November 12, 2010 12:14
Leaders of G20 nations in Seoul are heading for the conclusion of their summit. President Lee Myung-bak spoke of progress on Friday but offered no details ahead of a G20 communique to be issued later covering fiscal and monetary policy and other issues.
Lee's statement about "big progress" achieved by negotiators representing the G20 nations who worked through the night came at the beginning of a morning plenary session here in Seoul.
In referring to the work of "sherpas" -- the personal representatives of heads of state who do most of the preparatory work at such summits -- he provided no details.
G20 members have been divided about trade imbalances and large deficits in importing nations such as the United States, as well as surpluses in exporting nations such as China and Germany.
A draft communique at the end of the summit is widely expected to paper over major differences that were highlighted in the run up to this G20 summit, and will not likely end tensions between members over currency and trade policies.
On exchange rates, a statement is expected to contain language about the need to refrain from devaluation or undervaluation of currencies to achieve competitive objectives, an issue of concern to U.S. President Barack Obama regarding China's currency policies.
It would likely call for establishing guidelines to measure imbalances in the global economy, and endorse an approach settled upon by G20 finance ministers in October that included language urging overall movement toward more market-determined exchange rates.
A final statement would also likely pledge efforts to close the gap between G20 nations with large trade surpluses and those with big deficits, but would not include specific targets proposed by the United States.
The final G20 statement will also not call for any specific pressure on China to accelerate the rise in value of the yuan.
The communique will also address efforts to conclude the Doha round of trade negotiations. A Chinese government spokesman said emerging economies should have a stronger voice in international financial institutions, and called for reductions in development imbalances.
At Friday's morning session of the G20, Obama entered the conference hall with Russian President Dmitry Medvedev, and was seen speaking with his Treasury Secretary Timothy Geithner, and with Germany Chancellor Angela Merkel, and with President Lula DaSilva of Brazil.
After their morning meeting, G20 leaders will head into a working lunch, and then an afternoon plenary session, before holding a news conference at the conclusion of the summit.
The G20 is also expected to endorse a new system under which the International Monetary Fund would develop indicators to identify when imbalances pose a threat to global economic stability.
In some ways this has been a frustrating G20 for Obama, who failed to achieve final agreement with Korea before the summit on a Free Trade Agreement concluded in 2007 under his predecessor George W. Bush.
The president and Geithner have also faced criticism over the decision by the U.S. Federal Reserve to pump US$600 billion into the U.S. economy.
Obama had predicted on his arrival in Seoul a broad-based consensus about the direction G20 nations need to go to avert another global financial crisis, though he acknowledged differences between countries on particular strategies.
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