It was announced at the G20 meeting in Seoul that leaders of the G20 have agreed to avoid “competitive devaluation” (or “currency manipulation” as it is otherwise known) and that they have agreed to develop “indicative guidelines” to tackle trade imbalances affecting world growth.
The US had proposed a 4% limit on national trade deficits and surpluses but both China and Germany blocked this.
The leaders also agreed on the paramount importance of concluding the Doha Development Round of global talks in 2011, talks that have so far delivered little progress.
Analysts are cautious and many remain unconvinced especially following the US decision to inject $600 billion into the US economy after having initially criticised China for “currency manipulation”. What is clear is that any progress in this area will be slow and long-running.