G-20 leaders head into high-stakes summit amid currency row

via Yonhap NA, Seoul, Korea

World leaders will head into a high-stakes economic meeting Friday to make a final push for compromise on an intensifying dispute over currency and trade, and discuss other steps to underpin the fragile global economic recovery as Asia's first G-20 summit takes off in Seoul.

 

South Korean President Lee Myung-bak and other leaders from the world's 20 major economies will hold six sessions of discussions as well as a working lunch through the day at COEX in southern Seoul. The focus will be on the first session where the leaders are expected to tackle a widening row over currency management and trade imbalances.

 

Other issues on the agenda include strengthening the international financial regulatory system, modernizing international financial institutions, narrowing development gaps between advanced and developing nations, preventing protectionism and forging a global financial safety net.

 

It is the fifth meeting of the G-20 leaders since they first met in late 2008 to discuss joint responses to the crisis that was rocking the world economy at the time. The G-20, which includes major industrialized and emerging nations, accounts for about 85 percent of the global economy.

 

South Korea is the first Asian nation to host a G-20 summit.

 

This week's summit came amid a currency row between the United States and China as Washington has mounted pressure on Beijing to stop keeping its currency, the yuan, artificially low, which makes Chinese goods cheaper. The U.S. claims the Chinese currency policy has worsened global trade and current account imbalances.

 

Complicating the dispute was the Federal Reserve's move to inject $600 billion into the U.S. economy to lower long-term interest rates in an effort to spur growth. The move has raised the eyebrows of some countries, such as China, Germany and Brazil, which believe lower U.S. interest rates will lead to the values of their currencies rising and hurt their exports.

 

Last month, the finance ministers and central bank governors of the G-20 nations agreed to seek market-determined foreign exchange rates and refrain from competitive devaluation of currencies. They also agreed to seek every possible policy to keep current account imbalances at a sustainable level.

 

South Korea, as chair of the summit, has hoped to flesh out that deal at the summit, such as creating a guideline for sustainable current account imbalances by requiring countries to limit surpluses or deficits to a certain proportion of their gross domestic products.

 

In the run-up to the summit, vice finance ministers and personal representatives of the leaders, dubbed the "Sherpa" group, haggled for days over the current account guideline proposal, but failed to find a compromise, underscoring the difficulty dealing with the sensitive issue.

 

After the series of sessions, the leaders plan to adopt a joint declaration to summarize their discussions and include whatever agreements are made. South Korean President Lee, as chair of the meetings, will later hold a press conference to announce the statement.

 

Unless there is a breakthrough, officials said that the leaders could settle for simply calling for defusing the standoff before they meet again in France next year or making general recommendations to reduce excessive imbalances.

 

The declaration is also expected to support what is known as the "Korea Initiative" that combines the establishment of a global financial safety net with the issue of balanced development.

 

Other measures likely to go into the declaration include universal calls for a "standstill" on all forms of protectionist measures and support for carrying out reforms in the International Monetary Fund as well as new financial sector restrictions.

 

Seoul is also pushing to incorporate a pledge by G-20 members to expand support for developing countries and fuel a drive to fight corruption that has been cited for holding up progress in the world's poorest countries.

 

The summit brought together about 4,000 officials from the 20 member economies, including top leaders such as U.S. President Barack Obama, Chinese President Hu Jintao, Japanese Prime Minister Naoto Kan and Russian President Dmitry Medvedev.

 

In addition, the leaders of Spain and four other invited nations as well as top representatives of the U.N. and other international organizations will attend the summit.

 

jschang@yna.co.kr

Rights panel reviewing police action on G-20 poster graffiti

by Kim Eun-jung

via Yonhap NA, Seoul, Korea

The human rights panel is in discussions over the attempted arrest of civilians who drew graffiti on G-20 promotional posters to see if the police overreacted, its officials said Thursday.

A 41-year-old college lecturer, whom the police identified only by his last name Park, and a 23-year-old female student were caught on the spot on Oct. 31 drawing a mouse on the posters plastered in downtown Seoul.

