Curtain closes on G20 summit. What was achieved – and what wasn't.

G20 leaders failed Friday to reach a solid agreement on slashing the “currency imbalances” that are partly responsible for the United States’ trillion-dollar deficit in foreign trade. They did, however, agree on measures to increase the influence of emerging-market countries.

The “leaders’ declaration” that emerged from the two-day summit in Seoul implied both criticism and respect for China’s emergence as the world’s second largest economic power after the US – though the declaration did not mention any country by name.

G20 leaders avoided any formal agreement to reduce the “currency imbalances” that were a major topic of debate before and during the summit. Instead, without getting down to specifics, their declaration promised to “undertake macroeconomic policies” that would “ensure ongoing recovery and sustainable growth and enhance the stability of financial markets."

RELATED: Why the US should worry if Asian currencies strengthen

In that spirit, it called for “moving toward more market-determined exchange rate systems, enhancing exchange rate flexibility to reflect underlying economic fundamentals” – terms that suggested the need to set currencies at their real rates rather than at artificially low values.

The declaration did call for “refraining from competitive devaluation of currencies” but said nothing of the need for China to revalue its currency, as demanded by US negotiators, so Chinese goods would cease to flood American and other world markets.

China's powerful new role

Despite concern about Chinese currency, China’s position as a new force on the world stage was evident in the increased role that China and other emerging-market countries will now have in the International Monetary Fund (IMF).

The declaration confirmed that China will lead emerging-market countries in an increased quota that gives it far more say than before in decisionmaking, and emerging market countries also are getting increased representation on the IMF board.

The IMF “better reflects the changes in the world economy through greater representation of dynamic emerging markets and developing countries,” said the declaration. "These comprehensive quota and governance reforms,” it said, “enhance the IMF’s legitimacy, credibility and effectiveness.”

President Obama preferred to take an optimistic view though clearly concerned about China’s overwhelming trade surplus.

Despite the lack of progress, he believed IMF reform and stringent banking regulations, as agreed to in September in Basel, Switzerland, showed the value of the summit. “Instead of hitting home runs, we’re hitting singles,” he said.

While paying tribute to China’s new economic power and influence as “good for the world and good for America,” he was frank in his criticism. “The issue of the renminbi is an irritant not just to the United States but to a lot of trading nations,” he said, observing that China “spends enormous amounts of money interfering in the market to keep it undervalued.”

Mr. Obama argued against the view of the Chinese and Germans, shared by many here, that the US was depreciating its own currency by the decision of the Federal Reserve to buy up another $600 billion in Treasury bonds.

“This decision was not designed to have an impact on the dollar,” he said, defending a move that many have decried as depreciating the dollar and introducing volatility in global markets. “It was designed to grow the economy.”

Will international currency wars heat up?

Globally, the greatest concern is that international currency wars will intensify while emerging-market countries line up behind China and others in criticizing US financial policy and pressure.

That view was implicit in the leaders’ observation that “advanced economies” would be “vigilant against excess volatility and disorderly movements in exchange rates” – and “help mitigate the risk of excessive volatility in capital flows facing some emerging countries.”

Obama, in one-on-one meetings with China’s President Hu Jintao and Germany’s Chancellor Angela Merkel, did not succeed in convincing them of the need to reduce their countries’ surpluses.

IN PICTURES: Some of the world's most eye-catching currencies

Nonetheless, all could agree, “Uneven growth and widening imbalances are fueling the temptation to diverge from global solutions into uncoordinated action,” according to the declaration. And they agreed, “uncoordinated policy actions will only lead to worse outcomes for all.”

While everyone decried protectionism, Obama implied the risks. “Countries with large surpluses must shift away from depending on exports,” he said. “No nation must assume the road to prosperity depends on exports to the US.”

Korea-US free-trade agreement

South Korea’s President Lee Myung-bak, hosting the summit, was considerably more optimistic, claiming the deliberations here ended “ the so-called currency war.” He predicted that G20 leaders would come up with “concrete guidelines” at the next G20 in France in June. Meanwhile, he said, they had made “remarkable progress” here.

If currency imbalances added up to the most urgent topic confronting the Group of 20, the failure of the US and South Korea to come to terms on a Korea-US free-trade agreement may have had more immediate importance from an American perspective.

“A lot of countries including South Korea depend on exports,” said Obama. “They want to see us grow” – that is, for American consumers to have the resources to spend ever more on imports from Korea and elsewhere.

He was not, he said, “interested in trade agreements just for the sake of trade agreements.” Somehow, he said, there must be a way “to find a sweet spot that works for both Korea and the United States.”

Both he and Mr. Lee agreed Thursday that negotiators would work out “technical issues” besetting final approval of the free-trade agreement, which was actually concluded during the last year of the presidency of George W. Bush but needs ratification by the US Congress and the Korean National Assembly.

“It’s important to take the extra time,” Obama said. “I’m assured it’s a win-win for American workers and Korean workers.” But, he added, “There are a lot of suspicions” since “some of these deals may not be good for America.”