President Barack Obama bluntly accused China on Friday of undervaluing its currency and said he's insisting on a "win-win" free-trade agreement with South Korea, asserting that his hand in international summitry is strong despite election setbacks at home.
A combative Obama told reporters at the G-20 summit here that progress was made in stabilizing and strengthening the global economy, saying it is now back on "the path to recovery." But the president also said nations "risk slipping back" into peril if they don't work harder to foster sustained growth, end unfair trade practices and currency manipulation.
He argued that "countries with large surpluses must shift away from unhealthy dependency on exports" and said that exchange rates "must reflect economic realities."
Obama said China's currency "is undervalued." He added that Beijing "spends enormous amounts of money" to keep the yuan in that condition and said it's critical for China, "in a gradual fashion," to let markets set the currency's value.
Of the criticism from Germany and other quarters that the Federal Reserve Board engaged in what amounts to currency manipulation by purchasing $600 billion in U.S. Treasury bonds, the president said the move "was not designed to have an impact on the currency, the dollar. It was designed to grow the economy."
Obama dismissed the notion that he was negotiating at a weaker position internationally now compared to when he first came into office nearly two years ago. In fact, he said, his relationships with world leaders are now stronger, siting his relationship with China's President Hu Jintao as one that has improved.
"It wasn't any easier to talk about currency when I had just been elected and my poll numbers were at 65 percent than it is now," Obama said.
Of the global economy generally, Obama said that while improvements have been made in a number of areas, he and other leaders recognize "progress hasn't come quickly enough," particularly in the area of job creation.
"We have a recovery," he said when asked about lingering high joblessness in America.
"It needs to be speeded up. Government cannot hire back the 8 million people that lost jobs," he said. "That needs to be done by the private sector," he said of the economic woes back home in the United States.
Obama reiterated his intent to finalize a long-sought trade agreement with South Korea. A major sticking point remains access to the South Korean market for U.S. autos, but the president expressed confidence that the deal will get done.
"I think that we can find a sweet spot that works both for Korea and the United States," he said, adding that he was not interested in a trade agreement for the sake of having one.
"I want trade agreements that work for the other side but my main job is to look out for the American people, American workers and American businesses, and I want to make sure that this deal is balanced and so we're going to keep on working it. But I'm confident we can get it done," he said.
Obama said he "wasn't interested in making an announcement" just to send a signal of success here and said he thinks any pact ultimately must be a "win-win" deal for the U.S.
Obama started this Asian trip in the wake of a political battering at home, as Republicans recaptured the House and significantly curbed the Democratic majority margin in the Senate.
Although he had some deja vu moments in visiting Indonesia, where he spent four years growing up, and announcing a series of confidence-building agreements with both India and Indonesia, the president struck out in his attempt to close a new free-trade pact with Seoul.
It was an embarrassing setback for a president who stressed that the top objective of this trip was to cement agreements that would help create jobs at home, particularly through new trade opportunities with fast-growing economies like China, India and Indonesia.
Obama will confront the same vexing trade and currency issues when he arrives in Yokohama, Japan, later Friday for the summit of the Asia-Pacific Economic Cooperation, which is expected to move on creation of a Pacific-wide free trade zone that would encompass more than half the world's economic output.
He sought to deflect talk of missed opportunities.
"The work that we do here is not going to seem dramatic. It is not always going to be world-changing. But step to step, what we're doing is building stronger international mechanisms and institutions" that will help stabilize the world economy "and reduce tensions" among nations," Obama said.
"The easiest thing for us to do would be to take a passive role and just let things drift," the president said. He acknowledged that "some countries push back" in response to his suggestions about global economic strategy, but said that he will continue to push "to bring about changes."
On the question of extending Bush-era tax cuts at home, he said, "I want to make sure that taxes don't go up for middle-income families on January 1. That's my top priority." He reiterated that he opposes a permanent extension of those tax breaks for the wealthy.
"I'm not going to negotiate here in Seoul on those issues, but I've made very clear what my priorities are," he said.
Obama said he believes the reporting on the G-20 summit has been "all about conflict," and said much was accomplished here. Obama said G-20 leaders, among other things, developed a system to give "the international community the ability to monitor and see what countries are doing," and particularly gives the world a way to determine whether countries are engaging in unfair practices with their trading partners.
He said he hopes to reach agreement with congressional Republicans, when he flies home, on the fate of the tax cuts set to expire next month.
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