US asked not to trouble global financial system

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NEW YORK, Nov 13: The much vaunted G20 summit, as anticipated earlier, ended yesterday failing to grapple with the twin problems of trade imbalances and currency adjustments. President Obama even failed to clinch the free trade agreement with trusted ally South Korea, the venue of the summit. Major differences surfaced between Washington on the one side and China, Britain, Germany and Brazil on the other.
Each of the countries on the other side dismissed America's core strategy to stimulate the growth. Most nations accused US Fed Reserve for devaluating dollar to " put the costs of America's competitive troubles on trading partners rather than taking tough political decision to rein in spending at home". Almost everyone involved in international financial system agrees long term change is inevitable. The rise of China will surely mean that the dollar cannot continue to be the world's sole reserve currency, an analyst said.
World Bank Chief Robert Zoellick said change may be needed sooner than later. He proposed an international monetary system involving multiple reserve currencies with flexible exchange rates including dollar, renminbi and euro plus the use of gold prize as a reference point. President Obama's one to one meeting with his Chinese counterpart Hu Jiantao failed to make any headway with Beijing flexing its economic muscle and refusing to accept even nonbinding numerical target of limiting China's trade surplus. China told America that as the "issuer of the dollar, the main global reserve currency, Washington should consider the interest of the global economy rather than its own national circumstances." The US stand in previous five G20 summits were to forge a united and cohesive stimulus strategy. But the consensus began to crumble. It was the view of Washington that folding back stimulus programme could endanger the fragile recovery but the European nations were pressurised to slash their deficits. The corporate chiefs met on the sidelines of the G20 summit. Vikram Pandit Citigroup CEO expressed anguish over public backlash against the Wall Street. He was among 120 other CEOs who took part in business summit. Ms. Angela Merkel, the German Chancellor expressed little sympathy saying." We need a regulatory framework that encourages being risk aware not risk averse".
Revitalising trade, revitalising foreign direct investment, revitalising corporate financial stability are essential for to return to a sustainable growth. China said the US must not force others to take medicines for its own disease. China said Fed Reserve's policy of pushing more money is destabilising currencies. US said it would never devalue dollar to boost exports. So, G20 leaders failed to reconcile the clashing views on currencies and trade imbalances. Government leaders, business executives and international organizations separately warned that unless the stalled Doha Round of trade talks is resumed quickly it will encourage protectionism. British prime minister said "we are going to fight protectionism in all its forms".
Angela Merkel said Doha Round of talks must come to a successful end by 2011. Same views were aired by Asia-Pacific group, Organization for Economic Development, European Union and the World Trade Organization.