The United States confronted growing restiveness with its economic policy on Saturday as leading Asian countries resisted its call to set limits on trade deficits and surpluses while also warning that the decision to pump more money into the American economy would have harmful global repercussions.
The heightened wariness about United States policy underscores the difficulties facing the Obama administration as it experiments with ways to shore up the economy. The strategy differences will present a challenge to President Obama when he travels to Seoul this week for a meeting of the Group of 20 nations, where leaders will try to reach a framework for correcting the trade imbalances that economists say threaten a fragile global recovery.
The growing divide was evident here on Saturday at a gathering of finance ministers from the 21-member Asia-Pacific Economic Cooperation forum, after several days of sharp criticism of the Federal Reserve’s announcement that it would buy $600 billion in Treasury securities to bolster growth.
Countries like China, Brazil and Germany have warned that the unilateral move devalues an already-weak dollar, and could set off a destabilizing flow of funds into emerging economies that will inflate their own currencies and make their exports more expensive.
On Friday, the German finance minister assailed United States monetary policy as “clueless,” and China suggested that American officials explain their decision so as to calm international anxiety.
Though the atmosphere at the forum on Saturday was less charged, the United States was on the defensive. Treasury Secretary Timothy F. Geithner took pains to rebut some of the criticism, saying American economic policy was aimed at shoring up the recovery, and not an attempt to deflate the dollar to help exports.
“We will never use our currency as a tool to gain competitive advantage,” Mr. Geithner said after the meeting, adding that the United States was committed to a strong dollar.
He said that capital inflows into emerging markets were a vote of confidence in their fast-growing economies, and that a healthy American economy would benefit all its trading partners. “I think that confidence is justified,” he said, “and something that should be welcomed. It does come with pressures, and they’re going to have to manage those pressures.”
But Asian countries remained concerned about the effect of American policy.
“In the long term, there’s a hope that capital inflows will become good investments, but in the short term, they work to strengthen local currencies and that’s a problem,” the Japanese finance minister, Yoshihiko Noda, told reporters here. He said that Japan would work particularly closely with emerging economies in Southeast Asia to find solutions.
The Thai finance minister, Korn Chatikavanij, said that while he understood the need to address excessive trade surpluses and deficits, it was important “at the same time that trade protectionism is not used as a tool to correct imbalances.”
Countries like Thailand, South Korea and Brazil that have successful export economies have threatened to take measures to curb the flood of money that has pushed up currency values and raised the specter of asset bubbles.
With the Democrats having suffered a stinging defeat in elections, and with more government stimulus spending seemingly out of the question, economic recovery has increasingly hinged on the Fed’s injection of money into the economy, an attempt to encourage businesses to borrow and invest. Mr. Obama emphasized that point in an address to business leaders on Saturday in India as he called for job-creating economic ties between the two countries.
But increasing the money supply also weakens the dollar, and has opened the United States to the charge that it is doing what it has long accused China of doing: keeping its currency artificially weak, and helping to create dangerous imbalances in the world economy.
“Essentially, what the Fed’s doing is trying to get U.S. growth up on the backs of other countries’ growth — at least that’s the sense that other countries have,” said Raghuram G. Rajan, a former chief economist for the International Monetary Fund. “You are forcing them to adjust by making their exports to the U.S. more expensive.”
Mr. Rajan said the Fed could not ignore the overseas impact of its policies.
“When the Fed has reached the limits of expanding U.S. demand and monetary policy works primarily on the exchange rate, rather than on expanding spending, then it comes dangerously close to direct exchange-rate intervention,” Mr. Rajan said.
Mr. Geithner also encountered continued resistance to his proposal to set numerical limits to trade surpluses and deficits.
Asean, the 10-nation group of southeast Asian countries, will raise concerns over the United States proposals at the G-20 meeting this week.
Mr. Geithner did not appear concerned, and said that agreeing on specifics would take more time. But he cited an emerging consensus on obliging countries to avoid excessive trade imbalances: namely, too heavy a reliance on exports or imports.
“What I’m very pleased with is how much broad support there is for the idea that you need to build a better set of understandings around exchange rate cooperation,” Mr. Geithner said. “I really believe it will help reduce some of the tensions, some of the pressures you’re seeing.”
The divisions underscore a deterioration in global camaraderie in recent months. Less than five months ago, G-20 leaders in Toronto exchanged far friendlier words, pledging to work toward “shared objectives.”
At the meeting on Saturday, the atmosphere was one of labored consent, with the United States and China notably stepping back from the critical tone that has colored recent comments on economic policy.
Yet ministers at the two-day meeting broke no new ground in correcting global trade imbalances that economists say threaten the fragile worldwide recovery.
In a joint statement, the ministers pledged not to use their currencies as trade weapons and to take steps to shrink damaging trade gaps to bring more stability to the global economy.
For most of this year, the debate over trade gaps has focused on China and the value of its currency, which many countries have charged is being kept artificially low. But with criticism of its policies mounting, the United States appears to have diverted attention to itself and away from China.
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