South Korean President Lee Myung-bak said yesterday he hopes G20 leaders will agree on how to draw up current account “guidelines” aimed at easing global imbalances but admitted a severe standoff between the major economies.
Lee, who will host the Nov. 11 and Nov. 12 summit of leaders from the G20 major economies in Seoul, praised China’s cooperation in reaching an agreement between the finance ministers and central bank governors last month to avert a “currency war.”
“I think countries that are having a severe standoff such as the United States, Europe and China will be able to reach an agreement on the basis of the principles adopted in Gyeongju,” Lee told a televised news conference.
Finance ministers and central bank chiefs from the G20 economies agreed late last month in the South Korean city of Gyeongju to shun competitive currency -devaluations, although they stopped short of setting targets to reduce trade imbalances.
Lee said the leaders would try to adopt detailed plans on strengthening the global financial safety nets by diversifying the funding mechanisms away from the IMF’s lending facilities and helping poor nations develop.
“The development agenda [promoted by South Korea] is aimed at helping strengthening the growth potentials and the ability to grow,” he said, referring to his country’s proposal to find alternative ways of helping develop poor nations.
On the pending ratification of a free-trade agreement with the US, Lee said the US would be sending an important message on its commitment to free trade if the two countries finally advance a pact signed three years ago.
“I believe concluding the South Korean-US FTA carries an important message on free trade as far as the US position is concerned,” he said, while reaffirming that he hopes to finalize the deal through a meeting with US President Barack Omaba on the sidelines of the G20 summit.
China’s undervalued yuan is hurting Asia as much as the US, and neighbors should help convince Beijing to let its currency rise, -financial experts meeting in the Philippines yesterday.
The Asian Development Bank-backed Asian Policy Forum also urged regional governments as well as G20 leaders to take steps to avert possible currency and trade wars.
The forum issued a statement calling for the G20 to discuss the currency problem at its summit in South Korea on Nov. 11 and 12.
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