade and less heat transfer to the inside of a building, less energy is then required to maintain a comfortable temperature. Based on the simulation results from external parties, energy savings are quite substantial.

We also firmly believe in improving everyday life through our corporate social responsibility. Giving back to communities is deeply rooted in AkzoNobel’s culture. Our Human Cities initiative is our commitment to regenerating and energising urban communities across the world. We use our products and expertise to help cities deliver a stronger sense of community purpose, pride and happiness. For instance, our global Let’s Colour programme has been revitalising urban areas all over the world, with almost 70 million people benefiting from 2,000 projects and 12,000 volunteers involved. The 100th mural of the 100 ‘Let’s Colour Walls of Connection’, created by AkzoNobel and global peace movement MasterPeace, took place last November in a school in Badshahpur in India. The project transformed the lives of more than 5,000 children by getting them back to school and ensuring they continue their education and improve their grades. AkzoNobel has also partnered with SOS Children’s Village to train the next generation of painters and drive local economic growth through painting training and business development knowledge, thus contributing to the employability of young people from difficult backgrounds. This successful partnership has been rolled out in countries including Brazil, Nigeria, South Africa and Indonesia, and will be extended to up to 10 countries including India in 2018.

BEYOND INNOVATION Proposing true and sustainable technical solutions is one aspect of our contribution. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

ENHANCING THE ENVIRONMENT AND CLIMATE CHANGE CONTROL

The G7: collective action for a greener future

With clear goals and action on green investments, Canada will use its year as G7 host to further the transition towards a cleaner environment, writes the Honourable Jim Carr, Canada’s minister of natural resources

chieving a sustainable future means combating climate change, improving the health of the world’s oceans, and transforming the way we produce and use energy. It requires a global transition from the energy that has powered our societies for generations to clean, renewable sources. Canada and its G7 partners recognise the urgent need to accelerate this transition, and as a global community we know we need to step up our efforts.

11 72

years to spend $22 billion on clean growth

1.5

G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

billion dollars on the Oceans Protection Plan

carbon economy targeted in Canada by 2050 G7G20SUMMITS.ORG

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Our government has a clear goal: we want to be a leader in the clean-growth century by leveraging the resources we have today to deliver clean energy solutions for tomorrow. We believe that the environment and the economy go together and that clean technology is the engine for economic growth. This is why we are making generational investments in technology and innovation to develop the resources that will deliver long-term benefits for generations to come. We have committed to spending some $22 billion over 11 years to support green infrastructure and drive clean growth – all part of our Pan-Canadian Framework on Clean Growth and Climate Change, a plan that will allow us to meet our targets to reduce greenhouse gas emissions, grow the economy and build resilience to climate change. SMART INVESTMENTS In the past few months, we have invested in smart electricity grids, electric and alternative-fuel charging stations, more energy-efficient homes and help for northern communities to move away from diesel. We are also reimagining carbon, by helping to turn otherwise harmful carbon dioxide emissions into valuable products such as building materials, alternative fuels and consumer goods. And let’s not forget our $1.5 billion Oceans Protection Plan. Internationally, Canada has joined Mission Innovation, a global initiative to accelerate clean energy innovation, pledging to double public investments in clean energy research, development and demonstration to $775 million per year by 2020. Each of these takes us a step closer to the future we want: a country driven by clean technology and defined by innovation. The interconnected world we live in means we have to work with international partners to develop truly global solutions. This is why Canada’s 2018 G7 presidency is a significant opportunity for us. We get to speak with a strong voice on the international stage, engage our G7 counterparts on pressing global challenges – such as achieving a more sustainable future through clean and secure energy – and make real progress on the goals we all share. And while every G7 summit focuses on the day’s most pressing global challenges, the agenda is always enriched by the country that hosts it. This year, Canada

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will advance domestic and international priorities framed by the themes of investing in growth that works for everyone, preparing for jobs of the future, advancing gender equality and women’s empowerment, working together on climate change, oceans and clean energy, and building a more peaceful and secure world. Specifically, we hope to address matters such as how can the G7 accelerate the transition to low-carbon, climate-resilient economies? What issues, areas or initiatives should we prioritise? How can we create a cleaner environment for future generations, while also creating jobs and growth that benefit everyone? What are the most important issues facing our oceans and coastal communities today? Finally, how can we advance gender equality and women’s empowerment through our actions related to climate change, oceans and clean growth? There is a lot of work ahead. But throughout our G7 presidency, Canada is determined to chart new routes towards a more clean, secure and sustainable future. To do so, we plan to promote strong engagement with our domestic and international partners, the private sector and Indigenous and local communities. Our goal is that by 2050 Canadians will enjoy a thriving, zero-carbon economy – one that will be powered by a mix of old and new sources of energy. As the world undergoes a historic transition to cleaner forms of energy, we believe that Canada is uniquely positioned to lead the way.

JIM CARR

Minister of natural resources The Honourable Jim Carr was elected to the Legislative Assembly of Manitoba in 1988. He went on to become the founding CEO of the Business Council of Manitoba. He was the founding co-chair of the Winnipeg Poverty Reduction Council, and is a former member of the boards of the Winnipeg Symphony Orchestra, the Canada West Foundation, and the Arthur V. Mauro Centre for Peace and Justice at the University of Manitoba. Carr was elected to represent Winnipeg South Centre in 2015 and appointed minister of natural resources in November 2015. Twitter @jimcarr_wpg  www.nrcan.gc.ca

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The G7 must leverage its influence for progress on climate change, unlocking and mobilising funds before it is too late, writes Patricia Espinosa, executive secretary, UN Climate Change

G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

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ince 1980, the world has seen a four-fold increase in major flooding events and a doubling of significant storms, droughts and heat waves due to climate change. Without far-reaching, scaled-up action now, these impacts will likely increase, threatening the lives and livelihoods of women, men and children everywhere and costing billions in lost resources that could be used more productively. Climate action needs to be at the centre of humanity’s response to the existential threats that climate change and environmental degradation present for development, growth, peace and the well-being of all. That is why it is urgent to step up both climate policy and climate action by all stakeholders – including governments, regions, cities, businesses and investors, and civil society. This year presents an important opportunity, particularly for the sovereign states that make up the G7. They can act in three specific ways: •

Participate in the Talanoa Dialogue;

•

Agree on the rules of implementation of the Paris Agreement; and

•

Accelerate climate action and financial support to developing countries before 2020.

the opportunity for a solutions-oriented conversation on contributions to the Paris Agreement’s goals. It was the first time that countries and stakeholders could engage directly. The output from these storytelling conversations will feed into the political exchanges in Poland. The Talanoa Dialogue’s final political phase at COP24 will bring together high-level government officials. Ministers will consider solutions and suggestions from the technical phase with a view to generating political momentum and increasing ambition. It will be critically important for G7 members to use this opportunity to provide a powerful signal that they lead on climate action and that they intend to raise ambition and boost action across the entire globe.

These three milestones of 2018 are necessary to firm up climate policy to unleash accelerated and concerted action. THE TALANOA DIALOGUE The first milestone relates to climate action before 2020. It is an important international conversation to check progress, reaffirm the goals of the Paris Agreement and find solutions for countries to increase their ambition in the next round of their nationally determined contributions, or climate action plans. This conversation is called the Talanoa Dialogue. In the tradition of the Pacific region, the goal of a ‘talanoa’ is to find solutions for the common good. Throughout 2018, the Talanoa Dialogue will aim to find solutions for the global common good. It began with a preparatory phase launched at the beginning of the year, and will end with a political phase at the 24th Conference of the Parties (COP24) to the United Nations’s Framework Convention on Climate Change in December in Katowice, Poland. The dialogue is structured around three questions: 1. Where are we? 2. Where do we want to go? 3. How do we get there? The preparatory phase culminated at the UN Climate Change Conference in Bonn in May, when countries and stakeholders discussed these three questions for the first time. The May Talanoas provided all participants with

increase in extreme flooding events since 1980 due to climate change

2°C

the global temperature increase limit set in the Paris Agreement

$100b of climate finance pledged by G7 members annually to 2020

THE RULES OF THE PARIS AGREEMENT The second milestone centres on the urgent need to complete negotiations on the Paris Agreement Work Programme and the rules that are needed to unlock the agreement’s full potential. At COP23 in Bonn last December, countries agreed to accelerate and complete their work to make the Paris Agreement work fairly and transparently and for its institutions to be fully operational by COP24. Although the Paris Agreement itself is a complete legal instrument, rules are needed to unlock practical actions and enable everyone to see how it is being implemented by each country. This is equally important for determining whether the world is on track to achieve the agreement’s goals, including limiting the global temperature increase to 2°C, while pursuing efforts to further limit the increase to 1.5°C. The rules include a transparency system that applies to all with built-in flexibility for developing countries in view of their capacity. That system needs to provide clarity on action and support with respect to reducing greenhouse gas emissions and adapting to climate change impacts. Such impacts include increasingly frequent and severe floods and droughts. Countries have had in-depth discussions on the rules, which are important so that all positions and ideas are clearly understood. For success at COP24, countries must work with draft negotiating texts as soon as possible. Without a completed work programme, the tools for monitoring and measuring the daily efforts of implementing climate action will not be available to countries and the Paris Agreement will not be fully operational as anticipated. This would severely hamper the ability of countries to decisively address climate change in the way that world leaders envisaged in Paris in 2015. In 2015, the G7 played a key role in generating the ‘spirit of Paris’, which led to the Paris Agreement and provided the world with hope and optimism. I urge the countries of the G7 to take on a similar role in the lead-up to COP24. The G7 can seize a pivotal leadership role and help the world celebrate success at COP24 in Poland. → JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

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Strong action now will increase the chances of attaining the goals of the Paris Agreement, as well as reduce the cost of action in the future”

ACCELERATED ACTION BEFORE 2020 Strong action now lays the foundation for stronger action later. Strong action now will also increase the chances of attaining the goals of the Paris Agreement, as well as reduce the cost of action in the future. Accelerating action before 2020 in all aspects of climate change action, including reducing emissions and scaling up climate finance, is critical for stronger action later. At COP23, countries agreed to take stock of action before 2020, both at COP24 as well as in 2019. This represents a good opportunity for countries to reconfirm progress on pre-2020 ambition. For G7 members – and for developed countries more broadly – taking stock also represents an opportunity to fulfil their collective pledge of mobilising $100 billion annually by 2020. Many developing countries desperately need this support in order to make their contribution to climate action. I urge G7 members to unlock the promised and necessary funding to make this contribution possible. The contribution by developing countries will become ever more important in the future. Unlocking the promised funds will help the world reach the goals of the Paris Agreement. The G7 is a very influential group that can make a huge contribution to stepping up climate action and ensuring that 2018 yields a successful outcome for all. The G7 has the power to raise ambition. The G7 can provide the vision to engender renewed political will. And the G7 has the leadership to ensure tangible progress and action before 2020. A clear signal from the Charlevoix Summit would provide positive impetus for the climate change process in 2018. UN Climate Change stands ready to support all efforts by all countries towards shared success at COP24 in Katowice. 76

