COVER TORONTO SUMMIT '88

IN SEARCH OF PROSPERITY

June 20 1988
COVER TORONTO SUMMIT '88

IN SEARCH OF PROSPERITY

June 20 1988

IN SEARCH OF PROSPERITY

COVER TORONTO SUMMIT '88

The setting was a secluded French chateau. Six leaders sought to co-ordinate economic policies for the benefit of all. They did not plan in that autumn of 1975 to make their economic summit a yearly event. Now, 12V2 years later, the setting of the 11+th summit is downtown Toronto, the cast of leaders has changed, but the aim is the same. The record:

Rambouillet 1975

Nov. 15 to 17: Amid worldwide “stagflation”—combined economic stagnation and inflation—Valéry Giscard d’Estaing, then the president of France, convened a summit meeting of six leading industrial democracies at the 14th-century Château de Rambouillet, 55 km southwest of Paris. The economic malaise was fuelled by the U.S. defeat in Vietnam that year, recent world price increases for oil and a general shift to floating from fixed currency exchange rates. The leaders agreed to work jointly and urgently for “steady and lasting” growth and to “avoid unleashing additional inflationary forces.”

Dorado, Puerto Rico 1976

June 27 and 28: A seven-nation summit summoned to the Caribbean resort by U.S. President Gerald Fordadding Canada’s Prime Minister Pierre Trudeau to the group—agreed to remain vigilant against “a new wave of inflation.” Among the communiqué’s suggestions: income controls “in some cases.” Britain’s Labour government had already negotiated a wage-restraint program with major British unions, and Trudeau’s Liberal government had imposed wage and price controls the previous October. Canada’s annual inflation rate—7.5 per cent in 1976— reached 8.8 per cent in 1978 when its anti-inflation program expired.

■ London 1977

May 7 and 8: Meeting at 10 Downing Street, Prime Minister James Callaghan’s official residence, the leaders renewed commitments to “create jobs while continuing to reduce inflation.” The majority exerted pressure on Japan and West Germany to reduce their trade surpluses. The meeting generated controversies over U.S. President Jimmy Carter’s criticism of the Soviet Union’s human rights record, personal tensions between Carter and West German Chancellor Helmut Schmidt, and objections

from France’s Giscard to the presence—at the behest of the smaller European countries—of Briton Roy Jenkins, president of the European Communities commission.

Bonn 1978

July 16 and 17: Convinced by experience and by their West German host, Chancellor Helmut Schmidt, the seven leaders—joined by the EC’s Jenkins, except when politics were discussed-acknowledged that there were no quick solutions to inflation, unemployment and unbalanced trade. “We are dealing with longterm problems, which will yield only to sustained efforts,” their communiqué said. Persuaded by Canada’s Trudeau and Japanese Prime Minister Takeo Fukuda, the leaders warned in a separate statement that they would halt commercial flights to countries that failed to prosecute airline hijackers. Inspired by Schmidt’s economic views, Trudeau introduced a federal austerity program after his return to Ottawa.

■ Tokyo 1979

June 28 and 29: On the day that host Prime Minister Masayoshi Ohira convened the fifth summit, in Tokyo’s Akasaka Palace, the major oil-exporting countries announced in Geneva that they were raising their regulated export prices by about 25 per cent (spot prices were even higher). That new inflationary threat prompted the summit leaders—including two prime ministers elected in May, Britain’s Margaret Thatcher and Canada’s Joe Clark—to agree to a seven-year program to restrict their oil imports.

Venice 1980

June 22 and 23: Oil prices again dominated the economic agenda— the leaders jointly pledged to use more coal for power—but conflicting responses to the Soviet invasion of Afghanistan six months earlier generated sparks. Moscow, facing a U.S.led campaign to boycott the Moscow Summer Olympics, announced plans

on June 22 to withdraw some troops from Afghanistan. But the Venice meeting, despite the more conciliatory French and West German attitudes toward Moscow’s leaders, called for a complete Soviet retreat.

