Obama, S. Korea's Lee Say Trade Deal Not Ready

In South Korea for the G-20 meeting, President Obama is addressing U.S.-South Korea issues such as the not yet enacted free-trade agreement, commemoration of veterans of the Korean War and what, if anything, to do about North Korea.

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The U.S. and South Korea are allies, but that doesn't mean they always agree. And some of their disagreements are on display today, as President Obama visits Seoul. He's there for a meeting of leaders of the world's largest economies. He was hoping to be able to announce a free trade deal between the U.S. and South Korea. Instead, the two allies have agreed only to keep talking.

NPR's Scott Horsley reports.

SCOTT HORSLEY: President Obama paid tribute this Veterans Day to the bloody origins of the U.S.- Korean alliance. He visited a U.S. Army base that's headquarters to nearly 30,000 Americans still serving on the Korean Peninsula, 60 years after the war here began.

(Soundbite of Army Band, "The Caisson's Go Rolling Along")

HORSLEY: At the Yongsan Army Garrison in Seoul, Mr. Obama joined active-duty troops in honoring Korean War veterans. He said even though that war ended in a stalemate, on the same 38th Parallel where it began, the sacrifice of those who served here has been worth it.

President BARACK OBAMA: One thing is clear, this was no tie. This was victory.

(Soundbite of cheering and applause)

President OBAMA: This was a victory then and it is a victory today. And 60 years later, a friendship that was forged in a war has become an alliance that has led to greater security and untold progress.

HORSLEY: Mr. Obama hoped to further that progress today by finalizing a free trade agreement with South Korea. Former President Bush struck a deal back in 2007, but it was never ratified. U.S. automakers and beef producers, in particular, complained the deal didn't do enough to open doors to the Korean market.

President Obama said months ago, he wanted to iron out those differences in time for today's meeting with South Korean President Lee Myung-bak, on the sidelines of the G20 Summit. But when the two men emerged from their meeting, Lee said through a translator, the trade agreement is not ready.

President LEE MYUNG-BAK (South Korea): (Through Translator) President Obama and I agreed that we will give my trade minister and the U.S. Trade representative more time, so that they can finalize the technical issues. And President Obama and I will continue to work together, so that we can have a mutually acceptable agreement at the earliest possible date.

HORSLEY: U.S. Trade Representative Ron Kirk says market access for U.S. cars and cattle remain the biggest sticking points, despite some very productive discussions over the last four days.

Mr. Obama says Korean negotiators will be coming to Washington soon to continue talks. And he hopes a deal can be struck in weeks, not months.

President OBAMA: We believe that such an agreement, if done right, can be a win-win for our people. It could be a win for the United States because it would increase the export of American goods by some $10 billion, and billions more in services supporting more than 70,000 jobs back home.

HORSLEY: A free trade pact with Korea is seen as an important step towards the president's goal of doubling U.S. exports within five years.

Tami Overby, vice president of the U.S. Chamber of Commerce for Asia, notes Korea already has a free trade deal with Europe and is close to inking one with Australia. Without a Korean trade deal of their own, she warns, American companies are in danger of falling behind.

Ms. TAMI OVERBY (Vice President, U.S. Chamber of Commerce for Asia ): You know, they talk about a spaghetti bowl full of trade agreements in Asia. Something like 160 agreements in place and the U.S. is only signatory to two of them. We've got to get in the game.

HORSLEY: Even if Presidents Obama and Lee eventually do make a deal, there's no guarantee Congress would ratify it.

Todd Tucker, of Public Citizen's Global Trade Watch, says American voters have grown increasingly suspicious that trade agreements do more to help foreign economies than their own.

Mr. TODD TUCKER (Research Director, Public Citizen's Global Trade Watch): We see the poll numbers, year after year, increasing amounts of opposition from across the political spectrum and across the country, really, to so-called free trade agreements. By a three to one margin, folks believe they do more harm than good.

HORSLEY: President Obama acknowledged trade deals can be a tough sell. That's one reason, he says, U.S. and Korean negotiators need to keep talking.

President OBAMA: If we rush something that then can't garner popular support, that's going to be a problem. We think we can make the case. But we want to make sure that that case is airtight.

HORSLEY: The President said today six decades of U.S. military protection had helped South Korea grow into one of the world's most prosperous countries. He's optimistic freer trade with South Korea will help to boost prosperity back home.

Scott Horsley, NPR news, Seoul.

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