[G20 SEOUL SUMMIT 2010]G20 Leaders Chew over Issues at Working Dinner

The ball to resolve the currency dispute is now in the court of G20 leaders. All eyes are on the G20 Seoul declaration, expected to be released at 4pm on November 12.

While the G20 Seoul Summit has chosen the inclusive “Shared Growth beyond Crisis” as its slogan, an acrimonious global dispute over governmental roles in national currency values, and what some pundits fear is a looming “currency war,” has seized center stage.

Progress on this issue is likely to be seen as the litmus test of the high-profile meeting.

G20 deputy finance ministers who have been working on the official communiqu´e since November 8 have almost finalized the contents but have not yet reached agreement on the currency dispute. The deputy ministers completed their 3-day discussion by reporting the related details to the respective G20 leaders on the morning of November 11.

Questioned about easing imbalances in the global economy at the opening meeting of the B20 business summit taking place on the 11th, prior to the G20 leaders summit, President Lee Myung-bak said, “If one country fights to live, it may be helpful to that country for a while, but the global economy will go back-wards. We need international co-operation.”

Lee added that each country has its own agenda but expects an agreement at an appropriate level. He urged nations to agree upon setting the terms for a current account guideline and a timeline for making detailed plans for imp-lementation.

The G20 leaders themselves exchanged their first views on the currency issues during a welcoming dinner that was simultaneously a “Global Economy and Framework” session. This, the first official summit program for the leaders was held on the 11th at the National Museum of Korea.

▼Looms over G20 as Summit Discussions Get Underway▼

Chemistry appeared good as President Lee Myung-bak and First Lady Kim Yoon-ok greeted visiting leaders for a photo opportunity from 6pm.

The guests, who arrived in reverse order of seniority, passed through an official welcome hall on the way to the reception area. Laid out as a “Road of History,” the hall displayed some of the museum’s most valuable treasures, including a Baekje Dynasty incense burner and a Stone Age earthenware vessel. Upon reaching the dining room, the guests got a close view of historical relics placed on their banquet table.

Thirty heads of G20 states, observer nations and international organizations attended the dinner, excluding President Nicolas Sarkozy of France and President Susilo Bambang Yudhoyono of Indonesia who were late in arriving in Korea.

Once seated in the banquet hall, it was all business as the two-hour working dinner got underway from 7pm.

President Lee was flanked by U.S. President Barack Obama to his left and U.K. Prime Minister David Cameron to his right. President Sarkozy, chairman of the next G20 meeting in Paris, was supposed to sit to the left of President Lee, but seating plans were changed at the last minute as, due to domestic circumstances, the French president will arrive on the early morning of the 12th.

President Obama and President Hu Jintao of China, the heads of state most hotly engaged in the currency dispute, were strategically placed on opposite sides of the table.

In his opening declaration Lee hammered home the message of international co-operation and consensus.

“Let’s take one more step forward and come up with a concrete plan and accord for international cooperation at the Seoul summit,” he said.

He also emphasized that the world should understand that international cooperation is the only means for the global economy to grow continuously, pointing out some are skeptical that it would be hard to achieve cooperation among G20 countries as the global economy is back on track, leaving the recession behind.

But he sounded a cautiously optimistic note, saying, “We can deliver a reassuring message to the world by producing a concrete agreement on the global economy and framework during this two-day summit.”

Over dinner, the heads of state listened to a report on the state of the global economy by Dominique Strauss-Kahn, the managing director of the International Monetary Fund. They also exchanged views on the knotty current account and exchange rates issues which involve conflicting national interests.

As the leaders talked, listened and dined, G20 finance ministers, in a separate room next to the dinner hall, continued to thrash out the issues, in hopes of coming to an agreement that would enable a substantive official communiqu´e. After the dinner. details of the discussions among the leaders and among the finance ministers were passed on to their vice-finance ministers.

An official of the G20 Summit Pre-paration Committee said, “All finance ministers agreed on the currency principles previously discussed at the Gyeongju G20 Finance Ministers and Central Bank Governors Meeting, and are now striving to bring about further progress on that agreement.”

Accordingly, the principles of “market-determined exchange rate systems” and “refraining from competitive currency devaluations,” stated in the G20 Gyeongju Communiqu´e are likely to be re-emphasized in the final statement to be released by the leaders on the afternoon of the 12th.

Meanwhile, the two-day G20 business summit ended on the 11th with a press conference and closing meeting. Through a joint declaration, 120 chief executives of global businesses urged the quick settlement of the Doha Development Agenda, the restraint of protectionist tendencies, and the easing of financial regulations.

The business leaders emphasized that nations should stop government-led economic stimulus packages and give the lead to businesses. The joint declaration also called for regular business summit meetings; “We expect the framework of the Seoul business summit to advance further at [future] G20 summit meetings,” the declaration read.

turtle@donga.com

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