The G7 presidency is an important opportunity for the new German government to globally advance its policy goals on a broad range of issues. It is also the first international litmus test for the new coalition of the Social Democratic Party (SPD), Alliance 90/The Greens, and the Free Democratic Party (FDP). There is no shortage of topics that the G7 need to tackle under German leadership: The new Omicron variant has put health high on the agenda again, coupled with the issue of economic recovery. Another priority for Germany has long been climate change. The Greens are now part of the governing coalition, and they will invest a lot of political capital to achieve meaningful outcomes . Another major discussion will be on the way of how to deal with authoritarian and non-market economies such as China. Particularly the Greens want to connect economic issues more closely with human rights and values. The three “Cs” – Covid, Climate, China – will thus continue to dominate the G7 agenda, with further topics being infrastructure, digitalization, and supply chain security.
After the successful G7 summit in Elmau (2015), the new German government has picked the same location for this years’ summit in June. The riots in Hamburg at the G20 summit in 2017, when Olaf Scholz was mayor of the city, influenced the choice of the more reclusive venue. But this is not the only reason. Chancellor Scholz wants to show that his government stands for continuity. And he also wants to pick up on the success of the Elmau declaration, in which the G7 stressed the importance of keeping global warming below 2°C and agreed to decarbonize the global economy over the course of this century . This was important to help secure the adoption of the Paris Climate Agreement later in 2015. In his recent New Year’s Speech, Chancellor Scholz emphasized: “We will use our presidency to make this group of states a pioneer. A pioneer for climate-neutral business and a just world. International cooperation is important. In a world that will soon have ten billion inhabitants, our voice will only be heard if we join forces with many others.” According to the Press and Information Office of the Federal Government, the German government wants to pursue a focused agenda, concentrating on the essentials. This was also reflected in the minimalistic logo of Germany’s G7 presidency.
Dare more progress in vaccine distribution and phase out of all fossil fuel subsidies
What needs to be done and what can realistically be achieved? Managing the Corona pandemic and being better prepared for future health crises is again high on the agenda for all G7 member states. But this needs to be seen as a global issue. The access to vaccines and health care is still very unevenly distributed around the world. Particularly in African countries, the overall vaccination rate is alarmingly low. Limited production capacities for vaccines, insufficient distribution networks, and inadequate testing facilities pose huge problems in most developing countries to effectively fight the pandemic. However, despite the common concern, the issue is far from easy in the G7. Particularly controversial were patent rights for vaccines (TRIPS waiver): While the Merkel government was opposed to the waiver, U.S. President Biden generally supported the idea. Particularly India and South Africa push for this issue at the World Trade Organization (WTO). The Greens and also the SPD are sympathetic to their cause; the EU so far has voiced its concern and offered a compromise proposal. The new German government together with the G7 countries need a coherent answer to the waiver as well as a significant increase in vaccine distribution and production capacities to make this summit worthwhile.
In addition, concrete outcomes on climate change are needed. Otherwise, the credibility of the new German government and the G7 as a group of like-minded countries would be compromised. At the Leaders’ Summit in Cornwall last year, the G7 countries agreed to raise their contributions to honor the pledge of developed countries to provide 100 billion U.S. dollars annually to help poorer countries to cut carbon emissions and cope with global warming. But the Leaders’ Declaration lacked concrete numbers. The G7 also committed to collectively cut CO2 emissions by half by 2030 based on 2010 levels. But the rather vague statements on core elements of the green transition put a question mark behind this ambition. For example, the G7 could not agree on a concrete date for the phase-out of coal power generation. In addition, while the G7 re-affirmed their 2016 commitment to eliminating inefficient fossil fuel subsidies by 2025, they did not agree on a clear road map. And the phrase “inefficient” leaves a backdoor open for continuous support. The expectations will be high that Germany delivers on all the points above.
