As the Group of 20 summit got under way in South Korea, President Obama voiced confidence that leaders would agree on steps for balanced and sustainable global economic growth. But his day was marked by the failure to conclude an important trade pact, and the deep divisions between leaders of the G-20 don't bode well for the economic summit.
A formal reception marked the start of the summit on Thursday. But as Obama swept in to stand beside his South Korean host, his smile may have masked inner unease.
After all, his visit has failed to clinch the big prize: a free-trade agreement with South Korea three years in the making. Obama said he still hoped the deal would be reached in weeks, not months.
At a press conference, he was also forced to defend the U.S. plan to pump $600 billion into its own economy to stimulate growth.
"The most important thing that the United States can do for the world economy is to grow because we continue to be the world's largest market, and a huge engine for all other countries to grow," Obama said.
The depths of South Korea's dissatisfaction became clear when President Lee Myung-bak was asked whether he feared the U.S. policy would result in an influx of "hot" money large amounts of investors' cash flowing into Korea, risking an investment bubble and inflation.
His answer, through a translator, might have been a joke, but a pointed one at that. "I think that kind of question should be asked to me when President Obama's not standing right next to me," Lee said.
Brazil's President Luiz Inacio Lula da Silva had no such scruples; he said such policies would "bankrupt" the world.
China, perhaps seeking to deflect attention from criticism of its own currency, has also weighed in; it said Washington "should not force others to take medicine for its own disease."
Jasper Kim, a professor of international studies at Ewha University in Seoul, says such strong language as the summit opens is almost unheard of.
"The fact that there isn't concrete language, the fact that there's a verbal war going on at the G-20 itself, even up to today, is remarkable. Usually there's a toning down of the rhetoric as the leaders of the respective states come in; they want to play nice. Beforehand, it's a lot of positioning. But that positioning and that rhetoric "is still as hot as ever," Kim says.
Clashes May Damage G-20's Credibility
Critics of the G-20 took to the streets in Seoul on Thursday. Several thousand people participated in a series of small rallies. Many were clutching signs saying, "Put People First."
Protest organizer Lee Tae-ho says the G-20 hasn't helped those who have been most affected by the financial crisis: the poor.
"The G-20 is like a firefighter. Those who started the fires the financial firms and the big banks have been helped out. But still the world is being affected by this fire," Lee says.
An overwhelming police presence kept the demonstrations largely peaceful.
This year, the clashes may end up being not on the streets, but inside the conference halls. There's been no attempt to hide the squabbling among negotiators. On Thursday, they failed to even agree on an agenda, let alone the wording of a communique.
But if leaders issue a statement that's so bland it's meaningless, that could damage the credibility of the G-20, according to Kim.
"If there's not a concrete agreement and there doesn't look like there will be I think this is a couple of steps backward. It's sort of a punch to the stomach of the G-20.
"In the beginning with the subprime crisis, about the time when the G-20 began, there was an idealistic notion this will change global governance forever. I think we're starting to see the idealism turn into realism very, very quickly," Kim says.
The danger is that that realism could turn into protectionism, with each country placing its own short-term economic interests above all else.
When the 20 world leaders reconvene Friday, they have just one day to turn mutual accusations into meaningful solidarity. And at this stage, it is not clear that they'll be able to do that.