The Canada debacle showed the global economic system is no longer anchored by cooperation
To say that this month’s summit of G7 leaders in Canada was an unusual one would be an understatement. A traditionally friendly and predictable gathering of like-minded countries was marred by finger-pointing and disagreement, resulting in an inability to achieve consensus on a final communiqué. But, while political analysts were quick to declare the end of the G7’s coherence, integrity, and usefulness, markets were unfazed. In fact, the longer-term outcome may well prove markets right, albeit with some important qualifications.
Participants at the G7 summit reportedly clashed over issues such as climate change and the possibility of readmitting Russia. But the highly publicised discord was fuelled mainly by disagreements over the effects of trade among the members. Those disagreements – amplified by persistent differences on basic facts – impeded progress in other areas where greater consensus might have been possible, including Iran, some other Middle East issues, North Korea, migration and refugee relief.