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PATRICIA ESPINOSA

Executive secretary of the United Nations Framework Convention on Climate Change Patricia Espinosa took office as executive secretary of the United Nations Framework Convention on Climate Change (UN Climate Change) in July 2016. She served as Mexico’s ambassador to Germany from 2012 to 2016 and from 2001 to 2002, and minister of foreign affairs from 2006 to 2012. She chaired the 16th Conference of the Parties to the UNFCCC leading to the adoption of the Cancun Agreements and was named by the UN secretary-general to the High-Level Panel of Eminent Persons on the Post-2015 Development Agenda. Twitter @PEspinosaC  www.unfccc.int

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To truly herald a new era of environmental protection, we must close the materials loop by reimagining business and individual behaviour, writes Erik Solheim, executive director, United Nations Environment Programme

he olive ridley turtle recently ended a 20-year absence from the beaches around India’s megacity of Mumbai. It was a highly symbolic moment, underscoring that environmental recovery is both possible and, as a measure of an area’s good health, wholly worthwhile. Just two years ago, the yellow sands of Versova beach near Mumbai were invisible, covered up by piles of trash. Most of it was plastic – items such as discarded shopping bags and packaging spewed out by the city and washed up during each tide. Then an army of volunteers began cleaning the beach on weekends. Seven thousand tons of plastic waste later, the turtles made a comeback. Plastic is one of the most useful things ever invented. Its uses are many and often miraculous. It saves lives in medicine, keeps food clean and is at the centre of the renewable energy revolution. The problem is us: we got lazy. More than 12 million tons of plastic

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“When you are drinking bottled water, you are also drinking tiny pieces of plastic waste”

ERIK SOLHEIM

Director, United Nations Environment Programme Erik Solheim became executive director of the United Nations Environment Programme in May 2016. Previously, he chaired the Development Assistance Committee of the Organisation for Economic Co-operation and Development. From 2007 to 2012, Solheim held the combined portfolio of Norway’s minister of the environment and international development, and from 2005 to 2007 served as minister of international development. Solheim has served as UNEP’s special envoy for environment, conflict and disaster since 2013 and has been a patron of nature for the International Union for the Conservation of Nature since 2012. Twitter @ErikSolheim  www.unep.org

80%

of products are thrown away within six months of production

enter our oceans every year. It is destroying plants, animals and livelihoods. It is in the food we eat and the water we drink. Last year at the United Nations Environment Assembly, nearly 200 countries recognised that we are fast becoming a plastic planet and agreed to a non-binding agreement to address plastic pollution. But time is not on our side. My home country Norway was one of the first countries to call for a global agreement on mercury in 2003, and the Minamata Convention on Mercury came into force in 2017. We do not have the luxury of 14 years to wait for a convention on plastic pollution. The garbage patch in the ocean is getting bigger, and 99% of all seabirds will have ingested plastic by mid century. New research suggests that when you are drinking bottled water, you are also drinking thousands of tiny pieces of plastic waste.

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G7 members have made some progress on addressing single-use plastic. Many US cities have banned or put heavy taxes on plastic bags, as have some municipalities in Canada. The United States, Canada, France and the United Kingdom have banned microbeads. Europe’s plastics strategy for a circular economy aims to ensure all plastic packaging on the European Union market is recyclable by 2030. Policymakers and citizen action have taken us this far, but what we need now is to reimagine business and behaviour. This means a rethink of how we design products and end the throw-away culture. In 2016, a global population of more than seven billion people produced over 300 million tons of plastic. Planet Earth has no more space for products with a useful life that is measured in just seconds, minutes or hours. We throw away hundreds of billions of dollars in plastic, electronic and food waste a year. But imagine the opportunities if we viewed waste as a resource, an investment and as an employment provider? Taking a more circular approach allows us to think bigger than we have ever thought before. And the time is ripe for another revolution, to build the next frontiers of business. At a time when several G7 economies are looking for growth, changing the way we produce and consume could be the next big economic victory. Many businesses are looking keenly at how to close the materials loop. Danone, which produces Indonesia’s leading brand of bottled water, has set up several recycling cooperatives with litter collectors, creating jobs and providing social services and microfinance. The circular economy can also span the next generation of start-ups, because green business is good business. Method is one of the largest and fastest-growing green cleaning products companies in its field. It uses recyclable materials and renewable energy. Its ‘Oceans Plastics Bottle’ project has led to using discarded plastic from the sea in its packaging. Despite some progress by governments and business, transforming our economies to follow a circular route will depend enormously on changing individual behaviour. Our current lifestyle throws away 80% of products within six months of production. So any move to a circular economy must put people at the centre of the transformation. We cannot close the loop without them. G7G20SUMMITS.ORG

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At the intersection of climate and health Climate change poses a direct threat to health in the Caribbean, with food, water and drug supplies compromised by increasingly extreme weather events. C. James Hospedales, executive director, Caribbean Public Health Agency, calls on the G7 to ensure the sustainability of this vulnerable region

he Caribbean is a watery part of the world, with some 30 diverse countries and more than 100 inhabited islands. There are 40 million Spanish-, French-, English- and Dutch-speaking residents (population range 5,000 to 11,000,000) and 50 million visitors annually. Most countries are small island and low-lying developing states (SIDS), characterised by vulnerability to external natural and human-made shocks, including climate change. Most are now middle income, but their small size severely limits capacity, so the region has a long history of cooperation with regional organisations including the Caribbean Community (CARICOM) and the Caribbean Public Health Agency. Although emissions of greenhouse gases from the Caribbean region are negligible, regional climate change and rising sea levels threaten the existence of several small islands and countries with low-lying coasts. The Caribbean is already experiencing gradual warming, leading to hotter, drier weather, an increased frequency of Category 5 hurricanes and periodic inundations. The social, environmental and economic implications are profound, with a country’s entire annual gross domestic product wiped out in some cases by one hurricane, from which it will take a decade to recover. The obvious health impacts are the devastating effects of major storms. Hurricane Matthew in 2016 affected more than 10 territories, but especially Haiti.

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In 2017, Hurricane Maria devastated Dominica and Puerto Rico. Such storms cause immediate injuries and deaths from high winds, flooding and falling trees, and also damage homes and businesses. In the aftermath, many more people may die as supplies of medications for chronic illnesses can be disrupted. Many recent large storms have spawned civil unrest, looting and increased aggression in populations; sometimes the damage can be as bad as the hurricane itself. In addition, the vulnerability of health facilities is a special concern, and many health centres are near the coast, although hospitals recently constructed to withstand stronger storms have fared much better. These storms are planetary alarm bells sounding the need for people to change. HIDDEN IMPACTS Less obvious health impacts are related to mental stress and food and water insecurity as climate change advances. Warming oceans and widespread coral reef bleaching undermine food security as reefs are the nurseries for many species of fish and marine life. The more frequent storms damage agriculture, leading to increased dependence on cheap, low-quality imported foods. Water insecurity is heightened as hotter weather becomes the norm, with increased periods of drought like those that have affected Haiti and Jamaica since 2015. Climate-sensitive disease vectors, such as mosquitoes, are also causing increasingly adverse G7G20SUMMITS.ORG

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impacts. In the past 20 years, dengue fever has increased in frequency and severity in the Caribbean. In 2014 and 2016 respectively, region-wide epidemics of Chikungunya and Zika virus occurred, despite governments and businesses mounting major campaigns of education and vector control. These trends underline the vulnerability of this tourism-dependent region. All three diseases have the same main vector, Aedes aegypti. Transportation is largely by motorised vehicles that use fossil fuels. Moving away from them to alternative transport such as biking and walking, which use the existing built environment, brings potential co-benefits to health, energy security and the planet. RAISING AWARENESS OF THE ISSUES CARPHA in collaboration with the School of Public Health and Tropical Medicine at Tulane University convened an expert panel to address climate-related public health issues. The panel includes regional institutions working on climate change, disaster and emergency response, agriculture, crime and security, and international partners such as the Pan American Health Organization (PAHO) and the World Health Organization (WHO), the National Institutes of Health in the United States and the American Public Health Association. It prepared a roadmap for climate and health with five strategic imperatives, the first of which is raising awareness of the population and especially health professionals on the issue of climate and health. Community-based, technology-enabled resilience, such as using cellphones to coordinate response and recovery, is the second priority. The third is integrating health, climate and other data and gathering partners around that information. Fourth is reducing health facility vulnerability by constructing stronger, more energy-efficient buildings, and PAHO/WHO’s ‘SMART’ hospital programme is a leader in this regard. Finally, G7G20SUMMITS.ORG

C. JAMES HOSPEDALES Executive director, Caribbean Public Health Agency

C. James Hospedales was appointed the inaugural executive director of the Caribbean Public Health Agency in 2013. He was previously the coordinator of the Prevention and Control of Chronic Diseases at the Pan American Health Organization. From 1998 to 2006, he was director of the Caribbean Epidemiology Centre. Hospedales was a member of the Caribbean Commission on Health and Development, which made policy recommendations to the heads of government and named chronic diseases as a super-priority for the region. Twitter @carpha1  www.carpha.org

fifth is leveraging the built environment, as seen in the boardwalk built on top of coastal defences in Barbados, which has become a popular walking and jogging facility for locals and tourists. CARPHA also works with partners such as Germany on ‘ridge to reef’ approaches to mitigate and adapt to climate change, including watershed management, reforestation, collaboration with farmers to reduce pollution of waterways, and coastal and marine management improvements. G7 leaders meeting in Charlevoix can best help by recognising that the Caribbean countries are extremely vulnerable – they are the canaries in the coal mine. They can support a micro tax approach on visitors of, for example, $5 per passenger, to ensure the sustainability of the Caribbean regional institutions working in public health and environmental monitoring, crime and security, disaster and emergency response, all of which underpin resilience and a successful tourism experience and business. These provisions also reduce the risk of large numbers of persons migrating. G7 members can provide grants and technical assistance to climate-proof health facilities and develop alternative transportation systems such as biking and walking and rapid mass transport. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

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A better future: fresh starts in the world's metropolises

The lived reality of climate change is forcing increasing numbers of people from their homes. G7 leaders should ensure that climate migrants are given the tools and legal status to succeed in their new cities, writes Anne Hidalgo, mayor of Paris and chair of C40 Cities

Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. —The New Colossus, Emma Lazarus

hese words, engraved on the Statue of Liberty overlooking that great city of immigrants, New York, remind us of the power of cities to provide refuge and a new beginning for those forced to flee their homes. With leaders of the world’s most powerful countries gathering in Quebec for the G7 Charlevoix Summit, now is the moment for them to work with the mayors of their great cities to address the plight of forced climate migrants around the world. As the mayor of Paris, my primary responsibility is to ensure the safety and prosperity of my citizens. This is a preoccupation I share with all mayors around the world, especially those gathering within the C40 network. C40

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Cities now gathers 96 of the world’s greatest cities: together with my colleagues, we represent 700 million citizens, and our cities generate a quarter of the global economy. How could we deliver a better quality of life for people without addressing the greatest challenges facing the global community, including inequality, migration and climate change? Throughout history, Paris has been a refugee city for migrants from every part of the world. As for great cities around the world, our strength comes from our diversity and the solidarity that binds our citizens, whether they have just arrived or lived here all their lives. In Paris, we have initiated an unparalleled mobilisation to provide help to tens of thousands of refugees and support their long-term integration into

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ENHANCING THE ENVIRONMENT AND CLIMATE CHANGE CONTROL France. And we will remain true to this human duty. Thanks to the exceptional solidarity of Parisians, we have recently helped tens of thousands of people. I recognise the commitment of many other mayors around the world to offer similar support and solidarity, from Athens, Milan and Barcelona, to Vancouver, Los Angeles and Chicago, to Amman, Dhaka and Lagos. Cities are doing their best to honour the moral and material obligations to the world’s poorest and most vulnerable. But we need more and more support from all the national authorities to get the job done. AN INCREASING GLOBAL NEED Our commitments may also be more and more insufficient if levels of migration rapidly increase as a result of climate change. Natural disasters, many of them climate related, already displace more people than wars around the world. Studies suggest that by 2050, as many as 200 million people may be forced to migrate due to climate change. Studies also prove that women are disproportionately affected by the effects of climate change, and many of those most vulnerable to the risks of displacement will again be women and children. The G7 leaders should provide formal recognition for individuals forced into migration by climate change. No legal status for people who forcibly migrate because of climate-related events currently exists in international, regional or national law. This undermines the ability of governments, both local and national, to manage, protect and support those who arrive on our shores in search of a better life. Such status would provide them with the same legal protections that other migrants receive.

