FRANCE SEEKS G20 DEAL ON IMBALANCES, UNSURE OF SUCCESS

Paris, February 14 (Reuters)- France played down hopes on Monday of clinching a deal at a meeting of G20 finance ministers this week on which indicators should be used to measure global economic imbalances, but said that remained its goal.

A G20 summit in Seoul last year mandated France's presidency to reach agreement in the first half of 2011 on a list of "indicative guidelines" for quantifying imbalances to prevent a repeat of the global economic crisis. Agreeing on a list will be the focus of this week's meeting in Paris.

Disagreement has persisted between rich and developing nations over which indicators to select, with G20 officials saying China in particular is resisting pressure from developed nations to include factors like real effective exchange rates and the level of foreign assets. "We hope ... to reach agreements (this week) on economic performance indicators which will allow us to measure the way toward the optimal point," French Economy Minister Christine Lagarde told a news conference on Monday.

"Our hope is to reach agreement on indicators as soon as next Saturday. If we do not, it is not a drama”.

Lagarde said that while there was a basic understanding that any indicators should measure commercial imbalances, there was "a long debate on whether to include the trade balance with its flows of products and whether to include flows of services”.

G20 officials say that China would prefer to be assessed on its trade account, which it has pledged to gradually reduce as it boosts domestic demand, rather than on its current account.

The current account would include interest payments on China's nearly $3 trillion in reserves which reflect its accumulated past trade surpluses.

Data on Monday showed China's trade surplus fell to its lowest in nine months in January after imports surged, supporting the government's case ahead of the G20 meeting that it is doing enough to spur domestic demand without speeding up currency appreciation.

Lagarde said that if the G20 meeting on Friday and Saturday could seal agreement on the list of indicators then deciding numeric limits on them would be "the next stage”.

The group's finance ministers reconvene in Washington in April but the unity of purpose that marked the G20 response in 2009 when the world was looking into an economic abyss has dissipated.

Bank of France Governor Christian Noyer, who will host his fellow G20 central bankers this week, said the debate on imbalances was not intended to be a finger-pointing exercise at countries with large deficits or surpluses.

And Lagarde reiterated that the G20's Mutual Assessment Process (MAP) would take into account the economic conditions of individual countries, for example large commodities exporters like Saudi Arabia and Australia.

Not seeking commodities controls

France has made seeking agreement on tougher regulation to curb volatility in food and fuel prices one of the main priorities of its year-long G20 agenda.

But here too it has hit trouble with a deep split between major producers of commodities who oppose draconian market curbs, and the big consumers of commodities who want greater control of prices.

Lagarde tried to assuage what she said were concerns voiced by large emerging economies such as Brazil. "We do not want to propose that prices are administered, not at all," she said.

As part of French President Nicolas Sarkozy's aim of reshaping the international financial system, Paris is also pushing for the inclusion of China's yuan currency in the basket of currencies underpinning the IMF's Special Drawing Rights -part of a shift toward what Sarkozy dubs a "multipolar" world.

Lagarde stressed, however, that China would have to meet conditions on the convertibility of the yuan and liberalize its current account for its currency to be included in SDR.

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