The U.S. and South Korea reached agreement to change automobile provisions in a pending trade deal, clearing the way for legislatures in both nations to approve the delayed accord, said a person briefed on the talks.
South Korea agreed to let the U.S. phase out its 2.5 percent tariff on automobiles over five years instead of as much as three years, a demand of Ford Motor Co., the person said, declining to be identified before an announcement. Earlier today, trade ministers for both countries reported “significant progress” at the end of four days of talks in Columbia, Maryland.
“We are going to take it back to our team to review,” U.S. Trade Representative Ron Kirk said in an interview. Kirk declined to say if an overall agreement was reached. Korean Trade Minister Kim Jong Hoon said the two sides achieved a “significant result” and that he would provide details after returning to Seoul.
President Barack Obama demanded changes to provisions on trade in automobiles and beef for the agreement, which was completed by his predecessor in 2007. Obama and his counterpart, Lee Myung Bak, failed to reach a deal when they met in Seoul last month.
With almost $68 billion in trade between the nations, a deal would be the U.S.’s largest since the North American Free Trade Agreement in 1994 and would help President Barack Obama meet his goal of doubling American exports in five years. The accord, signed by negotiators for President George W. Bush, has languished as lawmakers complained about Korean barriers to exports of U.S. autos and beef. Ford and the United Auto Workers opposed the agreement and sought changes.
Amid high unemployment and opposition from fellow Democrats and organized labor, Obama hasn’t submitted to Congress the trade pacts approved by Bush with South Korea, Colombia and Panama.