BY DOUG LORIMER
This year's annual meeting of the heads of the Group of Eight (G8) countries — the United States, Japan, Germany, France, Britain, Italy, Canada and Russia — glossed over the deepening economic problems confronting the world capitalist economy.
Held in the French resort town of Evian, the June 1-3 summit was also attended by the leaders of 17 other countries (seeking to lobby the G8 leaders), 2700 government officials and 3300 journalists.
On the second day of the summit, a joint statement was issued in which all eight leaders committed themselves to ensure the success of the World Trade Organisation's crucial ministerial meeting in Cancun, Mexico, in September, and to improve market access for all WTO member countries, particularly poor ones.
However, a seven-point "action plan" set out in a joint communique contained no new initiatives and ignored the disputes between the US and the European Union (EU) which have stalled the WTO negotiations on further trade liberalisation. The disputes centre on US and EU farm sector subsidies. "The G8's statement on trade is completely vacuous. There is nothing new in it", Justin Forsyth of aid agency Oxfam told the June 2 British Guardian.
The G8 leaders called for "fairer trade" for poor countries, but, following opposition from the US, made no reference in their statement to a proposal by French President Jacques Chirac for rich countries to suspend subsidies on farm exports to Africa, which impoverish African farmers — 70% of the continent's employed population — by undercutting the prices of their products.
Currency realignment
Barry Coates of the London-based World Development Movement told the June 3 British Guardian: "The G8 have repeatedly refused to end their abuse of the [international trading] system through massive agricultural subsidies and barriers to exports of processed goods and textiles [from underdeveloped countries]. Yet they are pushing developing countries to open up their markets."
The G8 leaders also avoided any serious discussion, let alone commitment to coordinated action, on the biggest realignment of major currencies in the last eight years. US President George Bush was widely reported to have assured G8 leaders that he would "stick to his policy of the strong dollar", despite the fact that the US dollar has declined by 26% against the euro and 13% against the yen since January 2002.
Bush's comments were seen as contradicting remarks made by his treasury secretary John Snow at the May 17-18 G8 finance ministers meeting. Snow had said the declining dollar was "helpful to US exporters". However, Bush also made it clear that Washington would not intervene to shore up the dollar.
The dollar is falling because the US is accumulating foreign debt at a rate of US$1.5 billion a day and capital flows into the US have dwindled as foreign investors worry about US economic prospects.
"We are in a country that is buying more from the rest of the world than we're selling, and we're doing it on a big scale", billionaire stockmarket investor Warren Buffett told Microsoft's annual gathering of US corporate bosses on May 21.
"Any other country in the world that did that on that scale would have seen greater currency depreciation already", Buffet said. "We have such a strong currency historically that there's been a delayed effect. But it's started to happen in the last year, and unless the underlying conditions change it's going to continue."
The declining dollar will reduce the US trade deficit by making US goods cheaper abroad and foreign goods more expensive for Americans. However, by making imported goods more expensive in the US and US exports cheaper in foreign markets, the declining dollar will reduce economic growth in Europe and Japan.
The EU is already on the verge of recession after the German, Italian and Dutch economies contracted in the first quarter, and Japan's growth stalled last quarter as the recovery from its third recession in a decade has ground to a halt.
Emerging from a private meeting with Bush on June 2, Chirac stated: "We had a very positive meeting this morning that underscored our common belief in the capacity of tomorrow's world to achieve higher growth. The G8 is supposed to be about economics after all."
PR exercise
However, the main focus of the summit was on PR exercises to demonstrate that Washington and the governments of France, Germany and Russia had put to rest their sharp dispute over the unilateral US decision to invade Iraq — aimed at making that country's vast oil resources a US corporate monopoly.
In a statement issued at the end of the second day of the summit, G8 leaders said the "world community" had to use arms inspections, export controls "and, if necessary, other measures in accordance with international law" — diplomatic code for war — to tackle the "threat of weapons of mass destruction".
The statement made no reference to the US invasion of Iraq, launched on the increasingly threadbare premise that the overthrown Iraqi government possessed banned weapons — nor to the huge arsenals of WMD possessed by the US, Britain, France and Russia. Instead, it urged North Korea to dismantle any nuclear weapons programs it might be running and said the G8 leaders would "not ignore the proliferation implications of Iran's advanced nuclear program".
As part of its drive to restore a pro-US regime in Iran, Washington alleges — without any evidence — that the Iranian government has a secret nuclear weapons program.
Having secured tacit endorsement from the other G8 leaders for Washington's main pretext for engineering "regime change" in Iran, Bush left the summit — upon which the French government spent $390 million — a day before it formally wound up.
From Green Left Weekly, June 11, 2003.
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