Host President Lee Myung-Bak had urged fellow Group of 20 leaders to compromise when the meeting began Thursday evening, said summit spokesman Kim Yoon-Kyung.
Negotiators talked through the night to try to hammer out a compromise deal on easing trade imbalances distorting the world economy and hampering growth.
“I think the prospect is rather bright,” Kim told a briefing, when asked about hopes of making progress on deals reached by G20 finance ministers last month.
The ministers vowed to “refrain from competitive devaluation of currencies” and aim for “more market-determined exchange rate systems”.
They also agreed to “pursue the full range of policies conducive to reducing excessive imbalances and maintaining current-account imbalances at sustainable levels”.
How to do this is the topic dominating the Seoul summit, taking place amid intense security.
A US proposal made last month for numerical limits on current account imbalances — equal to four percent of economic output — has been shelved after fierce opposition from surplus nations like China, Germany and Japan.
Spokesman Kim declined to give any details of the overnight talks.
The vice finance ministers and senior officials held talks from 10 pm to 3 am Friday on a summit statement.
“Negotiators feel a lot of pressure (to reach an agreement) as their leaders agree on the need for international cooperation,” Kim said.
Lee had separate contacts Thursday evening with each leader after the summit started. “I would appreciate it if all countries make some concessions,” the spokesman quoted him as telling them.
The United States, striving to recover from its worst economic crisis in decades, has locked horns with exporting giants China and Germany over a plan to rebalance skewed trade.
President Barack Obama, hoping to salvage a deal at the G20 after suffering an economy-linked drubbing in US elections last week, said his administration wanted to boost growth via “prudent” economic policies.
“It is difficult to do that if we start seeing the huge imbalances redevelop that helped to contribute to the crisis that we just went through,” he told a news conference with President Lee.
“I don’t think this is a controversial proposition.”
But controversy is rife in the G20 after the Federal Reserve instituted a 600-billion-dollar attempt to reflate the US economy, in a radical monetary step that foreign critics say will trigger tit-for-tat currency devaluations.
Chinese officials sought to throw the onus back on the United States by arguing that Beijing has an “unswerving” commitment to reform its currency regime, but needs stability in the world economy to do it.
“If you’re sick yourself, don’t ask others to take medicine,” commerce ministry spokesman Yu Jianhua said, demanding the debt-ridden United States fix its own house first.
In one-on-one talks with Obama, Chinese President Hu Jintao said: “I believe that with the concerted efforts of all the parties, the summit in Seoul will produce positive outcomes.”
British Prime Minister David Cameron, however, conceded that the G20 was not in a “heroic phase” after its determined response to the 2008 financial crisis, and that it needed to do “a lot more work” on fixing economic imbalances.
Brazil’s president-elect, Dilma Rousseff, a trained economist, condemned Washington’s “weak dollar policy” according to the state news agency Agencia Brasil.
“China is being very difficult in finalising the texts, so there might be brackets left for the leaders to fill in after all,” a German government source said late Thursday.
At best, South Korean and German officials said, the G20 may settle for a watered-down deal to task the International Monetary Fund with crafting guidelines to trim the yawning imbalances between creditor and debtor nations.
Ahead of her own bilateral meeting with Obama, German Chancellor Angela Merkel lashed out at a more detailed US plan to rectify lopsided commerce by limiting the current account surpluses of big exporters.
The United States wants the G20 to agree to curtail “excessive imbalances” as a back-door way of forcing China to realign its currency, which critics say is kept deliberately cheap to support Chinese exporters.
But emerging economies around the world are worried that the billions in new Fed money will stoke speculative flows of foot-loose “hot money”, and some are resorting to capital controls in a bid to stem the tide.