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The G20 Montreal Ministerial Meeting:
A Preliminary Assessment

John Kirton
Director, G8 Research Group
Montreal, October 25, 2000

The Montreal G20 meeting proved to be a gathering of significant achievement. Its importance was grounded more in the new principles and directions it set than in the specific decisions it reached or in the institutional processes it put in place. It offered what host Paul Martin called, with accuracy, the "Montreal consensus" on globalization with shared benefits and social protections for all. In its broadest terms, the Montreal consensus consisted of an interlinked and balanced affirmation of three central points: that globalization was good for all; that its benefits had to be more broadly shared; and that the poor had to be protected from its costs. The Montreal consensus thus marked a move from stabilizing the global economy to sharing its benefits and safeguarding its poor.

The Montreal Consensus: New Principles and Directions

Montreal was the first time that the enormously diverse and influential countries assembled in the G20 all affirmed that globalization was the proper direction for them individually and the global community as a whole to take. All agreed that "the economic integration at the heart of globalization can continue to be an enormously powerful force contributing to improving the lives of hundreds of millions of people in industrial, transition and developing countries alike." Coming in the immediate wake of the 1997-9 global financial crisis and embracing countries such as China and Saudi Arabia, this acceptance was remarkable indeed.

The concept of globalization endorsed by the G20 was also meaningful. It was particularly broad, defined as "the increasing integration of national economies resulting from the greater international mobility of goods, services, capital, people and ideas." It was thus more than the mere economic liberalization at the heart of the neo-liberal consensus of old. It was also very focused on technology, the acceptance of market-based economic systems, and trade and capital liberalization. Moreover, it was infused with potential political content, in its celebration of globalization's generation of "greater access to ideas."

An equal and integral place was given to the distributional dimension of globalization. Signs that the voices of the emerging economies were heard came in the passages in the communiqué calling for "improved access for developing countries exports to advance economies markets." The G20 affirmed that liberalization provided the means "attack income inequalities and reduce poverty," while noting that it can create "economic difficulties and social dislocations." It declared that "Governments have an important role to play," and pointed to a "globalization process that works for all of its participants." In doing so it underscored the social dimension, and the human face of globalization.

The Montreal Commitments

Of less prominence and potency were the specific commitments made at Montreal, both formally in the communiqué and informally in the real agreement that lay behind it. Little new was contained in the commitment to improve the effectiveness, transparency, and co-operative spirit of international institutions, although the pledge may have been of some small solace to those protesting on the streets. The steps on the international financial architecture, detailed in an annex, represented at best small steps forward, although the communiqué's emphasis on implementation was a useful reminder of those needed next steps. Of more magnitude, coming from finance ministers with great influence on national budget expenditures, was the recognition that "emerging market economies should be supported with technical assistance" and the pledge to "contribute to international efforts to increase the provision of other public goods" regarding infectious disease, agricultural research, and the environment. The passage on HIPCs reaffirmed the need for a sharp focus on poverty reduction and economic reforms, and added a veiled reference for the U.S. to contribute its share. The link of financial abuse and "market integrity" to financial stability was noteworthy. Weak commitments but far-reaching social objectives came in the call for trade liberalization to benefit the lowest income economies, to "promote domestic policies that help spread the benefits of integration to all members of society," and to design and implement social safety nets to promote the most vulnerable during liberalization.

The Montreal Process

The legacy of Montreal in forwarding the growth of the G20 as the centre of global economic governance was more ambiguous. Most striking was the breadth of the G20's agenda, which went well beyond the hard-core finance subjects of crisis response and architecture construction aimed at stability to embrace debt, development assistance, trade liberalization, health, agriculture, the environment, and social policy. It was one that fulfilled Paul Martin's earlier promise that there was no area of policy that was potentially outside of the G20's purview. It was also one that, as Martin noted, would make the conclusions of Montreal the subject of discussion among many other ministers in national governments. Nor did he deny that it was an agenda whose breadth was appropriate for G20 leaders themselves collectively to address.

The institutional depth of the G20 was advanced by the Montreal meeting to a lesser degree. The agreement to have two deputies meeting and one ministerial meeting (time and place to be determined) in the coming year represented a continuation of the year-one pattern, rather than a move to a more dense schedule, featuring two annual ministerials, as some Canadians considered possible. It did, however, ensure that the G20 had become a permanent body, with an agenda - guiding globalization - to give it a rationale well beyond the crisis response and architectural reconstruction spawned by the 1997-9 crisis had passed. Moreover, with Paul Martin apparently chairing the body for another full year and thus prospectively hosting the 2001 ministerial, it seemed the body would be guided by an enthusiastic and effective chair as it went through year three. In addition, the ministerial mandated three follow-on processes: a series of case studies of real-world countries' experiences in being affected by and responding to globalization, aimed at providing a common diagnosis and balanced evaluation to advance the debate and identify key factors; a study of international institutions, conducted by G20 deputies, to look at the gaps and overlaps and functional responsibilities for global governance; and a G20 seminar on exchange rate regimes aimed at providing concrete advice to guide real-world decisions. While private-sector representatives would be involved in these activities, as they had been when G20 deputies met in Toronto in August, there were no other real advances in the G20's societal outreach.

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