In the communique adopted at the Toronto Summit in June last year, the Group of Seven (G-7) observed that, in sharp contrast to the 1970s when growth in the major industrial countries was weak and inflation high, the 1980s have seen the longest period of economic growth in post-war history. The G-7 also noted that sustained noninflationary growth has been accompanied by the emergence of large structural imbalances in the major industrial countries, exchange rate volatility, and debt-servicing difficulties in many developing countries. As at previous summits, the G-7 countries at Toronto declared their willingness to cooperate and to institute policies to solve global economic problems. They vowed to strengthen cooperative efforts to reduce spending growth in countries with large external deficits and to keep up the momentum of domestic demand in nations with large external surpluses; introduce structural reforms by removing barriers, unnecessary controls and regulations, and increasing competition; support the Uruguay Round of GATT negotiations for freer trade in manufactures, services, and farm products; adopt a case-by-case approach to debt rescheduling; and take action to protect the environment.
The Toronto communiqué, however, did not include any specific plans to deal with global economic problems. It announced no agreement on ways to settle the contentious issue of agricultural subsidies. Nor did the meeting provide a strong signal for urgent action to the crucial midterm GATT review at the end of 1988 in Montreal. But it did manage to reach a consensus on rescheduling the official debt of the world's poorest countries.
Though it did not come up with bold and imaginative approaches to deal with global economic problems, the Toronto meeting was significant from the perspective of the Asia-Pacific region. It was the first summit at which Japan had sought to play an important and visible role befitting its status as the world's second largest economy and perhaps its greatest financial power. The Prime Minister of Japan, Noboru Takeshita, reminded the leaders of the other six major industrial countries that Japan was the only Asian country at the Summit, and urged that attention be paid to the concerns of the Asian newly industrializing economies (NIEs) of Korea, Taiwan, Hong Kong and Singapore. He also put forth proposals on Third World debt and aid.