Are Paris and D.C. parting ways on the G-20?
Are Nicolas Sarkozy and Barack Obama headed for a bust-up? On the important question of what the G-20 should do, Sarkozy has become a loud apostle of hope and change while Obama and his team have morphed into defenders of a gradualist, practical approach to managing the global economy. In the lead up to a ...
Are Nicolas Sarkozy and Barack Obama headed for a bust-up? On the important question of what the G-20 should do, Sarkozy has become a loud apostle of hope and change while Obama and his team have morphed into defenders of a gradualist, practical approach to managing the global economy.
In the lead up to a key foreign ministers meeting that will take place in Paris on Feb. 18-19, the French continue to push an ambitious agenda for the key consultative group, which France currently chairs. Sarkozy and his ministers have challenged the G-20 to control volatility in world food prices, restructure the International Monetary Fund, reform the UN Security Council, and alter the international currency system. France’s G-20 website bubbles with enthusiasm and ideas. And a new report commissioned by the French government appears to have added fuel to the French fire. According to this Wall Street Journal account (reg. required), the report suggests major changes to the IMF, including giving the body the power to impose sanctions for noncompliance.
The Gallic activism is not finding an enthusiastic response in Washington. Key administration officials have signaled repeatedly that they want the G-20 to focus on practical, achievable goals rather than major changes to the global architecture. The latest sign of Franco-American tension came when Treasury Secretary Timothy Geithner politely but firmly rebuffed French ideas on controlling food prices. AFP has the story:
Treasury Secretary Timothy Geithner said Monday it was not clear what France was proposing within the G20 to stamp out food price volatility, and implied market forces should be left to work unhindered.
His comments, in response to a question asked at a meeting with business students and professors in Sao Paulo during a visit to Brazil, came as UN food agencies and France warned of unrest over rising food prices globally.
France, the current chair of the G20 group of major developed and developing nations, has vowed to bring stability to food commodity prices, possibly by creating a new mechanism in the World Trade Organization. [snip]
But Geithner said that the United States, while "working closely" with France on the issue, was wary of anything that might jeopardize the recovery from the global financial crisis.
"We want to be very careful to bring balance to that perspective, that in the desire of politicians to bring stability to markets we don’t create conditions that will be damaging to not just the interests of commodity exporters but to the better functioning of the basic dynamics of the recovery," he said.
"So it’s not clear to me yet what the French are really proposing," he said.
For the moment, the disagreement has been kept at a low volume. But if Sarkozy becomes convinced that Washington is obstructing his G-20 vision, it may soon become much louder.