They were put under detention at a local police station for two days but later released after a local court rejected police request for warrants to arrest them.

The actions of the police immediately drew fire as excessive and a violation of freedom of expression.

The National Human Rights Commission said that in addition to the case, it will be monitoring whether the police resort to excessive security control or engage in unreasonable crackdowns during the G-20 summit period on Thursday and Friday. Inspectors will head to the streets to monitor how the riot police handle demonstrations and rallies by civic and labor groups, it said.

Park said that the graffiti was meant to be a satire, but the police argued that what the two did was "intentional and systematic" behavior against the global economic summit.

"It seems that the police have requested the warrants as an example to the people ahead of the G-20 summit," said Park Ju-min, a lawyer for the defendants. "It is an action that limits basic rights, such as freedom of expression."

Obama urges N. Korea to abandon nuke weapons, seek improved ties with U.S.

 via Yonhap NA, Seoul, Korea

U.S. President Barack Obama Thursday urged North Korea to abandon its nuclear ambitions and refrain from provocations so it could enhance ties with the U.S. that would lead the impoverished communist state to prosperity.

"If they choose to fulfill their international obligations and commitments to the international community, they will have the chance to offer their people lives of growing opportunity instead of crushing poverty -- a future of greater security and greater respect; a future that includes the prosperity and opportunity available to citizens on this end of the Korean Peninsula," Obama said in a speech to U.S. soldiers at Yongsan Garrison in central Seoul.

About 28,500 U.S. soldiers are stationed in South Korea as a legacy of the 1950-53 Korean War that ended in an armistice, not a peace treaty. More than 360,000 American soldiers were killed in the war.

Obama flew into Seoul late Wednesday to attend the summit of leaders of the world's 20 major economies for discussion on ways for sustainable recovery from the worst recession in decades that hit the global economy in late 2008.

Obama was to have a bilateral summit with South Korean President Lee Myung-bak later in the day to discuss the resumption of the six-party talks and the ratification of a bilateral free trade deal pending over lopsided auto trade and limited shipments of beef, among others.

The six-party nuclear talks have been stalled over international sanctions on the North for its nuclear and missile tests early last year and most recently North Korea's torpedoing of a South Korean warship.

Seoul and Washington call on Pyongyang to show a commitment to denuclearization and apologize for the Cheonan's sinking that killed 46 sailors in the Yellow Sea in March. The North denies responsibility for the ship sinking.

Obama warned the North of any further provocations.

"In the wake of this aggression, Pyongyang should not be mistaken: The United States will never waver in our commitment to the security of the Republic of Korea," he said. "The alliance between our two nations has never been stronger, and along with the rest of the world, we have made it clear that North Korea's continued pursuit of nuclear weapons will only lead to more isolation and less security."

The U.S. president said his country's participation in the Korean War was a victory, not a tie.

"Because the Korean War ended where it began geographically, some used the phrase 'Die for a Tie' to describe the sacrifice of those who fought here," he said. "But as we look around at this thriving democracy and its grateful, hopeful citizens, one thing is clear: This was no tie. This was a victory. It was a victory then, and it is a victory today."

He took note of the close alliance between Seoul and Washington, "a friendship that was forged in war has become an alliance that has led to greater security and untold progress -- not only in the Republic of Korea, but throughout Asia."

"Today, the Korean Peninsula provides the world's clearest contrast between a society that is open and one that is closed; between a nation that is dynamic and growing, and a government that would rather starve its people than change," he said, describing South Korea's transition to "one of the fastest-growing, most prosperous democracies in all the world" from "little more than rice paddies and villages."

hdh@yna.co.kr

Korea - Britain: Lee, Cameron agree to bolster trade, investment

via Yonhap NA, Seoul, Korea

South Korean President Lee Myung-bak and British Prime Minister David Cameron agreed to further boost their ties in trade and investment as they met Thursday ahead of the opening of the G-20 summit.

