What Does the G7 Do?
Backgrounder

What Does the G7 Do?

The Group of Seven (G7) serves as a forum to coordinate global policy, but experts are increasingly questioning the group’s relevance.
G7 leaders walk alongside one another at the 2023 summit in Hiroshima, Japan.
G7 leaders walk alongside one another at the 2023 summit in Hiroshima, Japan. Stefan Rousseau - WPA Pool/Getty Images
Summary
  • The G7 is an informal grouping of advanced democracies that meets annually to coordinate global economic policy and address other transnational issues.
  • Russia’s membership was suspended in 2014 over the annexation of Crimea.
  • Due to internal divisions and the rise of alternative institutions such as the G20, some experts have questioned the G7’s relevance.

Introduction

The G7 is an informal bloc of industrialized democracies—the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom (UK)—that meets annually to discuss issues such as global economic governance, international security, and energy policy. Proponents say the forum’s small and relatively homogenous membership promotes collective decision-making, but critics note that it often lacks follow-through and excludes important emerging powers.

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Russia belonged to the forum from 1998 through 2014, when the bloc was known as the Group of Eight (G8), but it was suspended following its annexation of Ukraine’s Crimea region. The G7’s future has been challenged by continued tensions with Russia and, increasingly, China, as well as by internal disagreements over trade and climate policies. In a sign of renewed cooperation, the G7 reached a historic agreement ahead of its 2021 summit to overhaul the global rules for corporate taxation. More recently, the G7 has imposed coordinated sanctions on Russia in response to its war in Ukraine, including a cap on the price of Russian oil. The group also launched a major global infrastructure program to counter China’s Belt and Road Initiative. Those issues, along with climate change, food insecurity, artificial intelligence, and nuclear weapons, led the agenda at the 2023 summit in Hiroshima, Japan. 

Why was the G7 formed, and how does it work?

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Diplomacy and International Institutions

G7 (Group of Seven)

United States

The United States, France, Italy, Japan, the UK, and West Germany formed the Group of Six in 1975 to provide a venue for noncommunist powers to address pressing economic concerns, which included inflation and a recession sparked by the Organization of the Petroleum Exporting Countries (OPEC) oil embargo. Canada joined the following year, and Cold War politics invariably entered the group’s agenda.

The European Union (EU) has participated fully in the G7 since 1981 as a “nonenumerated” member. It is represented by the presidents of the European Council, which comprises EU member states’ leaders, and of the European Commission, the EU’s executive body. There is no formal criteria for membership, but all participants are wealthy democracies. The aggregate gross domestic product (GDP) of G7 member states (not including the EU) makes up about 44 percent of the global economy in nominal terms, down from nearly 70 percent three decades ago.

Unlike the United Nations or the North Atlantic Treaty Organization (NATO), the G7 is not a formal institution with a charter and a secretariat. The presidency, which rotates annually among member states, is responsible for setting the agenda of each year’s summit and arranging logistics for it; in 2023, Japan is acting as president. Ministers and envoys, known as sherpas, hammer out policy initiatives at meetings that precede the gathering of national leaders. Nonmember countries are sometimes invited to participate in G7 meetings.

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What happened with Russia?

Russia formally joined the group in 1998, making it the G8. U.S. President Bill Clinton thought that admitting Russia to the exclusive club would lend the country international prestige and encourage its first post-Soviet leader, Boris Yeltsin, to hew more closely to the West. Clinton also believed that membership would help mollify Russia as the NATO security alliance opened its doors to former Soviet satellites in Eastern Europe.

Clinton’s decision drew some pushback. Finance ministries, in particular, were wary of coordinating economic policy with Russia, which had a relatively small economy and large public debt. But Russia’s backsliding toward authoritarianism under President Vladimir Putin has provoked an even stronger reaction. Moscow’s annexation of the Crimea region of Ukraine in March 2014 resulted in its indefinite suspension from the group. Frictions between Russia and the G7 also grew over Russia’s support for Syria’s Bashar al-Assad, especially in the wake of chemical attacks linked to Syrian forces, and over Russian interference in U.S. and European elections.

