Obama Ready To Keep Pressure On Pyongyang

November 19, 2009

The threat posed by a nuclear North Korea and the expansion of bilateral trade were on the agenda Thursday as President Obama met with his South Korean counterpart in Seoul on the final leg of a swing through Asia.

Lee Myung-bak greeted Obama at the presidential "Blue House" in the South Korean capital, where schoolchildren, a modern military band and soldiers dressed in ancient blue and yellow uniforms were featured in an elaborate welcoming ceremony.

In discussions that followed, the two men agreed to redouble efforts on a U.S.-Korean free trade agreement.

"I am a strong believer that both countries can benefit from expanding our trade ties," Obama said at a joint news conference with Lee. South Korea is the United States' seventh-largest trading partner.

A free trade pact was negotiated by the Bush administration more than two years ago, but it has yet to be ratified by the U.S. Senate. Obama, mindful that many in his own Democratic Party think free trade is a threat to American jobs, said that such agreements are mutually beneficial if done right.

"One of my goals is to make sure as we work through some of these issues that the American people, American businesses, American workers recognize that we have to look at each country on its own merits and make sure that we can create the kind of win-win situation that I know President Lee is interested in seeing as well," Obama said.

One major sticking point has been access to the Korean market by U.S. automakers. During the news conference, South Korea's president noted that the European Union inked a free trade deal without such a concession for its automakers.

Free trade advocates have warned that Washington's delay in ratifying a trade deal with South Korea is putting U.S. exporters at a competitive disadvantage.

With the delay, the U.S. is "shooting itself in the foot," said Fred Bergsten, director of the Peterson Institute for International Economics.

While the U.S. dithers over ratification, "the Europeans have negotiated an agreement. India has negotiated an agreement," Bergsten said. "Those will probably go into effect before ours, and we will be discriminated against. We will lose exports; we will lose jobs. There will be an adverse effect on our economy, because we've failed in that case to follow through on our own initiative."

Obama and Lee also talked about climate change, Afghanistan and South Korea's role as host of next year's Group of 20 talks. But the nuclear threat from North Korea overshadowed other issues.

Lee said that in two decades of negotiations between the two Koreas, it has been one step forward and two steps back. But he praised efforts by the Obama administration and the U.N. Security Council to put pressure on North Korea to return to the table, and expressed hope Pyongyang would relent.

"International cooperation is perfect in my opinion in terms of trying to resolve this issue peacefully," he said. "I think we are entering a new chapter in bringing this issue to an end."

Obama also touched on the issue of Iran, saying that the U.S. and its allies are discussing new penalties to pressure Tehran into complying with international demands that it halt its nuclear program.

"They have been unable to get to 'yes,' and so as a consequence, we have begun discussions with our international partners about the importance of having consequences," Obama said. "Our expectation is that over the next several weeks, we will be developing a package of potential steps that we could take that will indicate our seriousness to Iran."

The White House described the visit to Asia as largely showing Washington's re-engagement with a region of fast-growing economies that often felt neglected by the Bush administration and its focus on fighting terrorism. To that end, Obama has spoken frequently of reinvigorating alliances with Japan, South Korea and in Southeast Asia, and of welcoming a prosperous, confident China as a partner.

Material from The Associated Press was used in this report

EU-Korea trade deal puts pressure on Obama to act

Thu Oct 15, 2009 4:35pm EDT

By Doug Palmer

WASHINGTON (Reuters) - President Barack Obama faced increased pressure on Thursday to win approval of a free trade deal with South Korea after the European Union locked up its own pact with Asia's third-largest market.

"We have concluded our negotiations with the EU, which has almost a similar economic size as the United States," South Korean Ambassador to the United States Han Duk-soo said.

"President Obama will visit Korea in November and we hope we will make some progress before that" to resolve concerns blocking approval of the U.S.-Korea free trade pact, Han said in a speech at the Heritage Foundation.

The United States and South Korea signed their free trade deal more than two years ago. But U.S. lawmaker concerns over beef and auto trade with the longtime ally that borders North Korea has blocked approval of the agreement.

Many U.S. lawmakers argue the free trade pact fails to tear down "non-tariff barriers" that keep out American cars. Others want Seoul to remove remaining barriers to U.S. beef imports that stemming from the discovery mad cow disease in the United States several years ago.

Since then, South Korea has continued negotiating free trade deals. It initialed a pact with the European Union on Thursday expected to go into force by the middle of 2010 and is currently in talks with Canada, Mexico and Peru.

"We would like to be the hub of free trade agreements in East Asia," Han said, citing a study that U.S. companies could lose 380,000 jobs to competitors in the EU and Canada if the U.S.-Korea free trade agreement is not approved.

The EU-Korea trade deal could be worth 100 billion euros ($149 billion) to both economies and advocates says it will help both sides fight the worst financial crisis in decades.

It also comes at a time when the United States is already losing market share in South Korea to the EU, Japan and China.

US SAYS "KEENLY INTERESTED" IN EU-KOREA DEAL

Obama sided with the United Auto Workers and other opponents of the South Korean free trade agreement during last year's presidential campaign.

After meeting with South Korean President Lee Myung-bak in June, the two leaders agreed to work on outstanding concerns. However, Seoul has steadfastly refused to renegotiate auto provisions that are the biggest obstacle to U.S. approval.

A spokeswoman for the U.S. Trade Representative's office said the United States was "keenly interested" in the implications of the EU-Korea deal for the United States.

"EU firms compete directly with U.S. suppliers in key segments of the large and growing Korean market, such as machinery, chemicals, plastics, auto parts, and dairy products," USTR spokesman Carol Guthrie said.

"Ambassador (Ron) Kirk believes it is vital to maintain the competitiveness of US businesses and workers in this important market," Guthrie said, referring to the U.S. Trade Representative.

(Additional reporting by Darren Ennis in Brussels; Editing by Cynthia Osterman)

© Thomson Reuters 2009 All rights reserved