 Good morning. Good morning, everyone, and welcome to the Center for Strategic and International Studies. I'm Andrew Schwartz, Vice President for External Relations here at CSIS, and I'm proud to welcome you here today. I know this is a busy news day, so we'll, to say the least, so we'll get through this briefing pretty quick. And regarding economics, Fairbore's Gidar has to leave a little bit early today, so please excuse us for that, but if any questions go unanswered, you can always contact me at hschwarz at csis.org or give us a call. We also have in front of, you should also have in front of you an article by Andrew Cuchins, who's our Russia program director that's sort of teeing up President Medvedev's visit here later in the week. Andy wrote this while he was in Moscow, where he is now, but you could also reach him later this week if you're seeking comment. We're going to talk about the G8 and G20. You also should have an addition of our Critical Questions series by Heather Conley and Stephen Morrison. And with that, I'd like to introduce my colleague, Heather Conley, who's a senior fellow and director of our Europe program, who's just going to set up the tone for this trip. And with that, I'll give it to Heather. Absolutely. Thank you so much, Andrew, and thank you all for coming. I have to say my point of reference, every time I begin to look at analysis of the G8, I always begin with the family photo from last year. And I see, well, what has changed? We have new faces and perhaps more stress lines on the faces that are still there. Obviously, this year for the G8 meeting in Huntsville, Ontario, we have two new faces, the new British Prime Minister, David Cameron, and the Japanese Prime Minister. And I'll let Charles talk a bit about the Japanese contribution. But let me, if I may, just very briefly touch on each of the leaders that will be convening at the G8 summit and sort of their approach both to the substance of the agenda as well as where they're coming from politically. I think probably the person who has the most stress lines on her face is Chancellor Angela Merkel. She's growing under great stress domestically. Her coalition has been very challenged by a series of domestic issues and obviously the great unpopularity of the bailout for Greece. But she's also under great stress within the EU, quite frankly, assuming that Germany is not playing its traditional role within the EU. And some are very anxiety-ridden about that. She will be under pressure today. She gave some outreach to the press suggesting that no Germany will not be singled out at the G8. And I think that's an interesting point of clarification. She does know she's under stress. Last year, Prime Minister Berlusconi of Italy provided some very scintillating headlines prior to the G8 summit in Italy. I think he's taken a much quieter approach, trying to stay out of the crosshairs of the market potentially and start doing some difficult austerity measures. But I think Italy and Lisa will likely touch on this. It's certainly probably the most significant underperformer as far as fulfilling its development aid pledges. And I think that will come out and has come out in the report card that has been issued. In France, it's not just about the World Cup, although that's been a great focus. President Sarkozy has been working very hard to try to improve his diminishing opinion polls. Obviously, the ban on the BRCA working through the National Assembly and his own efforts to take the economic helm and be the leader within the EU for an EU-led solution. It's important to note that next year, France will be the chair of both the G8 and the G20. So I think you'll see President Sarkozy working towards his own chairmanship in that agenda. Obviously, for Russia, President Medvedev will be coming off his visit to Silicon Valley and his bilateral with President Obama. He will certainly be talking about the economy. He had a conversation the other day with French President Sarkozy mentioning that it would be a great idea if we could enlarge the basket of international currencies, not just focus so much on the dollar. So you may see some dynamism there from President Medvedev. Obviously, Prime Minister Cameron, his first appearance at the G8 Summit, he'll be his first face-to-face with President Obama. It will be the precursor to an Oval Office meeting that Prime Minister Cameron will have with the President next month. Obviously, there will be lots of cameras pointed on that first encounter in light of the Gulf oil spill. Mr. Cameron is consumed by his own domestic situation and trying to implement some significant austerity measures. And obviously, Afghanistan, and this where some of the conversation about the recent news regarding General McChrystal, the UK just today had its 301st death in Afghanistan. This is going to be a continuing issue. Cameron was in Kabul very recently trying to ensure robust British presence there, but this will be an ongoing issue. And last but not least, Canada. Prime Minister Harper is the host to, for the first time, is trying to pull off back-to-back G8 and G20 meetings. He's done a very good job of trying to make sure those agendas are not overlapping, that they work together. He's under some political pressure himself for the cost of the security of both the G8 and the G20 is over a billion, more than the security for the Olympics in February. He's also under pressure for creating a fake lake and some of the atmospherics and the bucolic setting that becomes the G8. But he will be credited for creating, and again, Lisa will touch on this, a major maternal and child healthcare initiative that will be the G8 signature initiative coming out of this meeting. So that gives you a sense of how everyone comes to the dance as it were for the G8. And really on the economic agenda, and this is just a precursor to what will be discussed, there is more that divides the United States and Europe on the economic agenda than unites it. There's certainly unity on the security agenda and the political agenda, but there's actually great disunity on the economic agenda. And I'll just give you a very few examples. The Europeans would like very much to create a global bank levy to pay for future bank crises and bailouts. That's a no-go for the U.S., Canada and Japan. Europe is in the mood for austerity and fiscal consolidation, understandably for its debt crisis. In fact, the Germans have sort of created a preemptive austerity plan. And that is causing some discord because to coordinate how countries exit their stimulus packages will be very important. And in yesterday's call between President Obama and Chancellor Merkel, you started hearing the word, well, we have to differentiate our exit strategies, which means I think they're having a challenging time coming to an agreement on