U.S., South Korea Fail to Reach Trade Agreement

President Obama will not be coming home from South Korea with a long-sought free trade agreement, after negotiators failed to finalize a deal in time for this week's summit meeting.

U.S. and Korean trade teams had been racing to iron out a deal before President Obama met with his South Korean counterpart, Lee Myung-bak, on Thursday. But both sides said they needed more time at the table to hash out the key sticking points: automobile and beef imports.

Obama said he hopes a deal — seen as an important step toward his goal of doubling U.S. exports within five years — can be worked out in weeks, not months. He acknowledged, however, that winning congressional support for a trade deal will not be easy in the face of public skepticism.

"If we rush something that then can't garner popular support, that's going to be a problem," Obama said after he and Lee met on the sidelines of the Group of 20 summit, which opened Thursday in Seoul. "We think we can make the case. But we want to make sure that case is airtight."

The U.S. president said a free-trade deal would add 70,000 jobs in the United States.

Ron Kirk, the U.S. trade representative, rejected characterizations that the failure to cement a deal was a setback or defeat for Obama, who suffered huge losses last week when Republicans won control of the House and increased their power in the Senate. Obama is on the third stop of a four-country visit to Asia seeking greater access to the region's markets for American goods, something he hopes will help spur job creation at home.

"The president's leadership on this has put us much closer to a successful closure," Kirk told reporters.

Obama and Lee also discussed denuclearizing the Korean peninsula.

"President Obama and I have agreed that North Korea must display sincere and genuine intent to give up its nuclear ambitions and back this up with actions," Lee said at a joint news conference, speaking through an interpreter.

The U.S. president urged Pyongang to enter talks with the international community over its nuclear program or face what he called "more isolation and less security." He said the world would be ready to assist North Korea if it takes the steps necessary for talks to resume, including setting an "irreversible" path toward ending its nuclear program.

Obama Spotlights 'The Forgotten Conflict'

Breaking from economic matters, Obama celebrated Veterans Day by visiting a U.S. Army base in Seoul to honor those who served in the Korean War. The commander in chief spoke to veterans who fought on the peninsula 60 years ago, and to troops who are still protecting South Korea's tense border with the North.

Obama laid a wreath at  the Yongsan War Memorial and spoke at the nearby U.S. Army garrison, headquarters for the more than 28,000 American troops serving in South Korea. He was joined by 62 veterans of the Korean War and recalled their service in bloody battles such as Heartbreak Ridge and the Chosin Reservoir.

"You left your homes and your families, and you risked your lives in what has often been called 'The Forgotten War.' So today, I want you to know this: We remember," the president said. He added, "Whether you're a veteran who landed in 1950 or one of the Yongsan troops today, the security you've provided has made possible one of the greatest success stories of our time."

Obama contrasted the post-war prosperity of South Korea with the crushing poverty of the North. He once again challenged North Korea to abandon its pursuit of nuclear weapons and warned that the U.S. will "never waver" in defense of the South's security.

Hu Says China Ready To Work With U.S.

The U.S. president will spend much of Thursday and Friday in meetings of the Group of 20 economic powers. Obama has pledged that the G-20 nations will reach broad consensus on how to achieve balanced, sustainable economic growth.

Obama also was making his case directly to Chinese President Hu Jintao after lavishing attention on China's rising rival, India, for three days. The U.S. and China enjoy an economic partnership but continue to clash over currency, with the U.S. contending that China's undervalued yuan gives it an unfair edge in the flow of exports and imports.

Obama made the point again in a letter to fellow G-20 leaders. Warning of unsustainable balance sheets, with some countries holding surpluses and others swimming in debt, he pushed for exchange rates based on the market and no more "undervaluing currencies for competitive purposes."

Speaking at the beginning of a meeting with Hu, Obama said both countries have "special obligations" to ensure nuclear stability and strong, stable economic growth. Hu said China stood ready to work with the U.S. to create dialogue and increase cooperation.

Obama also met with German Chancellor Angela Merkel, whose government also has been outspoken against the move by the U.S. Federal Reserve to buy $600 billion in bonds in hopes of invigorating the economy by freeing up more credit.

China and Germany fear the U.S. is engineering a weaker dollar to boost trade, a charge the U.S. has been making against China.

Treasury Secretary Timothy Geithner on Thursday denied the United States was deliberately pursuing a weak dollar policy.

"We will never seek to weaken our currency as a tool to gain competitive advantage or to grow the economy," Geithner said on CNBC.

The White House said the currency exchange issue dominated Obama and Hu's 80-minute meeting Thursday.

Lael Brainard, Treasury undersecretary for international affairs, said Obama raised the topic and noted the importance of China's adhering to economic fundamentals in setting their currency rate. Hu expressed a strong commitment to moving forward on a flexible rate, Brainard said.

The White House said Obama and Hu also discussed the need for a United Nations Security Council agreement on Iran. Obama also brought up human rights and called on China to release people imprisoned for political advocacy.

Obama also emphasized the need for countries like China that have relationships with North Korea to impress upon the isolated communist nation the need to refrain from provocative actions against South Korea, the White House said.

Brainard said there was a "glancing reference" to the Fed decision in Obama's meeting with Merkel. Scathing comments about the Fed move from Germany's finance minister uncorked criticism from around the world in recent days. Brainard said Obama and Merkel agreed on the need for leaders to discuss a framework for addressing large imbalances between the world's economies.

Doualy Xaykaothao and NPR's Scott Horsley reported from Seoul for this story, which contains material from The Associated Press

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