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[In Update] People’s Response Action against G-20
G-20 closes, pushes imbalance guidelines to 2011
: Analysts said the summit signaled a decline in U.S. power and rise of emerging nations
By Ahn Seon-hee, Staff Writer
Nov. 13, 2010
The G-20 Summit in Seoul ended without any significant progress made in resolving the “currency war.” The leaders at the summit failed to agree on any concrete measures for resolving current account imbalances and concluded the summit with a simple agreement to discuss matters again in the first half of 2011. The United States, which faces a vast current account deficit, attempted to pressure China into reducing its current account surplus with the United States by increasing the value of the yuan, but China countered that the United States should work on addressing its own issues.
On the proposed current account guidelines, the only agreement reached by the leaders was to have the International Monetary Fund (IMF) develop a specific plan and to discuss the course of action in the first half of 2011. They reached no clear agreement over any specific deadline for future agreement. The wording used with regard to exchange rates was nearly identical to that seen in the communique from the Gyeongju finance ministers’ meeting. There, ministers reached an agreement to form somewhat loosely structured “current account guidelines,” but the summit meating failed to generate any specific details, and they delayed discussions until 2011.
Also, while the then-G-5 nations of the United States, West Germany, Japan, the United Kingdom, and France all agreed on the U.S. solution with the Plaza Accord, many countries in addition to China are now making their voices heard this time, including Germany, Brazil, and Japan.
The communique also included a “Seoul Action Plan” with policy measures to be taken by individual countries for the continued growth of the global economy, as well as a “Seoul Development Consensus” with a multi-year plan for supporting the growth of developing and low-income countries.
It adopted regulations on the rapid inflow and outflow of capital as a formal agenda item, declaring, “We called on the...IMF and BIS [Bank for International Settlements] to do further work on macro-prudential policy frameworks, including tools to mitigate the impact of excessive capital flows.”
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