Wednesday, November 10, 2010

Free-Trade Pact With South Korea Still Not Finished


SEOUL, South Korea — Aides to President Obama and President Lee Myung-bak of South Korea were scrambling early Thursday to reach agreement on a revised free-trade pact that they hoped would show their commitment to expand commerce ahead of the G-20 conference of leading nations.

As Mr. Obama and Mr. Lee prepared for a face-to-face meeting, negotiators were working furiously to resolve last minute-sticking points concerning South Korean imports of American beef and automobiles.

People monitoring the negotiations say that if the deal is sealed, it will be the result of the direct talks between the two leaders. Mr. Obama and Mr. Lee have scheduled a joint news conference for midday Thursday in Seoul. For Mr. Obama — who is trying to reframe his presidency around improving the American economy and who has made the doubling of exports a centerpiece of his agenda — walking away without an agreement could prove to be an embarrassment.

The trade accord, an update of one the Bush administration negotiated and signed in 2007 and that has expired, has languished in the Democratic-controlled Congress. Mr. Obama, though, has thrown his weight behind it while calling for technical modifications that would be more favorable to American automakers and industrial unions. With Republicans soon to control the House of Representatives, some believe he will have a better chance of winning approval for the agreement.

“We’re all better off if we move forward on an export agenda that is robust, bipartisan and thoughtful, and there’s an opportunity for that right now,” said Representative Peter Roskam, an Illinois Republican who met the Korean foreign minister to discuss the accord. “There’s a collapsing window to get this done. We’ve seen what happens when these free-trade agreements languish.”

Mr. Obama is on a 10-day, four-nation swing through Asia that he is promoting as an effort to create jobs at home. The president is also trying to repair ties with the American business community, and the South Korean deal is a priority of the U.S. Chamber of Commerce, whose president, Thomas J. Donohue, has said he can round up the Congressional votes to get it approved.

In the three years since Mr. Bush negotiated the first free-trade pact, other nations, including Australia and Canada, have put similar deals in effect, and the chamber argues that the United States is falling behind.

“The landscape in Asia has changed,” said Tami Overby, the vice president for Asia at the Chamber of Commerce, who is here to monitor the talks. “It’s much more competitive, so I think the pressure on both sides to get this deal done is greater than ever.”

Ms. Overby said the negotiators had a “bumpy night,” but that was not uncommon. “It’s a very typical intense Korean negotiation, where things do tend to go very much to the last minute, so this is not really unexpected,” she said. “It’s a bit like déjà vu from the original negotiation.”

The biggest sticking point is over auto imports. In Washington, the Democratic leadership has been pushing for lower nontariff barriers to American exports of automobiles to South Korea, and for an easing of restrictions on American exports of beef, which have been a source of controversy since an outbreak of mad cow disease in 2003.

While the agreement would lower or eliminate tariffs on cars in both countries, the Obama administration has pushed for reductions in other export barriers like emissions, mileage and safety requirements and tax and insurance rules.

“If we can reach the standard for a fair trade agreement that the president has set out on particularly autos, we will move forward,” said Jen Psaki, the deputy White House communications director, who is traveling with Mr. Obama. “We hope to continue making progress.”

Automakers have complained that the South Koreans want to impose onerous fuel efficiency standards — stricter than those required in the United States — as a way of keeping American cars out of South Korea. Last week, the Ford Motor Company placed newspaper advertisements calling the deal unfair. Ford said it had backed every free-trade agreement approved by Congress since 1965, but said it could not do so for this one.

The consumer advocacy organization Public Citizen, which often opposes trade pacts, and groups like it have also questioned the benefits of the deal, saying that in the short term it could cost more jobs than it would create.

Supporters say the deal would promote growth in both countries and solidify an alliance that goes back to the Korean War.

“South Korea has been our most reliable Asian ally since the Vietnam War, and Washington has not done enough to recognize that in the recent past,” said Donald P. Gregg, the American ambassador here from 1989 to 1993.

The talks have been going on at a high level since last week, when top trade negotiators from both countries began meeting. They were joined on Monday by Ron Kirk, the United States trade representative, and his Korean counterpart, Kim Jong-hoon. Congressional staff have also been included, and three members of Congress are here for support: Senator Daniel K. Inouye, Democrat of Hawaii; Senator Thad Cochran, Republican of Mississippi, and Mr. Roskam.

Trade is a tough sell at home, especially during difficult economic times in hard-hit manufacturing communities, where workers tend to view trade pacts as drawing American jobs overseas. A survey released Wednesday by the Pew Research Center for the People and the Press found substantial skepticism about trade deals like Nafta and the policies of the World Trade Organization. The poll found that 35 percent of adults said free-trade agreements had been good for the United States, while 44 percent said they had been bad.

While most Americans say that increased trade with Canada, Japan and European Union countries — as well as India, Brazil and Mexico — would be good for the United States, reactions to increased trade with South Korea and China were mixed, according to the survey, which was conducted Nov. 4-7 among 1,255 adults. The margin of sampling error was plus or minus four percentage points. Republicans and Republican-leaning independents who were aligned with the Tea Party movement had a particularly negative view of the impact of free-trade agreements.

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