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(LEAD) (G20) G-20 leaders kick off G-20 summit discussions

All Headlines 19:00 November 11, 2010

(ATTN: UPDATES with beginning of working dinner; RECASTS headline, lead)
By Lee Chi-dong

SEOUL, Nov. 11 (Yonhap) -- The leaders from the Group of 20 major economies opened a two-day summit on Thursday, the stage for a potential showdown on currency policy rifts, with a working dinner at a history museum in central Seoul.

South Korean President Lee Myung-bak, the chair of the G-20 Seoul Summit, declared the opening of the summit and introduced agenda items during the working dinner at the National Museum of Korea.

In his opening speech, Lee urged the leaders to use the summit sessions to work toward a meaningful outcome and offer direction and a vision for the global economy, Kim Yoon-kyung, spokesman for the G-20 Organizing Committee, told reporters.

Free discussions then got underway on the countries' positions on the agenda items, Kim said, adding that the discussion will continue into the first Friday morning session, "Global Economy and Framework II."

Dominique Strauss-Kahn, managing director of the International Monetary Fund (IMF), also reported on the state of the global economy during the dinner set to last about two hours, according to the spokesman.

Before the dinner, Lee hosted a welcome reception for the participants of summit and their spouses at the same venue.

The G-20, launched two years ago to cope with a financial meltdown fueled by the collapse of U.S. investment giant Lehman Brothers, now aims to map out concrete action plans for the "strong, sustainable and balanced growth" of the world economy.

Officials said the Seoul summit, the fifth G-20 session and the first to be held in Asia, will be a watershed for the fate of the nascent premier forum for economic cooperation.

Under the theme of "Shared Growth Beyond The Crisis," the meeting, arguably the largest diplomatic event to take place in South Korea, brings together the heads of state from the 20 industrialized and emerging economies, including the U.S. and China, in addition to the five special guests -- Malawi, Ethiopia, Vietnam, Singapore and Spain -- and the chiefs of the U.N., the OECD and five other international organizations.

The participants plan to review the implementation of agreements at the previous rounds in Washington, London, Pittsburgh and Toronto, and also draw up a long-term vision for the future global economy, Seoul officials said.

A sticking point is the trade imbalance among the member states deepened by competitive currency devaluations. China's policy of curbing the rapid appreciation of its currency, the yuan, to boost exports is at the center of the row.

Lee said the exchange rate issue will top the agenda of the G-20 summit along with reform of the IMF, a global financial safety net and the development of poor nations.

He said the "green light has been turned on" as the G-20 finance ministers and central bank governors agreed to move toward more market-determined exchange rate systems and refrain from devaluation of currencies as discussed in their preliminary negotiations last month in South Korea's ancient city of Gyeongju.

But a further agreement on the sensitive matter in Seoul is not guaranteed. Despite days of talks here, the G-20's financial officials failed to narrow differences over detailed measures to follow up on the Gyeongju accord and passed further negotiations to the summit.

The U.S. wants to limit current account surpluses and deficits to 4 percent of the gross domestic product, but some other countries such as Germany and India are against setting such numerical targets.

The world will pay keen attention to a joint communique to be read out by the South Korean president at 4 p.m. on Friday to sum up the results of the summit.

Lee, meanwhile, had a series of one-on-one talks with U.S. President Barack Obama, British Prime Minister David Cameron, German Chancellor Angela Merkel and Chinese President Hu Jintao for discussions on the G-20 agenda items and discussed other issues of mutual concern.

He also met bilaterally with Brazilian President Luiz Lula da Silva.



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