Dec. 5 (Bloomberg) -- President Barack Obama said a trade accord with South Korea is a “win-win” for both countries that shows the alliance between them is “stronger than ever.”
The trade deal offers “more choices for Korean consumers and more jobs for American workers,” Obama told reporters in Washington, a day after the government reported the U.S. unemployment rate rose to 9.8 percent in November. The deal is one example of how the U.S. government can “do more to accelerate the economic recovery and create jobs for the millions of Americans who are still looking for work,” he said.
The two nations yesterday announced an agreement to change automobile provisions in the free-trade deal, removing an obstacle that had prevented agreement on the pact during Obama’s visit to South Korea last month.
Obama requested the changes in the accord, which was negotiated during the administration of President George W. Bush, to meet demands from lawmakers and U.S. automakers including Ford Motor Co. regarding Korean barriers to American vehicles.
Winning the agreement was a key component of Obama’s plan to double American exports in five years. With almost $68 billion in trade between the nations, the accord would be the U.S.’s largest since the North American Free Trade Agreement in 1994.
AT&T, Wal-Mart Support
The White House said Dec. 3 the agreement will increase U.S. exports by as much as $11 billion and support at least 70,000 U.S. jobs. Yesterday it released a compilation of supportive statements from industry groups and companies, including AT&T Inc. and Wal-Mart Stores Inc., and lawmakers from both major U.S. political parties to bolster Obama’s effort to win congressional approval of the trade deal.
Under the agreement, both nations will scale back initial tariff cuts for cars, and South Korea said it would allow more imports of U.S.-made vehicles that meet American standards rather than Korean rules. The U.S. will maintain a 25 percent tariff on truck imports for eight years instead of beginning to phase it out immediately.
After Obama and South Korean President Lee Myung Bak failed to reach agreement during a summit last month in Seoul, trade negotiators from both nations spent last week huddled at a hotel in Columbia, Maryland, to resolve their differences on autos, pork and beef.
While the two sides didn’t announce changes on beef trade, Obama yesterday said the U.S. will keep trying for “full access” to the Korean market for beef exports.
The agreement is subject to approval by Congress before taking effect, and polls show waning public approval for trade deals. Two other trade agreements with Panama and Colombia, also signed by Bush administration officials, are awaiting approval in Congress.
North Korea Tensions
Obama said yesterday the U.S. trade deal with South Korea was also important amid “increasing tensions on the Korean peninsula.” North Korea shelled an island in South Korea Nov. 23, killing two soldiers and two civilians. Following the “unprovoked attack,” the trade deal reinforces the “defense alliance and partnership” between the U.S. and South Korea, he said.
Obama also urged Congress to pass legislation extending jobless benefits, which expired Nov. 30 for thousands of the nation’s long-term unemployed. The Labor Department has estimated that aid to 1.36 million Americans will be interrupted by the end of the third week in December without an extension.
Democrats have put forward a plan to extend jobless benefits for a year, with the $56 billion cost to be financed with borrowed money. Republicans have blocked the measure, demanding the extension be offset with savings elsewhere in the government’s budget.
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