The G7 leaders should provide formal recognition for individuals forced into migration by climate change” The best option to manage future mass movements of people is to take bold climate action and avoid the risks forcing them from their homes. Current pledges by nation-states to reduce greenhouse gas emissions would still see global temperatures increase well beyond limits considered safe by climate scientists and the limits set in the Paris Agreement. Scientists are clear that such warming would cause devastating impacts around the world, including rapid sea-level rise and more extreme droughts, floods, wildfires and hurricanes. Coastal cities would be particularly vulnerable and many millions of people could be forced to migrate.

photo: shutterstock.com

ANNE HIDALGO Mayor of Paris and chair of C40 Cities Anne Hidalgo, the first woman to be elected mayor of Paris, took office in 2014. After co-hosting the Climate Summit for Local Leaders in December 2015 with Michael Bloomberg, the United Nations secretary-general’s Special Envoy for Cities and Climate Change, she was elected chair of C40 Cities. A former Labour inspector, she held several positions in national and international organisations before becoming first deputy mayor of Paris in 2001. Twitter @Anne_Hidalgo @c40cities  www.c40.org

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That is why mayors of the world’s great cities are so committed to bold and urgent climate action. Through the C40 Cities network, 96 cities are committing to deliver on the most ambitious goals of the Paris Agreement. At the same time, we are preparing our cities for the challenges that the future may bring, ensuring a secure, prosperous and healthy future for our citizens. We need the G7 leaders to commit at the Charlevoix Summit to similarly bold goals to reduce emissions and take climate action, consistent with the ambition of the Paris Agreement. NEW CITYSCAPES Climate migration is already happening. It is already reshaping the great cities of Asia, Africa and the Middle East. The energy, ambition and commitment to a better future that migrants bring helps make our cities stronger. Now is the moment to formally and legally recognise climate migration and develop new provisions for addressing climate-induced displacement, filling the unacceptable gaps in legal protection. Throughout history, people have been forced from their homes by conflict, poverty and persecution. The ‘huddled masses yearning to be free’. By acting now, G7 leaders meeting in Quebec can determine if millions more will suffer a similar fate because of climate change in the decades ahead. The responsibility is great. We must succeed.

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Clean energy for Reduced air pollution and greater access to energy are not mutually exclusive, and sustainable development commitments are going some way in delivering clean energy to those most in need, explains Fatih Birol, executive director, International Energy Agency

nsuring secure, affordable and sustainable access to energy is a central concern of G7 economies and indeed all countries around the world. But meeting these goals while concurrently focusing on a range of other issues – including creating jobs, promoting gender equality, ensuring safety and security, and tackling climate change – can present a serious policy and investment challenge. This challenge is even greater for emerging and developing economies – countries that are facing a host of additional challenges, including citizens who lack any access at all to modern energy services and the ever-present threat of air pollution both outdoors and in their own homes. Countries are asking themselves: can we address all these issues without making sacrifices or trade-offs? The answer is yes, it is possible. But it involves understanding how energy weaves throughout all these issues and is itself both the cause of and solution to many of our collective challenges. First, energy is the main source of global greenhouse gas emissions. Preliminary figures from the International Energy Agency (IEA) show that carbon dioxide emissions rose again in 2017 after being flat for three years. This means that without more ambitious action, the world will not get on track to meet the objectives of the Paris Agreement on climate change.

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At the same time, 1.1 billion people still lack access to electricity, and nearly two out of every five people on Earth – 2.8 billion people – are without access to clean fuels and technologies for cooking. The smoke from cooking with polluting fuels leads to about 2.5 million premature deaths per year, and affects women and children the most. Countless hours are spent gathering fuelwood, a burden that is also mostly borne by women. DEATH TOLL RISING Energy is also the principal source of air pollution linked to severe human health impacts. Today, the number of premature deaths from outdoor air pollution is around three million a year, and is set to exceed four million if no further action is taken. Reaching universal energy access while at the same time reducing carbon dioxide emissions and air pollutants from the energy sector is therefore essential if we are to achieve sustainable development. G7G20SUMMITS.ORG

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40%

of all people are without access to clean fuels and technologies for cooking

FATIH BIROL

Executive director, International Energy Agency Fatih Birol has been the executive director of the International Energy Agency (IEA) since 2015. Previously, he was the IEA’s chief economist and director of global energy economics, with responsibilities that included directing the IEA’s World Energy Outlook, recognised as the most authoritative source of strategic analysis on global energy markets. Birol is also the founder and chair of the IEA Energy Business Council, which provides a forum to enhance cooperation between the energy industry and energy policymakers. Twitter @IEABirol  www.iea.org

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Recognising this, three years ago when the Sustainable Development Goals (SDGs) were adopted, the IEA and partner organisations contributed efforts to ensuring that energy was at their core. The SDGs include targets related to energy that, if achieved, will improve the lives of billions of people around the world: expanding access to electricity, improving access to clean cooking fuels, reducing wasteful energy subsidies and curbing air pollution. Progress towards these goals will also underpin many of the other SDGs, such as those on gender equality, poverty alleviation, education and sustainable cities. This work on energy and sustainability has long been fundamental to the work of the IEA. In 2002, after I had just taken over as IEA chief economist, I instigated the IEA’s first ever programme to compile annual estimates of the number of people worldwide who lacked access to electricity – I strongly believe that you cannot manage what you cannot measure. Fifteen years later, in the 2017 edition of our flagship World Energy Outlook publication, we introduced a new scenario that illustrates an integrated way to simultaneously achieve three critical policy goals: climate stabilisation, cleaner air and universal access to modern energy. This Sustainable Development Scenario (SDS) brings these points together for the first time, recognising their interrelated nature but also the competing priorities faced by policymakers. This brings us back to our question of whether we can address all our challenges at the same time. What is most striking is that the SDS shows policymakers can achieve the three objectives together – they are not incompatible. Fighting climate change or reducing air pollution does not preclude a country from expanding electricity access. In the SDS, universal access is achieved by 2030, and by 2040 both energy-related carbon dioxide emissions and premature deaths from air pollution are halved, relative to projections with no further policy action. In many cases, perceived trade-offs are either small or non-existent. Such a comprehensive approach can inform the way we tackle many of the global challenges faced today. Focusing on any one specific goal by itself creates a risk of locking in a pathway that impedes or increases the cost of achieving other goals. As G7 leaders gather to discuss their priority issues for 2018, it is worth remembering that no issue exists in isolation – and energy connects us all. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

5 STRENGTHENING SUSTAINABLE DEVELOPMENT

Delivering on Development is frequently a core topic in summit discussions, and leaders must maintain momentum by adopting 21st-century solutions to modern development challenges, says the G7 Research Group’s Courtney Hallink

evelopment has long been a focal point of G7 summitry. This includes the issues of health, migration and refugees, and food and agriculture. Since their first summit in 1975, G7 leaders have delivered more than 1,000 commitments on development, health, migration and food. This year at Charlevoix, development will be central under the theme of ‘investing in growth that works for everyone’, with health, migration and food under ‘building a more peaceful and secure world’. PLEDGES MADE Since 1975, G7 leaders have made 1,340 collective, politically binding commitments on development, health, migration and food. At their first summit in Rambouillet, France, in 1975, they made four development commitments. The leaders stated that ‘we will play our part, through the IMF [International Monetary Fund] and other appropriate international fora, in making

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urgent improvements in international arrangements for the stabilisation of the export earnings of developing countries and in measures to assist them in financing their deficits’. Since then, G7 leaders have delivered 669 commitments on development. On health, the G7 has delivered 403 commitments, beginning with three at the 1996 Lyon Summit, including a promise to provide assistance to the ‘countries hardest hit by HIV/AIDS and other infectious [and fatal] diseases’. On migration, G7 leaders delivered a key commitment at the 1981 Ottawa Summit. They reaffirmed support ‘for international relief efforts and [appealed] to all governments to refrain from actions which can lead to massive flows of refugees’. In all, the G7 has delivered 16 commitments related to migration. On food and agriculture, the first commitments were made at the 1979 Tokyo Summit. Leaders promised to ‘urge multilateral organisations to help these G7G20SUMMITS.ORG

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development commitments countries to develop effective food sector strategies’. Since then, they have delivered 252 commitments on food and agriculture. ABOVE-AVERAGE COMPLIANCE Compliance with the 131 commitments on development, health, food and agriculture, and migration assessed by the G7 Research Group averages 79% – above the G7’s overall average of 75%. This demonstrates that the G7 has had relatively strong performance on development, health, migration and food. On development, 47 commitments were assessed, with an average of 73%, led by the United Kingdom at 84%. On health, with 67 commitments assessed, average compliance is 77%. This was led by Canada with an average of 92%. On migration and refugees, average compliance is an impressively high 88%. This has been led by the United Kingdom,

European Union, United States, France and Germany, all with average scores of 100%. Japan stood at the bottom, with a compliance average of zero.

set, the assistance that was delivered undoubtedly had a significant impact: in 2009, 2.4 million fewer children died under the age of five than did in 2004.

SUCCESS IN DEVELOPMENT ASSISTANCE One notable achievement took place at the 2002 Kananaskis Summit. The G8 leaders, then with Russia as a member, adopted the comprehensive Africa Action Plan, targeting peace and security, economic growth and sustainable development, good governance, debt relief, and health and HIV/AIDS. This increased focus on development in Africa continued at the 2005 Gleneagles Summit, where the leaders promised to more than double overseas development assistance to Africa by 2010. Although the G8 did not meet the ambitious target the leaders

OPEN LINES OF COMMUNICATION To improve compliance at the upcoming Charlevoix Summit, G7 leaders must commit to maintain regular contact to report and discuss efforts on prior development commitments as well as broader national development projects. They must also maintain contact on issues pertaining to health, migration and food. With no official accountability mechanism in place, the leaders must take it upon themselves to hold one another responsible for delivering on the promises made at each summit. The G7 should also deliver development commitments that are in line with 21st-century development approaches. Social protection, often in the form of social grants, has become a primary part of development in the past 20 years. The G7 must demonstrate its ability to adapt to the global issues and global solutions of the time by committing to providing countries with the financial and technical support necessary to strengthen social protection systems. With this, the G7 leaders will be able to make a notable difference not just in development, but also in health, migration and food around the globe.

