Here is the “Leaders Declaration” for the Summit on Financial Markets and the World Economy (aka the G-20 Summit) hosted by President Bush last Friday and Saturday in Washington, DC.

This is the second of a two-part note. Here’s the first part.

A fair amount of the press coverage followed a ready-made storyline: “Lame duck President / not much accomplished.” This storyline is incorrect. Let’s look at some important wins in the actual text of the declaration.

• Formerly Communist China and Russia (along with all the other participating nations) agreed to the following text:

12. We recognize that these reforms will only be successful if grounded in a commitment to free market principles, including the rule of law, respect for private property, open trade and investment, competitive markets, and efficient, effectively regulated financial systems. These principles are essential to economic growth and prosperity and have lifted millions out of poverty, and have significantly raised the global standard of living. Recognizing the necessity to improve financial sector regulation, we must avoid over-regulation that would hamper economic growth and exacerbate the contraction of capital flows, including to developing countries.

• All 20 nations agreed to reject protectionism, to refrain from raising new trade barriers for a year, and to continue working toward a global free trade “Doha” agreement:

13. We underscore the critical importance of rejecting protectionism and not turning inward in times of financial uncertainty. In this regard, within the next 12 months, we will refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports. Further, we shall strive to reach agreement this year on modalities that leads to a successful conclusion to the WTO�s Doha Development Agenda with an ambitious and balanced outcome. We instruct our Trade Ministers to achieve this objective and stand ready to assist directly, as necessary.

• All 20 nations agreed on the “root causes of the crisis.” It’s not as clear as the President’s explanation, but it’s quite close, especially given that this is the result of a 20-nation negotiation.

3. During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent […]