Mike Callaghan is Director of the Lowy Institute's G20 Studies Centre.
Lough Erne, Northern Ireland, the site of the recent G8 summit, was chosen to inspire leaders, with Northern Ireland demonstrating that even the most intractable problems can be resolved. Were leaders inspired?
David Cameron said it was a success, but he would say that; he was the chair. Events in Syria dominated, if not hijacked discussions. But leaders will always have to deal with the most pressing current issues, regardless of what was planned. Dealings between President Putin and other leaders on Syria seemed intractable. Yet Cameron said the Syria statement in the G8 communique was 'very strong and purposeful'. Some commentators thought otherwise, calling it the 'blandest' of statements.
Cameron identified well in advance that his priorities were trade, tax and transparency. This is a lesson for the G20: set priorities. On tax, there was the Lough Erne Declaration, a ten-point plan to tackle global tax evasion. It is a clear, high-level statement of intent – something else for the G20 to think about. The aims in the Declaration include: sharing tax information, harmonising rules to reduce tax evasion, knowing who really owns companies, providing assistance to developing countries to collect tax, and having extractive companies report payments to all governments and make this public.
Cameron said 'These are very strong commitments that have never been written down in this way before', but the UK Overseas Development Institute was less generous: 'we were promised a bang, but this is a whimper. It is simply a wish list'. And the Tax Justice Network said 'the G8 declaration is all vague commitment and almost nothing of any consequence'.
Expectations from summits are generally too high, and this is particularly the case for combating global tax evasion, an enormously complex issue. But at least tax dodging is now a global issue and the G8 has turned up the heat. The hard part is to deliver and maintain the heat when the process will take years and not months. Another lesson for the G20. [fold]
Trade was another of Cameron's priorities. The communique says the G8 is 'committed to strengthen the multilateral trading system and securing a WTO deal in December' (at the Bali ministerial meeting). But the focus is totally on bilateral or regional agreements: the EU-US agreement, the Trans Pacific Partnership, the EU-Japan and EU-Canada agreements. Reference is made to welcoming 'trade and economic integration of Russia with some of the countries in the region', a token gesture to mention Russia.
If, as G8 leaders say, the WTO is ultimately 'the most effective means of reducing trade barriers globally', why not more effort to advance multilateral trade liberalisation? While many benefits may come to the parties in an EU-US agreement, the G8 could hardly be seen as taking a global perspective on trade. This is a challenge for the G20.
Could more have been achieved at the G8 summit? Who knows. But Cameron has been criticised for not putting in the work. Kirsty McNeill, a former Downing Street adviser, notes that getting a global summit to deliver is 25% showmanship, 25% brinkmanship and 50% long, hard graft on the detail. She notes: 'The issue facing David Cameron is that he both started his preparation for the G8 late and has failed to seize opportunities to build rapport with other leaders'. This is a big lesson for Australia as G20 chair in 2014.
In the lead-up to the G8 summit there were many references to its relevance compared with the G20. The communique itself highlights the issue of G8 legitimacy when it says 'Our economies together make up around half of the global economy'. What about the other half? At least the G20 accounts for 85% of the global economy. The Guardian noted that:
...there is something curiously dated about the G8. Its membership includes Italy but not India; Canada but not China. It is as if delegates from Austria and Turkey were invited to peace conferences between the first and second world wars but not the representatives from the US and the Soviet Union.
While the G20 is clearly more representative, its shortcomings are being seen as providing the opportunity for the G8 to re-assert itself. To quote The Guardian, 'the G20 has become a giant talking shop'. Gideon Rachman comments, 'It has become apparent that the G20's biggest merit – the size and diversity of its membership – is also its biggest flaw.'
The G8 cannot deal with global issues without the involvement of 'the rest', particularly the emerging markets. That's where the G20 comes in. But if the G20 is to be relevant, it has to be effective. In many respects, the Lough Erne summit demonstrates that the G8 will put its interests ahead of 'the rest'. This should be an incentive for 'the rest' to ensure that the G20 remains effective and relevant.
Photo by Flickr user President of the European Council.