Home > What's New
Obama calls non-tariff barriers to autos biggest obstacle to Korea FTA talks
By Hwang Doo-hyong
WASHINGTON, Nov. 12 (Yonhap) -- U.S. President Barack Obama said Friday that non-tariff barriers on the auto trade has served as a bigger obstacle than beef to the conclusion of talks for the ratification of a free trade deal with South Korea.

   "Beef was not the only issue that was of concern," Obama said at a news conference in Seoul, according to a transcript released by the White House. "In fact, a larger concern had to do with autos. And the concern is very simple. We have about 400,000 Korean autos in the United States and a few thousand American cars here in Korea."

   Obama met with South Korean President Lee Myung-bak Thursday, but failed to strike a deal for the ratification of the free trade deal pending for more than three years over U.S. demand for wider access to the Korean auto and beef markets.

   Obama said that he wanted the talks concluded during the talks with Lee held on the margins of the G-20 summit as part of his ambitious goal of doubling U.S. exports within five years.

   A deal could have given momentum for two other pending trade deals with Panama and Colombia and Obama's push for a similar deal with Japan, Australia, Malaysia and several other Asian and Pacific Rim countries called the Trans-Pacific Partnership (TPP).

   "People are concerned about whether the standards, the non-tariff barriers with respect to autos, is something that is preventing us from being able to compete with very good products," Obama said at the conference to wrap up his two-day stay in the South Korean capital, where he attended the G-20 summit and held bilateral meetings with Lee, Chinese President Hu Jintao and leaders from several other countries.

   Obama flew to Yokohama, Japan, later in the day for the annual Asia-Pacific Economic Cooperation (APEC) forum.

   Obama's remarks contradict media reports that the beef issue, which U.S. Trade Representative Ron Kirk presented in the last minutes of the intensive three-day negotiations earlier this week ahead of Obama's meeting with Lee, derailed the talks.

   South Korea has a firm position not to discuss the U.S. demand for shipments of beef from cattle older than 30 months as it experienced weeks of street rallies in early 2008 after lifting a ban on U.S. beef imports due to safety concerns.

   Seoul suspended shipments of U.S. beef in 2003 after the outbreak of several cases of mad cow disease in the U.S.

   Seoul officials said that they are not ready to allow imports of beef from older cattle, although they will consider easing safety and environmental standards for autos.

   Obama expressed hope for an early conclusion of the trade talks.

   "I think that we can find a sweet spot that works both for Korea and the United States," he said. "I'm not interested in trade agreements just for the sake of trade agreements. I want to make sure that this deal is balanced. And so we're going to keep on working on it. But I'm confident we can get it done."

   South Korean Trade Minister Kim Jong-hoon will soon visit Washington to meet with Kirk to conclude negotiations.

   Obama repeated his pledge to complete the talks "within weeks, not months."

   "We will continue to work toward a U.S.-Korea free trade agreement in the coming weeks -- not just any agreement, but the best agreement to create jobs both in America and Korea," he said. "I think we can get a win-win, but it was important to take the extra time so that I am assured that it is a win for American workers and American companies as well as for Korean workers and Korean companies, because I'm the one who's going to have to go to Congress and sell it."

   Many Congressional Democrats disfavor the trade deal for fear of possible job cuts amid the worst recession in decades, although free trade is seen as one of the potential areas of close cooperation between Obama and congressional Republicans, who regained control of the House in last week's midterm elections amid a prolonged economic slump and near double-digit unemployment.

   "I think there's a lot of suspicion that some of these trade deals may not be good for America," he said. "I think this one can be but I want to make sure that when I present that trade agreement to Congress I am absolutely confident that we've got the kind of deal that is good for both countries."

   Proponents of the deal fear any failure by Obama to present the deal to Congress early next year will jeopardize its fate as Republicans have vowed to reverse Obama's health care and focus on taxes and more urgent other domestic issues ahead of the politically sensitive campaign for the presidential election in 2012.

   The United Auto Workers (UAW) has called on Congress to delay implementation of the tariff reductions on autos and auto parts "until the domestic auto industry has fully recovered," and demanded it "be tied to measurable results in reducing the automotive trade deficit."

   The Korea FTA calls for the elimination of the 2.5 percent tariff on most autos and auto parts and a phase-out of the 25-percent tariff on light trucks.

   The U.S. exported 5,878 automobiles to South Korea last year. South Korean auto shipments to the U.S. totaled 476,833 last year, according to the UAW.
Beef is not an issue covered by the Korea FTA, but Senator Max Baucus (D-MT), chairman of the Senate Finance Committee, and some other politicians have threatened not to move for the approval of the Korea FTA unless South Korea allows shipments of beef from cattle of all ages. Montana is said to be the biggest source of beef from older cattle.

   The U.S. beef industry has called for a cautious approach, fearing a possible backlash in the Korean market, where U.S. beef shipments have grown rapidly since South Korea resumed imports in 2008 after a five-year hiatus.

   Independent studies show that the implementation of the FTA with South Korea will create 240,000 jobs in the U.S. and increase annual two-way trade by more than $20 billion, up from $83 billion.

   The U.S. goods trade deficit with South Korea was $10.6 billion in 2009, down $2.8 billion from 2008, according to U.S. Trade Representative (USTR) figures.

   South Korea says its trade surplus with the U.S. is far less than those enjoyed by China or Japan, and that the U.S. deficit would be easily neutralized after factoring in the U.S. surplus with South Korea in finance.

   Obama has feared any delay in the Korea's FTA's ratification will undermine U.S. competitiveness in Korea, the seventh biggest overseas market for the U.S.

   South Korea recently signed an agreement with the European Union for the provisional implementation of a bilateral free trade deal from July 2011.

   Seoul also effectuated free trade deals with India and Chile, and is proceeding with similar agreements with China, Japan, the Association of Southeast Asian Nations, Australia and Canada.

   China in 2004 replaced the U.S. as South Korea's biggest trading partner, with China's two-way trade accounting for 20.5 percent of South Korea's total trade volume last year compared with 9.7 percent for the U.S., according to statistics from the International Monetary Fund.

   hdh@yna.co.kr
(END)