Can the G7 Survive a Fragmented World?
The Association of Foreign Press Correspondents in the United States (AFPC-USA) hosted a podcast in partnership with the Hinrich Foundation titled, “Can the G7 Survive a Fragmented World?”
The conversation examines the evolution and future of the Group of Seven (G7) as it marks roughly 50 years at the center of global economic governance. Peter Draper, Professor and Executive Director of the Institute for International Trade at the University of Adelaide, explains that the group’s informal structure allows leaders to negotiate sensitive issues — such as climate policy, financial crises, and sanctions — away from public scrutiny, helping them manage domestic political constraints.
Draper is co-editor with Andreas Freytag of The Elgar Companion to the G7. He shares that the G7 now faces mounting pressures from geopolitical shifts, including the rise of China, the emergence of BRICS, and the broader expansion of forums like the Group of 20 (G20). Draper argues that internal political divisions, particularly the impact of populist movements and changes in US leadership, are weakening the consensus that once held the group together.
The podcast episode was hosted by Roseanne Gerin, an assistant editor at the newsletter Trade Strategies Today, who has worked in journalism for more than 25 years.
This podcast episode was produced in partnership with the Hinrich Foundation. AFPC-USA is solely responsible for the content of this episode. The podcast transcript is available HERE.
Gerin asked why this was the right moment for a comprehensive companion to the G7 and what gap the project aimed to fill. Draper said the milestone itself made it a natural time to reassess the institution, noting that the group has been “at the apex of global economic governance for… just over 50 years.” The anniversary offered an opportunity to “take stock of the G7’s various achievements over the five decades of its operation.” He added that the publisher was eager for a collection examining these dynamics and that the goal was to place the organization “under the microscope from its creation, through its evolution,” evaluating its policy debates and processes over time. The book seeks to assess “the successes, the achievements, the failures,” while also considering the challenges the organization faces today and even questioning “the next 50 years of the G7 — should there be a next 50 years.”
Gerin then asked about the G7’s reputation as an informal institution and why informality remains central to how it functions. Draper said the label can be misleading. While the leaders’ summit itself is informal, it rests on a substantial amount of preparatory work. He noted that “there’s a huge amount of process that undergirds the G7 summit,” which brings together heads of state annually to discuss major issues. Before leaders meet, “a lot has been resolved,” meaning that behind the informal gathering lies a “set of formal arrangements” and extensive preparatory negotiations. In that sense, the summit’s informality works because much of the substantive coordination has already taken place through structured processes leading up to it. Draper explained that although the G7 relies on extensive preparatory work, the most important moment still comes when leaders themselves meet.
Peter Draper
The “capstone,” he said, is when heads of state sit down together, often literally “having a chat around the table” or even “going for long walks through the gardens” at the host venue. These informal settings create space for candid exchanges that formal diplomatic settings cannot easily accommodate. Such off-camera interactions are crucial because they allow leaders to negotiate directly and honestly about their political limitations. As he put it, “all sorts of bargains can be struck” in these conversations because the participants are experienced political figures who understand that reaching agreements often requires stepping “away from the glare of the cameras.” In these private discussions, leaders can speak “leader-to-leader about the constraints they’re facing and the art of the possible in relation to those constraints.” The expectation, Draper said, is that this informal diplomacy helps leaders craft agreements that might otherwise be difficult to achieve. In theory, it enables the “better construction of sometimes challenging bargains” among the G7 countries. While the final summit communiqué is “largely pre-cooked before they get there,” he noted that these spontaneous conversations can still influence outcomes, sometimes producing “substantive changes in the summit outcomes.”
Draper said many transboundary issues — especially environmental problems and climate change, which sit “top of that agenda” — are politically sensitive at home. Leaders often face domestic audiences that would react negatively if they appeared to concede too much in international negotiations. As a result, it can be difficult for them “to go to a summit and to announce that they’re making this or that concession” on issues that affect multiple countries. The informal structure of the G7 helps leaders navigate those pressures. In private conversations, Draper explained, they can work out “the kind of language, the kind of phrasing, the nuancing” needed to present compromises in ways that are politically acceptable at home. This dynamic reflects what political scientists call a two-level game: leaders negotiate internationally while simultaneously managing domestic political constraints. They must show their own publics that others are also making sacrifices — “look, these other leaders are making these sacrifices as well… we are in this together.”
