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G-20 did not reach deal on imbalances, to try again next yearLeaders of the Group of 20 nations failed to reconcile their positions on the substantive issues but agreed to try to resolve their differences over currencies and trade imbalances over the course of the next year.
Facing the prospect of making no progress on “Currency Wars” the G-20 agreed a vague set of “indicative guidelines” to enhance the existing international process aimed at generating more balanced Global growth.
“These indicative guidelines composed of a range of indicators would serve as a mechanism to facilitate timely identification of large imbalances that require preventive and corrective actions to be taken,” the G-20 communique' stated.
The leaders also set a timetable of Y 2011 for the guidelines to be assess with the help of the International Monetary Fund.
Shortly after the communique' was issued neither leaders, finance ministers nor representatives of international organizations in Seoul were able to explain how the guidelines would help countries with irreconcilable differences find common cause.
Participants told the FT that the vague language of the communiqué was agreed only after “fractious” all night negotiating.
G-20 officials said South Korea failed to broker agreement between the US and China on trade imbalances, but the US, Britain and Canada insisted on new language in the communiqué to avoid the G-20 slipping backwards. The compromise was the vague language on indicative guidelines which had little meaning. “You can tell how difficult the negotiations were by how bad the language was,” said one British official.---Paul A. Ebeling, Jnr. www.livetradingnews.com
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