how and when you begin to end stimulus and start moving to greater fiscal consolidation. The Europeans very much have a focus on blaming the market for some of deepening the European debt crisis. And they're very focused on trying to prevent market speculation. So you're seeing where Germany and others are focusing on eliminating those elements, naked short selling, they're trying to tighten control over derivative and hedge fund activity. They see the market making this worse and the governments are losing the ability to effect where they'd like to see the outcome. Obviously, the stress test, the fact that Europe has now agreed to do some banking stress test is a victory, seen as a victory. Questions remain on the rigor of these stress tests. Questions also remain on how transparent they will be. And there's some concern in Europe that if actually we see how bad these banks are that it may actually cause increased market concerns. So a whole bunch of issues there won't be great, there'll be great conversation at the G8 as a lead up to the G20 economic conversation. But I'm not sure you're going to see much, much cohesiveness transatlantically on the economic agenda. And then finally we do this annually. We say wither the G8. Why do we have this meeting? The G8 isn't withering quite yet. It still has a robust role in security, development assistance in addition to consolidating the economic part of the agenda. I mean, if you recall in 1975, the G5 was created to talk about the economic crisis of the oil shock. And it grew and grew into a broader agenda which dealt with security, development assistance. It's not inconceivable at the G20 at some point. You'll see agenda items begin to migrate from the G8 to the G20. And in fact, the South Koreans who will host the G20 summit, the next G20 summit in November have suggested that maybe the G20 should start talking about development. This will be a fluid period, a transitional period. The G20 has to want these agenda items and they're going to have to create mechanisms to address it. But for now, the G8 will continue to play an important role in some of these broader agenda topics. But I wouldn't be surprised over time. You may see the G20 accepting more of these larger complex global challenges towards in the G20 framework. Thank you. Heather, thank you for that. That was a terrific overview. We're now going to go to my colleague, our colleague, Fair Wars Gidar, who is a distinguished scholar and senior advisor here at CSIS. You have FG as we call him, affectionately, bio in front of you. But he really is one of the leading authorities on future business trends, global economics, and international finance and banking. And I'm going to let him tell you about how this plays into the G8. Thank you very much, Andrew. And thank you, Heather, for such a wonderful start. I'll try to expand a little bit on what Heather was talking about. And last time when they met, both the G8 and the G20, there was quite a bit of consensus. The economy of the world was in trouble and they all had to do something. They were going to stimulate it and so there was much more consensus than it is this time. This time we really have three meetings, not two. I think we have the G8, the G20, and the street. And the street is going to be very important this time because the G8 and the G20 will disagree with what the street wants. And you may in fact see the street be quite a significant player in the coming week. Let me look at first on what are the key issues that are economic and global. And if you look at the key issues, the first one is financial regulatory reform, particularly regarding the development of more conservative capital requirements that Heather mentioned and more stringent regulations on liquidity. This is going to be a big deal and there's no consensus on that. And you're going to see discussions on how to handle it. And Heather mentioned about the tax levy. I'll mention that a little bit later on as well. The second one is how do we come up with sustained and balanced economic growth to deal with the persistent deficit of some countries and the persistent surpluses of the others? Read into that the U.S. and China. And finally sort of all-encompassing is what are we going to do and what about the level of deficits that these countries are generating. And that came into effect right front and center with the Greek and the Euro crises. And that's emblematic of what sustained deficit can produce. So you've got three major issues of which there is really no consensus among many other groups in the G8 and the G20. So now we sort of pare it down and go down into G8. The G8, I call them as the check writers of the world. They are the most affluent and they're writing the checks. They're writing the checks for development. So they're worried about things such as AIDS, malaria, childcare, et cetera. And I think Lisa was going to talk a little bit more about that. But they also are worried about the concerns of the developed world, which would be non-proliferation, terrorism, and security. So on those they can all sort of agree with each other. There's a question of whether they met their commitments in the past or they're just committing and not delivering, et cetera. But that's sort of the area in which the G8 feels very comfortable. As soon as you go into the three economic issues, however, that we talked about, they can't really deal with it without the G20. Each one of them looks at the G20 issues and wants to handle it in a different way. So if you look at, for example, the issue of the deficit of the Greek and the Euros and the implication of the deficit, as Heather mentioned, the Europeans want to have a bank tax levy. Transaction levies, constrained on the capital movement. That doesn't sit very well with countries that don't have a bank problem. So read into that Brazil, China, India. Even, I would say, Japan, Canada, and maybe even Russia. So there's going to be some disagreement on that. And the U.S. has basically said, look, I gave the money and the top money is coming back. So I think that's not going to go anywhere. So I agree with Heather's assessment. I think the whole issue of the tax levy is an interesting thing that the Europeans want to do, but it's not going to have any kind of track with the G20. And in fact, we saw some indication of that in June 4 or 5 in Korea, where in Busan they basically didn't have any take. However, the Europeans will say, look, we've done some stuff. We've done the stress test. Yes, they did the stress test, but they didn't divulge it. It took them a while before they divulged it. And now that they've divulged it, it's not clear whether the stress test was really stressful. There was some issue when the U.S. did the stress test that the stress test was not that stressful. Well, in