Why does the G7 matter? In the recent past, it has been largely a talking shop for the leaders of the world’s biggest economies, who gather for a couple of days before sendingout a communiqué generally agreeing that the western consensus should be maintained, and that globalisation is a good thing socially and economically.

 

Last year, all that changed. Who will forget the picture of Angela Merkel, surrounded by the leaders of Japan, Canada, the UK, France, Italy and the EU, standing behind a table with both hands forcefully supporting her as she leans over accusingly to a seated Donald Trump opposite? Remember the outrage at Trump’s subsequent tweet accusing Canada’s President Trudeau of being “weak” and “dishonest” because of his stance on iron and steel tariffs? At a point where the G7 should have been responding to the perceived threats to western values from fake news, cyber-threats, intellectual property theft and terrorism, the leaders of the world were arguing among themselves.

 

This breakdown in trust between the G7’s members will be even more evident when the leaders gather in Biarritz at the end of August. Since the last, fraught meeting, Donald Trump has become yet more bilateral in his negotiating stance, stepping further outside of the frameworks of the rules-based international order. Meanwhile, China and the US have become embroiled in something of a trade war of attrition, as each side seeks to wear the other down while circumventingthe usual dispute settlement systems of the World Trade Organisation. Members of the G7, particularly Germany, Italy and France (through the EU) and Japan are equally the target of US ire because of the size of their trade surpluses with the US and, in the EU’s case, its failure to contribute fully to the Nato budget.

 

Into this tension steps a new UK leader who is not noted for his consensus approach to politics and negotiations. Boris Johnson enters the G7 club next weekend with objections to the behaviours of some of its members, and while he takes care to call them “our EU friends and partners”, he has nevertheless made it clear that he blames their lack of willingness to withdraw the Irish backstop from the existing EU withdrawal agreement for any lack of progress in negotiating terms that would prevent a no-deal Brexit. To aggravate matters from an EU perspective, the US has talked up the prospects of a trade deal with the UK as soon as the UK is able to negotiate one.

 

The G7 is riven apart by trade at the moment  and the UK’s ambivalence towards the EU will hardly make for comfortable dinner-table conversations. The logic of the UK seems to be this: the US is our largest trading partner with exports that were some US$16bn more than the next largest partner, Germany at over US$61bn in 2018. There has been a decline over the last five years at an annualised rate of 1% in our exports to the US and a trade deal has the potential to stem this apparently ebbing tide. More than this, by aligning with the US at a G7 meeting, we can demonstrate the power of our own position.

 

Of course, there is an alternative view. The UK’s goods exports to the world in 2018 were around US$477bn while export trade with the G7 as a whole in 2018 was worth 35% of that, at US$166bn. The US accounts for nearly 13% of all the UK’s exports, but added together, Germany, France and Italy account for just over 19% while the EU as a whole accounts for nearly 43%. Exports to most of the UK’s partners have slowed over the past five years, with the US (1%), Germany (2.7%) and Canada (6%) slowing the most, although exports to France have grown slightly. Just in terms of size, the EU is more important than the whole of the G7 put together as an export destination.

 

In the end, you can prove any viewpoint with statistics. The relationship between Johnson and the other G7 leaders will be driven by the politics of bilateralism rather than by the consensus of multilateralism, as in the past. The US will take a similar line. Yet these countries matter to the UK because they are important trading partners and allies, and the team around Johnson should remind him of that.

 

Not long after that G7 photograph, Angela Merkel spoke of the need for a European army to protect Europe from the increasing likelihood that the US would become an “unreliable ally.” In so doing, she reinforced the fact that trade had become weaponised – rhetorically, and increasingly literally, a tool for nations to coerce and influence others to achieve their strategic objectives. A year on, trade, economics and finance are have become yet more weaponised, and the solid western alliance represented by the G7 countries can no longer be taken for granted. Within this context, the UK may well also be seen as an “unreliable ally”; but it is also worth remembering that by ourselves, our power to influence and coerce is weak.

Amid the current fragile foreign policy environment, with rising trade and military tensions, cyber security threats, and shifting power relations between Russia, China and the US, the field of strategic studies has arguably never been as important as it is today. At “The Future of Strategic Studies: Challenges to Collective Defence in the Modern Era”, held in London on 18th-19th September, we are bringing together leading academics, policy makers, thought leaders and business leaders from around the world to discuss potential ways forward for a volatile world. 

Don’t miss the chance to attend and join us here now: 

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