COURTNEY HALLINK

Director, South African Office, G7 Research Group Courtney Hallink is director of the South African office of the G7, G20 and BRICS Research Groups, based in Cape Town. Twitter @c_hallink  www.g7.utoronto.ca

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STRENGTHENING SUSTAINABLE DEVELOPMENT

Interview with Achim Steiner

The

multifaceted

approach

Q. How well is the global community moving to meet the 17 Sustainable Development Goals (SDGs) by the due date of 2030? A. The first indicator of success is how far and how widely the SDGs are now part of a conversation about development in terms of the number of countries, communities and sectors. We have seen a significant acceleration in terms of uptake. What will remain a focus is how to accelerate the momentum in order to be able to meet targets against timelines. We are left with about 11 and a half years, and that focuses attention and also effort. We look to the G7 to be part of that community to accelerate action. Q. How is the United Nations Development Programme (UNDP) coordinating those efforts? A. We have had requests from more than 110 countries to assist them with taking the SDGs into a national development policy context, promoting localisation whereby sub-national entities such as provinces or municipalities can work with this. We also facilitate joint interagency missions for the whole UN family, where we try to align the offer of the UN family in terms of national SDG priorities. Our role is to bring innovation and creativity to problem-solving, which involves new partnerships, for instance with the private sector. UNDP frequently engages with the 88

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The United Nations Development Programme’s Achim Steiner speaks with editor John Kirton about the interaction between this year’s G7 priority agenda and the Sustainable Development Goals, explaining what this means for advancing the global development roadmap financial and insurance sectors in transforming markets through smart public policy and finding incentives to mobilise additional finance or insurance products to help meet the SDG targets. These are the frontiers of innovation that will increasingly define the work of the UNDP. Q. What progress has been achieved so far? A. One indicator of success is that the UN invites roughly 45 countries to present their voluntary national reports on SDG implementation at the High Level Political Forum every July in New York. Demand has been so high that we have to decline offers from as many as 20 countries each year! Countries are using the SDGs nationally to change the policy directions of development, and are ready to exchange experience and present innovations at the global level. The SDGs are a catalyst for experimenting and reconfiguring capacities and actors across and beyond governments. We see it in the decision of Japanese prime minister Shinzo Abe to locate the SDG coordination unit in the prime minister’s office and German chancellor Angela Merkel’s new national SDG-based strategy adopted as part of Germany’s sustainable development strategy. These are real indicators that the SDGs have not remained a declaratory set of targets at the General Assembly. They have literally begun to spread into virtually every country. G7G20SUMMITS.ORG

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ACHIM STEINER Administrator, UNDP

Achim Steiner began his four-year term as UNDP administrator on 19 June 2017. He is also the vice-chair of the UN Development Group, which unites the 32 UN funds, programmes, specialised agencies and other bodies that work to support sustainable development. Prior to joining UNDP, he was director of the Oxford Martin School and Professorial Fellow of Balliol College, University of Oxford. He led the United Nations Environment Programme from 2006 to 2016 and previously served as director general of the International Union for the Conservation of Nature and secretary general of the World Commission on Dams. Twitter @ASteiner ‫ ‏‬ www.undp.org

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Q. Are you finding any goals that are the most difficult to advance and need special attention? A. Some of our more intractable problems – inequality, conflict and peace – require many things to come together. The SDGs provide a framework to address a problem from multiple entry points. The best example is for an investment in one target or goal to produce multiple benefits across a spectrum of goals. That is good economics in terms of development investment. The SDGs also challenge those who think that singular solutions will likely succeed in a complex development reality. Inequality, marginalisation and poverty are as much about enabling people to have incomes as they are linked to developing industries as they are also premised on introducing better health insurance schemes. Every year, we get millions of people out of poverty, and yet 40% of those who escape poverty fall back into poverty, often because there is an illness in the family, all the savings are used up, and before they know it they are back where they started. Our strategies for poverty eradication have to be multidimensional and more sophisticated to achieve the sustainable outcomes that the targets envisage. Success with the SDGs is inextricably linked to the availability of finance and the ability to invest. No country has a sufficient budget to guarantee the achievement of the SDGs. Mobilising finance beyond the public purse is fundamental to the success of Agenda 2030. Moreover, if the three hundred trillion dollars that represent our financial resources in today’s world economy are focused on yesterday’s economy or the status quo, there is no way we can succeed, because the entire force of gravity of the financial system is on a different pathway. Dialogue with the financial sector is, therefore, critical. The G7 has already played a significant role. The engagement with banks, fund managers and sovereign wealth funds has significantly enlarged the availability of green finance, now around $150 billion a year. Sovereign wealth funds are looking at portfolios in terms of climate change and carbon footprints. We also need to look at the agriculture, food and food retail sectors: along the production and marketing and consumption chain, over one third of everything we produce to be eaten is never actually consumed – it is lost between field and market, or on the plates and in the fridges of well-off societies that can afford to throw away food. This economic reality signals the need for investment in different markets and production systems. Here, public policy and the capacity of the financial markets and institutions to come together are enormously important. The SDGs resonate remarkably well with financial sector leaders, because they capture both the complexity of future markets and identify new avenues for investment, connecting an impactinvestment-oriented clientele with entrepreneurs and businesses trying to develop different products. 90

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The UN backed Zimbabwe’s elections to support economic recovery efforts

40% of those who escape poverty fall back into poverty

150 billion US dollars a year now available in green finance

1/3 of everything we produce to be eaten is never consumed

Mobilising private-sector finance and financial resources beyond government is equally critical, if not more fundamental, to scaling up the implementation solutions that the SDGs envisage. International financial institutions such as the World Bank and organisations such as UNDP are increasingly helping countries mature their domestic financial markets and provide incentives for pension funds, banks and other financial institutions to invest in outcomes with a public good component, as well as a private-sector return. Q. Can the five priorities that Canada as host has set for the Charlevoix Summit advance the SDGs? A. Each G7 summit cannot be an answer to all the world’s problems, but Canada has put together a menu of areas in which the G7 has both the capacity and opportunity to lead. The G7 is a group of countries that can significantly influence the global agenda by leading by example. All five themes are areas where Canada has signalled its own intention to do just that. G7G20SUMMITS.ORG

G20 Research Group G20 Research Group The G20 Research Group is a global network of scholars, students and professionals in the academic, research, business, non-governmental and other communities who follow the work of the G20 leaders, finance ministers and central bank governors, and other G20 institutions. It is directed from Trinity College, the Munk School of Global Affairs and the Department of Political Science at the University of Toronto, which also host the G7 Research Group and the BRICS Research Group. Our mission is to serve as the world’s leading independent source of information and analysis on the G20. As scholars, we accurately describe, explain and interpret what the G20 and its members do. As teachers and public educators, we present to the global community and G20 governments the results of our research and information about the G20. As citizens, we foster transparency and accountability in G20 governance, through assessments of G20 members’ compliance with their summit commitments and the connection between civil society and G20 governors. And as professionals, we offer evidence-based policy advice about G20 governance, but do not engage in advocacy for or about the G20 or the issues it might address. Publications include:

Accountability for Effectiveness in Global Governance,by Marina Larionova and John Kirton, eds. (Routledge)

China’s G20 Leadership, by John Kirton (Routledge)

The Global Governance of Climate Change: G7, G20 and UN Leadership, by John Kirton and Ella Kokotsis (Routledge)

G20 Governance for a Globalized World, by John Kirton (Routledge) (also available in Chinese)

The G20: Evolution, Interrelationships, Documentation, by Peter I. Hajnal (Routledge)

Background Books and eBooks For each summit the G20 Research Group produces a “background book,” available free of charge in print and online, outlining the perspectives of the leaders and key stakeholders and offering analysis by leading global experts. It also works with GT Media on the Global Governance Project to produce related analysis and publications. Compliance Assessments For each summit the G20 Research Group, working with the Russian Presidential Academy of National Economy and Public Administration (RANEPA), assesses each G20 member’s compliance with the previous summit’s priority commitments. Cumulative compliance assessments are compiled on key issues. Pre-summit Conferences With a local partner in the country hosting the summit along with a core group of international partners, the G20 Research Group produces a conference in the lead-up to each summit analyzing the institutional workings of the G20 and the issues, plans and prospects for the summit. Field Team The G20 Research Group sends a field team to each summit and some ministerial meetings to assist the world’s media, issue its own reports and analyses, allow students to witness

world politics at the highest level at close hand, and collect the documents and artifacts uniquely available at the summit, to build the G20 archives at Trinity College’s John Graham Library and online at the G20 Information Centre website. G20 Information Centre @ www.g20. utoronto.ca The G20 Information Centre is a comprehensive permanent collection of material available online at no charge. It complements the G7 Information Centre, which houses publicly available archives on the G20 as well as the G7 and G8, and the BRICS Information Centre, and the Global Governance Project at g7g20summits.org. Speaker Series The G20 Research Group hosts occasional speakers in its efforts to educate scholars and the public about the i ssues and workings of the G20. Past speakers have included senior officials of the International Monetary Fund and the World Bank and scholars and policy makers from Mexico, Turkey, China, Australia, Brazil, Italy and elsewhere. Research The G20 Research Group conducts research on the causes of summit and system performance and the G20’s relationship with the G7/8, BRICS, United Nations and other formal multilateral institutions.

G20 Research Group Munk School of Global Affairs, 1 Devonshire Place, Room 308N, Toronto, Ontario M5S 3K7 Canada Telephone 1-416-946-8953 • E-mail g20@utoronto.ca • Twitter @g20rg www.g20.utoronto.ca

STRENGTHENING SUSTAINABLE DEVELOPMENT

They also reflect key areas in the global sustainable development agenda that require our attention. Economic growth that delivers for everyone speaks both to the harsh lessons of the past decade since the 2008 global financial crisis and everything we have seen since then, where inequality produces marginalisation, extremism and political uncertainty. The jobs market of the future is going to be significantly changed from the market of the present and certainly of the past. In fact, it seems without precedent in terms of the significance of changes coupled with a short window of time. The world is more ready than ever for leadership on gender equality and women’s empowerment from the G7 governments and leaders as it is ready to address what over the past year have been very serious moments of introspection. On climate change, we are entering a critical phase where the Paris Agreement has to demonstrate that the nationally determined contributions are working and that the built-in ambition will allow the international community to move forward despite the challenge of the US position. Part of that is to address the challenge of decoupling energy from emissions. And finally, oceans are a natural issue on which Canada can play a leadership role. It builds on the UN’s Oceans Conference in June 2017 and echoes the negotiations on the Convention on Biological Diversity – for which Montreal and Canada host the secretariat. The last theme speaks to a long tradition that Canada has honoured in being proactive in multilateralism as a basis for a more peaceful and secure world. I am not surprised that Prime Minister Trudeau would put this forward. This theme echoes in many ways the benefit of realising Agenda 2030. Indeed, the work that we do at UNDP today resonates as much about the first four priorities as it does on this one. Development interventions are increasingly often a response to crisis and, in some ways, an antidote to not falling into crisis. In Iraq, our stabilisation work now involves 1,800 projects to reconnect electricity and water pipes so six million displaced people can return to where they once had their livelihood. In the Sahel region now, we are focused on investing in prevention rather than witnessing the growing number of people feeling that they have no reason to believe in the concept of a nation-state, which delivers nothing to them. It explains how people become vulnerable and open to being recruited by radicalised elements and drifting into extremism. The cost of intervening from a security perspective eventually becomes unaffordable. Development must be integral to the way we look at the global peace and security agenda. 92