Europe, it's much less stressful. And the question is, how transparent is it? Does it make sense? So yes, they've done this stress test, and they want to come up with a resolution. Remember, the banks have bought, many of the European banks have bought the papers of Spain, Italy, and more Greece. Those papers may be worthless. If it's worthless and it all comes out, then who's going to bail it out? If the governments don't want to bail it out, then they're going to tax them, and this is just not going to see it very well. This is a major issue with Europe, even though they come to the table and say, look, we've done the stress test. U.S. comes to the table and basically says, look, I've got an economy that's improving. I did the stress test. It was a pretty good stress test. My legislative branch is trying to come up with financial regulations, and the truck money is coming back. So Obama goes there actually looking pretty good, except that we've got the largest deficit of any country around the world. Maybe not as a percentage, but certainly an absolute amount. It's a huge deficit. And we're the ones who buy everything, and the Chinese are the ones that sell everything. The Chinese, the Brazilians, and the Indians come to the table in much better shape, but the main issue was going to be the foreign exchange rate. The Chinese sort of made some kind of gesture that they're going to consider changing the valuation. They're going to try to change it. The markets got very excited about it. The stock market went up. European stock markets went up. And then we sort of sat back and said, well, this is what they've been telling us all along. So what's new? Now, to be fair to the Chinese, the currency has actually appreciated. So if you look at it, I remember four or five years ago it was 7.5. I was there recently at 6.75. So that's really a significant appreciation. However, the feeling is that's not good enough, and we really need some more. And yes, it's nice that you're telling us that, but when are you going to do it? But by their gesture, the emphasis on the G20 that was going to be on the currency of the Chinese is basically somewhat dissipated, although I think it's going to come back again. The G20 is also going to talk about development. Some of these countries are now beginning to be rich. Some of them are going to start writing checks. To the extent that they're going to write checks, they want to have a say. One of the issues that sort of hasn't been talked about but periodically comes about is what about if I'm writing all the checks, why don't I have a say on the global financial and economic situation? What's their position going to be at the IMF? If they're going to be the big buyers of U.S. Treasury, if they're going to be giving a lot of money to international monetary forefront, why can't they have more of a say on how things are done at the IMF and the World Bank, which is right down the road? Finally, I'd like to talk about the street. Heather talks about the billion Canadian dollars that's being spent on security. Some of it is going to the lake. Some of it on construction that may not even finish. They're trying to put a very good face. Some people say because of internal politics in Canada, but a billion dollars is still a billion dollars. That's a lot of money. So why are they doing that? I suspect that the street is looking at this and saying you guys have failed. The G20 is supposed to be the board of directors of the global economy. The G20, according to the street, has failed. Now, the G20 looks at it and says, look, if I'm going to be benevolent and look about the social issues, et cetera, I'm going to dilute my impact. So I should really be the board of directors of the global economy. The street, however, says, look, you're missing on some key issues. The issues are if you restrict the budget, if you want to restrict the budget deficits, you're going to have to cut off a lot of benefits. What's going to happen to the labor movement? I think we're going to see some labor demonstrations in Canada. The U.S. steel workers are going to be there. Other people are going to be there. The street is going to say you've talked about environmental issues, but what are you doing about it? Yes, you're going to talk about the oil spill in the Gulf, but what about global warming? A billion dollars, I think, is because they're quite concerned the street's going to be very local. And the proof of the pudding is I read an article that they're going to have some sound cannons coming up. Now, I didn't know the Canadians believed in sound cannons. These are machines that make very, very loud noise, and up to 300 yards is practically, you know, first years. So that's part of the crowd control. Why didn't they need sound cannons? I believe that there's concern that the street's going to be quite vocal, and I believe that the street's going to say, look, you're relying on the three issues. The three issues that we talked about, the deficit, the financial regulatory reform, and the sustained economic growth, U.S. deficit, China surplus, but you've forgotten them out the concerns of society. And that's going to be a big issue. And G20 rightly will say, look, my role is the board of directors of the economy of the world. The street's going to say, well, what about social issues that are related to the world? And that's going to be one of the sort of secondary issues that we're going to see interact. Thank you very much. Thank you, Charles. Thank you, Fairboys. Charles Freeman, my colleague who is our China studies chair and former U.S. Assistant USTR for China Affairs and the Bush administration, Charles. Thanks, Andrew. Thanks, Heather. And Fairboys, you've covered a lot of ground. I guess my role is here is to add the China dimension, which seems to be present in everything that we do. So I will do that. I won't try to get... I won't, as Heather suggested, talk too much about Japan's role in G8, other than to say the interesting thing there is to watch the body language between President Obama and Prime Minister Nato-kan as this is the... There is some speculation both here in Japan that the U.S. administration was too heavy-handed in bringing down the former Prime Minister Yukio Hadayama. And there is some concern that U.S. and President Obama will be unpopular in Japan. So there's a question of how that the two leaders relate. But China, China's role in G20, which is, I think, the interesting that FG talked about and which I think a lot of people are focused on. China's role in these meetings, in the G20 meeting in particular, is still evolving. I don't think there's any consensus in China alone anywhere else that the G20 is the new, not only board of directors of the world economy, but it's also the new, effective board of directors for other issues, whether