|
 |
 |
|
Obama hopes to rally GOP on S. Korean pact
The White House’s attention will turn swiftly to trade after the midterm elections as President Obama intensifies an effort to wrap up an agreement with South Korea.
Trade is one of the few areas where the White House hopes, with some reason, to find agreement with resurgent Republicans. Obama is headed to South Korea for a G-20 meeting on Nov. 10-11, where he hopes to finalize the pact that was negotiated by the George W. Bush administration.
The GOP has been pressing for the South Korea deal to move forward. Obama, who wants to burnish his business credentials ahead of his expected 2012 reelection bid, also has a strong interest in seeing the $70 billion trade deal approved.
If passed by Congress, the South Korea pact would be the largest U.S. trade deal since the North American Free Trade Agreement of the early 1990s with Canada and Mexico.
Opposition from the American auto industry has been a sticking point in the negotiations. The administration is under heavy pressure from the Ford Motor Co. and the United Autoworkers to win new concessions from South Korea, which is the second-largest exporter of vehicles to the U.S.
Winning support from Ford is particularly important for the administration, since the company was the only one of the Big Three U.S. auto producers to decline a bailout during the financial crisis. Moving an agreement through Congress that Ford opposes would be a tough sell for the administration, especially since Obama has touted his support for the auto sector as an example of his economic accomplishments.
While South Korean auto producers sold 552,000 cars and light-trucks in the U.S. in 2009, Ford sold fewer than 3,000 cars in South Korea. The U.S. company points to those sales figures to argue that non-tariff barriers and rules imposed by the Korean government prevent more sales by U.S. companies.
Ford wants the U.S. to win more concessions from South Korea and slow the elimination of tariffs on South Korean cars. A 2.5 percent U.S. tariff on small cars would be eliminated immediately under the deal, while a 25 percent tariff on trucks would be eliminated over 10 years.
“Tariff reductions have to happen at a different pace,” one K Street source said of the auto provisions. The argument is that slowing the elimination of U.S. tariffs would give more time for Korea to grow its import market.
“Our goal is the same as the U.S. negotiators’ — fully open the Korean auto market in an enforceable way,” a spokesman for Ford said.
South Korea, however, sees any change to the original deal as a serious step backward and would likely demand additional concessions in exchange. They have referred to the recent meetings with the U.S. as discussions rather than negotiations to emphasize that the deal is already complete.
South Korean officials argue that imports make up an increasing share of their domestic market, and say the deal would help U.S. producers by immediately eliminating an 8 percent tariff. South Korea recently signed a trade deal with the European Union, however, that could give European producers a leg up in the South Korean market.
So far, other advocates for the Korean deal are not voicing concern that the agreement could unravel. Business groups led by the U.S. Chamber of Commerce recently visited South Korea and told officials they would have to accept concessions on autos and beef to finalize the deal.
Under the pact negotiated by the Bush administration, all U.S. beef would have access to the South Korean market. Only beef from cows 30 months old or less has been allowed since a mad cow disease scare hit the U.S. a few years ago. South Korea briefly opened to trade of all U.S. beef in 2008 before mass protests in the streets forced the country to change course.
Sen. Max Baucus (D-Mont.), the chairman of the Senate Finance Committee, wants South Korea to open its border to all U.S. beef imports, and business sources said the agreement might not move through Congress without action on the issue.
Most Viewed RSS Feed »