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The power of the G7 lies in the totality of what it brings to the ‘global table’ in terms of economic, technological and geopolitical might and influence. It brings these seven countries to act together and carries significance over global challenges” Q. How can the G7 leaders best help? A. The power of the G7 lies in the totality of what it brings to the ‘global table’ in terms of economic, technological and geopolitical might and influence. It is both inward-looking, bringing these seven countries to act together, and also outward-looking because as a group it carries significance over many of today’s global discussions and policy challenges. The greatest impact of the G7 is to set the example with their own economies and policies and also collectively propel the global agenda along the lines of those five themes. G7 summits are a moment for people to judge whether aspirational intent is met by concrete commitments. The G7 Research Group provides a report card on the implementation of G7 and G20 commitments. It is a good moment for the public to interact with leaders and say, you took a leadership position on these issues – a year later, or three years later, what have you accomplished? Finally, out of every summit there usually comes one or two initiatives that without the summit would not have been born. They themselves have at times proved extremely valuable and important. My hope is that one or two things will come out of Charlevoix that would otherwise have taken years to initiate or never have seen the light of day. G7G20SUMMITS.ORG

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Prioritising global healthcare I

n many respects, 2018 could be a make or break year for global health. At least we will see if the new constellations of power will also find their reflection in global health priorities, financial contributions to common global challenges and commitment to multilateral institutions. G7 leaders are challenged to send clear messages about the need to invest in health nationally and globally and to strengthen the World Health Organization (WHO). Much has already changed. Dr Tedros Adhanom Ghebreyesus, the new WHO director-general, is positioning the organisation as a catalytic force to improve world health. His vision is closely aligned to the implementation of the Sustainable Development Goals (SDGs) – especially Goal 3: Ensure healthy lives and promote well-being for all at all ages – and he is actively creating an overall investment case for health, far beyond the organisation’s budget. This is particularly important as the replenishment activities of major global health actors are gearing up – at a time when global health funding is no longer as secure as it once was. There is much speculation on how significant the financial contributions of the world’s largest global health funder – the United States – will be over the next few years and whether other funders, for example the European Union and rising powers

such as China and India, will move to contribute more. Given such insecurities, there is a need to move from competition for funding to cooperation towards aligning national and international funding to achieve global health improvement. This plays to WHO’s constitutional role to lead and coordinate global health activities and is one of the reasons why the organisation must be strengthened significantly. HEALTHY INVESTMENTS But the need to rethink global health approaches goes far beyond donor contributions, whether from countries or large foundations. The major challenge in global health financing is to have countries commit to make domestic investments in the health of their populations. Indeed, calculations indicate that to be on track for achieving the health-related SDGs, $1.4 trillion would be required over the next five years, with 85% consisting of domestic investments. These include universal health coverage, health security, and

We are at a critical juncture in health diplomacy, and the G7 has a responsibility to reach consensus on achieving agreed health and well-being targets, writes Ilona Kickbusch, director of the Global Health Centre at the Graduate Institute of International and Development Studies in Geneva

health promotion and prevention. Dr Tedros makes this point vehemently when he says health is a political choice. Several countries are moving in this direction: Xi Jinping of China has launched a significant investment plan for Healthy China 2030; India’s Narendra Modi has announced significant investment in order to eliminate tuberculosis in 2025, five years before the global target. The government of Kenya has prioritised universal health coverage in its Big 4 agenda over the next five years. ACCELERATING ACTION But this is not enough. Two other priority areas require rapid and determined political action. The world’s rapidly growing crisis of non-communicable diseases needs action on the commercial determinants of health, and the impacts of air pollution and climate change on health require many different policy arenas to be aware of their health consequences. Over 10 years after the adoption of the Framework Convention on Tobacco Control, many countries have still not put

1.4tn 85% 12years

is required to achieve the health-related SDGs

G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

of that $1.4 trillion should consist of domestic investments

until the global deadline to eliminate tuberculosis

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ILONA KICKBUSCH

Director, Global Health Programme Ilona Kickbusch is director of the Global Health Programme at the Graduate Institute of International and Development Studies in Geneva, Switzerland. She served on a panel of independent experts to assess the response of the World Health Organization to the Ebola outbreak. She previously had a distinguished career with WHO and Yale University, and has been widely published on global health governance and global health diplomacy. Twitter @IlonaKickbusch  www.ilonakickbusch.com

in place the regulatory measures they agreed to implement, and progress on implementing the 2015 Paris Agreement on climate change is also too slow. SDG 12 calls for sustainable production and consumption, but the negative health impacts of products such as processed foods, sugar-sweetened beverages and alcohol are spreading rapidly across the globe. Consumer products are some of the most profitable investments in the global financial sector, and research shows relationships between obesity rates and trade agreements that allow for their rapid spread in developing countries. This raises important issues of taxation and regulation within countries and beyond borders, as well as strategies for divestment in such products following the example of divestment in fossil fuels. Here, too, health is a political choice. In such critical times, the key political message from the G7 Charlevoix Summit should be one of a clear commitment to health, multilateralism and the strengthening of the United Nations to implement the SDGs. If the summit cannot find consensus on the basics it requires to ensure the health and well-being of millions around the globe, it does not bode well for its positioning as a political leader of a multipolar world. G7G20SUMMITS.ORG

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r pe o f d

David Beasley, executive director of the World Food Programme, shares with editor John Kirton the correlation between hunger, conflict and migration How serious is today’s threat of famine and malnutrition? About as serious as it can get. It is true that, thanks to the support of the international community, last year we staved off famine in Yemen, South Sudan, north-east Nigeria and Somalia. But across the world, food insecurity is dramatically up. Acute hunger has gone up 55% in just the past two years. Climate-related issues are significant, but mostly, hunger is rising because people just won’t stop shooting at each other. About 60% of people who are severely food insecure live in conflict zones. This means more migration, too. For each 1% increase in hunger, there’s a 2% increase in migration. We saw this in Syria, where asylum applications to Europe spiked during the 2015 crisis, when humanitarian assistance was cut. The same thing is happening in Africa, as people flee conflict, hunger and extreme poverty. The number of people living in Europe who came from 96

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STRENGTHENING SUSTAINABLE DEVELOPMENT

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60% of people who are severely food insecure live in conflict areas

increase in hunger leads to a 2% increase in migration

Africa as refugees has doubled from 2010 and 2016. That’s according to the United Nations High Commissioner for Refugees. It’s not hard to understand why. In addition to the conflicts, in Burkina Faso, Chad, Niger, Mali and Mauritania acute malnutrition has risen 30% in the past five years. Most of Africa has a wealth of natural resources, plenty of arable land and young populations available to work. But Africa also has high food insecurity, near-constant conflict, climate-related challenges such as droughts and, in some cases, active violent ideological extremist groups. How is the World Food Programme (WFP) working to overcome the threat? We’ve seen how food can be used as a weapon of war. But we want food to be a weapon of peace. And it shouldn’t just be food. We need a properly funded, long-term, coordinated strategic plan – one that involves work from other UN agencies, non-governmental organisations and national governments. This work could help create conditions that help a family, a community, a region take care of itself. Of course, that’s food, but it’s also schools and water and roads and a dozen other things. Last year, we had 10 million people in 52 countries in Food for Assets programmes, building roads G7G20SUMMITS.ORG

STRENGTHENING SUSTAINABLE DEVELOPMENT

Poor access makes deliveries expensive and is a major obstacle in getting food to those most in need

and bridges, and working on irrigation and other agriculture-related projects. In Niger, we’re getting big results with a programme that’s helping more than 250,000 people. Agricultural productivity has doubled, even tripled in some areas. More young men are staying to work the land instead of migrating to other countries. We also need to do more in providing school meals for students. Data shows that families keep their children in school for longer if they know they’ll get fed. That’s especially important for gender equity. The longer girls stay in school, the more they learn,

DAVID BEASLEY

photo: shutterstock.com

Executive director, United Nations World Food Programme

David Beasley was appointed executive director of the United Nations World Food Programme in March 2017. In a public service career that spans more than four decades, he has worked across political, religious and ethnic lines to champion economic development, humanitarian assistance, education, and intercultural and interfaith cooperation for the most vulnerable people around the globe. He served as governor of the US state of South Carolina from 1995 to 1999. Beasley was first elected to public office at the age of 21 as a member of the South Carolina House of Representatives. Twitter @WFPChief ‫ ‏‬ www.wfp.org

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the later they marry and, when they do have children, those kids are healthier. School meals offer something else, too. Children sit down, and talk, and laugh together while eating. This meal binds them together. When they’re older, those bonds are harder to break. Climate disasters, such the recurrent droughts in the Sahel region and hurricanes last year in the Caribbean, are also having an impact on hunger. We’re working to tackle these issues with our emergency preparedness and early warning systems, along with innovations such as climate risk insurance. We’re working with the African Union and others to protect farmers from climate shocks and help them recover quickly from floods and droughts. What obstacles remain? A lack of efficient humanitarian access means we cannot get food to everyone who needs it, and even when we can, it makes that delivery very expensive. If we just improved access, we could save $1 billion a year. I must say that humanitarian needs are great and they’re underfunded, so obviously more resources are needed. At a minimum, I hope every country can keep its commitment. In the end, this will be a lot cheaper than other ways to foster and secure peace. We’ll get at the root cause of hunger, and maybe the world can spend a little less than the $14 trillion it now spends on military needs. How can the G7 leaders at their Charlevoix Summit help? The G7 leaders are already so tremendously helpful – the generosity of the donor countries truly saves lives and changes lives. But the need out there is so great. We need more resources, and we need more peace. We also need to make aid more efficient, so we can make a bigger impact. More than 90% of the money we get is earmarked, not just for specific countries, but specific activities within them. So in many cases we can’t build roads to connect farmers to markets, even if we have the qualified teams who could do just that. Fewer restrictions also gives WFP the ability to respond rapidly, to go where we need to and when. When we get flexible funding, we can plan better. That includes early warning and emergency preparedness systems that make responding more cost-efficient. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT

6 PEACE

AND SECURITY

G7 performance on security With Canada seeking to build a more harmonious and safe world, Tasnia Khan, research associate, G7 Research Group, explores how an increase in security minister meetings leads to a rise in compliance rates on security commitments

