History
The Group of Seven (G7) is a group of like-minded countries who meet regularly to address pressing global issues. The seven countries’ influence on the international stage has led to further interest in their meetings and their diagnosis of the most important issues to address.
The Group of Seven (G7), consisting of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, held its first summit in 1975 in response to global economic challenges. In 1944, the Bretton Woods system established the U.S. dollar as the “world currency” by requiring nations to peg their currency to the dollar which was then tied to the price of gold. In 1971, President Nixon announced the end of the gold standard in the United States and countries were left to select a new exchange agreement for currency. For example, a nation could link the value of its currency to that of another nation, “float” the currency and allow the market to determine its value, participate in a currency bloc, or adopt a new currency.
A few years later, the Organization of Arab Petroleum Exporting Countries (OAPEC) placed an embargo on exports to the United States for supporting Israel during the Yom Kippur War, causing oil prices to skyrocket. The rise of fiat currency paired with the 1970s recession led the world’s largest economic powers to convene and discuss the future of international economic policy with the first G7 meeting.
From the G6 to the G8 and Back to the G7
The G7 was initially known as the G6 before Canada joined the group in 1976. Russia then became the newest member in 1998. President Bill Clinton hoped by granting membership to Russia, he could encourage the nation’s first post-Soviet leader to develop closer relations with the West. However, Moscow’s annexation of Crimea in 2014 resulted in Russia’s indefinite suspension. President Trump suggested Russia be readmitted in 2018 but that idea was rejected by other members.
Initiatives
The heads of government for each G7 nation meet annually to discuss an array of issues. The European Union participates in the annual summits as a “non-enumerated” member represented by the presidents of the European Council. The G7 is not based on a treaty and has no permanent secretariat, and the presidency rotates each year.
The G7’s agenda focuses on the most pressing global issues, as seen by the nations involved. For example, in the 1990s the group focused heavily on the economic transition of former communist states. Although the G7 formed to discuss economic cooperation, the group evolved to address foreign policy and human rights issues as well. At the June 2021 meeting, the G7 discussed rebounding from the economic hardships of COVID-19 in a sustainable manner. They pledged to increase global vaccine manufacturing capacity, invest in recovery plans that promote economic growth, reach net zero carbon emissions by 2050, and increase access to education, especially for women. The group also launched its Build Back Better World initiative to counter China’s Belt and Road Initiative. The plan aims to provide hundreds of billions of dollars in infrastructure investments to developing countries.
Although the G7 is not able to pass laws as a collective body, the members still work in unison to achieve their objectives. In 2002, the G7 played an instrumental role in creating the Global Fund to fight against HIV, TB, and malaria across 155 countries. G7 members have provided 75% of the Global Fund’s $45.4 billion in assistance since its creation. The effort has saved an estimated 38 million lives so far. Member nations also helped organize the Muskoka Initiative in 2010 to help reduce maternal and infant mortality and committed billions in funding. Experts projected the initiative would prevent more than 1.3 million deaths.
Future of the G7
Although the G7 has experienced notable success, questions remain as to whether the group is losing relevance. G7 nations accounted for 63% of the global GDP in 1975. Today, that share has dropped to 45%.
Two of the six largest economies in the world, China and India, are not members of the group despite their rising share of the global GDP. The G20, a complimentary organization to the G7, includes all G7 members in addition to India and China, among others. The group’s members make up 80% of global GDP and 60% of the world’s population. While the G7 addresses both economic and political issues, the G20 tends to focus almost exclusively on economic matters.
Efforts to counter China, such as the Build Back Better World initiative, continue to dominate the G7 agenda. As former White House advisor and member of the secretary of state’s policy planning staff Ash Jain explained, “The G7 is being rebranded as a group of like-minded democracies, as opposed to a group of ‘highly industrialized nations.’ They’re changing the emphasis.” The effort to counter the rise of China explains the G7 as more of a “like-minded” coalition of nations rather than a forum dealing exclusively with economic concerns.