they be social issues that FG talked about or climate change or anything else. In fact, China has been pretty vociferous that those issues be kept off the agenda because China has some defensive concerns there and doesn't want another opportunity to be knocked about head and shoulders on those issues. China approaches these meetings very much with its own interests in mind. It's not yet at the point where it is prepared to cloak itself in the mantle of global leadership and take charge at the G20 or elsewhere or the UN or elsewhere. It's very much focused on its own issues, so therefore it's very defensive. One of the things that Chinese leaders really despise is being isolated in the company of their peers on the world stage. And some of the moves that FG talked about with respect to the Rem&B's exchange rate were very much, I think, politically motivated to remove the potential focus on the Rem&B as a primary issue at G20. The idea was to effectively take back, pay something forward on the Rem&B, take the focus off them, take the pressure off them, and then very much throw it back at the Europeans on the dead crisis. And I think in large part that has succeeded. Yes, I think as FG says, there's been some reading of the tea leaves and sort of parsing through the comments over the weekend from the People's Bank of China and questioning, well, that's what you've said all along, what's new here. There was a bit of a bump on Monday in terms of appreciation. A little bit of a clawback as I think very clearly the Chinese government is trying to prevent a whole lot of hot money speculation from flooding the marketplace. But I do think that if you read all of the comments that have been going on in China that there is some sincere desire and an intent to move the Rem&B. Pretty clearly, there's a lot of discussion internally in the media in China that this is the right time to begin to move the Rem&B that a lot of focus on what happened over the period of time when the Rem&B was appreciating before mid-2007 and the suggestion that exports weren't hurt, our current account surplus continued to go up. So therefore, the notion that Chinese competitiveness is being hurt by Rem&B, appreciation is wrong, there are a lot of benefits to doing it. So I think there is some sincere intention to move it and I think you will see a modest blip in movement over the course of the next six months to a year on the order of 5% perhaps. The question for the G20 is whether to completely remove the pressure on China to remove the Rem&B by virtue of what they said over the last weekend. I think if you've seen some comments by Prime Minister Harper and others coming out of the US whether it's our legislative branch or otherwise, there's still a lot of intention to say, well, we're going to keep watching you, we're going to keep focusing on this issue. We really think the Rem&B has to move. So it hasn't been completely taken off the table for G20 although I think in large part the Chinese have been effective in saying, hey, we already said we're going to move, look, we're moving, here's what we're doing, we've got some concrete stuff going on so I think they can defend their interests there. More broadly, I think what is China looking to achieve at G20? I think they're not interested at all in things like a bank levy, not particularly interested at all in some of the other nitty-gritty financial regulatory reforms that are on the table, there is no consensus. I think by and large they approach this looking at trying to figure out a way to protect their assets in the dollar and at the same time trying to defang any efforts that might be out there to rebalance the economy in ways that limit their flexibility. So they go in to this, looking at this as a political exercise, an exercise in international politics and given the lack of cohesion and consensus in G20 I think this will be very easy for them to remove, reduce any challenges to their interest that might come up, so I'll stop there. Colleague Lisa Cardi, who is the deputy director of our Global Health Project and they, if you know about Lisa's work on our Smart Global Health Commission, you can find all of that at smartglobalhealth.org. Thanks very much Andrew and thanks to all of you for being here this morning. One thing I've learned is that when you go last it's best to be really brief, so I'm just going to make three very short points of things. I think it might be useful for you all to be attentive to over the coming week and then make sure there's plenty of time for questions for the full panel. So I think the first point I'd make is that I think we're very fond of saying this is really a critical moment for and then sort of name your issue, but I think in the case of the G8, the G20 and development, this is actually really true this time around. We're five years out from the very important commitments made at Glen Eagles. Those commitments were to increase by $50 billion by now, by 2010, the general pot for development and health. And it's been a bit of a mixed bag in terms of performance. We're 60% of the way there, largely due to U.S. and U.K. leadership, but we're 40% away from that goal, and Heather mentioned Italy, which has certainly, I think, been a disappointment for many in the advocacy community. So there's a lot that remains to be done to still meet the commitments made at Glen Eagles. And we're five years out from the Millennium Development Goals Summit, which is supposed to be in 2015. Now that's important in the social and development community because there are a list of eight targets that were set for achieving greater equity and reducing poverty in the developing world, and about four of them are related to health. It's a very mixed story. There's been phenomenal progress made in getting life-saving AIDS treatments to people on the ground. We went from 400,000 people getting access to treatment about eight years ago to 4 million people having access today. And there's still a deficit of 10 million people that need treatment, but by any measure, that's very good progress. There's not been as good progress in maternal and child health, and I'll come back to that in a minute, and that's an area where the Canadians are very much stepping up to the plate. But I think by any measure, the G8 has really played a very important role in bringing added focus and attention, particularly to the health issues. Simply the fact that at this type of a briefing, I'm sitting here talking about global health, and you're taking notes is, in my view, quite amazing because I've been in this field for almost 25 years, and I could not have imagined that happening even 15 years ago. So both in terms of providing political leadership, in terms of providing resources, I mean, tremendous amounts of money have been mobilized to create