WASHINGTON (Reuters) - President Barack Obama vowed at the weekend to work with Republicans and Democrats to pass a free-trade pact with South Korea that he said was a model for future agreements he would seek in Asia and around the world.
U.S. and South Korean negotiators struck a deal on Friday on the long-delayed pact, which was signed in 2007 but had not been ratified for three years because of U.S. auto and beef industry concerns.
The pact was an accomplishment for Obama, who faced an embarrassing setback when negotiators failed to settle their differences before he visited Seoul last month, but it was greeted less positively in South Korea.
“The agreement we’re announcing today includes several important improvements and achieves what I believe trade deals must do. It’s a win-win for both our countries,” Obama told reporters in Washington on Saturday.
A day after the Labor Department reported U.S. unemployment unexpectedly hit a seven-month high of 9.8 percent in November, Obama said the pact would boost annual exports of automobiles, agricultural products and other goods and services by $11 billion and generate 70,000 additional jobs.
South Korean trade minister Kim Jong-hoon denied reports in his country he had made concessions that were not reciprocated.
“By accepting U.S. demands on the auto sector, South Korea may be able to advance the time to raise market share in the U.S. auto market,” he told reporters, citing growing local production by South Korean carmakers in the United States.
The revised deal keeps the 2.5 percent U.S. tariff on South Korean cars until the fifth year of implementation, while South Korea will immediately halve its 8 percent tariff on U.S. auto imports.
“Given the trend, having the 2.5 percent tariff for another four years may have a limited impact on our auto sales,” Kim said.
Obama said the agreement with South Korea showed the United States was ready to finalize more trade pacts — business leaders wish two other long-delayed deals, with Panama and Colombia, would also get through Congress.
“I’m especially pleased that this agreement includes groundbreaking protections for workers’ rights and for the environment. In this sense, it’s an example of the kind of fair trade agreement that I’ll continue to work for as president, in Asia and around the world,” Obama said.
“This agreement also shows that the United States of America is determined to lead and compete in our global economy,” he added.
He also said the agreement shows the strength of Washington’s alliance with Seoul. Tensions in the region ratcheted up last month after North Korea attacked the small southern island of Yeonpyeong, killing four people.
Business leaders and analysts said free trade could be one area of cooperation between Obama’s Democratic administration and Republicans in Congress, who won a majority in the House of Representatives in the November 2 elections, amid voter discontent over the sputtering economy and worries over the U.S. deficit.
Obama said he looked forward to working with Congress and leaders of both parties to approve the pact.
Both the U.S. House and Senate must approve the agreement, and Senate Republican Leader Mitch McConnell said he was prepared to work with Obama to win approval. A range of companies and industry groups have spoken out in support, including the United Auto Workers union and Ford Motor Co., which welcomed the changes made to address their concerns about market access provisions of the original deal. House Majority Leader Steny Hoyer, a Maryland Democrat, also praised the deal.
South Korea’s Kim said the deal would take effect by the start of 2012 after parliamentary approval.
South Korea-based Hyundai Motor, the world’s fifth-largest carmaker along with affiliate Kia Motors, was the only major carmaker to increase sales in the battered U.S. market last year.
Despite progress on the auto issues, Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said he was “deeply disappointed” the deal did not address South Korea’s remaining restriction on beef imports imposed in response to discovery of several cases of mad cow disease in the U.S. cattle herds a number of years ago.
Baucus, whose committee has jurisdiction over trade, said he would reserve judgment while continuing to work with the Obama administration.
Obama said the United States would continue to press for “full access for U.S. beef to the Korean market,” but a senior official in the South Korean government said no talks were scheduled on the subject.
“There is no plan to hold additional talks in relation to beef between South Korea and U.S. governments,” the unnamed official told Yonhap news agency on Sunday.
Obama has made increasing U.S. exports a focus of his strategy for generating jobs.
“(The Korea pact) will contribute significantly to achieving my goal of doubling U.S. exports over the next five years. In fact, it’s estimated that today’s deal alone will increase American economic output by more than our last nine free trade agreements combined,” Obama said.
Additional reporting by Kim Yeonhee in Seoul; Editing by Daniel Magnowski