G20 Leaders Likely to Agree on Trade, Currency at South Korea Summit

French President Nicolas Sarkozy places a hand on the shoulder of South African President Jacob Zuma as they talk after world leaders posed for a family photo before the start of the G20 Summit in Seoul, South Korea, 12 November 2010. Photo by EPA/BGNES

Leaders of the G20 group of major economies continue to hold talks during the summit in South Korea capital Seoul, the BBC has reported.

A spokesman for the summit has announced that the G20 leaders were likely to reach some sort of agreement on resolving trade and currency disputes.

Despite feared tension between the United States and China, a US official has expressed optimism that the summit would back a declaration addressing global economic balances.

“I think that if you look past some of the heat you’ve seen recently and you look at what’s happening in our very important relationship with China, I’m very encouraged by the progress we’ve seen,” the official said, as cited by the BBC.

In the meantime, the UK, France, Germany, Italy and Spain came up with a joint declaration, which aimed at calming down market fears over a possible future EU bail-out fund.

“Any new [bail-out] mechanism would only come into effect after mid-2013 with no impact whatsoever on the current arrangement,” the declaration said.

The G20 leaders are expected to ask the International Monetary Fund (IMF) to produce an “objective data” to identify when global imbalances pose a threat to economic stability.

However, according to the BBC, negotiators were unable to agree which indicators the IMF should measure and what countries should do to reduce global imbalances.

The UN Secretary General Ban Ki-moon is expected later Friday to urge the leader to keep their aid promises to the world’s poor despite economic uncertainties.

Despite the spokesman's statement for likely agreement on trade and currency issues, however, according to British PM David Cameron, the summit was not going to be as successful as previous meetings and the group needed to do “a lot more work” on fixing economic imbalances, the BBC reported.

US President Barack Obama has called on other nations to agree on clear rules for reducing big trade surpluses and deficits. He also expressed his opinion that a strong US recovery would be in everyone’s interest.

“The most important thing that the United States can do for the world economy is to grow because we continue to be the world’s largest market and a huge engine for all other countries to grow,” he said, as cited by the BBC.

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