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| Lyon Summit Information |
Overview and Evaluation of Economic Issues
at the Lyon Summit
June 28, 1996
1. Overall Evaluation
(1) This year's Group of Seven Summit in Lyon, France, which marked the start of the fourth seven-year cycle of such gatherings, was an important and constructive meeting. In the context of the end of the cold-war structure of international relations, the rapid progress of globalization and other structural changes affecting the international community, the G-7 leaders showed their visions for a new international order looking ahead to the twenty-first century. The issue of globalization, which was the main theme at this year's summit, is an important one and one suited for high-level discussions among the top leaders; it was beneficial that they were able to project a concrete awareness of the problems involved and to come up with directions for the response to them.
(2) A major topic for discussion at Lyon was the issue of development; the G-7 leaders examined this, considering in particular the developing countries that have not been benefiting sufficiently from the globalization process. It was significant that the leaders came out with a development strategy, including the setting of output-oriented objectives based on the concept of a "new global partnership" between the industrialized and developing nations, which Japan has been advocating.
(3) With respect to economic policy coordination, the leaders affirmed the aims of achieving sustainable, non-inflationary growth and of expanding employment through appropriate macroeconomic policies and structural reforms. They also reaffirmed their commitment to maintaining and strengthening the open multilateral trading system.
(4) Japan's Prime Minister Ryutaro Hashimoto took an active part in the discussions, calling attention to the views of Asia-Pacific regions and explaining Japan's policies to contribute in such areas as development, United Nations reform, and employment, for which he received the endorsement of the other leaders.
2. Principal Topics of Discussion
(1) Employment and Growth (Macroeconomic Policy)
The global economic situation is on the whole positive, but with
many countries continuing to experience serious unemployment, the
issue of employment drew considerable concern. The leaders
affirmed the importance of sustainable, non-inflationary growth
for the sake of job creation and also the need for structural
reform aimed at achieving an economic structure in which growth
will lead to increased employment. They also noted the importance
of increased market flexibility through deregulation and of
education, vocational training, and other forms of investment in
human resources.
(2) International Monetary System
In his opening remarks, Prime Minister Hashimoto commented on
cooperation among the industrialized nations aimed at exchange
rate stability, the issues of integrating emerging economies into
international financial markets, and the problems of dealing with
the expansion of new financial channels and the development of
new financial technologies. Taking heed of considerations like
last year's Mexican financial crisis and the major fluctuations
in the value of the U.S. dollar, the participants welcomed such
developments as strengthened surveillance of individual
countries' financial conditions, improved oversight of capital
markets and other measures to prevent future financial crises,
and the strengthening of international financial institutions.
With respect to the heavily indebted poor countries, the G-7
leaders welcomed relief measures by international institutions,
including the World Bank's proposal to commit up to $2 billion.
It is of great significance that ways of coping with these
countries' most serious problems have begun to be found.
(3) Trade and Investment
The leaders affirmed the importance of full implementation of the
Uruguay Round agreements, and they expressed their strong
determination to continue negotiations in the service sector and
to actively tackle further liberalization and new issues. They
agreed to work to strengthen the confidence in and credibility of
the multilateral trading system by avoiding taking trade and
investment measures that would be in contradiction with WTO rules
and OECD codes and by using and complying with any applicable
provisions for consultation and dispute settlement. The leaders
affirmed their commitment to reaching a multilateral agreement on
investment, currently under negotiation in the OECD, by
successfully completing the negotiations by next year's OECD
ministerial meeting. They also recognized that there is a will to
address the question of the relationship between trade and
internationally recognized core labor standards.
(4) Development
The G-7 leaders agreed on the establishment of a "new global
partnership" between developing countries, developed
countries, and multilateral institutions. Under this partnership,
the developing countries will be expected to conduct responsible
policies, and the developed countries will be expected to support
the self-help efforts of the developing countries through
securing substantial flows of funds and in other ways.
Japan has been calling for setting development targets under such
a partnership with a view to achieving concrete results in areas
like the reduction of poverty and of infant, child, and maternal
mortality. This approach won the support of the other
participants and was included in the economic communiqué.
(5) United Nations Reforms
Participants in the summit proposed reforms aimed at
strengthening the function of the United Nations and concrete
proposals for the achievement of greater efficiency in its
operations, including the merger of departments responsible for
development. Japan's proposal that savings resulting from
improved cost effectiveness should be reinvested in development
programs was supported by other participants.
(6) Integrating the Countries in Transition into the
Global Economy
The leaders expressed their support for Russia's ongoing
political reform and its commitment to democracy. They noted that
economic and political reforms are mutually reinforcing and are
expected to position Russia to play a more significant role in
the global economy.
3. Japan's Positions
Japan expressed its views on the following points, which it puts emphasis on, and the other countries voiced their support of this thinking.
(1) Development
Japan proposed the "new global partnership" between the
industrialized and developing countries for the sake of
development; in order to give this concept concrete shape, Japan
called for the adoption of indicators capable of measuring
progress toward development targets with a focus on the results
that should be achieved in such areas as the reduction of
poverty, universal primary education, and the reduction of infant
and maternal mortality.
(2) United Nations Reforms
Japan's position is that reform of the United Nations should not
be for the sake of budget cutting per se but should be carried
out in such a way as to strengthen the organization's activities
for development. On this basis Japan proposed that savings
resulting from improved cost effectiveness should be reinvested
in development programs, a proposal that was included in the
economic communiqué
(3) Employment
In order to carry out in-depth discussions of employment issues,
Japan proposed that it host a meeting next year to focus on
unemployment among young and older people.
(4) Trade and Investment
Taking the view that it is important to achieve early
participation by China in the open multilateral trading system
under the WTO, Japan proposed efforts aimed at bringing China
into the WTO at an early date through intellectual support and
the promotion of dialogue with China. On the issue of
trade and the environment, Japan has proposed guidelines for
consistency between WTO rules and multilateral environmental
agreements. Japan also plans to hold a joint public- and
private-sector symposium this coming September with the aim of
strengthening dialogue with the developing countries concerning
trade and investment.
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