China and the WTO
As the G7 justifies its existence as a values-based group of democratic market economies, China will feature – directly or indirectly – in all the discussions. This includes topics like human rights, sustainability, technology transfer, and supply shortages. China had been a hot topic already during the UK G7 Presidency. In the Leaders’ declaration, the G7 underlined that they “will continue to consult on collective approaches to challenging non-market policies and practices which undermine the fair and transparent operation of the global economy.” Without doubt, the G7 infrastructure initiative is designed as an answer to the Chinese Belt and Road Initiative. How these commitments translate into concrete actions, is a question yet to be answered. U.S. President Biden is pushing for a tougher stance against China, connecting trade and supply chains with labor rights and sustainability standards. This has long been a major point for the Green party. Foreign minister Annalena Baerbock strongly supports the initiative of the European Parliament to ban the import of all products, which were produced with forced labor. Chancellor Olaf Scholz, on the other hand, told President Xi for example, that he wants to deepen economic ties with China. It is thus unclear, how confrontational the new German government will be – also in the context of the G7. The G7 will certainly put the new government, and who makes foreign policy (the Chancellery or the Foreign Ministry) to the test.
One aspect, which is related to China, and where the G7 can and should make a difference, is the reform of the WTO. The multilateral organization guarantees a transparent and rules-based global trading system and is therefore the right venue to deal with market-distortions by China. The new German government promised in its coalition treaty: “We support the strengthening of multilateralism and the further development of the World Trade Organization (WTO), including the renewal of the rules on market-distorting subsidies, the lifting of the blockade on the dispute settlement mechanism and an alignment with the Paris Agreement on Climate Change and the Global Compact.” A new commitment to integrate sustainability rules in the WTO, a work program for the reform of the Appellate Body, as well as a commitment to a new initiative on tariff-free trade in medical products could make a huge difference. It could pave the way for reform commitments at the G20 and give the WTO reform a much-needed new impetus.
A Thorny Road ahead
The G7 is a great chance for the new German government to prove itself and “dare more progress”. But the challenges are also great. And they could be even greater if the conflict between Russia and the Ukraine escalates further, which could easily derail the agenda. Given the multitude of global crises the G7 is facing, it remains to be seen if the agenda can really be as minimalistic as the new G7 logo. And it will take some considerable efforts to forge compromises in critical areas. In the end, the G7 will need to focus on the issues where it can have an impact in order to advance global governance. As such, it needs to work closely together with other governance fora like the G20.
“This is, above all, a human crisis that calls for solidarity…. that demands coordinated, decisive, and innovative policy action from the world’s leading economies”. This is an excerpt from António Guterres‘ statement on March 19, 2020, in which the Secretary-General of the United Nations called for innovative, appropriate and coordinated action from all world leaders to tackle the new Covid-19 pandemic. But after more than a year and a half , international coordination and cooperation is still lacking in handling this multidimensional crisis.
International cooperation for sustainable development is crucial for securing life in dignity for current and future generations. In a globalized world like ours, without such cooperation, it is impossible to strengthen individual and societal freedoms for flourishing, to curb climate change and biodiversity loss, reduce inequalities in income and wealth, end armed conflicts and avoid outbursts of violence, strengthen the rule of law and accountable and effective public institutions, and shape digitalisation.
This year’s G20 summit took place this weekend in Rome and – as it is always the case when the G20 meets in a country where protests are not suppressed – thousands of protestors used this occasion to express their opposition to the supposedly neoliberal agenda of the G20 and the human rights violations perpetrated by some of the member governments (although Vladimir Putin and Xi Jinping as important addressees of this second criticism did not even bother to come to Rome). This year, the meagre results of the group with respect to climate action and the failure to ensure a fair global allocation of Covid-19 vaccines were among the key complains concerning the content of the agreements of the group. However, the G20 was not only criticized for the substance of its policies. It has always also faced contestation with respect to the way in which the group takes political decisions in procedures that do not allow for much democratic participation and public control.
Time to revisit the debate on the democratic deficit of global governance
This criticism concerning decision-making procedures, which also applies to many other global governance institutions, gains additional relevance in light of the debate on the rise of authoritarian right-wing populism in many countries. Armin Schäfer und Michael Zürn argue in a recent book that right-wing populism cannot be explained entirely by socioeconomic or sociocultural factors but has also genuinely political causes. They describe how the composition of parliaments and the shift of decision-making competences to non-majoritarian institutions, such as central banks, courts, and many international institutions, decrease the responsiveness of political decisions to the opinions of, in particular, poorer and less-educated segments of society. The feeling of not being heard by political decision-makers that many supporters of populist parties voice is thus, sadly, often well-founded.
