Art of the Deal

Trade should be on President Obama's agenda with South Korea.

SOUTH KOREAN President Lee Myung-bak arrives in Washington today, with the North Korean nuclear threat at the top of his agenda with President Obama. This is as it should be: In recent weeks, North Korea has tested a long-range missile and an atomic device, and, when confronted with new U.N. sanctions, it declared its intention to enrich uranium -- something it had previously denied doing -- and "weaponize" plutonium. Past agreements with North Korea to trade food, fuel and diplomatic concessions for a nuclear freeze appear to have collapsed. South Korea and the United States, longtime allies, need to stand together against this latest spasm of belligerence from Pyongyang.

That is all the more reason for the two sides to take a fresh look at another issue that has at times divided them: trade. In 2007, the Bush administration inked a free-trade agreement with Mr. Lee's predecessor. The United States and South Korea currently do about $101 billion worth of business with each other. Under the trade pact, nearly 95 percent of consumer and industrial products would be duty-free within three years, and most remaining tariffs would disappear within 10. The U.S. International Trade Commission estimates that the deal would add $10 billion to $12 billion to U.S. gross domestic product, and $10 billion to merchandise exports to Korea. Given the current plight of the economy, it's little wonder that the vast majority of U.S. businesses support the pact: It would be a powerful job creator.

On both sides, however, protectionist voices have made themselves heard. A year ago, opponents nearly toppled Mr. Lee's government with violent demonstrations over claims that U.S. beef imports were tainted with mad-cow disease. But Mr. Lee, who faced down the riots, firmly supports the trade deal, and his party controls the Korean national legislature, so ratification is likely in Seoul. In Congress, however, the Democratic majority has balked in the face of opposition from the United Auto Workers and one U.S. automaker, Ford. The UAW and Ford say the deal doesn't guarantee access to South Korea for U.S. cars. But the deal slashes tariffs and discriminatory taxes in Korea. What Ford and the UAW fear is competition from Korean imports -- which benefits U.S. consumers and spurs U.S. automakers to make better products. In any case, the agreement permits the United States to reimpose auto tariffs if South Korea treats U.S. companies unfairly.

As a candidate, President Obama opposed the agreement. His U.S. trade representative, Ron Kirk, has said the deal "just simply isn't fair." But that was before North Korea began its current aggressive campaign, the probable goal of which is dividing Seoul and Washington. (Another new development: The U.S. government is on its way to owning 60 percent of General Motors, whose South Korean-based Daewoo subsidiary sold more than 100,000 vehicles in the United States last year.) The Obama administration has adjusted its stated position, saying that it will look for ways to meet U.S. opponents' concerns -- without renegotiating the whole deal -- then reengage with the Koreans. Considering the trade agreement's potential to create jobs for Americans, and to improve ties with a key ally in Asia, that process needs to move quickly.