Montebello, Que. 1981

July 19 to 21: The most urgent issue confronting Ronald Reagan’s first

economic summit was the new U.S. President’s austere monetary program. His policy held contagious American interest rates at historic heights (some Canadian rates exceeded 20 per cent), depressed the exchange value of other currencies and disrupted world trade. Still, despite criticism of U.S. policy before and after the meeting in the rustic but luxurious Château Montebello, 65 km east of Ottawa, “Reaganomics” emerged unscathed in the final communiqué issued by summit chairman Pierre Trudeau.

Versailles 1982

June 4 to 6: Guarded by 3,000 police inside Louis xiv’s luxurious château in suburban Paris, the summit leaders negotiated a truce in several economic and policy disputes. Their communiqué promised undefined efforts to fight recession and high interest rates. They said that they were “deeply disturbed” by Israel’s June 6 invasion of Lebanon, were silent in advance of Britain’s June 14 defeat of

Argentina in the Falkland Islands, and promised to review U.S.-opposed European loans to Moscow.

Williamsburg, Va. 1983

May 28 to 30: Although most of the visiting leaders criticized U.S. economic policies, the Williamsburg Declaration on Economic Recovery avoided naming host Ronald Rea-

gan’s administration in calling for reduced budget deficits, lower interest rates and stronger employment programs. Their debates over arms and peace in the reconstructed 18thcentury village — “We should be busting our asses for peace,” Canada’s Pierre Trudeau urged at one stage— also produced a commitment to seek “meaningful arms reductions” while affirming plans to deploy new U.S. missiles in Europe should arms talks with Moscow founder.

London 1984

June 7 to 9: Pierre Trudeau, senior in experience at his eighth economic summit, just three weeks away from his retirement as Canada’s prime minister, pressed a personal crusade to inspire a breakthrough toward disarmament. But the other leaders rejected his appeal for a conciliatory declaration that stressed the shared peace objectives of East and West. Indeed, U.S. aides reported, President Reagan threw down his glasses at one impatient point during the

argument in London’s Lancaster House and demanded, “Dammit, Pierre, what the hell more can I do?” Trudeau said later that he had retorted, “For heaven’s sake, Ron, do a bit more.”

Bonn 1985

May 2 to 4: A series of bomb scares and explosions unsettled the 11th economic summit, the first attended by Canada’s Brian Mulroney. The meeting itself was marked by discord, notably when French President François Mitterrand vetoed a summit endorsement of the U.S. Star Wars space defence project and balked at setting a starting date for a new round of international trade negotiations without monetary reforms. Controversy continued when President Reagan afterward visited a Second World War military cemetery at nearby Bitburg, which includes Nazi SS graves.

■ Tokyo 1986

May 4 to 6: After an abortive attack

by Japanese terrorists on their opening session in Akasaka Palace—five home-made rockets landed close to the nearby Canadian Embassy without injuring anyone—the summit leaders issued a forceful antiterrorist statement. Urged on by British Prime Minister Margaret Thatcher, who had supported an April 14 U.S. air raid on Libya, the summit singled out Libya as a potential target for political countermeasures. The leaders also agreed to expand a fivenation consultative group of finance ministers to include Canada and Italy in a new Group of Seven (G7).

Venice 1987

June 8 to 10: A leaderless summitchaired by caretaker host Amintore Fanfani pending Italy’s June 14 election-covered a loosely focused agenda. U.S. leadership was diminished by the Reagan administration’s scandals and the U.S. position as the world’s largest debtor nation. Margaret Thatcher went home after one day for a June 11 election in which she became the first British prime minister in 160 years to win a third consecutive term. In Venice, her absentee influence helped to exclude a Canadian-sponsored denunciation of racist South Africa from the summit communiqués. Now Thatcher attends the 14th summit in Toronto— her 10th—as the widely acknowledged leader of the leaders. □