Wednesday, November 17, 2010

The G20's Twenty Agendas

Background - G20 issues

Here is an article that can help you get a knack of international issues discussed in the G20!! It also summarizes the stances of each country. I hope it would be of great help :)

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G20 Communique, November 2010


  • The G20 leaders' declaration from the G20 Summit in Seoul, Korea was released on November 12, 2010. This copy is provided by the Guardian (UK).
    1. We, the Leaders of the G20, are united in our conviction that by working together we can secure a more prosperous future for the citizens of all countries.
    2. When we first gathered in November 2008 to address the most severe world recession our generation has ever confronted, we pledged to support and stabilize the global economy, and at the same time, to lay the foundation for reform, to ensure the world would never face such upheaval again.
    3. Over the past four Summits, we have worked with unprecedented cooperation to break the dramatic fall in the global economy to establish the basis for recovery and renewed growth.
    4. The concrete steps we have taken will help ensure we are better prepared to prevent and, if necessary, to withstand future crises. We pledge to continue our coordinated efforts and act together to generate strong, sustainable and balanced growth.
    5. We recognize the importance of addressing the concerns of the most vulnerable. To this end, we are determined to put jobs at the heart of the recovery, to provide social protection, decent work and also to ensure accelerated growth in low income countries (LICs).
    6. Our relentless and cooperative efforts over the last two years have delivered strong results. However, we must stay vigilant.
    7. Risks remain. Some of us are experiencing strong growth, while others face high levels of unemployment and sluggish recovery. Uneven growth and widening imbalances are fueling the temptation to diverge from global solutions into uncoordinated actions. However, uncoordinated policy actions will only lead to worse outcomes for all.
    8. Since 2008, a common view of the challenges of the world economy, the necessary responses and our determination to resist protectionism has enabled us to both address the root causes of the crisis and safeguard the recovery. We are agreed today to develop our common view to meet these new challenges and a path to strong, sustainable and balanced growth beyond the crisis.
    9. Today, the Seoul Summit delivers:
    • the Seoul Action Plan composed of comprehensive, cooperative and country-specific policy actions to move closer to our shared objective. The Plan includes our commitment to:
    - undertake macroeconomic policies, including fiscal consolidation where necessary, to ensure ongoing recovery and sustainable growth and enhance the stability of financial markets, in particular moving toward more market-determined exchange rate systems, enhancing exchange rate flexibility to reflect underlying economic fundamentals, and refraining from competitive devaluation of currencies. Advanced economies, including those with reserve currencies, will be vigilant against excess volatility and disorderly movements in exchange rates. These actions will help mitigate the risk of excessive volatility in capital flows facing some emerging countries;
    - implement a range of structural reforms that boost and sustain global demand, foster job creation, and increase the potential for growth; and
    - enhance the Mutual Assessment Process (MAP) to promote external sustainability. We will strengthen multilateral cooperation to promote external sustainability and pursue the full range of policies conducive to reducing excessive imbalances and maintaining current account imbalances at sustainable levels. Persistently large imbalances, assessed against indicative guidelines to be agreed by our Finance Ministers and Central Bank Governors, warrant an assessment of their nature and the root causes of impediments to adjustment as part of the MAP, recognizing the need to take into account national or regional circumstances, including large commodity producers. 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. To support our efforts toward meeting these commitments, we call on our Framework Working Group, with technical support from the IMF and other international organizations, to develop these indicative guidelines, with progress to be discussed by our Finance Ministers and Central Bank Governors in the first half of 2011; and, in Gyeongju, our Finance Ministers and Central Bank Governors called on the IMF to provide an assessment as part of the MAP on the progress toward external sustainability and the consistency of fiscal, monetary, financial sector, structural, exchange rate and other policies. In light of this, the first such assessment, to be based on the above mentioned indicative guidelines, will be initiated and undertaken in due course under the French Presidency.
    • a modernized IMF that better reflects the changes in the world economy through greater representation of dynamic emerging markets and developing countries. These comprehensive quota and governance reforms, as outlined in the Seoul Summit Document, will enhance the IMF's legitimacy, credibility and effectiveness, making it an even stronger institution for promoting global financial stability and growth.
    • instruments to strengthen global financial safety nets, which help countries cope with financial volatility by providing them with practical tools to overcome sudden reversals of international capital flows.
    • core elements of a new financial regulatory framework, including bank capital and liquidity standards, as well as measures to better regulate and effectively resolve systemically important financial institutions, complemented by more effective oversight and supervision. This new framework, complemented by other achievements as outlined in the Seoul Summit Document, will ensure a more resilient financial system by reining in the past excesses of the financial sector and better serving the needs of our economies.
    • the Seoul Development Consensus for Shared Growth that sets out our commitment to work in partnership with other developing countries, and LICs in particular, to help them build the capacity to achieve and maximize their growth potential, thereby contributing to global rebalancing. The Seoul Consensus complements our commitment to achieve the Millennium Development Goals (MDGs) and focuses on concrete measures as summarized in our Multi-Year Action Plan on Development to make a tangible and significant difference in people's lives, including in particular through the development of infrastructure in developing countries.
    • the Financial Inclusion Action Plan, the Global Partnership for Financial Inclusion and a flexible SME Finance Framework, all of which will significantly contribute to improving access to financial services and expanding opportunities for poor households and small and medium enterprises.
    • our strong commitment to direct our negotiators to engage in across-the-board negotiations to promptly bring the Doha Development Round to a successful, ambitious, comprehensive, and balanced conclusion consistent with the mandate of the Doha Development Round and built on the progress already achieved. We recognize that 2011 is a critical window of opportunity, albeit narrow, and that engagement among our representatives must intensify and expand. We now need to complete the end game. Once such an outcome is reached, we commit to seek ratification, where necessary, in our respective systems. We are also committed to resisting all forms of protectionist measures.
    10. We will continue to monitor and assess ongoing implementation of the commitments made today and in the past in a transparent and objective way. We hold ourselves accountable. What we promise, we will deliver.
    11. Building on our achievements to date, we have agreed to work further on macro-prudential policy frameworks; better reflect the perspective of emerging market economies in financial regulatory reforms; strengthen regulation and oversight of shadow banking; further work on regulation and supervision of commodity derivatives markets; improve market integrity and efficiency; enhance consumer protection; pursue all outstanding governance reform issues at the IMF and World Bank; and build a more stable and resilient international monetary system, including by further strengthening global financial safety nets. We will also expand our MAP based on the indicative guidelines to be agreed.
    12. To promote resilience, job creation and mitigate risks for development, we will prioritize action under the Seoul Consensus on addressing critical bottlenecks, including infrastructure deficits, food market volatility, and exclusion from financial services.
    13. To provide broader, forward-looking leadership in the post-crisis economy, we will also continue our work to prevent and tackle corruption through our Anti-Corruption Action Plan; rationalize and phase-out over the medium term inefficient fossil fuel subsidies; mitigate excessive fossil fuel price volatility; safeguard the global marine environment; and combat the challenges of global climate change.
    14. We reaffirm our resolute commitment to fight climate change, as reflected in the Leaders' Seoul Summit Document. We appreciate President Felipe Calderón's briefing on the status of the UN Framework Convention on Climate Change negotiations, as well as Prime Minister Meles Zenawi's briefing on the report of the High-Level Advisory Group on Climate Change Financing submitted to the UN Secretary-General. We will spare no effort to reach a balanced and successful outcome in Cancun.
    15. We welcome the Fourth UN LDC Summit in Turkey and the Fourth High-Level Forum on Aid Effectiveness in Korea, both to be held in 2011.
    16. Recognizing the importance of private sector-led growth and job creation, we welcome the Seoul G20 Business Summit and look forward to continuing the G20 Business Summit in upcoming Summits.
    17. The actions agreed today will help to further strengthen the global economy, accelerate job creation, ensure more stable financial markets, narrow the development gap and promote broadly shared growth beyond crisis.
    18. We look forward to our next meeting in 2011 in France, and subsequent meeting in 2012 in Mexico.
    19. We thank Korea for its G20 Presidency and for hosting the successful Seoul Summit.
    Essential Documents are vital primary sources underpinning the foreign policy debate.
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Trade imbalances; G20 at Seoul, South Korea

