👀 Ones to watch: The MOST undervalued stocks to buy right nowSee Undervalued Stocks

Obama's Asian outreach under scrutiny at G20

Published 11/10/2010, 06:19 PM
Updated 11/10/2010, 06:24 PM

* Obama meets with South Korea, China, German counterparts

* Currency, trade, North Korea to be discussed

* Trade pact talks with South Korea going down to wire

By Alister Bull and Patricia Zengerle

SEOUL, Nov 11 (Reuters) - U.S. President Barack Obama will hold delicate meetings with China and South Korea on Thursday as he seeks to advance key security issues while navigating tough talks on currencies and trade.

Any sign of confrontation, particularly with China, could have an impact on financial markets.

Obama, visiting a G20 summit here during a 10-day Asian tour to boost exports and jobs, will be judged harshly by the region if he cannot advance a trade pact with Seoul that many see as a litmus test of his true commitment to trade.

"If we're serious about creating jobs in the United States, we need to see action on this agreement," said Tom Donohue, president of the U.S. Chamber of Commerce.

Talks on the long-stalled pact, which was signed by Obama's predecessor George W. Bush in 2007 but then hit obstacles in the U.S. Congress, were going down to the wire, officials said.

Obama has a meeting and a working lunch with South Korean President Lee Myung-Bak, and they are due to hold a joint press conference at 2.00 p.m. (0500 GMT).

Analysts say Asian leaders understand anti-trade pressures are building back home for Obama. His Democrats were hammered in elections last week over high unemployment, and the leaders want to see how he will stand up to protectionist forces.

"If you can't pass an agreement you've already negotiated, it is really bad," said Ernie Bower, at the Center for Strategic and International Studies in Washington. "If they can do that, and spend the political capital, that's going to be very reassuring for the rest of Asia."

Obama's meeting with Lee is also likely to discuss North Korea, where they are partnered in a diplomatic push on its nuclear weapons program, as well as mounting regional tensions linked to China's increasing assertiveness.

DELICATE DIPLOMACY

Beijing is also an important part of the international push to curb North Korea's nuclear weapons and the topic will be on the table when Obama meets with Chinese President Hu Jintao at 3.30 p.m. (0630 GMT)

China sided with Obama earlier this year in bringing tough new U.N. sanctions against Iran for its nuclear program, but the partnership has frayed when it comes to financial diplomacy.

The United States wants Beijing to allow its yuan currency to appreciate faster against the dollar, which U.S. officials say is held down through intervention at the cost of U.S. jobs.

Obama maintained this argument in a letter to G20 leaders obtained by Reuters on Wednesday.

"Just as the United States must change, so to must those economies that have previously relied on exports to offset weaknesses in their own demand," he said, in a clear reference to China and fellow export power Germany.

Both the Chinese and Germans have pushed back by criticizing the U.S. Federal Reserve's decision last week to pump another $600 billion into the U.S. economy in the hopes of stimulating growth.

Obama stoutly defended the Fed's action during a press conference in New Delhi on Monday, when Indian Prime Minister Manmohan Singh emphatically sided with his guest, and refreshed this argument in the G20 letter.

"The dollar's strength ultimately rests on the fundamental strength of the U.S. economy," he said, rejecting German allegations that the Fed was deliberately weakening the dollar to boost U.S. competitiveness.

Obama meets German Chancellor Angela Merkel at 5.00 pm (0800 GMT). She has been much milder in her comments than some members of her cabinet, notably Finance Minister Wolfgang Schaeuble, and in her recent comments has stressed the importance of avoiding confrontation at the summit. (Editing by Noah Barkin)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.