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G7 (Group of Seven)

United States

As Russia’s intervention in Ukraine escalated, the United States and EU ratcheted up economic sanctions in an effort to further isolate Moscow. But the Ukraine conflict has only intensified, with Russia launching a full-scale invasion in early 2022. In response, G7 countries have imposed unprecedented sanctions on Russia. These include phasing out imports of Russian oil and gas, a major source of revenue for Moscow, and barring Russian banks from transacting in dollars and euros. Other measures are aimed at Russia’s industrial sector to curtail its military capabilities. G7 members have also collectively pledged more than $100 billion dollars in financial aid to Ukraine, and every member but Japan has provided weapons.

What other challenges has the group faced?

Experts hoped that the reconstituted G7 would have the potential to better facilitate collective action. Without Russia, the group was more “like-minded and capable,” according to former CFR fellow Stewart M. Patrick, with both common interests and common values. However, President Donald Trump challenged G7 unity on a number of issues, with trade and climate chief among them, contending that U.S. allies took advantage of the United States. Trump also split with the group by calling for Russia’s readmission to the bloc. Other challenges stem from China’s rise as a military and economic power, increasing nuclear proliferation, and the rise of artificial intelligence.

At his first G7 summit, in 2017, Trump refused to commit the United States to the Paris Agreement on climate and hinted at plans to withdraw from the deal, leading other members to take the unusual step of singling out the United States in their final communiqué. In an unprecedented statement following the summit, then German Chancellor Angela Merkel questioned the cohesiveness of the transatlantic relationship, saying that for the first time since World War II, Europe “must take our fate into our own hands.” Other leaders and many analysts were alarmed by Trump’s testy relationship with the rest of the group during his presidency. At the same time, European leaders of the G7 have contended with a laundry list of regional challenges, including navigating the UK’s withdrawal from the EU and maintaining cohesion amid rising nationalism.

Alongside the Russia challenge, CFR’s Sheila A. Smith argues that the G7 will have to respond to China’s growing ambitions. Previously, China’s repression of Uyghurs in the Xinjiang region and its crackdown in Hong Kong drew condemnation from G7 members, and its massive Belt and Road Initiative has prompted concerns about Beijing’s influence over developing countries. Brussels, Tokyo, and Washington have all shared grievances over Beijing’s state-led economic model and alleged unfair trading practices. China’s growing trade and defense ties with Russia have also caused concerns. But there are reportedly divisions within the group over how to respond to China, as some European countries are leery of jeopardizing commercial ties with the world’s second-largest economy. At the 2022 summit, assembled leaders overhauled the 2021 Build Back Better World initiative, creating the Partnership for Global Infrastructure and Investment as an alternative to Belt and Road. The G7 pledged $600 billion in public and private investment for the new strategy, though it’s unclear whether the group will be able to match the resources that China has devoted to its project. As of May 2023, the United States has mobilized $30 billion in public and private investment toward the project. 

Fallout from the COVID-19 pandemic and the Russian invasion of Ukraine has created additional obstacles. In 2020, the sharp global economic contraction caused by the pandemic forced G7 governments to respond with massive stimulus measures. In many countries, economic recovery has been accompanied by record levels of inflation and food insecurity. Meanwhile, repeated nuclear threats by Putin, alongside an increasingly bellicose North Korea, have reinvigorated worries about nuclear weapons. “While it may seem passé to call for a world without nuclear weapons, there is fresh impetus for a renewed international effort to mitigate the possibility of nuclear weapons use,” Smith writes. Some experts fear that rapidly advancing artificial intelligence could raise the risk of nuclear conflict.

Are there alternatives to the G7?

In addition to its internal divisions, external dynamics have chipped away at the G7’s global influence, many analysts note. Some argue that the group lacks relevance without China and other emerging global powers. In 2021, the Financial Times’ Gideon Rachman wrote that “the fact the G7 no longer represents most of the global economy—and is skewed towards the Euro-Atlantic region—remains a problem.” However, leaders from outside the G7 are frequently invited to G7 summits. Australia, Brazil, India, Indonesia, South Korea, and Vietnam all participated in 2023.

Many analysts believe that the power and prestige of the Group of Twenty (G20), a forum for finance ministers and central bank governors from nineteen of the world’s largest countries and the EU, has surpassed that of the G7. Emerging powers including Brazil, China, India, Mexico, and South Africa, whose absence from the G7 was often noted, all belong to the G20. Russia remains a member of the G20, despite calls by some G7 countries for its removal. The group’s member states represent about 78 percent of global GDP and three-fifths of the world’s population.