Regarding the group’s origins and what lessons from the first summit at Rambouillet in 1975 still resonate today, Draper replied that “history doesn’t repeat, but it does rhyme.” The original meeting, which involved the Group of Five (G5) rather than the G7, occurred amid major economic disruptions. The background included the “Nixon shocks,” when President Richard Nixon severed the dollar’s link to gold and imposed a 10% tariff, moves that contributed to the collapse of the Bretton Woods monetary system. Those changes were compounded by a major oil shock that helped produce stagflation in the 1970s. Draper said the G5 was created to coordinate responses to those crises and to “manage the economic aftermath” through shared governance. In that sense, he argued, today’s environment echoes the conditions that gave rise to the group. He pointed to recent examples such as the G7’s coordinated release of oil reserves during the latest Gulf crisis, illustrating how the organization still acts to stabilize global markets during shocks. However, he noted that the G7’s influence today may not be decisive because the international system has changed and includes other major powers — particularly China and Russia — that shape global outcomes.
Gerin also asked about the impact of Russia’s entry into the group in 1998, when it briefly became the Group of Eight (G8), and its removal in 2014. Draper said Russia’s admission initially symbolized the success of the Western order the G7 had sought to defend. The organization began as a group of “like-minded Western leaders, all liberal Western democracies,” working to strengthen the liberal international economic order established after the Second World War with US leadership. For decades that order competed with the Soviet bloc, and Russia’s eventual participation appeared to confirm that “the West had won” and that liberal economic arrangements would dominate the future. During the early years of Russia’s membership, Draper said, the G7’s central mission became integrating the former Soviet bloc into Western economic institutions. But that trajectory changed as Vladimir Putin consolidated power and geopolitical tensions increased. A chapter in the book examines how Russia’s experience in the group produced frustration in Moscow. According to the research Draper cited, Putin and other Russian officials often felt their country was “just appendages to a G7 conversation,” lacking real influence over the group’s decisions.
Draper described the period from 1975 to 1989 as one shaped by the breakdown of the Bretton Woods system and the economic turbulence of the 1970s. During this era, the G7’s focus was largely on “post-Bretton Woods, post-global oil crisis stagflation episode adjustment and management,” while also navigating the final phase of geopolitical competition with the Soviet bloc. The next phase, from around 1990 until Russia joined the group, involved the consolidation and expansion of Western economic institutions following the end of the Cold War. In Draper’s words, this period marked “consolidation and then ultimately expansion of Western liberal arrangements.” That process was soon complicated by broader shifts in the global economy and power structure.
He pointed to several major developments that reshaped global governance structures, including “the rise of China,” the emergence of BRICS, and institutional responses to financial crises. After the Asian financial crisis, the G20 finance ministers’ process was established, and the 2007–2008 global financial crisis later elevated the G20 to a leaders’ forum. These changes reflected the growing influence of emerging economies and what Draper called “the rise of the rest.” These developments show that the G7 has been in “constant evolution in response to geopolitical developments,” including the fall of the Soviet Union, the rise of new economic powers, and a series of global financial crises. Although the organization has continually adapted, Draper emphasized that these changes occurred within “broad chunks of historical time that had some coherence.”
Gerin then turned to internal political pressures within G7 countries, asking about arguments in the book that right-wing populist governments — including in the United States and Italy — have strained the cohesion of the group and challenged the Western-led order it represents. Draper said domestic populist politics inevitably shape how leaders approach G7 negotiations. Because of the organization’s informal nature, leaders bring those political pressures directly into their discussions. As he put it, “any G7 leader facing a domestic populist problem is going to bring that into G7 deliberations.” In many cases, he argued, those movements have been manageable. Populist currents in countries such as Italy or France have not fundamentally disrupted the group’s functioning. Draper noted, for example, that Italian Prime Minister Giorgia Meloni’s government has become “somewhat mainstream” in its foreign policy positions, particularly in maintaining alignment with the European consensus on Russia.
However, Draper identified Donald Trump and the Make America Great Again (MAGA) movement as a more significant challenge. In his view, the G7 embodies the kind of international cooperation that Trump’s political movement fundamentally rejects. The group represents “globalism, the US commitment to maintain these institutions and to pay the costs of maintaining them,” ideas that he said are “anathema to many on the right of the MAGA movement.” Because of that ideological divide, Draper believes Trump’s return to power represents “a real shift in the underlying normative foundations of the G7.” He argued that the group has now entered “uncharted territory,” particularly given tensions between the United States and European allies. Draper cited Trump’s recent national security strategy, which warned Europe about “the enemy within,” as an example of rhetoric that could strain relations. For European G7 leaders, he said, it creates a difficult situation if the United States appears to treat them — or political forces within their countries — as adversaries.
