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Analysis

Canada Set to Score a Substantial Success at the G20's St. Petersburg Summit

John Kirton, co-director, G20 Research Group, August 31, 2013

At the eighth G20 summit, being held at St. Petersburg, Russia, on September 5-6, 2013, Canada will focus on the current versions of the six priorities it has promoted at summits past. It will likely make advances on most of them, sufficient to secure a substantial Canadian success.

The St. Petersburg Summit's central theme of growth and jobs align fully with Canada's focus on promoting growth and fiscal responsibility together, with trade openness as a key tool. Canada's first priority, as co-chair of the G20's core Framework Working Group, is to obtain a St. Petersburg Action Plan that contains a macroeconomic strategy that credibly combines short-term growth with fiscal consolidation in the medium term. Canada's second priority is to advance the implementation of the already agreed financial regulatory reforms, starting with the fundamental Basel III standards on bank capital approved at the Seoul Summit in November 2010. The third priority is liberalizing trade, through endorsements of the many major trade deals Canada is negotiating with Europe, key Pacific partners, Japan and India, and by extending the G20's anti-protectionist pledge beyond its current expiry date in 2014.

Canada's fourth priority is to combat corruption, through more enforcement of existing legislation on bribery and solicitation and more international information exchange. Canada's fifth priority is to use modest public sector money to catalyze market-based solutions to help the poor, as it did by helping pioneer the multistakeholder-sponsored AgResults initiative last year. Its sixth priority is to advance the G20's accountability for delivering its own promises and their desired results, especially as Canada is likely to rank second to only Australia as the country that complied most with the priority commitments made at the last G20 summit, in Los Cabos, Mexico, in June 2012.

Canada is likely to achieve most of these understandably modest goals, to a meaningful degree. It is due to get a strong growth-first message, backed by G20 members' production of country-specific growth strategies, although credible medium-term fiscal consolidation strategies are unlikely to come from deficit- and debt-ridden Japan and the United States. On financial regulatory reform, constant pressure from G20 governors will see effective implementation of Basel III capital standards by all G20 members in the short term, paving the way for the G20 to focus on introducing leverage ratios for banks, implementing standards for globally significant insurance companies, devising those for over-the-counter derivatives and delivering the high-quality global accounting standards needed to make all other reforms work. On trade, the anti-protectionist pledge will be extended and regional and bilateral free trade agreements endorsed, but only if China and India relax their demand that getting the overdue Doha Development round finally done should be the only major thing on trade that the G20 leaders do.

On combatting corruption Canada is likely to get some gains, as its case is backed by the Business 20 and reinforced by the important thrust on tax evasion and transparency that the G20 summit will make. On development, Canada will do well, if only because the summit seems unlikely to take more ambitious steps, even with the fast-approaching due date to complete the expensive United Nations Millennium Development Goals in 2015. And Canada will do well on its accountability agenda, as a strongly committed Australia can be counted on to follow up progress when it chairs the G20 next year.

Such success could be blown away if the Syrian issue sideswipes the St. Petersburg Summit, forcing the U.S., Canada and their allies to line up against Russia in a way reminiscent of the long-gone Cold War. But in 2006 at the first G8 summit that Russian president Vladimir Putin hosted and that Stephen Harper attended, the prime minister proved that he could help produce innovative G8-approved solutions to conflicts in the Middle East. At the most recent G8 summit in Lough Erne in June 2013, Harper, Putin and U.S. president Barack Obama proved they could find a last-minute compromise on Syria, so that the summit's centrepiece achievements on tax, trade, transparency and terrorism could proceed. And at its ministerial meeting in Ottawa in the autumn of 2001, the G20 showed it could flexibly refocus on stopping terrorism and act here in a highly unifying and effective way. Now, with leadership from the summit host, and veteran leaders such as Harper, the shock from Syria could even be mobilized and crafted to spur the St. Petersburg Summit to bigger, broader success.