U.S., South Korea miss Obama deadline on reaching trade deal

Negotiators failed Thursday to reach a deal on a U.S.-South Korea free trade agreement because of differences over automobiles.

President Obama, who hoped to finalize a deal during his trip to South Korea to boost his pledge to double U.S. exports over the next decade, said Thursday that he had asked U.S. negotiators to continue talks.

In a press conference in Seoul, Obama expressed confidence a deal would be reached, but suggested the agreement as negotiated by the George W. Bush administration would not have the support to move through Congress.

"If we rush something that then can't get popular support, that's going to be a problem," Obama said. "We think we can make the case, but we want to make sure that case is airtight."

Ford and Chrysler oppose the deal unless it is changed to address what the two companies say is an unbalanced trade in automobiles. The two companies argue the agreement would not do enough to open the Korean market to U.S. companies, which sell few cars and trucks in South Korea compared to what Korean companies such as Hyundai and Kia sell in the U.S.

The auto companies have support from key members of Congress from Michigan.

In a bipartisan statement, House Ways and Means Committee Chairman Sandy Levin (D-Mich.) and ranking member Dave Camp (R-Mich.), who will soon replace Levin as chairman, both said it was essential for the U.S. to demand more concessions from South Korea.

"In 2009 alone, South Korea exported more than 476,000 autos to the U.S. while fewer than 6,000 U.S. vehicles managed to get through Korean trade barriers," the two said in a joint statement. "It was essential to our government today to deliver a strong message by insisting on a two-way street for trade with South Korea."

The joint statement from Camp and Levin is interesting because Republicans are seen as being more reflexively pro-trade than House Democrats. The tough line from both members on autos, however, suggests the U.S. will have to win concessions from South Korea to gain support from the incoming GOP majority in the House.

U.S. Trade Representative Ron Kirk said it was "fair" to say the sticking points on an agreement are trade and beef. South Korea is to allow all imports of U.S. beef under the deal as negotiated, but stopped accepting beef from cows more than 30 months old after a mad-cow disease scare in the U.S. When Seoul tried to open the market further, it prompted huge street demonstrations in South Korea.

Kirk said U.S. officials felt that the disparity in market access for the auto industry "was one thing that we needed to address" despite "very productive" discussions over the past four days, according to a pool report.

"But it became apparent that we weren't going to resolve all of these in the remaining hours," said Kirk, who insisted the failure to finish the deal was not a setback for Obama.