The G7’s new mission appears to be irritating China. As the leaders of the US, Japan, Germany, the UK, France, Italy and Canada gathered for their annual summit last week, Beijing made clear they had no business involving themselves in territorial disputes in the South China Sea. “We hope the G7 will focus on urgent economic and financial matters,” a spokesman for the Chinese foreign ministry said ahead of the Ise-Shima Summit. “We do not want to see actions escalate tensions in the region.”

So what did the G7 do? It involved itself in the dispute over who controls various rocks in the South China Sea. Leaders endorsed the statement by G7 foreign ministers on maritime security that toughened the group’s stand against Beijing’s push into those waters, although without naming China specifically. “We are concerned about the situation in the East and South China Seas, and emphasize the fundamental importance of peaceful management and settlement of disputes,” the G7 said in its communique.

The G7’s origins in the 1970s are as a steering committee for the global economy. The G20 took over that role in 2009. For a moment, it looked like the G7 might actually go away. What was the point of holding court on trade and capital flows and foreign-exchange rates without China present? Then Russia started behaving like a bully. That gave the G7 a purpose. The US was able to quickly assemble its old Cold War allies to punish Vladimir Putin for his aggression in Ukraine. Now, the President Barack Obama and Japanese Prime Minister Shinzo Abe are using the G7 to advance their strategic ends in the Pacific. What the four European countries and Canada have to gain by taking sides in the row over the South China Sea isn’t entirely clear. Given the sorry state of their economies, and their desire to boost exports, their interests lie in staying on the good side of the government that controls the world’s second-largest economy. The Americans and the Japanese would appear to owe them each one.

In Japan, the G7 leaders emphasized their concern about the global economy. “Global growth is our urgent priority,” the leaders said. Yet it surprised no one when they did nothing to back up that statement, with the possible exception of dousing Japan’s apparent desire to do something about the value of the yen. Without China in the room, there was nothing the group could have done that would have had any credibility. As Thomas Bernes, a distinguished fellow at the Centre for International Governance, noted ahead of the summit, the G7 “just does not have the right membership to come to important decisions on the world economy and implement them.” That’s why the G7 yielded to the G20 seven years ago.

But what the G7 can do is provide the US with some diplomatic backup when it confronts touchy rivals such as China and Russia. President Barack Obama has made a point of forcing America’s allies to play a more active role in the world’s police work. Part of that strategic push is forming alliances to counter the impression that the US is only ever pushing its own agenda. “The G7 has a vital role,” Adewale Adeyemo, the US deputy national security adviser for international economics, said during an interaction at the Peterson Institute for International Economics in Washington on May 19. “It gives us a chance to meet with some our closest allies to not only discuss economic policy, but also [the] number of security issues that we have in common.”

There’s nothing wrong with the US assembling its democratic allies to discuss security matters, of course. The G20 is particularly ill-suited for such talks, given the dramatically different world views of its members. But just as the G7 lacks the credibility necessary to tackle the global economy on its own, it also lacks the right mix of countries to confront the most pressing geopolitical concerns. Australia and South Korea surely have more to contribute to a strategic discussion about China’s expansionist tendencies than do Italy and Canada.

It is tempting to say the G7’s desire to continue meeting is harmless. And maybe that’s so. The danger is if its very existence undermines the willingness of countries such as China and Brazil to participate fully in the G20. It is easy to imagine that the BRICS Summit will take on a more strident tone when India hosts the leaders of Brazil, Russia, China and South Africa later this year. Abe’s talk of the G7 reasserting itself will not have gone unnoticed by the leaders of the world’s big emerging markets. And perhaps therein lies the legacy of the Ise-Shima Summit: the further balkanization of global affairs.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.
  • Kevin Carmichael is a senior fellow at CIGI and the national business columnist at the Financial Post.