A part of the democratic shortcomings that give rise to authoritarian populism concern, according to Schäfer and Zürn, political decision-making beyond the national level. It might thus be time to revisit the debate on the democratic deficit of global governance. The democratic credentials of, for instance, the European Union, the World Trade Organization (WTO), the World Bank, or the International Monetary Fund (IMF) have been critically discussed for decades. This has led to some reforms: the European Parliament, for instance, has gradually received more competencies and the World Bank and the IMF have made some efforts to increase their transparency and accountability. In general, though, progress has been very limited.
While the longstanding academic debate on the democratic deficit of global governance focussed mainly on other institutions, club governance formats, such as the G20, also show serious democratic shortcomings (as protestors have long emphasized). Such formats exclude a great share of those affected by its policies from its decision-making, simply because the majority of countries are not invited to join the clubs. In addition, decision-making in these fora is usually opaque and leaves not much space for parliamentary and public control. Where club governance has an impact, political decisions are de facto prepared in technocratic meetings of bureaucrats from national government departments.
No easy fixes to all democratic shortcomings
To some of the democratic shortcomings of global governance there are no easy fixes. Partly, it seems unavoidable that decision-making in international institutions allows for less opportunities for democratic participation than national level political institutions could, at least in principles, provide. After all, larger political units have more citizens. If decisions are taken in higher-level institutions, the influence of each individual thus decreases. In addition, a truly global public sphere with global public debates, global media, and global NGOs, as it is seen in deliberative conceptions of democracy as prerequisite for well-functioning democratic procedures, is largely non-existent. Furthermore, we must be cautious that efforts of democratisation do not further increase the number of veto players to avoid harming the chances for effective governance. Finally, it is very challenging to achieve agreements on measures of democratisation because there are very different conceptions of democracy advocated globally and, obviously, not all governments that occupy influential positions in international politics put much value on democratic decision-making at all. After all, institutions such as G20 include also governments that pursue a tied autocratic agenda at home (and even do not shy away from supporting authoritarian populist movements in other countries). The governments of countries such as China and Russia have no problem to use the rhetoric of a democratisation of global governance. However, such references are usually better understood as attempts to strengthen their own position in the international order than as pleas for reforms that would increase meaningful democratic participation and public control.
To give up on international institutions (as right-wing populists often suggest) and return decision-making competences to national level political institutions would, clearly, also not be an adequate response – not even from the perspective of democratic theory. Given that many national political decisions, such as those concerning environmental policies, have external effects in other countries, international institutions are crucial to give those affected by these external effects a voice. In general, facing the tremendous global challenges that can only be addressed by coordinated efforts of actors all over the world, fora of inter- and transnational coordination conforming to clear governance- and accountability standards are crucial.
Some potential for reforms
However, that does not imply that there are no ways to react to the populist challenge to international cooperation. First, to some degree it is feasible to increase opportunities for political participation in global governance. Consider again the example of club governance. Groups of smaller countries that are currently excluded from influential clubs could at least be allowed to share a representative in these groups. In addition, parliamentarians could be included in the negotiations and transform club governance from a format of exclusively executive bodies to a format in which also parliaments cooperate (although this would, obviously, not lead to any improvements in countries in which parliaments have only a marginal role). And clubs could certainly make their working procedures more transparent, expand on instruments to increase accountability, and strengthen engagement processes with civil society.
Secondly, with respect to every step of further economic integration we need to ask whether the potential economic gains really outweigh losses of opportunities for democratic participation that might be associated with them. Economic integration increases the need for international coordination. In general, if goods and capital can move more freely, the need for internationally harmonised rules increase, for instance with respect to taxation or working conditions. As Dani Rodrik and others argue, if international institutions that could effectively decide in a democratically acceptable way on these common rules are hard to achieve, we need to reflect on the question at which point we put a halt on economic integration.
The future of globalisation might depend not a little on that we make progress with respect to the political institutions of global governance. If we fail in making political decision-making in these institutions more democratic, right-wing populists will be able to continue to spur nationalist feelings and lobby against the international cooperation that we so urgently need.
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