Cars Are A Hurdle To U.S., Korea Free-Trade Deal

November 19, 2009

More than two years ago, U.S. and South Korea signed a bilateral free trade agreement but lawmakers of both countries have yet to ratify the deal. Officials from both countries hope the deal will create new jobs and open up markets. However, auto trade is a major hurdle.

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TRANSCRIPT

RENEE MONTAGNE, host:

Doualy Xaykaothao reports on how the president was received by those troops and how South Koreans viewed the visit by a leading ally.

(Soundbite of cheering)

DOUALY XAYKAOTHAO: Mr. Obama visited U.S. troops at Osan Air Base, home to some 10,000 Americans. He walked on to a stage in front of a huge U.S. flag and loads of American servicemen and women who stood to greet him.

President BARACK OBAMA: Hello, Osan.

(Soundbite of cheering)

XAYKAOTHAO: The audience, filled with excitement, waved their hands in the air and snapped photographs of Mr. Obama. He said America's commitment to the defense of the Republic of Korea will never waiver and that the alliance has never been stronger, and he thanked the U.S. troops for their contribution to security in the region.

Pres. OBAMA: And I promise you this: I will not hesitate to use force to protect the American people or our vital interests, but I will also not risk your lives unless it is absolutely necessary. And if it is�

(Soundbite of cheering and applause)

Pres. OBAMA: �and when it is necessary, America will back you up to the hilt. We'll give you the strategy, the clear mission, the equipment and the support you need to get the job done. That's the promise I make to you.

XAYKAOTHAO: His visit to Osan was his last stop before leaving South Korea and ending his week-long Asia trip. As Mr. Obama left Osan Air Base in the city of Pyeongtaek, traffic halted briefly. At the nearby train station, asked about Mr. Obama's visit, some South Koreans gave a thumbs up or just smiled. Some didn't even know he was in town for 24 hours. A recent Pew study found that near eight in 10 South Koreans expressed a favorable view of the U.S. That's up eight percent from last year. When asked in central Seoul about their views of the U.S., like the survey, there was a modest improvement in how South Koreans see the U.S. A few youths expressed their anti-U.S. sentiment by saying directly, we don't like the U.S. Many of the U.S. beef protestors last year were young people.

The South Korean-U.S. trade deal was a key element of Mr. Obama's talks here. The pact was signed by the Bush administration more than two years ago, and lawmakers from the U.S. and South Korea are pushing for ratification of the deal, hoping it will create new jobs and open up markets for both countries. But auto trade is a major hurdle.

(Soundbite of footfalls)

XAYKAOTHAO: Earlier this morning, Mat Kim(ph), an HR specialist, was still eating his egg and ham sandwich when he was asked about the U.S.-South Korea free trade deal. He shrugged off the topic. But when asked about U.S. automobiles, he emphatically said he wouldn't buy one.

Mr. MAT KIM (HR Specialist): (Through translator) Quality, overall, is the same. In terms of price, fuel efficiency, and after-service, I think U.S. cars are not very good.

XAYKAOTHAO: Less than 7,000 U.S. vehicles were sold in South Korea last year. In a recent survey done by Dong-A Ilbo, a major daily in South Korea, the newspaper found about 73 percent of Korean consumers said they would still buy Korean, Japanese or European cars even if the price of American cars gets cheaper.

Ms. OK MING CHUNG(ph) (Grand National Party, Foreign Affairs Trading Unification Committee): The reason why U.S. cars are not sold very well in Korea is not because we have put some sort of trade barrier, but because the consumers prefer European, Japanese and Korean cars.

XAYKAOTHAO: That's Ok Ming Chung. She's a member of the ruling Grand National Party and a member of Foreign Affairs Trading Unification Committee.

Ms. CHUNG: The problem is the perception of U.S. cars among the Korean consumers. So we don't have any tariff barrier, non-tariff barrier.

XAYKAOTHAO: Korea is a $1 trillion economy, and according to U.S. data, is the U.S.'s seventh largest trading partner. Congressman Adam Smith, a Democrat from Washington, wants to change this.

Representative ADAM SMITH (Democrat, Washington): I don't think anybody can deny that. They've come up with various creative ways, some of it has been taxes, some of it has been regulations on particulars about the engines that have blocked access to the market, no question about it. But this agreement that has been negotiated eliminates all of that.

XAYKAOTHAO: He says he doesn't want to see this one particular aspect of the U.S. economy being used to hold the rest of this trade agreement hostage, because he says there are a number of products the U.S. can sell in South Korea.

For NPR News, I am Doualy Xaykaothao in Pyeongtaek, South Korea.

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