The leaders shared the view that the free trade agreement (FTA) signed between South Korea and the European Union last month would help expand their countries' bilateral commerce, according to the presidential office Cheong Wa Dae.

"(The two leaders) agreed to work together for the Korea-EU FTA to take effect on July 1 next year as planned," it said in a press release.


Lee and Cameron also exchanged views on "the two countries' close cooperation in their preparations for the G-20 summit" and "expressed satisfaction with their friendly and cooperative bilateral relations, which continue to develop across all areas based on the common principles of democracy and market economy," it added.

Two-way trade amounted to US$6.7 billion last year, with South Korea exporting $3.8 billion worth of goods, including wireless phones, ships and autos. Imports from Britain, comprising mainly of steel parts, medicine, medical supplies and alcoholic beverages, reached $2.9 billion.

Britain was the largest investor in South Korea last year, spending $10 billion in the banking, insurance and retail sectors, among others, while South Korea invested $5.46 billion in Britain's sales, distribution, shipping and financial services sectors.

hague@yna.co.kr

Seoul summit to help solidify G-20 as regular gathering

via Yonhap NA, Seoul, Korea

The Seoul summit of the Group of 20 major economies is expected to establish the G-20 as a regular gathering of leaders to handle key global economic issues and set rules for sustainable growth, government sources said Thursday.

The local summit preparation committee and the finance ministry said there is a good chance that G-20 leaders will announce a move to hold a summit meeting on a regular basis like the G-7 meeting of advanced industrialized economic, the Asia-Pacific Economic Cooperation and the Asia-Europe Meeting.

"The G-20 has already established itself as a 'premier forum' for economic issues, and since host countries for the 2011 and 2012 summits have been set, there is wide support for the meeting to be held regularly in the future," a government official said.

Originally, the G-20 was a gathering of finance ministers but gained prominence when leaders met in Washington in November 2008 to tackle the global financial crisis triggered by the collapse of U.S. investment giant Lehman Brothers earlier in the year.

Leaders from the Group of 20 advanced and emerging economies and international organizations such as the United Nations have since met in London, Pittsburgh and Toronto, during which the G-20 has proven its worth by handling both crisis situations and helping to lay the foundation for how the global economy should grow in the future.

"The summit has shown it can solve critical problems not only in times of crisis, but in a post-crisis environment as shown by the agreement reached during the Gyeongju finance ministers meeting last month when members moved to prevent the currency issue from getting out of hand," he said.

To turn the G-20 summit into a regular gathering, efforts are underway to create a permanent secretariat. At present, the G-20 does not have a permanent secretariat, and host countries take turns coordinating the summit and various agenda items.

Initially, there were calls to operate an "online secretariat" that may be built up into a more permanent body in the future.

In addition to the G-20 summit, officials here said that efforts are underway to institutionalize the G-20 Business Summit so that it can be held alongside the meeting of global leaders.

France has already said it wants to hold a gathering of entrepreneurs similar to meetings held in Seoul. Businessmen can coordinate their agendas with government officials to tackle issues facing the global economy, they said.

yonngong@yna.co.kr

G-20 Seoul Declaration to call for more effort to resolve currency row

by Lee Joon-seung

via Yonhap NA, Seoul, Korea

The Group of 20 countries are expected to call for a resolution to the currency row before France hosts the next global economic leaders meeting in late 2011, government sources said Thursday.

The local summit preparation committee said the Seoul Declaration, to be announced Friday at the conclusion of the two-day gathering, is expected to fully endorse the Gyeongju communique agreed upon by finance ministers from the G-20 countries last month, although it is not expected to elaborate on a clear solution to the dispute.

The finance ministers reached an understanding to move toward a more market-determined exchange system that reflects underlying economic fundamentals and to refrain from competitive devaluation of currencies. They said countries should pursue a full range of policies conducive to reducing excessive imbalances to sustainable levels.

The communique also agreed that advanced countries will be vigilant against excess volatility and disorderly movements of exchange rates in order to help mitigate the risks facing some emerging economies.

