WASHINGTON — President Barack Obama said Saturday a sweeping US-South Korean free trade agreement that broke through a three-year deadlock was a “win-win” for both countries.
The “landmark” agreement benefits US workers, farmers and ranchers, Obama said, and was also a “win” for South Korea because it will grant the Asian ally “greater access to our markets and make American products more affordable for Korean households and businesses.”
Associated tariff reductions are expected to boost annual exports of US goods by up to 11 billion dollars while contributing “significantly” to his goal of doubling US exports over the next five years, Obama said of the agreement that raised hopes of renewed US leadership in Asia.
The agreement lifts tariffs on 95 percent of goods between the countries within five years, in what would be the largest US trade pact since the North American Free Trade Agreement with Canada and Mexico in 1994.
After nearly four days of talks in suburban Washington, negotiators cleared a key hurdle Friday by letting the United States move more slowly on lifting tariffs on South Korean cars after US automakers feared a flood of imports.
The deal still needs ratification by the two countries’ legislatures. But the US Chamber of Commerce has already said it supports the measure’s passage, vowing to do everything it can to lobby for the necessary votes.
In Seoul, President Lee Myung-Bak said the agreement would bring “huge benefit” to South Korea and provided “a new window of opportunity for our economy to take off again,” embracing the free trade deals as a strategy to promote an economy long in the shadow of economic giants Japan and China.
Obama won early support from a labor-backed congressman and the Ford Motor Co., former staunch opponents of the deal.
Once a critic of the deal first negotiated in 2007 under his predecessor George W. Bush, Obama praised what he called “the best deal for America” that would create 70,000 US jobs through new exports — an estimate disputed by critics.
“The agreement we’re announcing today includes several important improvements and achieves what I believe trade deals must do — it’s a win-win for both our countries,” he told reporters.
Obama had hoped to finish the deal in time for his visit to Seoul last month for the Group of 20 summit, believing the agreement would boost close ally Lee, who is facing down soaring tensions with North Korea.
Negotiators failed to reach an agreement in time, largely due to concerns by US automakers worried about the immediate end to tariffs on cars.
Under the renegotiated agreement, the United States will be allowed to keep its 2.5 percent tariff for five years, while South Korea would immediately cut its tariff in half to four percent. Both sides would eliminate tariffs after five years.
US officials said South Korea would also ease car safety and environmental standards that US automakers contend are a thinly disguised way to stifle foreign competitors through arbitrary requirements.
The revised agreement would let each US automaker export 25,000 cars per year that meet only US safety requirements — four times the current level.
Ford Motor CEO Alan Mulally hailed the Obama team’s “tireless” efforts and said the new version offered “greater confidence that we will be able to better serve our Korean customers.”
And the United Auto Workers Union called the agreement a “dramatic step toward changing from a one-way street to a two-way street for trade between the US and South Korea.”
Unlike many other issues, Obama may win approval for the trade deal more handily after last month’s congressional election sweep by rival Republicans, as most opposition came from the president’s Democratic Party.
Mitch McConnell, the top Republican senator, voiced support for the deal and hoped that the “more balanced Congress” will back it.
“The goal of improving market access for American farmers, entrepreneurs and manufacturers is one that the president and I share,” the Kentucky lawmaker said.
But Senator Max Baucus, a Democrat from the ranching state of Montana, withheld judgment on the trade agreement and said he was “deeply disappointed” that it did not address beef exports.
The United States has pushed South Korea to buy beef from older cattle. The issue is especially sensitive for Lee, who has faced major street protests by Koreans concerned about mad cow disease in US cattle.
US officials said beef exports have already grown and would rise further with tariff restrictions. But they conceded that South Korea had not made concessions on the cattle age.