Obama urges cooperation as G20 opens amidst finger-pointing and stalling tactics (+ analysis); Thousands protest Japan's plans to join TPP; Kenyan court rules it has no jurisdiction over pirates; EU to work together on energy security and efficiency; and more
Top of the Agenda: Obama Urges G20 Cooperation amid Skepticism
US President Barack Obama urged the G20 to embrace global cooperation (Reuters) on economic growth as leaders gathered in Seoul, South Korea, while deemphasizing heavily criticized US economic policies. In a letter to G20 leaders Tuesday, Obama said, "When all nations do their part--emerging no less than advanced, surplus no less than deficit--we all benefit from higher growth." But diverging national policies since the financial crisis have called into question the effectiveness of the G20 (NYT) in cultivating cooperation. Growing international concern about the US Federal Reserve's recent move to buy $600 billion in Treasuries is strengthening resistance to US solutions to global imbalances. Some economists say countries like China and Germany are using the issue to divert attention from their own contributions to imbalances. Meanwhile, countries are also loath to cede national sovereignty on G20 efforts to create global recovery and resolution plans for systemically important banks (WSJ). The G20 is expected to defer a decision on whether these institutions should be held to a globally set capital surcharge. It also plans to delegate many tasks on addressing threats to the financial system to national regulators, believing a harmonized global approach would be too complex (FT).
Analysis:
In the Japan Times, Jamie Metzl and Zachary Karabell say one imperative for the G20 will be moving forward with multilateral trade agreements, particularly by completing the Doha Round of trade negotiations.
In the Financial Times, George Magnus says domestic political pressures, especially in China and the United States, will prevent G20 leaders from striking a "grand bargain" to resolve global imbalances
A New York Times editorial says while the Fed's quantitative easing plan is not ideal, the G20 should realize the alternative is prolonged stagnation, or the United States turning "off one of the main sources of global demand and global growth."
The Federal Reserve's move to inject an added $600 billion into the banking system is bad policy, straining the international monetary order and US credibility abroad, writes CFR's Sebastian Mallaby.
Background:
This Backgrounder examines the roots of US-China economic imbalances.
PACIFIC RIM: Chinese Credit Agency Cuts US Debt Rating
A leading Chinese credit agency, Dagong Global Credit Rating, cut its rating of US debt (Xinhua) in response to what it sees as deliberate devaluation of the dollar by quantitative easing.
Japan: Thousands of people staged a rally Wednesday in central Tokyo to voice their opposition to Japan's steps to join a US-backed trans-Pacific free trade agreement (JapanTimes), saying it would destroy the country's agriculture sector.
ELSEWHERE:
- Obama Lauds Indonesia for Religious Tolerance
- Kenyan Court Deals Blow to Piracy Convictions
- EU Unveils Ten Year Energy Strategy
This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org