G20 summit was not the "battle royale" people expected
TEXT OF STORY
JEREMY HOBSON: Leaders of the world’s 20 wealthiest nations rang the closing bell on their annual summit today. There was no trade deal between the U.S. and South Korea. No formal call for countries to stop undervaluing their currencies. And not much of a public currency fight between the U.S. and China.
So — what did happen at the summit?
Here’s Marketplace’s Rob Schmitz with the play-by-play.
ROB SCHMITZ: It turns out the “battle royale” everyone was expecting had already happened in the messy lead-up to the summit. What emerged from the more civil G20 summit, says economist Michael Pettis, was a weak agreement for countries to keep an eye on unsustainable trade imbalances.
MICHAEL PETTIS: No framework for deciding what is a unsustainable imbalance, and there’s no mechanism for forcing unsustainable imbalances to go away, so basically, it doesn’t really mean much.
Countries with surpluses say they need them for growth. Deficit countries like the U.S. blame high unemployment on demand that’s leaked abroad. Pettis says as long as both sides are convinced they’re right, nothing will be accomplished. How will we know if today’s agreed-upon framework will work? Leaders said they’d wait to finish their “imbalance assessment” at next year’s G20 summit.
In Shanghai, I’m Rob Schmitz, for Marketplace.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
