Obama: South Korea Trade Deal Needs More Work

President Barack Obama said on Tuesday that auto, beef and other trade issues with South Korea must be resolved before he will ask Congress to vote on a two-year-old free trade agreement with the longtime ally.

Korea, Korean Flag
Korea, Korean Flag

"We want to make sure that we have ... an agreement that I feel confident is good for the American people, that President Lee feels confident is good for the Korean people, before we start trying to time when we would present it," Obama said at a press conference with South Korean President Lee Myung-bak.

He paired South Korea's concern about beef imports with U.S. concerns about the pact's auto provisions, saying both were "understandable, legitimate issues for negotiation."

Obama and Lee issued a joint statement saying they were "committed to working together to chart a way forward" for the agreement, which was signed in June 2007.

Toward that goal, the two countries agreed to begin "working-level consultations," Lee said.

"Once we have resolved some of the substantive issues, then there's going to be the issue of political timing and when that should be presented to Congress. But I don't want to put the cart before the horse," Obama said.

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Obama opposed the free trade deal during last year's campaign on the grounds that its auto provisions were unfairly tilted in favor of South Korea, which already runs a huge auto trade surplus with the United States.

That won him favor with U.S. auto workers but disappointed a wide swath of manufacturing, service industry and farm groups that expect the agreement would boost their exports.

U.S. Open To 'Creative' Solution

The U.S. Trade Representative's office has been meeting in recent weeks with Congress and other stakeholders to hear their concerns and hopes to have a proposal ready "in the near future" to present to Seoul, a U.S. trade official said.

South Korea has been clear that it would be very difficult for them to formally reopen the pact because of the demands some domestic farm groups would make for changes in the agreement, the official said.

"We're open to being creative on finding a way forward," the official said, adding that could be accomplished through a variety of means, including an exchange of letters to outline additional commitments.

U.S. Trade Representative Ron Kirk and South Korean Trade Minister Kim Jong-hoon will have several opportunities in the coming months to discuss the pact, including a meeting of Asia-Pacific trade ministers on July 21-22 in Singapore.

Obama's insistence on changes to the trade deal comes as he is committing tens of billions of dollars in taxpayer money to prop up U.S. automakers Chrysler and General Motors. Ford, the only U.S. automaker not to accept U.S. government aid, has led opposition to the Korea deal.

"Ford deeply appreciates President Obama's strong commitment to ensuring a correction in the huge imbalance in U.S.-Korean automotive trade before an FTA will be considered," Stephen Biegun, vice president of international government affairs, said in a statement.

Last year, Lee paid a huge political price when he agreed to U.S. demands to reopen South Korea's market to American beef in an effort to spur action in the U.S. Congress on the pact.

The move stirred massive protests in South Korea and caused Lee's popularity to plummet on concern the deal did not have adequate protections against importing beef from U.S. cattle that could have mad cow disease.

The United States appreciates the progress South Korea has already made in reopening its beef market, but still has concern about obstacles that U.S. exporters face, the U.S. trade official said.