What Does the G7 Do?

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, most recently, artificial intelligence (AI). 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 emerging powers.

Russia belonged to the forum from 1998 through 2014, when the bloc was known as the Group of Eight (G8), but the country was suspended following its annexation of Ukraine’s Crimea region. The G7’s future has recently been challenged by continued tensions with Russia and, increasingly, China, as well as by internal disagreements over trade and climate policies. But responding to Moscow and Beijing has also brought the bloc together. In a sign of renewed cooperation, the G7 has imposed coordinated sanctions on Russia over its war in Ukraine and launched a major global infrastructure investment program to counter China’s Belt and Road Initiative. The bloc’s fiftieth summit, held in southern Italy in 2024, is set to focus on the conflicts in the Gaza Strip and Ukraine, migration, climate change, and AI. 

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

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 43 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 2024, Italy 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.

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 into 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.

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 levied 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 curtailing Russia’s military capabilities. G7 members have also provided weapons to Ukraine, collectively pledged more than $100 billion dollars in financial and military aid, and are considering using windfall profits from frozen Russian assets to finance additional loans to the country. 

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, currently the Director of the Global Order and Institutions Program at the Carnegie Endowment for International Peace. 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 AI.

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, the G7 will have to respond to China’s growing ambitions, CFR Senior Fellow Sheila A. Smith argues. Beijing’s repression of Uyghurs in the Xinjiang region and its crackdown in Hong Kong have drawn 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. 

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. Some experts fear that rapidly advancing artificial intelligence could raise the risk of nuclear conflict. At the 2023 summit, the bloc unveiled the “Hiroshima AI Process,” which seeks to develop a common framework for AI governance worldwide.

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. The bloc’s current priorities “risk failure” unless they garner support from other countries, wrote Laura von Daniels, Head of the Americas Research Division at the German Institute for International and Security Affairs, after the 2023 summit. Perhaps aware of this, G7 summits often include leaders from outside the bloc. 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, the EU, and the African Union (AU), has surpassed that of the G7. Emerging powers including Brazil, China, India, Mexico, and South Africa 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 (not including the AU or EU) 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 by 2018, 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.

There are also calls for new multilateral arrangements. Some experts previously 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 India’s democracy. While president, Trump floated the idea of a Group of Eleven, comprising the D10 countries and Russia. 

In 2021, then CFR President Richard Haass and Senior Fellow Charles A. Kupchan 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 described as the “fly-in, fly-out” nature of G7 and G20 summits.

What’s next for the G7?

Some experts acknowledge that the G7’s influence has diminished, but say that it still has value because all member countries are grappling with similar issues. “The G7 may no longer be a global agenda setter,” writes Riccardo Alcaro, Research Coordinator and Head of the Global Actors Program at the Institute of International Affairs, an Italian think tank. “Yet, insofar as it generates consensus within the U.S.-led Western camp on the conditions for coordinating with geopolitical foes such as China and Russia and reaching out to the Global South, it will retain significant capacity to shape international relations.”

The wars in Gaza and Ukraine are expected to be major agenda items at the 2024 summit. At times, the bloc has seemed divided over the Israel-Hamas War, which has killed at least 1,200 Israelis and 30,000 Palestinians, according to Israeli estimates. One month before the summit in Italy, France and Japan joined 141 other countries in voting for Palestinian membership to the United Nations. Canada, Germany, Italy, and the United Kingdom abstained from the resolution, while the United States voted against it. But just weeks later, G7 leaders appeared to be on the same page, publishing a joint statement that endorsed U.S. President Joe Biden’s cease-fire proposal.

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. 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 2024, Scholz urged Beijing to stop sending weapons to Moscow, though he drew backlash for not mentioning China’s controversial human rights track record.