Twenty-five years ago next week, a small group of men gathered in the Plaza Hotel in New York to remake the world economy. The accord they struck, by which governments in the world’s five leading powers combined to weaken the dollar and rebalance the world economy, stands as perhaps the high-water mark of international economic co-operation over the past 40 years.

Today, as deep fissures have opened between the world’s leading economies over exchange rates, global imbalances and deficit reduction, a reawakening of the Plaza Accord spirit could be invaluable.

But though some ambitious souls think that the G20 could be a forum in which such a grand bargain can be struck, the path is more difficult than in 1985.

Fred Bergsten, head of Washington’s Peterson Institute and an optimist about the possibilities for global economic governance, notes that some of the potential trade-offs then also exist now. By boosting the US economy through a weaker dollar, he says, Plaza and a subsequent 1987 deal to stabilise the dollar, the Louvre Accord, allowed the White House more freedom to reduce the deficit.

“I asked [then Treasury secretary] Jim Baker how much contribution Plaza had made to the deficit reduction, and he said maybe 10-20 per cent,” says Mr Bergsten. “That’s not huge, but it’s not bad.”

A similar commitment from China to let the renminbi appreciate might calm the debate on fiscal consolidation in the US, he adds.

But others point out the differences. David Rothkopf, a fellow at the Carnegie Endowment, says: “Japan in 1985 was part of a small club of advanced economies and was prepared to play by the rules of that club. But China regards itself as sui generis – such a large and diverse economy that it can’t play by the same rules as anyone else.”

Mei Xinyu, a researcher at the Chinese ministry of commerce, said earlier this year that rapid appreciation would have “an even bigger impact on China than on Japan because China was at a much earlier stage of development”. While Japan was an advanced country with sophisticated companies, he says, China’s “labour-intensive industries cannot stand the pressure from a substantial appreciation because of their very slim profit margins”.

In any case, Chinese officials often argue that the Plaza Accord was disastrous for Japan. It encouraged the Bank of Japan to cut interest rates to offset the strengthening yen, and many in both Japan and China say that shift encouraged Japan’s property and financial bubble at the end of the 1980s.

Mr Bergsten says that “smarter Chinese economists” privately accept these arguments are bogus, and that Japan’s poor banking regulation was more to blame for the bubble.

Even to achieve the Plaza Accord took a committed diplomatic effort by the US to corral European members of the G5 – France, Germany and the UK – and strong-arm Japan into co-operating. Such co-ordination is now more difficult.

True, there are complaints from other members of the G20 about China’s exchange rate manipulation. But the administration of Barack Obama, US president, has not managed to unite them to press Beijing. Japan’s decision this week to weaken the yen was not a vote of confidence in the multilateral approach.

Dan Price, partner at the law firm Sidley Austin and President George W. Bush’s “sherpa” representative at the G20, says the forum made remarkable achievements at the very height of the global financial crisis in 2008 and 2009.

But he adds that fixing the global economy needs more than just a deal on exchange rates and fiscal deficits, and must address Europe’s sovereign debt problems, Germany’s current account surpluses and rigidities in the European labour market.

“While much can be accomplished, it would be unrealistic to expect that the G20 summit could definitively resolve all these issues in one grand bargain with metrics and timetables,” he says.