G-20 Leaders: Yardsticks Needed For Trade Imbalances
STEVE INSKEEP, Host:
Scott, what bothers the leaders about the trade imbalances most?
SCOTT HORSLEY: This is how President Obama described it during a post-summit news conference.
BARACK OBAMA: Many advanced economies are growing too slowly and not creating enough jobs. Some countries are running large surpluses, others running large deficits. Put simply, we risk slipping back into the old imbalances that contributed to the economic crisis in the first place and which threaten global recovery.
INSKEEP: And Scott, what can the leaders agree to do about this?
HORSLEY: Well, they have not yet agreed what to do about these imbalances. What they have agreed to do is develop some yardsticks to help them know when a country is running too big a deficit or too big a surplus. As of now, they have not attached any numbers to that yardstick. There had been talk maybe they would say if a deficit was four percent of GDP, that would be the trigger. They're not saying that yet, but a senior administration official tells us eventually there are going to have to be some numbers attached to these yardsticks. What the G-20 members have agreed to do is develop the yardsticks sometime in the first half of next year and then actually start measuring countries for deficits and surpluses sometime in 2011.
INSKEEP: Okay. I've got this image in my mind, Scott. A yardstick, no numbers, it's blank. It's a piece of wood.
(SOUNDBITE OF LAUGHTER)
INSKEEP: They also pledged to, quote, "refrain from competitive devaluation of currencies." Would you translate that for us, please?
HORSLEY: Ironically, in the run-up to this summit meeting, we were hearing criticisms leveled against the U.S., that the Fed's action to prop up the U.S. economy was artificially devaluing the dollar, the same complaints that the U.S. has leveled against China. President Obama's retort is the Fed's intention was not to artificially devalue the dollar, and anyway, the best thing the U.S. can do for the world economy is to grow faster, he says.
INSKEEP: We're about to hear from NPR's Mara Liasson about the domestic political effects of the election the Democrats lost last week. But you're there in Seoul with the president. How has it affected his international standing, that the president was delivered what he called a shellacking?
HORSLEY: He insists that he has not been handicapped by that. He reminds reporters that even when he first came into office at the height of his popularity, the G-20 didn't necessarily fall in line behind what the United States wanted. And he joked that it was difficult talking to the Chinese president about currency disputes even when his polling numbers were 20 points higher.
INSKEEP: NPR's Scott Horsley in Seoul, South Korea. Scott, thanks for your work.
HORSLEY: Good to be with you.
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