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PEACE AND SECURITY

he 2018 Charlevoix Summit will work to build a more peaceful and secure world based on a rules-based international order through democracy, human rights, the rule of law and territorial integrity. Charlevoix’s security themes are in line with the key democratic values of both Canada and the G7, which is especially important given current concerns over growing authoritarianism in North Korea and Russia. This democratic devotion also underscores the importance of upholding human rights, as exemplified by Charlevoix’s focus on crimes against humanity in Syria and the abuses against the Rohingya in Myanmar. Led by Canada, Charlevoix will infuse security issues and solutions with the theme of empowering women and girls. A STRONG GLOBAL SECURITY GOVERNOR From its start in 1975 until the 2017 Taormina Summit, the G7 made 1,308 commitments on peace and security across an expanding array of subjects including terrorism, non-proliferation and conflict prevention. These commitments were led by terrorism with 372 commitments, followed by non-proliferation with 308, crime and corruption with 288, regional security (recently including Russia and Ukraine) with 210, peace and security with 53, East-West relations with 51, and conflict prevention with 26. Between 2011 and 2017, G7 security commitments focused on terrorism, with 95, followed by regional security with 78, and crime and corruption had 74 commitments. Conflict prevention virtually disappeared. Thus, the G7 summit has become a strong global security governor both in traditional national security and the newer human security sphere. Charlevoix will add gender security to the range. OVERALL PERFORMANCE Over the 28 years from 1985 to 2013, G7 members’ compliance with their security commitments averaged 65%, below the overall average of 75%. The United States scored the highest with 93% on terrorism, 95% on regional conflict, and 86% on crime and corruption. It tied with Germany and Canada with 94% on conflict prevention. On East-West relations, Japan scored highest with 75%. On non-proliferation, Germany scored highest with 95%. Across the various security issue areas, compliance on non-proliferation was highest with 83%, followed by regional G7G20SUMMITS.ORG

65%

Average compliance rate with G7 security commitment from 1985 to 2013

93% 138

Compliance rate achieved by the United States on terrorism pledges

security with 82%, terrorism with 80%, crime and corruption with 72%, conflict prevention with 76% and East-West relations with 50%. Non-proliferation (including North Korea, Iran and Syria), regional security and terrorism continue to be important topics and will remain so at Charlevoix. CARRYING WEIGHT The G7 has historically been a significant body for tackling peace and security because three of its members are also permanent members of the United Nations Security Council (UNSC). The G7 can, therefore, effectively address global security concerns. It can also do so when the UNSC is paralysed, as seen in its response to the recent security shocks involving Russia’s nerve gas attack in the United Kingdom in March 2018 and Russia’s support for Syria over the use of chemical weapons in Douma a month later. These acts resulted in G7 members’ expulsion of Russian diplomats, the introduction of new sanctions, a military strike by the United States, United Kingdom and France in Syria, and collective endorsement by the G7 leaders and their ministers of these moves. Increasingly, all G7 members have fully taken the necessary actions to achieve the desired results, whether through the G7 or the UN. Yet across various security issues both Japan and Italy have at times

commitments made at the most recent foreign ministerial meeting

achieved the lowest average compliance scores, hampering the G7’s full security effectiveness. Furthermore, neither institution has yet halted North Korea’s nuclear advances, Myanmar’s ethnic cleansing or the atrocities in Syria. A HIGHER DEGREE OF COMPLIANCE To improve compliance with their security commitments, G7 members can use low-cost accountability measures under their leaders’ direct control. Between 1996 and 2003, the highest rates of compliance with terrorism commitments coincided with G7 ministerial and other meetings on this topic. Compliance generally increases when G7 foreign ministers meet and publicly proclaim their conclusions before and after their leaders themselves make a commitment. There, specific security dimensions can be addressed with more depth by ministers who are familiar with the field. At the most recent foreign ministerial meeting in Toronto on 22–24 April, ministers met by themselves and then with their fellow security ministers to make 138 commitments in all – the second highest in G7 history, following their 2017 meeting on their own. This suggests that peace and security commitments made in Charlevoix will be complied with to a high degree. It could also mean that G7 foreign ministers should meet more often, for example at the meetings of the North Atlantic Treaty Organization, with Japan invited.

TASNIA KHAN

Research associate, G7 Research Group Tasnia Khan is a research associate with the G7 Research Group and the Global Governance Program based at the Munk School of Global Affairs in Trinity College at the University of Toronto. She is also a lead analyst with the G20 Research Group. Khan has just completed her undergraduate degree with a major in international relations and a minor in political science and history. She is interested in global security and artificial intelligence. Twitter @g7_rg  www.g7g20.utoronto.ca

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Young Syrian refugees at a camp in Turkey. In 2017 alone, there were 30.6 million new displacements arising from war and disaster

Leave no one behind Internal displacement is a global issue affecting nearly every country in the world. William Lacy Swing, director general, International Organization for Migration, calls on G7 leaders to follow a set of principles that protect and assist these vulnerable persons

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n 1998, internal displacement was recognised as one of the world’s greatest tragedies. Today, 20 years later, it still is. More than 40 million people are displaced by conflict within the borders of their own country. Disaster displaces another 25 million people on average each year. Facing losses, hardship and deprivation, generations of internally displaced persons are often the most neglected in many of the world’s crises. Children make up more than half of these populations. On 17 April 1998, the Commission for Human Rights took note of the Guiding Principles on Internal Displacement, effectively launching them as the global standard for states and humanitarian actors. Today, on the 20th anniversary, their value is universally recognised.

PEACE AND SECURITY They are widely accepted as the standard for protecting and assisting internally displaced people. Many states have incorporated them into national legislation, they have inspired regional agreements and they are the mainstay for work in this area. Nonetheless, 20 years on, the number of internally displaced people has nearly doubled, due to new displacements – some of which are ongoing – as well as a lack of solutions for those being left behind in protracted crises and a chronic shortfall of almost 50% of the funding needed to meet basic humanitarian needs. The daily tragedy of internal displacement continues or grows worse for millions. As the international community embarks on a year of reflection and action to mark the 20th anniversary of the Guiding Principles, everyone can and must do more. Anyone can be vulnerable to disasters, violence and violations of human rights. More than a humanitarian imperative, it makes good economic sense and is socially advantageous to empower states and populations in their own preparedness, in strengthening their resilience and in helping to resolve internal displacement. In the spirit of ‘leaving no one behind’ – the principle behind the Sustainable Development Goals for 2030 – greater attention must be focused on addressing the root causes of displacement and reducing risk. When displacement is a life-saving necessity, concerted efforts must minimise its impact, address its drivers, create conditions for return in safety and dignity and prevent displacement from happening again. The International Organization for Migration (IOM), the UN migration agency, helps states and the public prevent and resolve internal displacement.

Calling on G7 leaders to support, protect and empower displaced people As the G7 leaders meet in Charlevoix, I hope they keep the plight of those who need their support around the world, including internally displaced persons, in the forefront of their minds. Although internal displacement by definition takes place within the borders of a country, it is a global issue that affects nearly every country in the world. In 2017 alone, there were 30.6 million new displacements associated with conflict and disasters across 142 countries and territories. Uprooted from their homes, separated from families and unable to meet basic needs, internally displaced people face many challenges. As an organisation working with internally displaced persons, we recognise the centrality of the Guiding Principles [on Internal Displacement] in their protection and assistance and commit to helping states prevent and resolve internal displacement. I call on the G7 leaders meeting at Charlevoix to ensure that the Guiding Principles are incorporated into their national legislation. I call on them to become global advocates, supporting the protection and empowerment of internally displaced people across the globe. Throughout 2018 and beyond, I will continue to call on the international community to do more to support and protect internally displaced persons the world over. I hope the world will join me. Adapted from remarks delivered in Geneva on the 20th anniversary of the Guiding Principles on Internal Displacement

Throughout this year, with partners, we are using the 20th anniversary of the Guiding Principles as an opportunity to do three vital things: raise awareness of its fundamental importance, call on governments to incorporate the principles into their national legislation, and strengthen partnerships that contribute to effective and accountable programming to meet their needs, empower them and give them a voice. In 2016, IOM’s operations reached more than 19 million internally displaced persons and provided more than six million host community members with support across 31 countries. This makes IOM one of the largest actors on internal displacement issues globally.

WILLIAM LACY SWING

Director general, International Organization for Migration William Lacy Swing is completing his second term as director general of the International Organization for Migration. Previously, he served as United Nations special representative of the secretary-general for the Democratic Republic of the Congo, special representative of the secretary-general for Western Sahara and chief of mission, United Nations Mission for the Referendum in Western Sahara. Swing’s diplomatic career has spanned 40 years, including the positions of US ambassador to South Africa, Nigeria, Liberia, the Democratic Republic of the Congo, the former People’s Republic of the Congo (Congo Brazzaville) and Haiti. Twitter @IOMchief  www.iom.int G7G20SUMMITS.ORG

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The global system:

taking stock

uring the G7 foreign ministers’ meeting on 22–23 April 2018 in Toronto], my colleagues and I had very good discussions about the state of the world and the important role that the G7 countries must play as partners in our post-war [societies] to help meet the challenges we face. One of these challenges comes from those who question the value of the norms, rules and institutions that have ensured peace and prosperity in the world for more than 70 years. Despite the challenges that exist within the present system, the solution is not and cannot be its dissolution. On the contrary, we must renew or even strengthen the post-war multilateral order. That is why Canada is demonstrating constructive leadership in the multilateral arena to promote peace, security and prosperity around the world, and why we look forward to taking advantage of our G7 presidency

Canada has seized a leadership role in promoting peace, security and prosperity – essential elements for democratic societies – as it seeks to overcome challenges in the international order, explains the Honourable Chrystia Freeland, Canada’s minister of foreign affairs

in 2018 to advance the priorities that we share with our partners. Peace and prosperity go hand in hand. A core pillar of our government’s mandate has been to present new ideas to Canadians about the economy and about how to create good middle class jobs in the 21st century. When we make concerted efforts to create opportunities for everyone, we create the economic security that is essential for our countries to grow and thrive together. When we create opportunities for everyone, we learn that the forces that bind us together are much stronger than the forces that pull us apart. Canada is a living, growing testament to that fact. And it is with this in mind that the G7 foreign ministers have … focused on the opportunity to show strong, united leadership in the face of today’s major political, economic and security challenges.