Summit organizers said that while talks had been held to consider placing a cap on current account imbalances detrimental to sustainable growth, opposition has made it hard to reach consensus so that it can be reflected in the final statement. The United States, supported by South Korea, called for a numerical limit but the move ran into opposition from countries such as China, Japan and Germany.

"Because of the present opposition, leaders from the 20 largest economies may agree on a compromise that calls for a resolution to the standoff before the next G-20 meeting takes place," said a source who declined to be identified. He pointed out that France has already expressed a willingness to tackle the critical agenda to preempt the possibility of a full-fledged trade war from erupting.

The official said that before a viable solution is reached next year, countries could be asked to announce a detailed action plan with the International Monetary Fund (IMF) to review feasibility and set up an early warning system to check for excessive imbalances.

In addition, the Seoul Declaration may make recommendations to reduce imbalances for both countries that maintain large current account surpluses and those with chronic deficits.

"A so-called Seoul Action Plan that could recommend country-specific currency and current account policies, may be included in the statement at the conclusion of the summit," the official said.

Related to the move to set future goals instead of concluding the matter in Seoul, Sakong Il, head of the preparation committee, said Tuesday that reaching an accord on when to start or conclude talks on resolving the imbalance issue should be seen as a significant achievement in itself.

In addition to the currency standoff that has received considerable media attention, local organizers said the G-20 leaders will support the Korea Initiative that combines the establishment of a global financial safety net with the issue of balanced development.

Other measures to be included in the declaration are universal calls for a "standstill" on all forms of protectionist measures that can affect trade, and support for the decision to carry out reforms in the IMF as well as new financial sector restrictions as outlined by the Basel III requirement reached in September.

Seoul, as chair of this year's summit, is also pushing to incorporate a pledge by G-20 members to expand support for developing countries and fuel a drive to fight corruption that has been cited for holding up progress in the world's poorest countries.

yonngong@yna.co.kr

Lee, Obama to discuss trade, N. Korea in summit talks

by Lee Chi-dong

 

via Yonhap NA, Seoul, South Korea

 

11 November 2010

 

South Korean President Lee Myung-bak and his U.S. counterpart Barack Obama will hold bilateral summit talks Thursday expected to focus on trade and regional security issues, just ahead of the opening of the G-20 Seoul Summit, officials said.




Air Force One arrives in Korea.
(Credit: Yonhap)

 

The Lee-Obama meeting will be the first since Obama's Democratic Party suffered heavy defeat in mid-term elections last week.

 

It is uncertain whether Obama will present or signal a shift in Washington's approach toward North Korea to end their protracted stand-off and resume the six-party talks over Pyongyang's nuclear weapons program.

 

The leaders plan to "reaffirm unswerving commitment" to the Seoul-Washington alliance and discuss ways to denuclearize the Korean Peninsula, a South Korean presidential official said on the customary condition of anonymity.

Keen attention is also being paid to whether Lee and Obama will be able to announce the conclusion of a bilateral free trade agreement (FTA), signed in 2007 but yet to be ratified by respective legislatures.

 

The official said it is hard to predict whether the two countries would be able to reach an accord on the matter.

 

Trade officials from the two sides have been in intensive consultations over Washington's demand that Seoul lower the trade barrier for U.S. autos and widen its market to American beef.

 

South Korea has hinted at the possibility of some concessions on the auto trade but ruled out any discussion over beef. The Lee Myung-bak administration was hit hard in its early months in office by weeks of fierce street protests and candlelight vigils against its decision to resume American beef imports despite fear of mad cow disease. It has since banned the imports of U.S. beef from cattle older than 30 months.

 

The South Korean president will also hold one-on-one talks with Chinese President Hu Jintao, British Prime Minister David Cameron, German Chancellor Angela Merkel and Brazilian President Luiz Lula da Silva on the sidelines of the two-day G-20 session.

 

He is due to meet bilaterally with French President Nicolas Sarkozy on Friday and Turkish Prime Minister Recep Tyyip Erdogan on Saturday.

 

lcd@yna.co.kr