When asked how he interprets the current state of transatlantic trade cooperation, Draper said the outlook is “pretty grim.” In his view, the deterioration is not limited to trade policy but extends to broader security cooperation between the United States and its allies. He pointed to recent tensions surrounding the conflict in the Gulf, noting that some allies refused to send naval assets to support a US military effort they did not back. He argued that the dynamic highlights a lesson the Trump administration may be learning: alliances require consultation and compromise rather than unilateral demands. As he put it, “you do need to cooperate with allies, and you do need them on board.” Simply issuing directives is unlikely to produce cooperation. He cited the Turnberry accord between the European Union and the Trump administration as an example of how relations have frayed. In his description, the arrangement effectively amounted to the United States telling Europe, “Here’s the price you’re going to pay. We are not going to pay anything in return, and when we say jump, you ask how high.” Such an approach, he suggested, inevitably undermines trust and willingness to collaborate. Although he believes the fundamental tension remains unresolved, Draper said the aftermath of the Iran war could shape how these relationships evolve going forward.
In response to a question about how the rise of China as a major creditor outside the Paris Club system complicates the group’s traditional approach to sovereign debt relief, Draper explained that the G7 has long played a major role in debt relief efforts for regions such as Latin America and Sub-Saharan Africa, typically through coordination among finance ministers and central bank governors. Much of that work has taken place through institutions such as the International Monetary Fund (IMF) and the World Bank, where G7 members maintain significant influence due to their large ownership shares and voting power. These structural advantages have historically given the group “a high degree of dominance over those institutions.”
Although Beijing is a member of both the IMF and the World Bank, Draper said Chinese policymakers concluded they would never be granted a dominant role in those organizations because existing powers — particularly in Europe — were reluctant to surrender influence. As a result, China has increasingly developed parallel financial structures and lending practices. These include institutions linked to China’s global development efforts as well as large-scale financing through the Belt and Road Initiative (BRI) and other bilateral arrangements. Such initiatives have sparked debate and skepticism in the West, often framed through the concept of “debt trap diplomacy.” Draper cited Sri Lanka’s Hambantota Port as one of the most frequently referenced examples in those discussions.
The emergence of these parallel systems creates a more complex environment for sovereign debt restructuring. Countries facing financial distress can now “play off the West versus China,” using competing financing options to strengthen their bargaining position. While Draper noted he is not a specialist in Chinese debt restructuring itself, he argued that the rivalry between Western institutions and Chinese lending frameworks is likely to make debt negotiations more contentious. He also observed that Western approaches to debt relief have themselves evolved. In the past, IMF assistance often came with strict conditionality requirements, but crises such as the Greek financial crisis pushed Western policymakers toward somewhat more flexible arrangements. Taken together, these developments have produced what Draper described as “a lot of fluidity” in sovereign debt management, with geopolitical competition between China and Western powers ensuring that “conflict is baked into those debt resolution processes going forward.”
Gerin then asked Draper how the G7’s role in managing systemic rivalry with Russia and China should be understood. Draper stressed that the answer is complicated by the policies of the current Trump administration, which he described as a break with previous approaches. Echoing language used by Canadian Prime Minister Mark Carney, Draper said the administration represents “a rupture of the old system and practices.” As a result, it is harder to assess the G7’s present strategy toward geopolitical rivals. He contrasted this with the period under the Biden administration, when the G7 played a central role in coordinating Western responses to both Russia and China. In the case of Russia, Draper said the group was “very effective in mobilizing a concerted sanctions campaign,” positioning the G7 “right at the apex of that effort.” Coordinated economic pressure became a key tool for responding to Russia’s actions and maintaining Western unity.
Regarding China, Draper noted that the G7 — particularly through close cooperation between the United States and Japan — developed a series of policy positions aimed at managing Beijing’s growing influence. Japan’s deep familiarity with China made it an important partner in shaping these responses. According to Draper, the G7 issued statements and pursued initiatives addressing several aspects of China’s economic system, including industrial subsidies and elements of its “state capitalist model.” These efforts reflected attempts to “manage, if you like, contain China’s rise.” However, Draper argued that the return of the Trump administration has introduced significant uncertainty into this framework. On Russia, he said it remains unclear how the administration intends to proceed with sanctions or broader policy, especially amid the current Gulf crisis. As a result, the consensus painstakingly built during the previous administration has “certainly frayed and might be broken.”