 
Currently I had the opportunity to research in-depth on the several financial issues to be discussed in the G20 Summit-level talks held in Seoul, Korea. Trade imbalance is one of the key issues among several other agendas such as IMF reform, stabilization of currency rates, and the creation of a global safety net.

Enjoy!! :) This is an article on trade imbalances.
 
The Mirage of Lower Trade Imbalances
By FLOYD NORRIS

WHEN the going gets tough, governments complain about trade.
The meeting of the G-20 in Seoul, South Korea, this week was dominated by concerns about world trade, which has rebounded after falling sharply during the credit crisis and global recession. With the rebound, trade deficits and surpluses, which had appeared to be falling, have begun to rise again, setting off complaints from numerous countries that others are trying to hold down the value of their currencies to gain a trade advantage.
The apparent shrinkage of trade imbalances, usually presented as a percentage of gross domestic product, was in significant part a mirage caused by the plunge in trade. After all, if world trade went to zero, so would surpluses and deficits.
Looked at in another way, by comparing the value of each country’s exports with its imports, the declines were not nearly as sharp, and in some cases vanished altogether. Germany’s balance of payments — a figure largely made up of the trade balance — fell from 8 percent of G.D.P. in late 2007 to 3.8 percent in early 2009, for example, only to recover to 4.4 percent in the latest data. But, as the accompanying charts show, its total exports were about 20 percent larger than its imports throughout the period.
Similarly, the United States’ balance of payments deficit fell to as low as 2.4 percent of G.D.P., less than half what it was a few years earlier. But the improvement was far more modest when looked at in terms of trade. The country exported 41 percent less than it imported in 2007, compared with 34 percent less in the most recent 12 months.
As can be seen in the charts, Germany may have benefited over the last decade from the fact that other members of the euro zone were becoming less competitive in exports. France was exporting more than it imported when the decade began; now its exports are running 12 percent behind imports. Italy went from relatively small surpluses to relatively small deficits.
Not shown are some of the peripheral members of the euro zone, which have been robbed of competitiveness by inflation. Greek exports are 60 percent lower than imports, and that ratio has improved lately only because it is less able to afford imports. The figures for Portugal and Spain are 36 percent and 23 percent, respectively. Had there not been a euro, it is probable that the value of the German mark would have risen relative to that of other European nations, reducing the competitive advantage Germany now enjoys.
There were some significant changes in trade ratios during the downturn. Japan’s trade surplus briefly vanished, although its export/import ratio has recovered in recent months. China’s gap did narrow, although it now seems to be rising again. India’s substantial trade deficit widened, and its ratio of exports to imports is now lower than that of the United States.
There has been little talk of that, however. In part, it is because the figures shown are for trade in goods, not services, an area where India is strong. But it also reflects the fact that India has been importing capital as it grows, offsetting the trade numbers.
With much of the developing world now growing more rapidly than the developed countries, there has been a rush of capital into many of them, touching off worries that their currencies will become overvalued and their terms of trade worsen. That appears to have happened in Brazil, where the rising value of the real has been accompanied by a sharp reduction in the export-import ratio. Some countries are beginning to impose various forms of capital controls in an effort to keep that from happening to them.


source: NY times
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