Obama pushes global leaders to fix trade imbalances

SEOUL, South Korea - Under worldwide pressure, President Barack Obama told global leaders Wednesday the burden is on them as well as on the United States to fix trade-stifling imbalances and currency disputes that imperil economic recoveries everywhere.

The president promised the United States would do its part but declared "the world is looking to us to work together." On the eve of an economic summit, Obama landed in Seoul hoping to close an elusive trade deal with South Korea, the kind that could potentially mean jobs and markets for frustrated businesses and workers back home. Yet the deal was still in the balance in the last hours, slowed by U.S. demands over South Korea's auto trade and its market for American beef.

Obama also was to make his economic case directly to Chinese President Hu Jintao after lavishing attention for three days on China's rising rival, India. The United States and China enjoy an economic partnership but continue to clash over currency, with the United States contending that China's undervalued yuan gives it an unfair edge in the flow of exports and imports.

Obama made the point again in a letter to fellow leaders gathered here for the G-20 summit of established and emerging economies. Warning of unsustainable balance sheets, with some countries holding surpluses and others swimming in debt, Obama pushed for exchange rates based on the market and no more "undervaluing currencies for competitive purposes."

He shows up at this year's summit on the defensive about the recent $600-billion intervention by the U.S. Federal Reserve, and weakened by sweeping Republican victories in the congressional midterm election.

Obama's message is that the United States cannot be the world's consumer, propping up others by borrowing and spending. "The foundation for a strong and durable recovery will not materialize if American households stop saving and go back to spending based on borrowing," he wrote.

Ahead of his trip, the Federal Reserve announced plans to purchase $600 billion in long-term government bonds to try to drive down interest rates, spur lending and boost the U.S. economy. Some other nations complain that gives American goods an unfair advantage in competition with theirs.

Already pressed about that once on his trip to Asia, Obama said the Federal Reserve acts independently, but he still threw support behind the action. "I will say that the Fed's mandate, my mandate, is to grow our economy," he said. "And that's not just good for the United States, that's good for the world as a whole."