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Don't get your hopes up: Toronto's G20 simply a pit stop on the way to Seoul

Prime Minister Stephen Harper in Gatineau, Quebec April 29, 2010.

CHRIS WATTIE/Chris Wattie/Reuters

Luckily for Stephen Harper, it will be hard for the Toronto G20 summit to end in failure. That's because it's mostly a prep session for the meatier summit in Seoul in November.

It's not that there are no urgent or important matters to discuss. It's just the real deadlines for the nitty-gritty G20 issues are set for Seoul. The Toronto summit in June is a stop along the route.

The G20, the economics summit, faces three big tasks: co-ordinating an international shift from stimulus spending to deficit-cutting, arranging medium-term adjustments to global trade and capital flows so the world economy isn't unbalanced, and setting out new banking regulations.

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At last September's summit in Pittsburgh, world leaders set deadlines for key steps on all three: November, November and November. The Seoul summit is when talk is supposed to turn into concrete measures.

The Toronto G20, and its part of a $1-billion security bill, was an add-on to the summit schedule. Canada was scheduled to host the G8 and South Korea the G20. But last September, the broader G20 replaced the G8 on the economy. Mr. Harper, who had seen it coming, persuaded South Korean President Lee Myung-bak to add a second G20 summit in Canada, so the bloom of the Prime Minister's G8 would not be eclipsed.

The technically separate G8 summit in Muskoka will see more concrete outcomes: an initiative to improve maternal and child health in poor countries, likely with pledges of billions of dollars, for example. The details will be hashed out ahead of time, and discussions of political and security issues tend to be dominated by the crisis of the moment, whether tensions in the Middle East or a standoff in the Korean peninsula.

The G20 has its own important business, to be sure. The Toronto summit is attended by a greater sense of urgency since Greece's financial meltdown gave the world a new economic scare, but it doesn't have an acid test for success or failure.

Mr. Harper sought to inject a little rush into the G20 by sending leaders a letter last month warning that Greece's problems show they need to co-ordinate deficit cuts to avoid a new financial panic.

He didn't mint the idea - the International Monetary Fund's April world economic outlook made the same point, and many other G20 countries feel the same sense of urgency. Just as they agreed to launch stimulus-spending programs equal to 2 per cent of their economies, Mr. Harper has floated the idea of the G20 setting criteria for countries to get their finances in order.

But the politics of getting 20 countries to agree on deficit-cutting rules, notably getting the United States onside, are daunting. The G20 is supposed to outline "co-ordinated exit strategies" - in Seoul.

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There are also efforts to tame the imbalance in the global economy, partly by urging countries with huge trade surpluses - notably China - to reduce them through expansive spending policies or currency adjustments. The IMF is putting together data on regional imbalances for the leaders to review in Toronto, but countries in each region will hammer out the sacrifices needed before setting policy - again, in Seoul in November.

The G20 leaders could do a lot by setting out broad targets for national debt, but co-ordinating economic policy is bound to be a slow process for a new institution that includes several members with little experience in working together on such a complex issue, said Wendy Dobson, co-director of the Institute of International Business at the University of Toronto.

"You would be wrong to say the Toronto summit is a failure because of X, Y, or Z, because economies just don't work that way," Dr. Dobson said. "But by Seoul, you could."

There is one issue Mr. Harper might be able to move up a little. The G20 meeting in Toronto could see agreement on certain core principles of financial regulation reform, such as capital reserves for banks, although the deadline for doing so is not until the end of the year. In the meantime, the Prime Minister has been leading a vocal fight against proposals for a global bank tax, even though European officials privately concede it has no hope of being adopted.

That offers Mr. Harper the hope of a win at a no-lose G20 summit that's really just a step on the road to Seoul.

Campbell Clark writes on foreign affairs in Ottawa

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About the Author
Chief political writer

Campbell Clark has been a political writer in The Globe and Mail’s Ottawa bureau since 2000. Before that he worked for The Montreal Gazette and the National Post. He writes about Canadian politics and foreign policy. More

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