things like the Global Fund to fight AIDS, TB, and malaria, which has saved almost 5 million lives over the last eight years, to launch the Global Food Security Initiative in Italy last summer, although there's still some question around how those resources are coming forward, and to really push forward with the program to eradicate polio around the world. These have all been important G8 initiatives that have been sustained by the G8. So as I look forward to this transition between the G8 and the G20, I think it's going to be very complicated for all the reasons that my colleagues have outlined, and I do really think, at least over the next five years, between now and 2015 and the achievement of the Millennium Development Goals, it's really going to be important for the G8 to continue to step up to the plate in the way it has in the past. The second area where there's really an important opportunity over the next five years and at this G8 summit is in the area of maternal and child health. The statistics here are incredibly bleak, more than 8 million children die every year from largely preventable causes. That's 1,000 kids every hour dying, which I actually had to do the math last night to make sure that was right, because when I looked at that figure, I thought that simply can't be true, 1,000 kids an hour, but it is. The story for mothers is not much better, between 350,000 and 500,000 mothers dying every year. Again, one way to think about that is if you're a mother giving birth in the developing world, your risk of dying is one in seven. If you're a mother giving birth in a northern European country, your risk of dying is one in 30,000. So again, an incredibly stark difference here, that the global community now is focused on in a different kind of way, which is certainly a very good and powerful thing. The U.S. Global Health Initiative is very much focused on maternal child health issues. The Gates Foundation has just announced a new $1.5 billion program in this area. And most importantly for the G8, as Heather has mentioned, the Canadians are putting on the table a billion-dollar initiative on this set of issues, the details of which are very unclear still at this point. But they're challenging others to come forward as well. I think the UK has said it's going to put about a billion dollars on the table. I think France has said it's going to step up in some way. Not a lot of clarity from some of the other G8 participants, which has actually led the Canadians to do something interesting. They've gone out and invited some of the traditional donor leaders on maternal and child health, specifically New Zealand and Norway, to come to the summit later this week and help get this issue more on the table. So I think it's going to be very important to look at how concretely this moves forward and how successfully the Canadians can really leverage engagement and money from others. Again, this is an issue where political leadership is imperative, where money is needed. But what is really needed is an organizational drive and focus and a sustained view, because these are problems that require 5 to 10 to 15-year solutions to actually drive forward progress in this area. And it's not a question of not knowing what to do. The health community knows what to do. And it's relatively affordable, but it's a question of getting organized and having the focus to really see it through. So my second point of something to watch is really do keep an eye on this set of maternal child health and broader health issues and particularly look for the follow-through on the commitments. The third point I'd make is around the accountability report. The G8 for quite some time now has been saying it needs to keep better track of its own commitments and how it's followed through on those commitments. And many people in the civil society, the NGO world, the street have been making that same point. So this year, for the first time, there actually has been an accountability report developed that I think looks back on the last five years of G8 commitments. It was released on Sunday evening. Different people are going to see it different ways. I mean, there's going to be folks who are going to say, can governments really truthfully evaluate their own performance? And I think that's a fair enough point. I've looked at parts of that report. And actually on some issues, there's surprising convergence between how the governments rate themselves and how the street would rate those governments and in other issues, there's a difference. But I think the thing that struck me when I read at least the health part of the report is it doesn't look forward. And I think the important question now is, how do you take something like an accountability report? And it doesn't just look at health. It looks at G8 commitments across the board, peace and security and food and development. But I think the question is, what's the plan forward? You've taken this important first step of rating yourself and looking at your achievements, but now what are you going to do to address the gaps? So those are the three things I suggest that people look forward to in the next week. Thanks. Yeah, George Condon with Congress Daily. Two questions. Last year we sat here and said the leaders had a lot of questions about President Obama's leadership. Have they reached conclusions about his leadership? And secondly, can you talk about what role trade will play on the agenda? Will there be any pressure on President Obama to do more than just talk about free trade? Well, it certainly has been, you know, looking now almost 18 months into the Obama administration, the European leaders have sort of settled in and settled down. I would suggest last summer they were all trying to get their oval office meetings. They were trying to get lots of photo ops, whether that was at the London summit in April or throughout the G8. So I think they now have a working pattern with the president. Clearly, I think there's still some room to develop that personal relationship, but I think the leaders have established a very workman-like approach. I think you're seeing a lot of transatlantic phone calls. Some of those a few weeks back, it was President Obama urging Chancellor Merkel to sign on to the trillion-dollar aid package in other times that, you know, it's obviously conferring about an issue. So they've established their rhythm. But I point to a line in the recently released National Security Strategy that I'd like to see the administration flesh out a little bit more, and that's how they cultivate relationships with allies. In this period of great tests, whether it's Afghanistan managing the global economic crisis, how do you cultivate your traditional allies? And in part, that's about the G8. How are you cultivating this group of like-minded