What is the G7? … Its Purpose and History of Influence

The drama around the 2018 G7 summit meeting in Quebec has been hard to miss.

Before it even opened, France’s President Emmanuel Macron made it clear that the other six parties to the group would be happy to sign an agreement without the participation of the U.S. if necessary… while President Trump threatened to leave the summit early and called for Russia (expelled in 2014 for invading Crimea) to be reinstated to the group.

And leave early he did, roiling the international community and markets alike. This came fresh in the wake of disputes touched off by the U.S. imposing unilateral tariffs on other group members, the looming backdrop of an impending trade war, and accusations of collusion between the Trump campaign and the Russians. As it all came to a head, many couldn’t help but feel uncertain about the stability and future of the G7.

But what exactly is the Group of Seven (or, occasionally, Eight, or Five, or possibly Six very soon)? What is it for and why is membership such a big deal? The major effects the group has on all aspects of international affairs makes it a subject that every international relations graduate student has to become familiar with.

Membership and Origins of The Group of Seven

The loose organization originally emerged in the early 1970s as a somewhat informal gathering of the finance ministers from the United States, West Germany, France, and the United Kingdom. As the energy crisis of that decade was spooling up, U.S. Treasury Secretary George Shultz decided it would be wise to coordinate macroeconomic initiatives with other larger players on the world stage.

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Subsequently, nations such as Japan, Italy, and Canada were brought into the group. When the European Union became a prominent coordinator for the European common market in the late 70s, the president of the European Commission was also invited to participate. And in 1998, the recently devolved Russia was invited to the table (somewhat briefly, as it turned out), although mostly in a political sense since the country continued to lag the other participants economically.

Today, the G7 are reckoned as the seven wealthiest and most advanced nations in the world… advanced nations because China, which holds the second largest net worth in the world, nonetheless has a low net worth per individual and an economy that has not yet fully modernized.

Between them, the G7 fill out numerous global top lists:

  • Leading export countries
  • Largest gold reserves
  • Largest nuclear energy producers
  • Top contributors to the UN budget

With that sort of economic and political heft, the Group of Seven is uniquely positioned to make things happen around the world, both in and outside their own countries, and both economically and politically. Meeting to decide what those things should be is the primary purpose of the summits today.

The Power of The G7 Has Bred Controversy

Up through the mid-1980s, this all happened somewhat discretely and informally. In 1985, however, major meddling in international currency markets culminating in the Plaza Accord made it clear that the group needed to be more forthright in briefing other worldwide economic interests with respect to their decisions. Meetings have subsequently been announced and usually some sense of the agenda floated to prepare global markets for possible changes in macroeconomic policy.

The major summit involving world leaders is still held annually at a site that rotates through the member nations. The group finance ministers, however, may meet more frequently throughout the year depending on the subjects on their plate and global economic conditions.

Because economic power has also found itself tightly coupled with military and political power, the G7 forum has also become a place for prominent international crises or disputes to be discussed or resolved. In 2013, world leaders tackled the developing Syrian crisis (unsuccessfully), while more recent meetings have covered topics like North Korean nuclear armament, environmental issues, Brexit implications, and the rise and fall of ISIS.

Inevitably, the summits have also drawn fire, both from nations that are not commonly invited and from the public at large. Whether it’s the perception of conspiracy or the blatant exercise of its power that people take exception to, G7 meetings have been met with large-scale demonstrations at virtually every summit held since 2000. In fact, in many cases, the demonstrations and the crowd control measures used by the host country become the focus of press coverage more so than the points discussed in the meetings themselves.

Group of Seven Summits Generate Results

Protests notwithstanding, the summit meetings have continued, and have continued to forge real agreements and create real progress on subjects of international concern. The Global Apollo Program, for instance, was launched out of the 2015 summit meeting. Designed to tackle climate change through clean energy research and development, the multinational effort was conceived in the United Kingdom but couldn’t get traction until agreed to by the other major world economies.

Real work happens at summits. Although national leaders may appear more for photo opportunities and glad-handing than substantive policy discussions, foreign policy experts and cabinet-level officials conduct genuine negotiation and make significant decisions at G7 meetings.

The group started a tradition of inviting other international organizations to the summits in the late 1990s, a list that has included:

  • International Monetary Fund
  • World Bank
  • United Nations
  • World Trade Organization
  • African Union
  • International Energy Agency

Other nations have also been invited to participate from time to time, such as the G20 and the G8+5… each of which are simply different groups of nations with growing economic interests. Each participating nation and intergovernmental organization has an opportunity to conduct business with power brokers from the most influential nations in the world all in one place. This can lead to real breakthroughs in a relatively short period of time.

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In an era when a number of members seem otherwise inclined to go their own way— as seen in the newly isolationist bent of the American administration, and the UK voting to leave the EU —the G7 is one of the last remaining forums in which major world powers can coordinate their actions and peacefully resolve conflicts.