At the G20 finance ministers and central bankers meeting in South Korea, Washington has failed to win wide backing for its plan to limit trade surpluses as a way of better balancing global economies.
Obviously with China in mind, the US Treasury Secretary Timothy Geithner suggested that countries should move to reduce their trade deficits and surpluses.
He wants surpluses limited to four percent of gross domestic product.
In the first half of this year China’s current account surplus was 4.9 percent of its GDP.
The Chinese did not responded to Geithner’s suggestion, but Germany, Russia and Japan do not think it can work.
Japan’s Finance Minister Yoshihiko Noda said: “I’m sceptical about setting a strict numerical target. But I wouldn’t mind if that were one of the reference points used to check the progress in efforts to correct imbalances.”
The lack of support for the US suggestion shows how difficult it is for the G20 to reach agreement on measures to put the world economy on a more stable footing and defuse currency tensions that economists fear could lead to trade wars.
The two day meeting – which is taking place under tight security – is supposed to set the agenda for next month’s G20 leaders’ summit in Seoul.
Protesters demonstrating nearby called the gathering a ‘show’ that would not produce any tangible results, and they denounced the G20’s methods of solving global financial problems as detrimental to the poor.