countries to further an agenda? And I think that's where perhaps the administration could flesh out more. But I think it has developed its rhythm. The leaders are comfortable. Obviously, Prime Minister Karaman is sort of the last of the European leaders to establish that under great stress and duress, obviously, because of BP. So that will be the most fragile relationship to develop in the coming weeks. But I think for Sarkozy, Merkel, Berlusconi, the other major European leaders, they feel more confident in their relationship with President Obama. Let you take trade. Sure. Yeah, it's a great question. And if you look at the agenda that's been shared around, the trade is really notable in its absence. I think partially that's because members of the G20, the Europeans, the Asians, and the Latins can look at the calendar and realize that November 2010 is just around the corner and the likelihood that the President is going to move any kind of trade liberalization agenda forward is slim and none. So pushing that agenda too hard is probably going to yield no results at all. I have no doubt that there will be, again, a recommitment to the concept of free trade and perhaps even another tired saw sort of trying to breathe life into the Doha round. That stuff is going to ring pretty hollow, to be honest with you. And I think it's going to be, if I'm Korea at the table and I hear the President talking about trade, I kind of scratch my head and say, okay, well, how about it? So I think trade is going to be a sore point. And I have no doubt that there will be some snarky remarks at the table, but they probably won't end up in any concrete document. Just a note on kind of the President's leadership. With respect to China, there was a period, remember, over the last 18 months where we had a real dip in U.S.-China relations and then I think the Chinese and we sort of realized, well, we can't really afford to let this relationship go sour. So I think although the Chinese really viewed the President as relatively weak during his first year and there have been comments among Chinese leadership apparently sort of calling him professorial in his approach, I think there's a recognition again that this guy is, after all, the leader of the most powerful country on earth and being overly critical or sensing more weakness than probably is there is probably not to our benefit. If I may add a couple of things. One is trade, while not specifically mentioned, is one of the key issues when they talk about sustained and balanced economic growth to deal with the deficit of some countries in the surplus. That's basically trade. They're not putting it in terms of trade to make it sensitive, but they did signal the G20 that there was substantial consensus on the importance of maintaining open markets. So that is also very positive. It basically says we're not going to increase non-tariff barriers, we're not going to change barriers. So at least the statements are okay. The implementation of it, as Charles said, is going to probably get delayed a little bit. And with regard to Obama, I actually think that he is going to go to the thing being relatively successful. The economy is turning around. Torp money is being paid. Financial regulatory is being put in place. I mean, we'll talk about the Gulf, but other than that, compared to last year, Obama is going to be perceived as having done a pretty good job. Yeah, exactly. And the signal that I got in reading the press readout of the President Obama's call with Miracle sort of suggests that, well, we're going to differentiate those exit strategies. And I think they'll come up with artful terms to suggest that we're continuing to work on these issues. We haven't reached agreement. I think back in September in the Pittsburgh G20 summit, I mean, there was a feeling that, okay, corners being turned that this summit in Toronto would be a point where the leaders could say we've managed through the worst part of the storm, still lots of cleanup to do, but we've made it. And I think with the European debt crisis, with the concern echoed by some that this could cause sort of a double-dip recession and unclear where European growth rates are going, that this is not the summit to quite say, okay, we've weathered the storm. It's to say we're coming out of this in different places. We need to keep up the progress. And I think you're going to see the agenda developing really for the summit in South Korea in November to see if we really have weathered this European debt crisis. And I think the link here and obviously what I've read about the Chinese government's concern about the European debt crisis and their ability to dampen purchase of exports, this does have these global ramifications. If Spain continues to have challenges in July, they'll have a big turnover of debt. If that continues to be a problem, that affects US markets. So you're still seeing where these ripples in the pond, if you will, are still affecting them. We're not through it yet. So it's going to be a very important challenge. I watch sort of, and I know this is not the politically correct term, but I don't know what else to call it, sort of these pre-G20 caucuses, if you will, to try to manage this agenda, whether it's the BRIC countries conferring, whether it's the GA countries conferring, where it's others they're trying to manage an unruly G20 to make sure they can manage these issues. And in some cases, the management is trying to prevent something from happening, like the bank levy and things like that. So you really have a dynamism here that it's been a challenging from an analytical perspective to watch. Sure. The question is, who's going to be disadvantaged? And if the European banks are in trouble and we're paying for their trouble, why should our bank be disadvantaged because of their mistake? Without the bank levy, the European banks have to handle what's going on, but we already are in the clear. So our banks will be relatively in better shape. That's the same feeling as the Canadian banks. It's the same thing as the Japanese. And this is some of the concern that some of the European ideas, they're almost in a point sort of going unilateral a bit. Some recent German actions. If you don't manage this carefully and coordinate it, you're going to cause new problems and the global financial transactions, whether you're going to manage derivatives and hedge funds. Well, how does that disadvantage American investment and capital? So this has to be coordinated, but you don't have a coordinated position yet. So it's a very challenging moment. And it's an unintended consequence that may occur, which is exactly what Heather's saying. Thank you. Jim, from the Straits Times, a question for Charles. You know, the Chinese moves on the UN issue. Do you think that's enough to satisfy Congress