Negotiations produce U.S.-Korea trade agreement

By Howard Schneider
Washington Post Staff Writer
Monday, December 6, 2010; 9:17 PM

The outlines of the Korea-U.S. trade deal announced last week were brokered in a head-to-head meeting between President Obama and South Korean leader Lee Myung-bak in Seoul early last month. There the leaders agreed to accommodate the domestic political problems each faced over the agreement, according to a senior administration official.

It was in that session, the official said, that Obama made clear to Lee that he would not put the deal before Congress without substantial new concessions from Korea for the U.S. auto industry. Such moves were needed, he thought, to help boost U.S. carmakers and correct the impression that previous free-trade deals "traded off manufacturing for other parts of the economy," the official said.

At the same time, said the official, who was not authorized to comment for the record and spoke on the condition of anonymity, Obama said he recognized that it would be tough for Lee to fully open the Korean market to U.S. beef exports, given the scare over mad cow disease several years ago.

Even as the leaders left the meeting with the disappointing news that they would not reach a deal in Seoul, they had the rough outlines of a compromise that came together last week in Maryland after four days of talks.

Meeting at the Sheraton Columbia hotel, with an artificial lake and a shopping mall as the diplomatic backdrop, U.S. negotiators agreed to set the beef issue aside, while delaying for at least five years any reduction in the tariffs imposed on Korean auto imports into the United States. American automakers were also given freer market access under Korean safety and environmental regulations.

The talks were monitored closely by Obama, the official said, and other top administration officials were also deeply involved in an agreement that the White House hopes will begin building consensus on U.S. trade policy.

A pivotal session came Wednesday, when Ford Motor chief executive Alan Mulally met with Treasury Secretary Timothy F. Geithner and Lawrence H. Summers, outgoing head of the National Economic Council, and endorsed the revised tariff schedule proposed by U.S. negotiators.

Ford had focused on the tariff issue, among other things, because of the large amount of money that a cut in U.S. levies would provide Korean exporters such as Hyundai, compared with the relative pittance it would provide Ford based on the few thousand cars it sends to Korea. Hyundai ships hundreds of thousands of vehicles to the United States each year.

The United Autoworkers union and key auto-state legislators in both parties also have endorsed the final agreement.

"It has been a long time since a union supported a trade agreement," the administration official said, adding that the White House is expecting a "big, broad bipartisan vote" for the Korea agreement when it is put before Congress next year.

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