Tags: Obama | Trade | Currency | Imbalances | Hinder | Global | Growth

Obama: Trade, Currency Imbalances Hindering Global Growth

Tuesday, 09 Nov 2010 02:03 PM

U.S. President Barack Obama said imbalances in trade and currency markets are hindering global economic growth, in a preview of the U.S. stance when leaders of the Group of 20 nations meet this week in Seoul.

Obama is on a 10-day trip covering four nations in Asia seeking to expand U.S. exports and keep up pressure on China to let its currency rise. At a news conference in Jakarta yesterday, Obama challenged the G-20 to do more on a framework for more balanced growth.

“You’re seeing some countries run up very big surpluses and intervening significantly in the currency markets to maintain their advantage when it comes to their currency,” Obama said at the news conference with President Susilo Bambang Yudhoyono, without singling out any nation.

A day before a scheduled address to a largely Muslim audience at the University of Indonesia, the president also criticized Israel for advancing plans for new homes in east Jerusalem and expressed concern that Israelis and Palestinians aren’t making the “extra effort” needed to reach a peace agreement.

Obama arrived in Jakarta yesterday from India as part of a tour of Asia focused on economic issues and boosting exports. As China’s economic and diplomatic clout grows, Obama has made a priority of engaging other Asian states, particularly the 10 countries that make up the Association of Southeast Asian Nations. With a population of about 600 million, Southeast Asia was America’s fifth-largest trading partner and the fourth- biggest market for U.S. goods last year.

Expanded Cooperation

Obama said Indonesia, a member of Asean and the G-20, presents a dynamic marketplace to expand security cooperation and trade, investment and commercial ties.

Indonesia’s benchmark Jakarta Composite Index has risen 46 percent this year compared with a 12.1 percent gain for the MSCI Asia Pacific Index.

The two presidents initiated a five-year program today to enhance a partnership on issues including climate change, counterterrorism, combating Iran’s nuclear program and territorial disputes in the South China Sea.

“From our prosperity, expanding partnerships between our people and deepening political and security cooperation, these are the pillars of our new partnership,” Obama said. “Our two nations have only begun to forge the cooperation that’s possible.”

Education

The administration announced a plan to provide $165 million over five years for education and establishing partnerships with 25 U.S. institutions including Harvard University in Cambridge, Massachusetts, and Columbia University in New York. The U.S. also plans to provide $136 million for a joint project that would establish a climate-change center in Indonesia, an area where the country has excelled, Obama said.

Obama leaves later today for Seoul, where imbalances in global spending and capital flows are set to dominate the G-20 summit.

“Both surplus and deficit countries would benefit if there was a more balanced program in which the surplus countries were focused on internal demand, there was a more market-based approach to the currencies,” Obama said. “This is going to be something that we’re going to be discussing extensively in Seoul.”

The U.S. is pressing China for faster gains for its currency without triggering a descent into a trade war. Companies including Caterpillar Inc., Wal-Mart Stores Inc. and Citigroup Inc. have warned U.S. lawmakers that legislation aimed at forcing China to move could lead to retaliation.

China’s Currency

The yuan is approaching the strongest level against the dollar since 1993 on speculation the country’s central bank will permit faster appreciation before the G-20 meeting. China may report its second-largest monthly trade surplus of $25 billion in October, its second-largest monthly surplus of the year, according to the median forecast of 27 economists.

Obama is scheduled to meet with Chinese President Hu Jintao while in Seoul.

On the Middle East, Obama expressed concern about Israel’s published construction plans for more than 1,000 new homes for Jews in east Jerusalem, which Palestinians seek as the capital of a future state.

“This kind of activity is never helpful when it comes to peace negotiations,” Obama said in response to a question at the news conference. “I’m concerned that we’re not seeing each side make the extra effort involved to get a breakthrough that could finally create a framework for a secure Israel living side by side in peace with a sovereign Palestine.”

Settlements Issue

Israel’s Prime Minister Benjamin Netanyahu is in the U.S. to discuss reviving direct peace talks that started Sept. 2 in Washington and have since stalled over Israeli settlements.

In a text message from his office, Netanyahu said Israel has never accepted restrictions on building in Jerusalem. “Jerusalem is the capital of the state of Israel,” the text said. “Israel never took upon itself any limitations on construction in Jerusalem.”

Later today, Obama is scheduled to deliver a speech to 6,000 people at the University of Indonesia. He’ll highlight the coexistence of democracy and Islam in Indonesia and the country’s ability to set a positive example in the world because of its emerging economy and pluralism, said Deputy National Security Adviser Ben Rhodes.

Obama will depart Indonesia several hours earlier tomorrow than previously scheduled to avoid volcanic ash spewing from Mount Merapi, White House press secretary Robert Gibbs said.

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U.S. President Barack Obama said imbalances in trade and currency markets are hindering global economic growth, in a preview of the U.S. stance when leaders of the Group of 20 nations meet this week in Seoul.Obama is on a 10-day trip covering four nations in Asia seeking to...
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2010-03-09
Tuesday, 09 Nov 2010 02:03 PM
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