G-8 leaders to declare oil, food costs a major threat

The sharp rise in crude oil and food prices is seen as a grave threat that could stall the world economy, according to the final draft of a declaration to be issued at the end of the Group of Eight summit in Hokkaido, Japan.

However, the document does not offer any new solutions to counter the surge in crude prices. That's partly due to a conflict of interests among the G-8 nations over regulating the flow of speculative funds into the oil market, according to government sources.

To wrap up this year's three-day meeting in the lakeside town of Toyokocho, the G-8 leaders are scheduled to issue a declaration Wednesday that will address a wide range of global and regional issues, including the fight against global warming.

A short-term measure cited by the draft declaration as a means of curbing the rise in oil prices is ensuring that oil producers increase their production and supply capacity. The document also calls for adopting such medium-term policies as increasing investment in oil refineries.

However, the draft does not present any measures that would immediately help reduce the flow of speculative funds into the oil market, widely seen as a factor in the crude surge. The document only states that it is essential to boost the transparency of oil prices in the futures market.

During the conference, President Bush found resistance to his climate-change policy.

Mr. Bush insists that major emerging economies like China and India be included in any plan to cut emissions. But they have resisted.

Adding to Mr. Bush's isolation on the issue, European Commission President Jose Manuel Barroso said G-8 nations must reach agreement among themselves and avoid taking the approach that "I will do nothing unless you do it first," which he called a "vicious circle."

Beyond the climate-change standoff, Mr. Bush's proposal to base a missile defense system in Eastern Europe was rebuffed by Russia's new president, Dimitry Medvedev. And Mr. Bush failed to achieve a consensus among African leaders on sanctions against the government of Zimbabwe's Robert Mugabe to protest his re-election last month after his rival dropped out, fearful for his life.

Separately, German Chancellor Angela Merkel said Mr. Mugabe's election was not legitimate. "As for us in Germany, we do not rule out further sanctions," she said, adding that many other G-8 nations feel the same way.

But African nations are deeply divided, with many reluctant to put public pressure on Mr. Mugabe.

"There were differences. Not all leaders are there yet in terms of sanctions," said Dan Price, a White House national security aide.