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U.S. plan for trade targets runs into G20 headwinds
Fri Oct 22, 2010 9:40am EDT
GYEONGJU, South Korea (Reuters) - The United States struggled on Friday to win backing for its proposal of setting numerical targets for external imbalances as a way of pressing surplus countries such as China to let their exchange rates rise.
In a letter to fellow finance ministers of the Group of 20 leading economies, U.S. Treasury Secretary Timothy Geithner said countries should implement policies to reduce their current account imbalances below a specified share of national output.
Diplomats said the Treasury chief was proposing to limit surpluses and deficits on the current account -- the broadest measure of trade in goods and services -- to 4 percent of gross domestic product.
But Geithner's proposal met a cool reception on the first day of a two-day meeting meant to smooth the path for a G20 summit in Seoul on November 11-12.
German Economy Minister Rainer Bruederle warned of falling back into "planned economy thinking," while Russian Deputy Finance Minister Dmitry Pankin said the draft communique to be issued on Saturday would stay clear of numerical targets...
...Japanese Finance Minister Yoshihiko Noda also voiced skepticism about Geithner's proposal.
"We said that we doubt whether rigid numerical targets should be set...
...Not everyone rejected the U.S. gambit out of hand.
"At a time when people are talking about currency wars, the merit of Geithner's proposal is that it shifts the discussion back to the macroeconomic framework," a French official said.
Jim Flaherty, Canada's finance minister, said setting numerical targets was a step in the right direction...
Fri Oct 22, 2010 9:40am EDT
GYEONGJU, South Korea (Reuters) - The United States struggled on Friday to win backing for its proposal of setting numerical targets for external imbalances as a way of pressing surplus countries such as China to let their exchange rates rise.
In a letter to fellow finance ministers of the Group of 20 leading economies, U.S. Treasury Secretary Timothy Geithner said countries should implement policies to reduce their current account imbalances below a specified share of national output.
Diplomats said the Treasury chief was proposing to limit surpluses and deficits on the current account -- the broadest measure of trade in goods and services -- to 4 percent of gross domestic product.
But Geithner's proposal met a cool reception on the first day of a two-day meeting meant to smooth the path for a G20 summit in Seoul on November 11-12.
German Economy Minister Rainer Bruederle warned of falling back into "planned economy thinking," while Russian Deputy Finance Minister Dmitry Pankin said the draft communique to be issued on Saturday would stay clear of numerical targets...
...Japanese Finance Minister Yoshihiko Noda also voiced skepticism about Geithner's proposal.
"We said that we doubt whether rigid numerical targets should be set...
...Not everyone rejected the U.S. gambit out of hand.
"At a time when people are talking about currency wars, the merit of Geithner's proposal is that it shifts the discussion back to the macroeconomic framework," a French official said.
Jim Flaherty, Canada's finance minister, said setting numerical targets was a step in the right direction...
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