SEOUL - Negotiations over a U.S.-Korea free-trade agreement broke down on Thursday after four days of discussions, a setback for the leaders of the two nations and a blow to efforts to rekindle broader world trade talks.
Despite optimism from both sides as they began bargaining, domestic political concerns weighed heavily on the talks and ultimately appeared to have prevented the final compromises needed to secure the agreement.
South Korean President Lee Myung-bak and President Obama began their scheduled meeting around noon Thursday in Seoul without a deal in hand. A White House official familiar with the talks said the discussions foundered over long-standing disagreements over U.S. access to the Korean auto and beef markets.
The meeting between the two heads of state ended without an accord. At a news conference afterward with South Korean President Lee Myung-bak, Obama said, "We believe that such an agreement, if done right, could be a win-win for our people."
"We have asked out teams to work tirelessly in the next days and weeks to get an agreement, and we are confident we will do so," Obama said.
The failure to produce a signed agreement at the summit is significant. Obama had set a personal goal of completing the Korea deal during the meeting of the Group of 20 world leaders, and Lee had cast the agreement as way to deepen the strategic and political ties between the two nations, as well as the economic ones.
Corporate and trade officials have been watching the talks as a barometer for trade issues as a whole, and how they might fare at a time when many countries are struggling with high unemployment and trying to boost their exports as a way to create jobs.
Obama has pressed for the trade pact as part of his effort to boost U.S. exports. New data released by the federal government Wednesday showed sluggish growth in U.S. overseas sales in September, which were up less than one half of 1 percent over the month before. Imports also fell, narrowing the monthly trade gap to $44 billion from $46.5 billion.
In the United States, opponents of the South Korea deal, originally negotiated by the George W. Bush administration, say the agreement would siphon away more U.S. manufacturing jobs without creating a truly open market for U.S. products.
Obama had criticized the deal during his presidential campaign, and officials from the Office of the U.S. Trade Representative have pushed for ways to increase U.S. auto sales in the country and persuade South Korea to lift a lingering restriction on U.S. beef.
Officials involved in the talks had reported progress on the auto issue, including a possible agreement by South Korea to accept slightly weaker U.S. emissions standards as long as imports remained below a certain level. Such an agreement would have spared U.S. automakers the expense of modifying a small number of vehicles for the South Korean market.
But in the end, negotiations did not advance enough to assure U.S. officials that American carmakers would gain better access to Korea's market.
Beef has been another major sticking point. South Korea has insisted that it retain for now a restriction on imports of U.S. beef produced from the slaughter of cattle that is more than 30 months old. That limit was set when Lee lifted a more general restriction on U.S. beef put in place after the mad cow scare several years ago.
Though the rule affects only a small portion of the market, South Korean officials think that public opposition would be too great if they did away with it
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