The leaders of the world's top 20 economies wrapped up their summit in Seoul, South Korea, with promises to strive for currency exchange rates that are determined by market forces and plans to create a system to identify economic imbalances that threaten economic stability.
But their closing statement was vague on specifics, and did not clearly resolve outstanding differences.
At the summit close on Friday, South Korean President Lee Myung-bak acknowledged it was difficult to agree on the most contentious issues: exchange rate policies and trade imbalances among key economies. However, President Lee said the summit achieved meaningful results, with the biggest accomplishment being the spirit of international cooperation.
British Prime Minister David Cameron echoed that sentiment, pointing out that because the leaders gather in one place, it compels them to make decisions to help the world, not just their own economies.
The G20 leaders pledged to refrain from competitive currency devaluations. They also urged advanced economies, especially those with reserve currencies, to be vigilant against excess volatility and disorderly movements. But they rejected the idea of setting numerical targets for national trade balances. The United States and South Korea favored the idea, but others, including China, Germany and Japan, opposed it.
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Instead, the leaders' statement said they will order their finance ministers to begin creating a set of "indicative guidelines" to measure trade and economic balances. The guidelines, to be set next year, are to help identify imbalances that could become economically destabilizing.
U.S. President Barack Obama noted reform of the International Monetary Fund and financial regulations as significant accomplishments here.
"It's puzzling to me that the reporting is all talking about conflict when the communique actually reflects a hard-won consensus that the world's 20 largest economies signed up for," Mr. Obama said.
The president admitted that while the agreement does not have enforcement powers, it does give G20 members the ability to apply peer pressure if some countries are perceived as engaging in unfair trade practices. He also reiterated that China's currency is undervalued, a problem Mr. Obama said cannot be solved overnight but "needs to be dealt with."
The summit statement did not include an explicit position on China's yuan.
However, it did say that developing economies could take steps to block huge inflows of foreign capital if they are faced with rising exchange rates because of other countries' weak currencies.
Brazil's Finance Minister, Guido Mantega, cautions that the possibility of a currency war "absolutely" remains although, he says, the G20 now has the tools to reduce the intensity of the standoff.
China is viewing the outcome of the Seoul summit positively. The Xinhua news agency quotes a government spokesman saying the leaders began the shift of the G20's framework from emergency response to long-term economic governance.
The leader of France, which will host next year's G20 summit, is counseling patience. French President Nicolas Sarkozy, speaking at the conclusion of this summit, said all the problems facing the leaders cannot be solved in one year.
