Wang Hwi Lee (Associate Professor International Studies, Ajou University)

On November 11-12, the G20 summit took place in Seoul. The summit is one of the largest global events attended by leaders from the world’s largest economies and international organizations. Korea was the first non-G8 country to host the meeting.

Expectations soared high in Seoul not only because international attention descended on the city but also because the summit itself was expected to bring good fortune to the country. According to a report from the Korea International Trade Association, it will have a 400 trillion won ($28 billion) impact on the economy by improving the country’s image and boosting demand for Korean products.

This is why citizens readily endured many inconveniences throughout the summit. More than 20,000 police officers were mobilized to keep protesting demonstrators away from the CoEx building. To reduce traffic, schools in the vicinity changed their timetables. Even college entrance examinations were postponed by a week. These measures were instrumental in avoiding any serious trouble surrounding the highly controversial meeting. In this respect, the summit can be viewed as a big achievement for the citizens of Seoul.

For Koreans, the G20 summit was a rare chance to promote their own agenda on the world stage. The hosting country wanted to create a new financial safety net for crisis-affected countries, seal agreement banking capital accords, and re-orientate developing countries’ policies towards more investment-friendly growth. To play an important role in the global debate, the government hoped to issue any major announcements (such as a Seoul Accord or Korea Initiative) during the summit.

Korean policy makers did whatever was required to keep thorny issues─which might distract attention from their cherished agenda─off the table. Substantial progress was made at the meeting, with agreements in financial regulation, international financial governance, and global trade. There was widespread consensus on a new round of bank capital standards known as Basel III, the long-delayed Doha round of world trade talks, the development of poorer countries and the reform of IMF governance.

To major economies, however, currencies were too significant to leave off the top of the agenda. Frustrated by surging trade deficits, the US government did not hesitate to press China whose trade surpluses rose to a record level. Heading into the summit, the US Treasury pushed for agreement on specific guidelines for curbing the trade surpluses of China and Germany. Disappointingly enough for the Korean host, currency concerns dominated the meeting which became a theater for currency war.

As a result, world leaders did not succeed in reducing fears of impending conflict over trade imbalances and exchange rates. China and Germany rejected specific numerical targets for current accounts, which the United States suggested. A compromise was a set of ‘indicative guidelines,’ which are not binding rules.

As the G20 Seoul summit failed to yield fruitful results, high expectations come down to earth. Most Koreans, nonetheless, will share fond memories of the event. It was their first attempt to make their voices heard at such a summit. At the same time, it provided a good opportunity for them to take their global role seriously.

leew@ajou.ac.kr