Monday, November 8, 2010

G20 officials begin talks on summit statement

Finance officials from the Group of 20 have launched tough negotiations Monday in Seoul to finalize a joint statement to be issued by their leaders this week. 

Korea, the chair of the fifth G20 summit, handed out the draft to each member last week, said a key official of the Presidential Committee for the G20 Summit. 

The communiqu will be announced Friday at the close of the two-day summit. 

“Via e-mail, each country has replied with comments to the draft we’ve sent,” the official said. “Korea has just collected their revised proposal and vice finance ministers started to review each member’s position at the (Monday’s) close-door meeting.”

He said the draft covers all agendas, including the most contentious of issue of currency policy. “Their comments on the draft concern details.”

The draft has been drawn based on prior consultations among working-level officials of the chair country and the other members, he said.

The national flags of Group of 20 members stand behind a sculpture in front of the COEX, the main venue of the upcoming G20 summit, in southern Seoul on Monday. The G20 leaders’ meeting will be held on Thursday and Friday. (Yonhap News)

While the vice finance ministerial meeting will continue on Tuesday, working-level officials also known as sherpas will also hold a separate meeting on the same day. And both of the groups will convene a joint meeting on Wednesday.

The committee official said no meeting of finance ministers has been scheduled.

The revising process is expected to go on until the last-minute of the two-day summit meeting starting Thursday.

The most sensitive part would be the phrases on foreign exchange rates amid the re-escalating tension over the value of major currencies.

G20 finance ministers made a process in shifting to “market determined” exchange rates from “market oriented” in the agreement at the previous summit in Toronto.

But it seems that the market regarded both of the terms as almost same one as there is no way to sanction against members going against the agreement.

In the same vein, the U.S. has in effect scraped its earlier proposal that each member agree to limit the surplus or deficit on its current account the broadest measure of trade and investment to 4 percent of GDP.

The proposal met strong opposition from export-driven countries like Germany and China.

U.S. officials, including U.S. Treasury under secretary for international affairs Lael Brainard, also have said the scheme is inappropriate. They said, instead, “indicative guidelines” that would define a range of sustainability for each country’s current account balance.

Meanwhile, the Basel III regulations on bank capital and liquidity will likely be approved by the G20 leaders and hailed as a milestone in financial reform.

By Kim Yon-se (kys@heraldm.com)

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