WASHINGTON – U.S. and South Korean negotiators agreed Friday to a free-trade deal that the Obama administration hopes will increase American exports by billions of dollars annually and create momentum for a broader push on free trade in the coming year.

The pact is the administration’s first major foray into the arena of free-trade politics, and officials said it may be followed by efforts to have Congress approve pending deals with Panama and Colombia and reinvigorate the larger Doha round of global trade talks.

The South Korea agreement was first negotiated by the George W. Bush administration, but during follow-up negotiations the Obama administration won further concessions considered important by American automakers. Those include a slower reduction of U.S. tariffs on imported South Korean vehicles and a provision under which South Korea will exempt up to 25,000 of any American company’s cars from its strict safety standards, as long as they meet similar U.S. regulations.

In a concession to South Korea’s internal politics, a U.S. demand for unfettered access to the South Korean beef market was set aside for now, leaving in place that country’s ban on the import of older U.S. meat.

The changes, coupled with the promised elimination of stiff South Korean tariffs on U.S. farm products and the prospect of a more open market for U.S. financial, engineering and other service companies, was enough for President Obama to decide to try to win congressional approval of the deal next year.

The agreement sets the stage for a debate in Congress over whether free trade with a major Asian nation can deliver the promised benefits or will instead drain U.S. jobs.

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It is a sensitive matter at a time when concern is high over China’s huge trade surplus with the United States, allegations of unfair trade practices on its part, and a general sense that Asian nations have reaped the benefits of free trade without truly opening their markets.

In South Korea’s case, the Obama administration says the agreement will add more than $10 billion annually in U.S. exports and create employment for thousands. South Korea is the nation’s seventh-largest trading partner, and a free-trade agreement would be the largest such deal since the North American Free Trade Agreement in the early 1990s.

Business groups quickly rallied around the pact.

Ford Motor Co. said it was satisfied the agreement will help balance the lopsided trade in motor vehicles between the two countries. Tens of thousands of South Korean cars are shipped to the U.S. each year, but only a few thousand U.S.-made vehicles move in the other direction. Ford had been the most vocal corporate holdout on a pact that was pushed aggressively by the U.S. Chamber of Commerce and major U.S. companies.

As a candidate, Obama was highly critical of existing free-trade agreements — including the then-pending South Korea pact — and said that as president he would ensure future trade treaties did more for American workers and include stronger labor, environmental and other safeguards. Critics say the administration has reneged on its tough campaign line and argue the South Korea agreement should have been more thoroughly renegotiated to include stricter labor and investment rules.

“I had hoped for more from this White House, which campaigned on a need to change the way we negotiate trade agreements,” said Rep. Mike Michaud, D-Maine, head of a trade policy group in the House.

 


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