G7 foreign ministers meet ahead of the Charlevoix Summit

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Meeting discussions centred on the state of the world and the role of G7 countries

As a group, we share a common desire to uphold democracy, human rights and the rule of law and to strengthen the rules-based international order, including rules-based trade. My colleagues and I agree that as our democratic institutions come under increasing threat, we must use meetings such as this one to provide international leadership that will serve as a bulwark against these trends. This meeting … has been a chance for us to clearly state once again to the world that the G7 countries are committed to preventing, stopping and responding to foreign interference. And to be very clear, there are consequences for those who seek to undermine G7G20SUMMITS.ORG

As a group, we share a common desire to uphold democracy, human rights and the rule of law” JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT 103

PEACE AND SECURITY our democracies and otherwise harm the open, pluralist and prosperous societies we have built. Naturally, we spent a considerable amount of time talking about Russia, whose actions continue to challenge the rules-based international order. We all share deep concerns about what we agree is a wide pattern of unacceptable behaviour, including the despicable nerve agent attack in the United Kingdom, one of our partners in the G7; Russia’s continued complicity in the crimes of the Assad regime; the illegal annexation and occupation of Crimea; Russian-led fighting in eastern Ukraine; support for civil strife there as well as in Georgia, Moldova and other countries; and interference in elections and disinformation campaigns. The countries of the G7 are united in our resolve to work together to respond to this continued flaunting of international norms and standards. I was pleased that Pavlo Klimkin, the foreign minister of Ukraine, was able to join us here in Toronto as a guest at the breakfast I hosted at my house … Ukraine is all too familiar with the very real consequences of Russian misbehaviour and the countries of the G7 will continue to provide support to Ukraine through the upcoming national elections, in the face of ongoing aggression, as well as with much needed anti-corruption and economic reforms. As a group, we must be united in our steadfast commitment to address instability wherever it may occur. Over the two days [of meetings], we spent time discussing Myanmar and what we can and must do to address the humanitarian and security crisis in Rakhine state and Bangladesh. We must take action in a unified way, working with regional partners to deliver humanitarian aid for the monsoon season and crucially to seek accountability and justice for survivors, particularly the survivors of sexual violence. FINDING SOLUTIONS TO CONFLICT On Syria, we remain gravely concerned by chemical weapons attacks against civilians. Conversations will continue in Brussels … about carving a path towards genuine, durable and humane solutions to the tragic conflict, focusing on a political solution. Building on conversations we had at the Summit of the Americas in Lima, and at the Commonwealth in London, we also addressed the crisis in Venezuela and the important role the G7 can play to address the deepening political humanitarian and economic crisis that President Maduro and those close to him have created. And as one of the two western hemisphere countries in the G7, I want to thank my colleagues in the G7 from the rest of the world for their solidarity with us and their focus on the Venezuela issue. With respect to North Korea, we agreed that a peaceful diplomatic solution to the crisis is both essential and possible. The Canadian government will continue to follow developments closely … and support South Korea and Japan, our key partners in the region, and of course, the work of the United 104 G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

CHRYSTIA FREELAND Chrystia Freeland was first elected to Canada’s Parliament in 2013. She served as minister of international trade until 2017, before being appointed minister of foreign affairs. Before she entered politics, as a journalist and author she worked for the Financial Times, the Washington Post, The Economist and the Globe and Mail before becoming US managing editor of the Financial Times and, later, managing director of Thomson Reuters. Twitter @cafreeland  www.international.gc.ca

States. More broadly, the ministers gathered here in Toronto discussed what it means to defend the rules-based international order and democracy. As G7 foreign ministers, we pledge to do everything in our power to protect human rights and to ensure that those responsible for crimes committed are held accountable. We also agree that it is particularly important that gender dimensions are fully integrated in our thinking on the entire spectrum of foreign policy, including conflict resolution and prevention. MEETINGS AHEAD [On 22 April], I was delighted to welcome women foreign ministers from outside the G7 from Croatia, Jamaica, Ghana, Panama, Colombia, Guatemala and Ecuador for an outreach session. And Federica [Mogherini, the European Union’s high representative on foreign affairs] and I announced that we will co-host a meeting of all the women foreign ministers in the world in Canada in September. I think that will be a great event and a great moment in Canada’s G7 presidency. It is our duty to combat gender-based discrimination that slows down women’s leadership, to break down the barriers that women face. The preservation of this multilateral global order and the resolution of international conflicts pass, among other things, feminism. This is not an exhaustive list of the topics covered. We have been very hard at work over the past couple of days, but I wanted to give you a sense of how much ground we’ve covered. Closing remarks by the Honourable Chrystia Freeland, minister of foreign affairs, after the G7 foreign ministers’ meeting in Toronto, 23 April 2018. G7G20SUMMITS.ORG

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PEACE AND SECURITY

Security in Asia: the end of normalcy Faced with uncertainty and unpredictability, the G7 must keep the United States in check to maintain a united front on Asian security, explains David A. Welch, CIGI chair of global security, Balsillie School of International Affairs, and senior fellow, Centre for International Governance Innovation

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nce upon a time, security problems in Asia were predictable: containing communism, preventing proliferation, deterring North Korea, keeping the sea lanes open, and reassuring friends and allies. These had stable, reliable solutions, primarily in the form of the San Francisco system, a robust liberal international order, American military supremacy, Washington’s network of bilateral alliances and diplomatic legerdemain in awkward cases, such as Taiwan and the Association of Southeast Asian Nations. Everything has changed. The primary pillar of the post-war security order in Asia – the United States – has shifted from the ‘solution’ column to the ‘problem’ column. This is entirely because of President Donald Trump, whose ‘America First’ agenda, disdain for multilateralism, transactionality G7G20SUMMITS.ORG

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and other personal characteristics make it impossible for world leaders to plan. The result: security problems in Asia are now unpredictable and tried-and-tested solutions are unreliable. THE MADMAN THEORY And, yet, there are grounds for hope. Who would have predicted, just two years ago, that North Korean president Kim Jong-un and South Korean president Moon Jae-in would have strolled across the border at the DMZ, hand in hand? Who would have predicted a 12 June Kim-Trump summit in Singapore? Who would have anticipated the calm that has descended upon the potentially explosive South China Sea? Future historians could credit Trump for at least some of this. By living – not merely acting out – Thomas Schelling’s ‘madman theory’, Trump may well have scared Kim Jong-un into rethinking his nuclear ambitions and his aversion to international engagement. He may have persuaded Chinese president Xi Jinping that China’s interests are best served by taking on the stabilising, defender-of-thestatus-quo role that Trump has abandoned. He may have re-energised everyone else’s commitment to multilateralism and the rule of law. Such predictions seem foolish in such a fluid context. However, it may be helpful to note the following points. The US foreign and defence establishments have not abandoned their commitment to the pillars of post-war order in Asia; they are simply hunkered down, weathering Hurricane Donald. When the storm passes, they will be well positioned for business as usual. The other countries of the Asia-Pacific know this. To a first approximation, everyone is biding time. •

The Kim-Trump summit may bear fruit, fall apart in the most spectacular way or fail to come off entirely. The latter two possibilities are extremely dangerous. But the goalposts have shifted. Kim’s rhetorical willingness to commit both internationally and domestically to a denuclearised Korean peninsula in principle will increase the costs of intransigence. This is hopeful.

•

The South China Sea is a good-news story. Careful observers will notice that China is fully complying with the July 2016 ruling of the Permanent Court of Arbitration that effectively undercut China’s expansive claims. China no longer talks about the Nine-Dash Line; it no longer actively enforces its jurisdiction over waters more than 12 nautical miles from features that it claims; and it has ceased to complain about the freedom of navigation patrols of the United States, Australia or

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DAVID A. WELCH David A. Welch is CIGI chair of global security at the Balsillie School of International Affairs and a professor of political science at the University of Waterloo, as well as a senior fellow at the Centre for International Governance Innovation. Twitter @davidawelch  www.davidwelch.ca

other countries as violations of China’s ‘sovereignty’ or ‘rights’ and instead complains about them as threats to ‘peace’, ‘stability’ and ‘security’. Although China is completing its pre-programmed construction of military infrastructure on its seven artificial islands, it has apparently abandoned plans for imposing the Air Defense Identification Zone for which this military infrastructure was necessary, and it has ended its land reclamation. For domestic political reasons, the regime will never admit that the Permanent Court ruling was legitimate – but as a signatory to the United Nations Convention on the Law of the Sea and as a country whose interests depend crucially upon its avoiding being seen as an outlaw state, it has evidently realised that it has an overwhelming interest in playing nice. One can only hope that the Trump administration recognises this and resists the temptation to push China into a corner. •

Taiwan is emerging as the most serious long-term security issue in the region. Beijing is stepping up its efforts to isolate Taiwan and is sending increasingly blunt signals that demonstrations of independence will not be tolerated. There are reasons to worry that Xi Jinping has made the reunification of Taiwan with the mainland one of his legacy goals. The Trump administration has upgraded its contacts with Taiwan and authorised the sale of advanced weapons, but many wonder whether it would be willing to throw Taiwan under the bus in return for Beijing’s help in solving the North Korea problem.

What can the G7 do in the face of all this? The right question, perhaps, is what can the G6 do? The United States has become unpredictable and unreliable. It may help on some issues; it may hurt on others. At such a time it is imperative that everyone else in the group maintain a united front in support of a rule-governed international order and the peaceful settlement of disputes. JUNE 2018 — G7 CANADA: THE CHARLEVOIX SUMMIT 107

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Lessons from the past for Canada’s G7 summit Nicholas Bayne, London School of Economics, casts back to earlier summits, arguing that what matters most is not the immediate outcome, but rather what is borne from summit groundwork over time

he early G7 summits still offer when the global financial crisis broke in lessons for today. The G7 summit 2008. The new G20 summit emerged and was invented jointly by President the G8 lost its pre-eminence. Russia was Valery Giscard d’Estaing of France suspended after it annexed Crimea in 2014 and Chancellor Helmut Schmidt of West and the summit became the G7 again. Germany. Their aim was to produce an In the past decade, the G7 has followed a authoritative collective response to the strategy aimed at complementing the G20 economic crisis that produced the surge in without conflicting with it. Many problems oil prices of the early 1970s. After the first needing treatment by the G20 initially arise summit at Rambouillet in 1975, they kept in the G7 – tax evasion is a good example. the numbers small – just seven leaders plus The G7 is careful not to alienate the rest of the the European Union, meeting once a year. G20. But it can still pursue closer cooperation At first they focused on economic issues, on issues such as climate change than can be such as the monetary system. The most achieved in the larger group. ambitious summit, held in Bonn In general, the summits only tackle in 1978, produced a complex intractable problems, because cross-issue deal between fiscal, easier ones are settled at trade and energy policies. But lower levels. The personal after US president Ronald representatives of the Reagan arrived in the 1980s, leaders, called sherpas, the level of he moved the summit away narrow the area of dispute debt relief from economics to focus so that the heads can use given under the more on political issues. their authority to bridge Trinidad terms In the 1990s, the summit got the gap and reach collective a new lease of life with the end decisions. The agreement struck of the Cold War. The G7 led western at each year’s summit is seen as the efforts to promote market economies and main achievement, yet often it is only the working democracies in Eastern Europe. beginning. Summits do not always get The collapse of communism enabled the the answer right the first time. Instead advance of globalisation, which also of bearing mature fruit, they may plant occupied the summit throughout the seeds that need more cultivation before the 1990s, and Russia was added to make the harvest appears. I regard this process of G8. The focus shifted again in the 2000s, iteration as one of the most valuable aspects to embrace development issues such as of summitry. I offer you three case studies of infectious diseases and the revival of iteration, each linked to a summit chaired Africa. But the G8 neglected problems by Canada: debt relief for poor countries, nearer to home and was taken by surprise financial reform and the revival of Africa.

