Prometheus 6

The issue that many developing countries feel much more strongly about — knocking down barriers to trade, especially in politically sensitive sectors like agriculture — is barely likely to be part of the official discussions.

Rather, the packed agenda includes proposals to raise capital requirements for financial institutions, rein in executive compensation and reduce imbalances between shop-till-you-drop countries like the United States and export behemoths like China, Germany and Japan.

Global Economic Forum to Expand Permanently
By EDMUND L. ANDREWS

PITTSBURGH — Global leaders will announce Friday that the once elite club of rich industrial nations known as the Group of 7 will be permanently replaced as a global forum for economic policy by the much broader Group of 20, which includes China, Brazil, India and other fast-growing developing countries, the White House said.

The move highlights the growing economic importance of Asia and some Latin American countries, particularly since the United States and many European countries have found their banking systems crippled by an economic crisis originating in excesses in the American mortgage market.

World leaders agreed to the expansion of the Group of 20’s role in global economic affairs during meetings on Thursday, the White House said in a statement.

“Dramatic changes in the world economy have not always been reflected in the global architecture for economic cooperation,” the statement said. “This all started to change today. The G-20 leaders reached a historic agreement to put the G-20 at the center of their efforts to work together to build a durable recovery while avoiding the financial fragilities that led to the crisis.”

For more than three decades, the main economic group was the Group of 7 — the United States, Britain, Canada, France, Germany, Italy and Japan. During the Clinton years, Russia was gradually added, not because of the size of its economy, but to help integrate it with the West. Administration officials said the group would still meet twice a year to discuss security issues. But for practical purposes, the smaller group will become more like a dinner club that defers to the broader group on the economic issues that have dominated summit meetings for nearly three decades.