Many observers argue that the G20 was most effective during the 2007–08 global financial crisis. G20 leaders first met in Washington in 2008, after the fall of the investment bank Lehman Brothers. While such consensus has been harder to come by in the years since the crisis, G20 summits have been the occasion for setting ambitious goals. At the 2014 summit, hosted by Australia, leaders adopted a plan to boost their economies by a collective 2.1 percent, which they did not achieve. In Hangzhou, China, in 2016, President Barack Obama and Chinese President Xi Jinping used the summit to jointly announce their accession to the Paris Agreement.

Yet, at the 2017 meeting, in Germany, the G20 ran into the same problems the G7 has come across in recent years, as countries proved divided by trade issues; the United States blocked a planned reference in the communiqué to the need to “resist all forms of protectionism.” The following year, in Argentina, the G20 achieved what the G7 could not, releasing a communiqué to which all its members agreed. But, as critics pointed out, this consensus was only made possible by sidestepping disagreements on trade, climate change, and migration.

There are also calls for new multilateral arrangements. Some experts have endorsed an expansion of the G7 to include Australia, India, and South Korea, thereby forming a “D10” group of democracies. The Washington-based think tank Atlantic Council has held meetings of officials and analysts from those countries since 2014; however, there are growing concerns about democratic backsliding in India. While president, Trump floated the idea of a Group of Eleven, comprising the D10 countries and Russia. 

CFR President Richard Haass and Senior Fellow Charles A. Kupchan have called for a new concert of powers comprising the United States, China, the EU, India, Japan, and Russia, reminiscent of the nineteenth-century Concert of Europe. The proposed system would have permanent representatives supported by a secretariat to avoid what Haass and Kupchan describe as the “fly-in, fly-out” nature of G7 and G20 summits. The group would be focused on practical cooperation rather than ideological alignment to avoid “haggling over detailed, but often anodyne, communiqués.” 

What’s next for the G7?

Patrick says the G7 still has value because all member countries are grappling with similar issues. “It’s sort of a manageable steering group of the West,” he says. “They’re a repository, an embodiment of common values and a similar rules-based approach to world order.” In addition, the G7 can serve as a useful platform for “prenegotiation,” he says, allowing members to hash out disagreements before taking proposals to the G20 or other forums.

At the 2023 summit, the war in Ukraine remained a major agenda item. Discussions focused on maintaining support for Ukraine ahead of its planned counteroffensive and cracking down on sanctions circumvention. The bloc also discussed the worsening global food crisis, which stems in part from the war. At the 2022 summit, the G7 called on Russia to cease attacks [PDF] on Ukrainian agricultural infrastructure and pledged $4.5 billion for improving global food security. 

Climate concerns also remain at the forefront; German Chancellor Olaf Scholz has said he wants to develop the G7 into a “climate club.” Ahead of the 2023 summit, G7 ministers committed to a new joint agreement on climate protection and energy security. Among other commitments, the countries agreed to increase offshore wind and solar capacity by 2030, but stopped short of setting the same deadline for phasing out coal or restricting investments in natural gas. The efforts are part of a plan to achieve net-zero emissions by 2050, a goal that G7 leaders reiterated at the summit in Hiroshima. However, climate efforts could take a back seat as members focus on curbing energy prices.

Another problem for the bloc is managing the dual threat of Russia and China while maintaining cohesion. While the United States has at times taken a confrontational approach toward China, other members are less keen to provoke confrontation with Beijing. The G7 could therefore try to avoid alienating China as it tries to further isolate Russia. During a trip to China prior to the G7 summit in 2023, French President Emmanuel Macron said the EU should avoid becoming pulled into a conflict between the United States and China over Taiwan, drawing backlash from some U.S. lawmakers. At the 2022 summit, the group rebuked China for human rights abuses but also urged the country to use its influence with Russia to stop the war in Ukraine.

Recommended Resources

CFR Senior Fellow Sheila A. Smith looks at Japan’s G7 moment.

Former CFR fellow Stewart M. Patrick explains the G7’s role in upholding the international standards established in the UN Charter.

For Foreign Affairs, Mark Leonard of the European Council on Foreign Relations examines the global implications of a more muscular Germany and Japan

For Foreign Policy, CFR’s Edward Alden investigates the current economic crisis and the role of the G7.

The Washington Post analyzes how an iconic photo of President Trump and other G7 leaders in 2018 reflected the geopolitics of the time.

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Emily Lieberman and Chelsea Padilla contributed to this report.

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