Huntsville, Ontario: After failing to resolve their differences on economic strategy, world leaders are turning their attention to grappling with some of the globe's toughest foreign policy problems.
President Barack Obama and other leaders of the Group of Eight major industrial countries were scheduled to open their second day of talks Saturday focused on nuclear standoffs with Iran and North Korea.
On Iran, the U.S. and European nations will push other major powers to join them in imposing tough new sanctions on Tehran over its suspect nuclear program, a move that would build on expanded U.N. Security Council measures adopted this month. But China and Russia only reluctantly supported those sanctions and have balked at new unilateral steps against Iran.
The foreign policy discussions among the leaders of the G-8 — the United States, Japan, Germany, France, Britain, Italy, Canada and Russia — were taking place after an opening day of talks during which the group failed to resolve a dispute over the proper mix of government spending and deficit reductions needed to keep the global economy on track.
Obama made the case that the global economy remained fragile and should not be put at risk by countries moving too rapidly to trim their bulging deficits through spending cuts and tax increases, which can slow economic growth.
But leaders of Britain, Germany, Canada and Japan argued that deficit cuts were needed to reassure nervous investors, given the severe market turmoil experienced in May after the near-default of Greece on its huge debt burden.
The G-8 talks were being held in a resort that is a two-hour drive north of Toronto. After they wrap up at midday Saturday, the G-8 leaders were scheduled to travel to Toronto for discussions with the larger Group of 20, which includes not only the wealthy nations but major emerging powers such as China, Brazil and India.
The G-20 leaders' summit, launched in response to the global financial crisis in the fall of 2008, has now replaced the G-8 as the world's premier forum for discussing and coordinating economic policy.
In addition to the group discussions, the leaders were holding a series of one-on-one talks.
Obama was meeting Saturday with new British Prime Minister David Cameron for the first time since Cameron took power last month. Those talks were expected to cover the difficulties posed by the BP oil spill, the biggest offshore oil spill in U.S. history.
Obama was also to meet with South Korean President Lee Myung-Bak to discuss South Korea's push for action by the U.N. Security Council to hold North Korea accountable for the sinking of a South Korean warship in March.
In a third meeting, Obama was to hold talks with Chinese President Hu Jintao, a week after China announced it would start allowing its currency, the yuan, to rise in value against the dollar. The administration had been pushing China to take this step as a way of boosting U.S. exports to China.
In Toronto, hundreds of protesters moved through city streets Friday, but police in riot gear blocked them from getting near the summit security zone. Some 19,000 law enforcement officers, from all over Canada, were providing security at a cost of more than $900 million.
The protests have been tame compared with past summits. The largest demonstration, sponsored by labor unions, was planned for Saturday.
Obama arrived in Canada fresh from a congressional win on financial overhaul, a victory that the administration hopes will persuade the other G-20 nations to adopt their own tough standards for banks in an effort to avoid a repeat of the 2008 financial crisis that pushed the global economy into a deep recession.
But in Friday's discussions, Obama made no headway in his call for more stimulus to keep the world economy growing. Instead, he ran into strong opposition from countries wanting to put deficit reduction first.
There was little expectation of economic breakthroughs on the deficit versus stimulus debate, or on the issue of financial overhaul by the time the three days of talks end on Sunday. The G-20 leaders were expected to push tough decisions on global banking regulations off to their next meeting in Seoul, South Korea, in November.
Divided on economic remedies, the leaders searched for common ground on other issues, such as providing greater support for maternal and infant health care in desperately poor countries — a key goal of Canadian Prime Minister Stephen Harper, the summit host.
Harper announced late Friday that the G-8 leaders had pledged to contribute $5 billion over the next five years to the initiative. He said Canada's contribution was $1.1 billion and the White House announced the U.S. would contribute $1.35 billion over the next two years, subject to congressional approval. Japan announced a pledge of $500 million over five years.
A Japanese spokesman, Kazuo Kodama, said that new Japanese Prime Minister Naoto Kan told his counterparts from Canada and Germany that North Korea's alleged torpedo attack is a "threat to the peace and stability of the region." Kan wants summit partners to issue a "clear message of condemnation" of North Korea, the spokesman said.
On Afghanistan, Cameron said he did not expect British troops — now numbering about 10,000 — to be in Afghanistan in five years' time. "We can't be there for another five years, having been there for nine years already," he told Britain's Sky News.
Russia's bid to join the World Trade Organization — for which Obama voiced strong support on Thursday after a meeting in Washington with Russian President Dmitry Medvedev — could also come up during the weekend talks. Obama pledged to help Russia speed up its more than decade-long bid in hopes that Moscow could win acceptance as early as Sept. 30.
First Published: Saturday, June 26, 2010, 16:03