The outlook regarding China is equally uncertain. Draper said observers are “all just waiting to see” how the administration’s approach will evolve and whether the previous G7 consensus can be maintained. One reason for the uncertainty is President Trump’s strong preference for bilateral negotiations, which contrasts with the multilateral coordination that has traditionally defined the G7’s approach. Draper also noted that Trump has spoken favorably about the possibility of a “G2” structure involving the United States and China, an idea that Beijing itself has reportedly dismissed. If the international system moves away from coordinated leadership altogether, Draper suggested the world could instead resemble what political scientist Ian Bremmer has described as a “G-zero world,” in which no major power or institution effectively organizes global governance. In such a scenario, Draper concluded, a fundamental question emerges: “Is there still a G7? Will there still be a G7?”
Asked how the G7 interacts with other international groupings, particularly the G20 and BRICS, and whether those forums complement, compete with, or constrain the G7, Draper replied that the relationship is “all of the above.” He explained that the G7 itself played a crucial role in establishing the G20 leaders’ forum, especially after the 2008 global financial crisis. The first G20 summit of heads of state took place in London under British Prime Minister Gordon Brown, marking what Draper described as “a new phase in global economic governance.” Even after that shift, the G7 retained significant influence because its members often coordinated positions beforehand. In his view, the G7 has historically functioned as a caucus group, aligning priorities internally before advancing them collectively within the broader G20 framework.
Within that larger forum sits the BRICS grouping, which Draper said emerged partly in response to the dominance of Western powers in global institutions. While BRICS countries coordinate in some settings, he emphasized that they lack the shared ideological foundations that historically united the G7. Unlike the G7, which has long been built around “the normative foundations of Western liberal democracies,” BRICS is largely defined “in opposition to… G7 dominance of global economic institutions.” Even so, Draper cautioned that BRICS itself is not cohesive, since its members frequently disagree on key policy issues. As a result, the global governance landscape remains highly fluid. The G7 can still exert influence in the G20 if its members maintain a coordinated approach; Draper cited the Biden administration’s efforts to forge a coherent caucus within the G20 as an example of how such coordination can be effective. However, he expressed skepticism that the Trump administration will pursue a similar strategy. He noted, for instance, tensions created by the decision to exclude South Africa from the upcoming G20 summit, a move he said risks deepening divisions and weakening the summit process under US leadership.
Draper said the G7’s future depends above all on developments in the United States. He argued that the most important variable is “what happens in the United States… domestically in the first instance,” pointing to concerns among observers about the trajectory of US democracy. Upcoming elections — beginning with midterms and culminating in the next presidential race — will serve as critical tests that could shape how the United States approaches the international institutions it helped create after the Second World War. He also identified political developments in France as another potential turning point. He noted that the Front National, which he described as a hard-right populist movement, could win the presidency in upcoming elections. If that were to happen while the United States is already moving away from the traditional Western consensus, it could leave two core G7 members outside the group’s longstanding political alignment, further weakening its cohesion.
Draper pointed out that Canadian Prime Minister Mark Carney argued that middle powers such as Canada and Australia may need to play a larger role in preserving elements of the existing order. Draper suggested that such countries could attempt to “salvage what we can from the system,” ideally working alongside a cohesive G7 if it survives in its current form. He expressed doubt about whether that cohesion will hold. If the G7 weakens significantly, he warned, the world may face a far more uncertain geopolitical landscape — one that includes a “rising and rather belligerent… China,” lingering instability from conflicts such as the Gulf war, and a broader erosion of established global governance structures.
Draper said reporters should pay much closer attention to the domestic political motivations shaping US foreign policy. In his view, international summits like the G7 and G20 cannot be understood without examining how the US government frames them for domestic audiences. As he put it, journalists should ask “how is the US approaching its management of the G20… through a domestic political lens?” and consider “what the Trump administration [is] trying to portray domestically.” He suggested that coverage should look more closely at how US officials prepare for these summits, including the internal policy debates and bureaucratic planning that shape the country’s negotiating positions. Questions worth investigating include what positions agencies and officials intend to bring into the G20 process, whether the administration can “achieve domestic political consensus on this,” and ultimately what the United States actually wants to accomplish through these forums.
For Draper, these questions are especially important given the ideological tension between the MAGA movement and the international system that institutions like the G7 and G20 were created to manage. He noted that both organizations are fundamentally about “system management.” That creates a potential contradiction if an administration positions itself politically against the very system it is supposed to lead. Journalists, he suggested, should ask how the United States plans to reconcile that tension when it convenes global leaders.
He also pointed to practical questions surrounding the upcoming G20 summit, including what agenda the United States might set if it hosts the meeting — “what are you going to be telling them?” and “what do you want them to do?” Draper questioned whether other leaders would support such an agenda, especially amid tensions such as the reported exclusion of South Africa and what he described as declining US influence over some allies.
