By Cho Jin-seo
Japan expects the G20 will produce a “compromise” on the sensitive issue of current account balance and exchange rate, its spokesman said ahead of the critical Seoul Summit.
“We will see by the end of tomorrow what kind of compromise is made. We believe that there will be convergence,” Hidenobu Sobashima, deputy press secretary of Japanese Ministry of Foreign Affairs, told The Korea Times on Thursday.
“We would like to support the chair country to make the G20 reach a consensus,” he said.
Japan’s softened approach on the global imbalance issue casts a ray of hope for the G20 Summit as national delegates still fighting against each other with less than 24 hours left to the announcement of the joint statement, or the communique.
Japan, along with China and Germany, has been known to be objecting to the idea of having a numerical target for national current account surplus. Last month, Korea and the United States proposed a 4-percent ceiling on the surplus or deficit on the current account balance of G20 nations against their gross domestic product (GDP), in order to fix the global imbalance of trade and capital flow.
Sobashima said that Japan has no major concern on the proposal because the country’s current account surplus will be comfortably low, though he refused to mention a specific figure. The three-year average of the country’s surplus was 3.6 percent to the GDP until last year.
There have been debates on whether the G20 will be able to make an agreement on having the surplus ceiling at the Seoul Summit. Some academics and policymakers have argued that it is not possible and not advisable to have a fixed target, because the figures are only accounting identity and do not perfectly reflect the unique situations of each nation.
Sobashima also urged emerging nations to take more responsibility in the global economy.
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