Obama, weakened after midterms, reveals limited leverage in failed S. Korea deal

President Obama laid a wreath at a Korean War memorial and addressed U.S. troops in South Korea before meeting with South Korean president Lee Myung-Bak about a free trade agreement.
By Scott Wilson and Howard Schneider
Washington Post Staff Writers
Friday, November 12, 2010; 12:39 AM

SEOUL - President Obama's inability to secure a free-trade agreement with South Korea reveals in sharp relief the limits of his leverage overseas after a devastating midterm election.

Obama's visit to four Asian democracies is aimed at promoting trade and other economic partnerships to boost long-term job creation in the United States, where voters pounded his Democratic Party this month over a moribund employment market.

But after visits to India and Indonesia, where Obama on his own removed trade barriers and announced specific export contracts, the politically weakened president could not bring home the agreement that would have the most far-reaching effect on the U.S. economy.

Administration officials say the nearly complete South Korea deal, which Obama inherited from the George W. Bush administration, would increase exports of U.S. goods by $10 billion annually and support 70,000 jobs in the United States. Although the list of outstanding issues was short and the U.S. Chamber of Commerce lobbied heavily for the agreement, key labor and auto interests and their allies in Congress demanded a fuller opening of South Korea's market. Any deal would have required congressional approval, leaving Obama little room to compromise after elections that lessened his clout on Capitol Hill.

Officials were aiming to finish the agreement before the president sat down Thursday with South Korean President Lee Myung-bak. But talks foundered, and the two leaders were left with nothing more to announce than that they would keep working.

"We don't want months to pass before we get this done," Obama said in a news conference after his meeting with Lee. "We want it done in a matter of weeks."

Although no one has said that Obama was unable to reach agreement directly because of his midterm losses, neither Lee nor other leaders in Seoul for the Group of 20 summit appear eager to help him with his biggest concerns or ingratiate themselves with the American president, as they had a year ago.

The setback, a characterization that White House officials rejected, occurred in a country where the United States has more leverage than perhaps any other. Nearly 40,000 Americans died in the Korean War, and the United States maintains tens of thousands of troops in Seoul to guard the thriving commercial capital against a North Korean attack.

As in his dealings with Iran and North Korea on nuclear issues, Obama - who in June set this meeting in Seoul as his deadline for finishing the trade deal - saw negotiations falter because of a country's inability to move from a strongly held internal position. In this case, it was South Korea's overriding national interest in protecting its robust domestic auto industry from outside competition.

Lee, a former chairman of Hyundai Engineering and Construction, expressed gratitude for the United States' sacrifice on what was Veterans Day.

But he did not relent on measures to ensure an open market in South Korea for U.S. cars and beef, not even for an American president to whom he privately confessed - during their first lunch together a year ago - feeling a deep personal gratitude for the support of the United States.

"I know that it will be beneficial for everyone if we can create good jobs in the United States," Lee said. "And I said it before, that that will be helpful not only to the American consumers but to the Republic of Korea, as well."

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