and the White House and going into this G20 meeting, you know, what sort of stance do you think Obama's going to bring to bear on the UN issue at the meetings? I think the President will continue to say, you know, this is a very important issue and we are watching very closely. Will it stave off congressional legislation? Well, Chuck Schumer is still calling for a vote soon. I think in general it probably takes all the wind out of the sails of legislation over the next little bit because you will see some movement and as legislators watch that happen, they're going to say, why are we doing this again? Certainly, it probably takes it out. It takes any chance that legislation will pass through the House completely off the table. If I'm Treasury, I wait until the congressional recess and issue the report and talk a lot about sort of the technical aspects of what defines manipulation and say, according to the technical aspects, China is not a manipulator because there's another street that's paying very close attention to that and that's Wall Street and I think a signal that that Treasury is going down the direction of entering into something like a currency war is it would not be good news for those of us that want to avoid a double dip. For anyone who can answer it, some of the administration have suggested that the European countries think that the fact that the financial regulation bill has gotten so far in Congress, it's tantamount to having passed. Is this the case? This bill is obviously not going to come out before the G8 and the G20. So what is the attitude going to be in Toronto towards what our Congress is doing and whether in fact Obama has locked up at this point? Well, I think the Europeans have been educated over the last year and a half particularly about how the Obama administration manages their legislative agenda and I think they were given a very important lesson on how long healthcare took and again, as I was telling you last year, this is when the Obama administration was meeting all the new leaders and they were coming to Washington to visit with the President and they were hearing where the process was on healthcare reform but the Germans want to talk about climate change. They want to know about where is this legislative process. So I think the Europeans have been educated, if you will, in the challenges of moving complex, difficult legislation through the process. Last fall in Pittsburgh, the Europeans were expressing concern that a year after the September 2008 collapse, there was still no package that was passed that again wanting to capture the urgency. Now as we're sort of heading towards the second anniversary of Lehman Brothers, again we need the urgency, we need the focus, we don't want this global economic crisis to happen again but on the other side, the Europeans themselves have had a very difficult time developing EU-wide regulation. I mean there's endless ideas on creating a ratings agency, more supervising, and they're creating these things but they haven't reached consensus themselves so I would suggest that while they may point to the US Congress and say, you know, why haven't you almost two years after when the world stood still, you haven't done anything, Europe hasn't quite come out with all of its regulatory requirements either. Just to add to that, that's why they're unilaterally making decisions. I think they basically thought that things are not going to happen very quickly, we need to do something, we may not like what the something is, in fact we don't like what the somethings are, but they've unilaterally decided to take some steps. The paradox is that there's more European representation around the G20 table yet can they find their voice, can they influence the agenda, and I would suggest they're going to have a difficult time getting the European economic agenda past the G8, not even to the G20 yet, so first steps first. You know, this is sort of a longer, broader, more theological I think point and where we are in transitioning from the post-World War II structures that were dominated by European and American perspectives and as I said the G5 in 1975 is the perfect example where five countries were gathered in Rambouille to have a talk about how this is all going to work. Well the conversation in 2008 to 2010 has to include 20 countries, some having a dynamism to their policies and their perspective and others are trying to renew and reinvigorate their growth strategies. So we're just in a different paradigm. The problem is we are still holding on to the old because that's what we know and that's the vehicle we choose. We haven't quite created the new structures to feel comfortable in completely moving over so we are going to be in this period of time, I would argue for the next five to ten years of this very messy ambiguous transition period where you're going to have some freelancing, some ad hoc coalitions that are created around interest-based agendas and what makes Europe really uncomfortable about this is that we're moving from a value-based paradigm of those like-minded countries and we're shifting much more to an interest-based agenda where the rules of the road aren't going to be as clear as we'd like and that's what has Europe feeling very uncomfortable and when you're in a situation where you feel like you have no control and I think this is again some of the European reaction to the view of the market speculation and this is out of control, you either grab onto it and by God you're going to control it and you're going to be unilateral and you're going to put your stamp on it or you're going to let your hands go and say I'm going for a ride on this roller coaster and I'll do my best to stay in the car and not fall out when we do the loop-de-loop and that's where I think they feel, it's uncomfortable for everyone we're in this transitional period for what's been working for us for 60 odd years isn't working anymore May I add a couple of things? It's interesting that you mentioned it in that way because I think many of the Americans feel that their role is diminished as well so it's not just the European, it's an American, it's basically the old guard as opposed to the rising. The difference between, from an outsider looking in the difference between Europe and the US is the US likes to see the G20 be board of directors of the global economy, I've said that before while the Europeans, maybe not the administration but the Europeans want to see the committee to save the world now the committee to save the world needs a lot of money and unfortunately where is that money going to come from so that's kind of the dilemma so I see both North America and Europe role diminishing but the role based on the desire of the people is quite different also The last two weeks I've probably had more public outreach