US cites 'substantial progress' in trade talks amid report of possible deal

President Obama's trade chief says the U.S. and South Korea have made progress but stopped short of announcing a trade deal. 

In a statement, U.S. Trade Representative Ron Kirk said he and Korean Trade Minister Kim Jong-hoon had made "substantial progress" and that it was time for leaders to review their work "before we move forward."

Kirk spoke after South Korean media reported a possible deal between the two sides. The Yonhap News Agency, quoting the South Korean embassy, reported the two sides had reached "a substantial outcome."

“We've produced a substantial outcome on the autos and other limited areas during the ongoing talks,” Yonhap news quoted the South Korean embassy as stating. “A final announcement will be made after the delegations reported outcome to their respective governments for confirmation.”

Officials from the two countries have been negotiating this week over U.S. demands that South Korea further open its market to U.S. automobiles and beef. The two sides failed to reach a deal by an earlier deadline set by President Obama to coincide with his visit to Seoul last month.

The Bush administration initially signed off on an agreement with South Korea, but the trade deal has languished in the Democratic Congress over objections from Ford and Chrysler, labor unions and consumer groups. President Obama has made finishing the deal a priority and has vowed to double exports in the next 10 years to bolster the economy.

But many House Democrats are skeptical new trade deals will help a struggling economy. Friday's report that unemployment in November rose to 9.8 percent is unlikely to increase enthusiasm for a South Korean deal among Democrats who are already skeptical of free trade. 

Democrats critical of the South Korean trade agreement met with President Obama the week before the Thanksgiving holiday to relay their concerns.

Ford has pushed for U.S. tariffs on South Korean automobiles to be lowered over a 10-year period, rather than eliminated immediately. The company argues U.S. auto producers have faced barriers to the South Korean market and that lowering the tariff over time will give the South Korean market more time to change so that it accepts more U.S. cars. 

This story was updated at 10:40 a.m.