Eight heads of state will meet starting Monday in Northern Ireland, officially beginning this year’s G8 Summit – an annual meeting between America, Japan, Germany, Canada, Great Britain, France, Italy, and Russia. The high-profile setting does not lend itself to substantive negotiations, but photo opportunities and scripted remarks do give world leaders a chance to set the diplomatic agenda. Here are the four most important issues for world leaders to address this week.
1. The Syrian Civil War
The Syrian civil war has gone on for over two years now, and support for a no-fly zone is increasing since the United States confirmed the Syrian government has used chemical weapons against rebel forces. The Canadian and British prime ministers both support a no-fly zone, which would eliminate the air superiority that gives the Assad regime military dominance, and the United States has moved fighter planes into Jordan, presumably so that a no-fly zone could be established immediately if America wanted to.
However, Russia will vigorously oppose anything that could undermine the Assad government, which is one of their closest allies in the Middle East. Russia fears an Islamist government could emerge after Assad is ousted, and believes this government could aid Islamist fighters inside Russia. Assad has been promised large amounts of arms from Russia, and Russia’s foreign minister called a no-fly zone a violation of international law. At a press conference this weekend, Vladimir Putin strongly defended Russia’s support of Assad, who he referred as Syria’s “legitimate government.” How President Obama acts in his meeting with Putin should be a good indicator of America’s plans in Syria. A sharp rebuke of the arms transfer means that no-fly zone will likely be imposed, while a softer tone means the rebels will probably be left at the mercy of Assad’s air force.
2. Free Trade
Free trade was one of the major topics of the original G8 (then the G6, with Russia and Canada not yet members), and it since been on the agenda at almost every meeting. This year’s is no exception, as EU-U.S. free trade negotiations are expected to continue. Last week, the 27 EU trade ministers had agreed on their initial negotiating position, which is that so-called “cultural” industries like cinema, music, art, and television programs will not be included in any trade agreement. This provision, insisted upon by the French government, was unpopular with German and British negotiators but French threats to walk away from the negotiations were enough to force it into the position. Prime Minister Cameron has named free trade as one of his highest priorities, and the meetings between President Obama and the European leaders will begin what will likely be a years-long negotiating process over a transatlantic trade agreement.
3. Tax Evasion
Ever since ancient kingdoms began taxing their citizens, people have found creative ways to avoid paying. The G8 hope to make such avoidance more difficult by updating a decades-old system of international corporate taxation, a relic of the time when most companies’ assets were tangible and hard to move from nation to nation. In the modern era of electronic everything and intangible intellectual property being worth billions, companies can easily structure their holdings so that every different asset is held in the nation where its taxed at the lowest rate, regardless of where the company actually does most of its business. A comprehensive tax reform plan will be unveiled at the larger G20 summit in September, but discussions of the plan's more controversial points will likely begin this week.
4. Japanese Central Banking
Japanese central banking practices will be scrutinized during the G8. Under the economic policy of Prime Minister Shinzo Abe, Japan’s central bank has committed to weaken the yen and encourage inflation. The Japanese believe this is necessary to fight the deflation that has damaged their economy since the 1990s, but the European Central Bank fears the policy could lead to competitive devaluation, where nations across the world have to inflate their currency to remain competitive as exporters. Japan certainly won’t change their monetary policy as a result of the summit, but seeing how aggressively Europe criticizes it will indicate if the ECB plans retaliatory economic action.