on the so-called US-UK special relationship it's not so special what does this all mean and it's been a very difficult conversation to have as such close allies as I said you never want to start a new relationship and creating this hopefully a good personal relationship between David Cameron and Barack Obama the last thing you want to do is in the highest stress environment where both public opinion on both sides are demanding a specific response by their leaders and it's a very populist response it's not necessarily seeking solutions to the actual problem so I think that the photo up here will be the handshake between Prime Minister Cameron and President Obama and how both leaders what their public statements will be on the oil spill as I said this is a mutual interdependence in the 21st century 40% of BP shareholders are Americans six Americans sit on their board of directors and British pension funds and tax revenues are very dependent on BP being successful so we are very mutually dependent economically on this subject and clearly BP must find a solution to the oil spill but we can't lose the side of the broader relationship and I'll get back to Afghanistan and the story that unfolds regarding General McChrystal General McChrystal also reports to NATO he reports to the Secretary General he's dual-headed he's in charge of the coalition now granted that coalition is predominantly of US forces but this issue is becoming will become I think a major challenge to David Cameron to manage that's why he went very quickly to Afghanistan to confer with his commanders the command changes in Helmand from a British command to US command that's been a bit of conversation their suffering casualties and obviously will continue as the offensive begins in Kandahar this is an ally we need to remain strong and so we have to keep BP in perspective as much as it's very difficult when you see these horrific pictures coming out finally on the oil spill President Medvedev has made a suggestion that we need a global oil fund to prevent you know to sort of create ways for clean up ecological cleanup I don't know whether he will introduce that bilaterally with President Obama at the White House or do that in the G8 setting but you will see obviously the spill over effect of this whether that's Arctic oil and gas exploration for the Russians and future drilling I mean this has got everyone focused on what the implications are of this both the spill as well as the environmental consequences sorry if in my effort to be brief and concise I overlooked some of the finer points here but I think to your first point of the role of the WHO and I think to the colleagues point here as well I think this area of cooperation around global health is a bit of a bright spot in terms of sort of multilateral collaboration and I think it is an area where the US has tried to engage strongly with European partners I think in part because the US realizes it alone cannot be the solution and I think there's also just a necessity to do that if these issues are actually going to be addressed over a 10 or 20 year horizon which is the time frame actually that's required in terms of your question on structure and WHO I don't think it's competing but I think it is a fair question of how effectively the governance structure for some of these big health initiatives has emerged and evolved over time because many of them are focused on single diseases which has yielded great results for example I mentioned some of them in the area of HIV AIDS but what they've done is also sort of silo the health systems so that while you know people might be surviving HIV better they're still dying of TB so I think there's a recognition that this is kind of the next tier of challenge that people need to go to now and that it is absolutely essential that the WHO be a part of those discussions and that there be a forum and maybe it's in the G8 or maybe it's in addition to the G8 where the check writers and the check receivers and organizations like WHO and this Global Fund to fight AIDS TB and malaria actually have a forum to have a joint plan and a joint platform for how to attack the problem Secretary General actually is convening in New York in I think October a summit on maternal and child health to get at some of these coordination issues but they're very difficult in some ways for all the same reasons coordination within the G20 might be difficult there's just lots of different interests that need to be met and to your point about Haiti I actually don't know the answer to that question I'm sorry we can try to check on it for you I think we'll have to get back to you on that one I'm sorry really that's sort of the next step G20 countries have to decide if they want a more formal transparent mechanism and this is part of the migration of the agendas if that's what the G20 countries want to do and start dealing with this in a more transparent regular process I mean we're still sort of deciding the chairmanship and when the summits are being held and things like that but that's a decision the G20 has to make and that will be an important decision because it's part of this transition period but they have not made those decisions to my understanding but if they're going to take on other issues on the agenda they're going to need some structure and process to that I'll just say the G20 was kind of the thing that was at hand in a moment of crisis so it's not necessarily the natural board of directors of the global economy let alone the global social welfare it just happened to be it was the tourniquet that was there when the bleeding was going on so I guess the question is is it going to survive as the de facto and desjure next thing probably because I don't know that there's a whole lot of interest in creating something completely new but you sort of look at the G20 membership and there are a couple of headscratchers there I love my friends in Buenos Aires but why are they on the board of directors of the global economy it doesn't necessarily make that much sense so I think given that there is some question about the fundamental nature of the G20 as that de facto club I think there's going to be a lot of questions in a longer transition period before people say well I guess it's time we finally formalize this thing and put together a secretariat and here's the formal agenda that we all agree on I think it's just too early to tell thank you thank you all for coming today there's a couple ways you can access the transcript to this one I will send it to you two it will be up at csis.org there will also be multimedia surrounding this briefing there will be video and audio and perhaps a highlights reel it will be at csis.org and also on our iTunes platform which is on the beyond campus section of Apple's iTunes thanks very much for coming