50%

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CASE STUDY I: DEBT RELIEF Brian Mulroney chaired the summit at Toronto in 1988, Reagan’s last year. Back then, many poor countries were crippled by heavy debts owed to governments. The Jubilee campaign of charities and non-governmental organisations lobbied hard for relief on these debts and appealed to G7 leaders on humanitarian grounds. They won over Canada, the United Kingdom, France and Italy, but the United States, Germany and Japan resisted. So the ‘Toronto terms’ agreed by the G7 only gave relief on a third of the debts of poor countries that accepted International Monetary Fund (IMF) discipline. This was a start, but clearly not enough. Thereafter each G7 member in favour revived the subject whenever it chaired the summit. The UK involved Commonwealth finance ministers, who included many poor debtors. They called for the ‘Trinidad terms’, giving 50% relief, which G7 leaders endorsed at the 1991 London Summit. Italy secured the ‘Naples terms’ of two-thirds relief in 1994 and France pushed relief up to 80% of government debt at Lyon in 1996. Poor countries also needed relief on their debts to the IMF and World Bank. So the 1996 Lyon Summit initiated the Heavily Indebted Poor Countries programme, based G7G20SUMMITS.ORG

on another Commonwealth initiative. Debtors could get softer loans from the IMF and World Bank if they met stiff conditions over several years. But this process was too slow and the Commonwealth urged faster and deeper relief. The UK commended this to the 1998 Birmingham Summit. But although the United States was now in favour, Germany and Japan refused. Germany would hold elections before it chaired the next year’s summit. The Jubilee campaigners lobbied all parties vigorously and their strategy paid off. The new government took a much more generous position, and Japan would not resist alone. The 1999 Cologne Summit agreed on a greatly improved regime: complete relief on debt to governments and much easier terms on debt to the institutions. A special trust fund was used to relieve World Bank debt, which needed another $1 billion in 2002. Congress at first refused the essential US share, but consented after that year’s Kananaskis Summit, where the rest of the G7 backed a Russian programme that Congress was promoting. Finally, at the 2005 Gleneagles Summit, the leaders endorsed a deal giving complete relief on debt to the IMF, World Bank and African Development Bank. Debt relief was settled at its eighth iteration.

SIR NICHOLAS BAYNE Sir Nicholas Bayne served in the United Kingdom’s Foreign and Commonwealth Office (FCO) and the embassies at Manila, Bonn and Paris (when he attended the first summit in 1975). He has been ambassador in Zaire (now DRC) and non-resident in Congo, Rwanda and Burundi; UK representative to the Organisation for Economic Co-operation and Development in Paris; economic director-general at the FCO (and sous-sherpa for the 1989, 1990 and 1991 summits); and high commissioner to Canada (when he attended the Halifax Summit in 1995). He has since taught the graduate course on economic diplomacy at the London School of Economics. He is a member of the Advisory Council of the G7 Research Group and has participated in many of their activities from 1997 to 2014.

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A STRONGER G7 SYSTEM CASE STUDY II: FINANCIAL REFORM Jean Chrétien wanted the 1995 Halifax Summit to focus on finance, to ensure the IMF and World Bank were fit to manage globalisation. Mexico’s economy had collapsed; the United States prepared a rescue scheme, but Congress refused it. So the US agreed with the IMF staff on a collective bailout, which was put to the IMF board as a fait accompli. The other G7 members agreed under protest and came to Halifax seeking to reform the IMF to prevent being bounced again. The summit agreed a solid package: better economic data, new emergency funds and closer cooperation among financial regulators. But these reforms were not in effect before the contagious Asian crisis broke out, needing more costly bailouts. To regain control, the 1998 Birmingham Summit agreed a ‘new financial architecture’, but more crises followed in Brazil and Russia. In a third iteration, Cologne reinforced the architecture to cover surveillance of member economies, further IMF facilities and better financial supervision. A new institution emerged: the G20 finance ministers and central bank governors, combining the G7 with other ‘systemically important countries’ such as China and India. Yet unwisely, G7 countries, especially the United States, behaved as if the new disciplines applied only to others, not to them. Private operators developed ever more risky financial instruments. Regulators allowed them, believing the market knew best. The 2008 Hokkaido Summit seemed blind to the imminent disaster, so that when it struck, the G8 was not trusted to formulate the international response. The responsibility passed to the new G20 summit, where iteration persisted until a complete package was agreed in 2009–10.

In NEPAD, for the first time, African leaders accepted they were to blame for their own problems and took responsibility for their own recovery” representatives to prepare detailed plans for the summit in 2002 – an example of built-in iteration. Although Kananaskis was the first summit after 11 September 2001, Chrétien insisted that Africa be the lead subject. The G8 leaders adopted the Africa Action Plan to promote economic and political recovery, with commitments in all areas covered by NEPAD; they also pledged to double their aid for Africa. The four Africans attended the summit as participants, not just guests, and welcomed the G8 plan. This was a major initiative by both sides, but its initial reception was mixed. There was early progress in helping the new African Union create peacekeeping capacity. But some thought the aid offer too small; disbursement was very slow; and coordination was poor. The UK decided iteration was needed and brought Africa back to Gleneagles in 2005. The special Commission for Africa drew up detailed recommendations. As well as complete debt relief, an ambitious target was set of doubling aid again for Africa by 2010. This new finance attracted more plentiful private investment and helped Africa to a sustained improvement in economic performance. The Organisation for Economic Co-operation and Development also attributed the steady progress to better political governance and improved economic policymaking. Average growth in Africa’s gross domestic product rose to 5% and was maintained over more than 10 years. Since 2015, weak commodity prices have reduced growth and deep political problems remain. Yet this was a success both for the summit and the Africans.

CASE STUDY III: THE REVIVAL OF AFRICA Globalisation accelerated after the Cold War ended, but Africa was marginalised. Economic growth did not keep up with expanding populations. Aid programmes made little headway. African states blamed others for their troubles, including their former colonial rulers. All this changed thanks to four African presidents: Thabo Mbeki of South Africa, Olusegun Obasanjo of Nigeria, Abdelaziz Bouteflika of Algeria and Abdoulaye Wade of Senegal. In 2001, they won acceptance of the New Partnership for Africa’s Development (NEPAD), covering peace and security, political governance and a range of economic issues. In NEPAD, for the first time, African leaders accepted they were to blame for their own problems and took responsibility for their own recovery. They pledged to correct their failures and hold each other accountable. Mbeki and the others realised that NEPAD needed external support. They got invited as guests to the 2001 Genoa Summit and asked the G8 to underwrite their initiative. The G8 leaders were impressed and at once drew up the Genoa Plan for Africa. They welcomed the NEPAD commitments and promised to help, provided the Africans took full ownership of their own revival. They chose African personal

PROSPECTS FOR CHARLEVOIX History never repeats itself exactly, but it can offer clues to what may happen in the present. It appears difficult to handle US president Donald Trump at the summit, because he does not favour collective decision-making. The five themes chosen for Charlevoix – growth and trade, jobs for the future, gender equality, climate and oceans, and peace and security – offer plenty of scope for friction. Yet earlier summits met comparable problems when Reagan first appeared. He had no interest in aligning his economic policies with his G7 partners. The first summit he attended achieved little, while his second, at Versailles in 1982, led to the worst transatlantic dispute of the entire Cold War. But the G7 learnt how to avoid such disasters and Reagan chaired a productive summit a year later that dealt mainly with politics. There were also problems when George W. Bush refused to act on climate change. In his first term, the summit had to use language on global warming that committed most leaders, but not all. But by 2005 Tony Blair induced Bush to join the G8 consensus. The moral of these case studies is that the immediate outcome of the summit is not what matters most, but rather the long-term impact. Trump’s presence makes it hard to predict the extent of agreement at Charlevoix. Yet prime minister Justin Trudeau and his team can still plant fertile seeds in the G7 process, to bear rich fruit over time.

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Nation states: back from the sidelines → G7G20SUMMITS.ORG

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Jan Wouters, director, Leuven Centre for Global Governance Studies, and Tine Carmeliet, Allen & Overy LLP, discuss the European Union’s and G7’s shifting positions within multilateral governance in an era of anti-globalism

he European Union and the G7 both mark in their own ways a changing world. While globalisation has caused the world’s economies to grow ever more intertwined and dependent on one another, transnational issues have grown in number and significance, sidelining the nation-state as the main decision-making body. Globalisation has hence put traditional nation-state–based governance on shaky ground, as countries’ abilities to address contemporary challenges have greatly diminished. Consequently, the need for governance bodies to provide guidelines and rules for the conduct of economic transactions has been high. It should therefore be no surprise that a plethora of bodies has been established at regional and global levels to address particular transnational challenges.

DIMINISHED COMMITMENT However, in recent years, both the EU and the G7 have been hit at the core of their ambitions. Both organisations are at the forefront of increased cooperation, yet they have lost members’ commitment at a time when dissatisfaction with globalisation is gaining momentum. Indeed, recent years have seen the rise of protest movements and populist parties taking an anti-European stance in several EU members. Such Eurosceptics have put forward questions related to the benefits and costs of being a member of the EU – an issue that was exemplified by the landmark decision of the United Kingdom to leave the EU after the referendum in June 2016. Such discontent is mainly caused by not everybody benefiting equally from globalisation, and its gains have been shared within a small subset

JAN WOUTERS Jan Wouters is a professor of international law and international organisations Jean Monnet Chair Ad Personam EU and Global Governance, and the founding director of the Institute for International Law and Leuven Centre for Global Governance Studies at the University of Leuven. He is a member of the Royal Academy of Belgium for Sciences and Arts, president of the United Nations Association Flanders Belgium and Of Counsel at Linklaters, Brussels. Twitter @LeuvenGGS  www.law.kuleuven.be

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G7 CANADA: THE CHARLEVOIX SUMMIT — JUNE 2018

TINE CARMELIET Tine Carmeliet is a junior member of the Leuven Centre for Global Governance, where her research focuses on global economic governance and international security. She holds a master of laws from the University of Leuven and a master of arts in European Studies from the Johns Hopkins University School of Advanced International Studies. Tine is also a member of the Brussels bar and an associate at Allen & Overy LLP, focusing on intellectual property, information technology, data protection and life sciences cases.

of the population. Public outcries of concern with globalisation were rather limited in the past, but they have now clearly reached the European ballot box. MAKING GLOBALISATION WORK FOR ALL Similar problems have been encountered by the G7. The first major blow came with Russia’s annexation of Crimea in March 2014. Russia’s subsequent suspension from the G8 provided a challenge to the G7 because it resulted in a more limited diversity in membership. As a group of industrialised states, internal pressures towards less globalisation are probably most acutely felt in this body, which at the same time is uniquely placed to address such discontent. However, now that one key member of the G7 – the United States – has a leader who stands for a more isolationist approach, the G7 needs to be led by other members. The EU and its members are best placed to provide this leadership, given that Canada and Japan as individual members lack the ability and influence to guide the G7. Indeed, although the UK’s decision to leave the EU is problematic as the EU loses one of its members at the G7 forum, it might also lead to closer cooperation between the EU and its remaining G7 members of France, Germany and Italy, and provide an opportunity for the EU to engage more deeply with the other G7 members. The fact that the 2014 G7 summit that was originally to take place in Sochi was moved to Brussels has been interpreted by some as an indication that the EU is finally moving from the status of a G7 participant to that of a full member. Moreover, the continental G7 members so far have been able to overcome populist and isolationist tendencies, arguably demonstrating that the electorate in these countries has still not given up on globalisation. However, the latest developments in the formation of a Eurosceptic coalition government in Italy may challenge this. Nonetheless, the EU can contribute to G7 policymaking that would eventually make globalisation work for all. It will therefore be key for the EU to take a leadership role and be a force for change at this year’s G7 summit. This summit, in fact, constitutes the perfect opportunity for the EU to do so, as the topics discussed (including gender equality and climate change) lie at the core of the EU’s activities and constitute the fundamental values that the EU has been keen to advocate in the world. G7G20SUMMITS.ORG