President Barack Obama will leave Asia without an agreement from other world leaders on concrete steps to rebalance the global economy or a South Korean trade deal central to his goal of boosting U.S. exports.
Obama, who began the four-nation tour days after his party lost its majority in the House of Representatives in midterm elections, landed in Japan last night on the last leg of the trip after a two-day summit of the Group of 20 nations marked by clashes over currency and trade.
Hours before the G-20 meetings began in Seoul, Obama and South Korean President Lee Myung Bak announced that differences over automobiles and beef still weren’t settled, holding up agreement on a free-trade accord.
“There’s an instinct to focus on the disagreements, because otherwise, these summits might not be very exciting,” Obama said yesterday at a news conference at the end of the summit. “Instead of hitting home runs, sometimes we’re going to hit singles. But they’re really important singles.”
The 10-day trip also included stops in India and Indonesia, where the president aimed to strengthen ties with two growing Asia economic powers. He spoke to business executives today in Yokohama, Japan, before meeting with Japanese Prime Minister Naoto Kan and is attending the Asia-Pacific Economic Cooperation forum.
After meeting with Kan, Obama told reporters the leaders discussed “the need to expand trade and open markets” in the region. Obama said he welcomed Japan’s interest in joining U.S.- led Trans-Pacific Partnership trade talks that Kan has struggled to sell to members of his ruling party.
‘Long Flight Home’
After the midterm election losses, Obama “must have been hoping he could come back from an international trip with at least something to at least be able to begin to rebuild,” said Tim Condon, head of Asia research at ING Groep NV in Singapore. “He wasn’t able to bring back the Korea FTA and he was roundly rebuffed at the G-20, so it’s going to be a long flight home for Mr. Obama.”
Obama disputed the notion that clashes over economic and monetary policy at the G-20 and the lack of a free-trade accord with South Korea represented setbacks for the U.S. He cited the G-20 agreement to develop “indicative guidelines” to identify economic imbalances and that currency valuations should be set by market forces.
The agreement on dealing with current-account surpluses and balances fell short of U.S. goals, largely because of resistance from China and Germany, which run two of the world’s biggest surpluses. Obama said such resistance is “natural” and “arises out of the fact that the U.S. is showing leadership and we are pushing to try to bring about changes.”
Obama said a revised trade deal with South Korea is still “achievable.”
The original accord was signed under President George W. Bush in 2007. Opposition led by Ford Motor Co. and the United Auto Workers union and beef producers because of South Korean tax and regulatory regimes has held up approval by the U.S. Congress.
With almost $68 billion in trade between the nations, the deal would be the U.S.’s largest since the North American Free Trade Agreement in 1994. Obama and Lee said they will strive to finish negotiations in the coming weeks.
“I want to make sure this deal is balanced,” Obama said. “I want trade agreements that work for the other side, but my main job is to look out for the American people, American workers and American businesses.”
Obama answered “No,” when asked whether the Nov. 2 election results weakened him in global negotiations.
“It wasn’t any easier to talk about currency when I had just been elected and my poll numbers were at 65 percent than it is now,” he said.
Julian Zelizer, a history and public affairs professor at Princeton University in New Jersey, said U.S. politics inevitably are part of the calculations by other nations.
“Obama will likely struggle on other issues overseas now that foreign leaders are dealing with the Obama of 2010 rather than the Obama of 2008,” he said in an e-mail.
“Obama’s stop in India was the high point,” Kupchan said in an e-mail. “He closed trade deals that will result in thousands of American jobs. He also advanced a growing strategic partnership between the United States and India important to shaping the emerging balance of power in Asia.”
Obama has said he wants to double U.S. exports to more than $2 trillion in five years, targeting emerging nations including India. “It’s the right aspiration,” Immelt said in an interview in Mumbai.
India is Asia’s third-biggest economy. The two governments highlighted about $15 billion worth of contracts that will support 53,670 American jobs. The Indian government plans to spend $1 trillion building roads, ports and infrastructure between 2012 and 2017 and U.S. companies vying to capture some of that work.
“We think there’s a lot of continued opportunity and I’m very encouraged to see the prospect of increasing trade,” Cote said at a Nov. 6 news conference in Mumbai.
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