G20 talks go down to the wire

SEOUL - Discussions on a joint statement by Group of 20 (G20) leaders were going down to the wire Friday with negotiators at odds over the wording to be used to address currency disputes.

But the latest drafts also suggested the leaders of the world’s 20 largest economies would paper over many of their differences, delegating many of the most contentious details to future meetings of their finance ministers.

Negotiators had agreed on the need to “move towards more market-determined exchange rate systems that reflect underlying economic fundamentals” and “refrain from competitive devaluation of currencies”.

But a reference to the need “to avoid keeping currencies undervalued for competitive reasons” was left in square brackets, meaning there was still no agreement on whether to include it in the final draft to be issued Friday, the last day of the two-day summit.

Leaders acknowledged they should reduce “excessive external imbalances” and keep current account imbalances within “sustainable levels”. But US plans to introduce numerical limits on such imbalances were shelved. Instead, finance ministers and central bankers would be instructed to draw up guidelines over the coming years.

The G20 heads of state and government were also to provide a political endorsement to an overhaul of the International Monetary Fund (IMF) designed to reflect the new world order by giving more weight to developing countries such as India and China.

The G20’s final declaration was also expected to endorse new rules for bank liquidity to prevent a repeat of the 2008 global financial crisis as well as calls for the current round of World Trade Organisation talks on trade liberalisation to be completed in 2011, 10 years after they began.