Under worldwide pressure, President Barack Obama told global leaders the burden is on them as well as the U.S. to fix trade-trifling imbalances and currency disputes that imperil economic recoveries everywhere.
The President promised on Wednesday that the United States would do its part but declared “the world is looking to us to work together.”
On the eve of an economic summit, Mr Obama landed in Seoul hoping to close an elusive trade deal with South Korea, the kind that could potentially mean jobs and markets for frustrated businesses and workers back home. Yet the deal was still in the balance in the last hours, slowed by U.S. demands over South Korea’s auto trade and its market for American beef.
Mr Obama was also to make his economic case directly to Chinese President Hu Jintao after lavishing attention on China’s rising rival, India, for three days. The U.S. and China enjoy an economic partnership but continue to clash over currency, with the U.S. contending that China’s undervalued yuan gives it an unfair edge in the flow of exports and imports.
The U.S. President made the point again in a letter to fellow leaders gathered here for the G-20 summit of established and emerging economies. Warning of unsustainable balance sheets, with some countries holding surpluses and others swimming in debt, Mr Obama pushed for exchanges rates based on the market and no more “undervaluing currencies for competitive purposes.”
In less than two years on the job, Mr Obama has become a familiar face at such summits, a sign of the enormous global effort to contain and reverse economic erosion.
He shows up this time on the defensive about the recent $600 billion intervention by the U.S. Federal Reserve, and weakened by a congressional midterm election that will give much greater power to the opposition Republican Party.
Mr Obama’s message is that the United States cannot be the world’s consumer, propping up others by borrowing and spending. He is pitching for a balanced recovery across the globe -- tougher to achieve when national interests collide.
“The foundation for a strong and durable recovery will not materialize if American households stop saving and go back to spending based on borrowing,” the President wrote.
Ahead of his trip, the Federal Reserve announced plans to purchase $600 billion in long-term government bonds to try to drive down interest rates, spur lending and boost the U.S. economy. Some other nations complain that gives American goods an unfair advantage in competition with theirs.
Already pressed about that once on his trip to Asia, Mr Obama said the Federal Reserve acts independently, but he still threw support behind the action. “I will say that the Fed’s mandate, my mandate, is to grow our economy,” Mr Obama said. “And that’s not just good for the United States, that’s good for the world as a whole.”
The President came into Seoul quietly on Wednesday night after his latest long flight across Asia, this one from Indonesia, where he had given a speech renewing his outreach to the Muslim world. His upcoming agenda is packed with economic sessions and one-on-one meetings, in South Korea through Friday and this weekend in Japan.
To honor America’s Veterans Day, Mr Obama will visit and praise troops on Thursday at a U.S. Army garrison. He is also expected to draw a contrast between South Korea’s booming progress and North Korea’s punishing isolation since the Korean War 60 years ago. The United States keeps a presence of more than 28,000 troops in South Korea.
Mr Obama’s meeting with South Korean President Lee Myung[-bak, after which both will take questions from the media, will surely centre on trade. Negotiators ended a third day of talks on the stalled trade deal Wednesday, offering no clues on possible progress.
