Julia Gillard meets President Lee Yung-Bak of South Korea in Seoul ahead of the G20 summit. Source: AdelaideNow
PRIME Minister Julia Gillard says she is confident an agreement on international economic reforms will be sealed during her trip to South Korea.
Ms Gillard flew into Seoul on Wednesday, ahead of the Group of 20 leaders meeting and amid a massive security crackdown in the South Korean capital.
Her first port of call was a meeting with President Lee Myung-Bak at his official residence, the Blue House.
Ms Gillard told Mr Lee she was looking forward to a very successful G20 meeting.
"Significantly we will deliver the reform to the IMF (International Monetary Fund), and I'm pleased we've been able to work on those and work alongside you," Ms Gillard said.
"We will deliver the financial stability rules which are so important for the future.
"That means this G20 here in Seoul, development will be centrally on the agenda."
A discussion on global growth would provide a framework ahead of future structural reform, Ms Gillard said.
Officials are moving closer to a communique on banking reform and other social and economic measures to be approved by G20 leaders on Friday afternoon.
The UK's Financial Times has reported the section on banking reform is likely to involve a two-tier system.
One tier would comprise about 20 global banks, mostly based in the UK, Europe and the US, whose failure would pose a risk to the international financial system.
The second would be a country-by-country list of banks that are important within their home economies, but would pose little danger to the world if they failed.
The move would mean many big banks in nations such as Australia, China and Japan with little presence overseas would be exempted from new financial rules designed to shield the world financial system from downturns.
But it is understood talks on currency exchange rates, which have attracted heated debate in the lead-up to the summit, are unlikely to produce a clear result.
Treasurer Wayne Swan, who is also in Seoul, says there is a consensus among finance ministers for more market-determined exchange rate systems and a commitment for G20 members to refrain from competitive devaluation of currencies.
The leaders are also expected to commit to tackling global trade imbalances, but would issue "indicative guidelines" rather than set targets.
Korean authorities have placed a ban on protests or rallies within a 2km radius of the conference venue at Coex - Asia's biggest underground shopping mall - which houses the convention hall where the talks will take place.
About 60,000 military and police are on duty ahead of the arrival of world leaders, as small groups of protesters gathered in Seoul's CBD highlighting issues including human rights and poverty.
Ms Gillard will on Thursday morning lay a wreath at Seoul's War Memorial of Korea to mark Remembrance Day, with a number of Australian veterans also attending.
This year is the 60th anniversary of the start of the Korean War.
About 17,000 Australians served in the war and 339 were killed.
Mr Lee thanked Australia for its role in the war in his remarks to Ms Gillard.
"We will never forget that," he said.
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