The leaders of the G20 summit gather around the meeting table at the Pittsburgh Convention Centre on Friday. (Jim Bourg/Reuters)

World leaders at the two-day trade summit in Pittsburgh on Friday found consensus on thorny trade issues and announced the G20 will supplant the G8 for governing economic issues.

"We designated the G20 to be the premier forum for our international economic co-operation," a draft statement from the leaders at a two-day G20 summit in Pittsburgh reads.

For more than three decades, the Group of Eight major developed countries — the U.S., Japan, Germany, France, U.K., Canada, Italy and Russia — had served as the board of directors for major global economic decisions.

But now the responsibilities of economic co-ordination are being transferred to the G20, which includes major emerging economies such as China, Brazil and India.

"The old system of international economic co-operation is over," British Prime Minister Gordon Brown said. "The new system, as of today, has begun."

Broad consensus reached

The leaders also declared major progress in their co-ordinated efforts and "forceful response" to prevent global financial collapse but cautioned that their work was far from over.

"Financial markets have come back to life, and we stopped the crisis from spreading further to the developing world," U.S. President Barack Obama said, speaking as the summit in Pittsburgh ended. "Still," he said, "we know there's much further to go."

In the draft version of the group's communique, leaders agreed to formulate objectives that each country will pursue in such areas as bringing down trade imbalances or budget deficits.

Deficits and trade imbalances are believed to have played a prominent role in plunging the global economy into a downward spiral.

U.S. President Barack Obama stands with Canada's Prime Minister Stephen Harper as they arrive at the Phipps Conservatory for the summit's opening reception. (Chris Wattie/Reuters)

A process will be put in place to have each nation's objectives reviewed by their peers but tellingly, does not include penalties for countries failing to reach their goals.

Tackling trade imbalances was one of many issues under discussion. The thorny issue of bank compensation was also included in the draft communique.

The group agreed to work toward ensuring bank bonuses are linked to long-term sustainable growth, not short-term profits. The final document papered over differences by avoiding language for specific caps, something that France had pushed for but that America had opposed.

A U.S. push for stronger requirements for bank capital — the cushion that banks hold against loan losses — was included, but with many of the specifics over how the capital would be determined left to be set at later meetings

"Our objectives were to encourage full implementation of domestic stimulus measures, to urge completion of measures to fix the financial system, and to urge all nations to resist the temptation of protectionism," Prime Minister Stephen Harper said Friday.

"We are pleased to see Canada’s voice in contribution reflected in the leaders' declaration."

Beyond specific policy announcements, the G20's new prominence as the major body of international trade issues was front and centre on Friday.

"I think it's a confirmation of the international reality," former prime minister Paul Martin, who was finance minister in 1999 when the G20 was formed following the Asian financial crisis, told CBC News from Montreal.

"[The G20] will be better able to tackle issues of global gridlock because all the protagonists are at the table.

"How can you talk about climate change if India and China are not at the table? How can you talk about trade imbalances if China is not at the [G8] table?" he asked.

Canada next G20 host

On Friday, South Korean President Myung-bak Lee and Harper announced that the two countries will co-host the next summit when the G20 meets in June 2010.

Prime Minister Stephen Harper shakes hands during a joint press conference with Republic of Korea President Lee Myung-bak at the G20 summit in Pittsburgh on Friday. (Sean Kilpatrick/Canadian Press)Canada is already scheduled to host a G8 summit in Huntsville, Ont., at that time, but on Friday, the two leaders said a separate G20 summit will happen simultaneously.

"We will hold distinctive summits but they will be proximate," Harper said at a press conference on Friday.

The details of where the summit will take place have yet to be worked out, Harper said, but Canada and South Korea will act as co-host and co-chair.

"We have to be very clear that we are not replacing the G8 with the G20," Harper said.

Next to the United Nations, the G8 has historically been the dominant body for discussions on peace and security issues, as well as international development.

"We we believe those discussions should continue," Harper said, but the G20 will now take the lead on economic matters.

With files from The Associated Press