Posted November. 09, 2010 10:07,
The target for current account balances, which is considered to be the biggest achievement of the G-20 finance chiefs meeting in Gyeongju, North Gyeongsang Province, last month, is on shaky ground.
U.S. Treasury Secretary Timothy Geithner, the biggest advocate of reducing trade imbalances, said after the APEC finance ministers meeting in Kyoto, Japan, that a specific figure is unlikely to be determined at the G-20 Seoul summit. Sources from the Korean government also said the same.
"The `indicative guideline,` that is the specific execution methods of the target, might not be completed at the Seoul summit," a high-ranking official said Monday. "Even reaching an agreement on the deadline for the guideline in Seoul can be a great achievement."
Though President Lee Myung-bak told media that the Seoul summit will produce an agreement on the guideline, working-level people are being more cautious.
The official added, "The Seoul summit can come to an agreement in a way that the guideline will be completed by the G-20 financial chiefs meeting next year or the G-20 summit in France. The schedule is too tight, however, to produce the final result in Seoul."
The idea is to control a trade surplus to a certain level based on GDP. Korea was the first to propose the idea at the G-20 financial ministers meeting last month and was strongly backed by the U.S.
Though a limit on the surplus within the range of four percent of GDP was proposed, Germany, Japan and other countries opposed. Instead, it was decided to make an indicative guideline later.
Geithner said after the APEC finance ministers meeting that a numeric target is neither desirable nor necessary and that the number is unlikely to be included in the G-20 summit communiqué.