Leaders of the world's major economies announced a deal Friday to try to curb imbalances in saving and spending. But the accord didn't go as far as President Obama had wanted, the New York Times reports.
The agreement, which came at a meeting of G-20 leaders in Seoul, South Korea, reflected a general concern that the world's trade balance is out of whack--chiefly because America consumes too much, and China too little.
But the group rejected American demands for firm numerical targets on trade surpluses and deficits. China also resisted pressure from the United States to relinquish its policy of artificially deflating the yuan--a move that helps China export more goods.
And Germany insisted that the group act to redress fiscal and monetary imbalances, in addition to trade imbalances. German leaders have criticized recent U.S. efforts to jolt the economy through monetary policy and government spending.
"Instead of hitting home runs, sometimes we're going to hit singles," Obama said in sizing up the meeting's achievements. "But they're really important singles."
British Prime Minister David Cameron had a similar take. "Not heroic, but good and steady progress," he said.
During the talks, Obama seemed to go further than he previously had in denouncing what the United States views as a system of currency manipulation. "Precisely because of China's success, it's very important that it act in a responsible fashion internationally. And the issue of the renminbi"--the overall Chinese currency system--"is one that is an irritant not just to the United States, but is an irritant to a lot of China's trading partners and those who are competing with China to sell goods around the world. It is undervalued. And China spends enormous amounts of money intervening in the market to keep it undervalued."
What does the deal on imbalances mean? By June, the G-20 governments will agree on "indicative guidelines" for identifying major imbalances. Then, the International Monetary Fund will conduct a study of the root causes of those imbalances, to be completed in time for next year's G-20 summit.
That might not sound too dramatic -- but wrangling over the deal nonetheless took days.
Dominique Strauss-Khan, the managing director of the IMF, put her finger on the difficulty of individual countries coming to agreement on major issues of economics.
"Countries are sovereign entities," she said. "They want to have their own policies. At the same time, they understand that more and more in the globalized world, they need to take into account their spillovers and interactions and can't act independently."
(Photo of South Korean President Lee Myun-bak and his wife, Kim Yoon-ok, officially welcoming Obama to the G-20 summit in Seoul on Thursday: AP/Charles Dharapak)