| McClatchy Washington Bureau WASHINGTON -- The White House announced Friday the successful conclusion of an accord that will allow it to submit a long-stalled trade deal with South Korea to Congress.
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The side accord, which includes South Korean concessions for U.S. automakers, will supplement the trade agreement that the Bush administration negotiated to conclusion with South Korea but which the Democratic-controlled Congress never acted on.
U.S. automakers and beef exporters opposed the agreement on grounds that it didn't do enough to knock down barriers to U.S. exports. The side accord addresses those concerns and allows the Obama administration to move forward on its first major trade agreement.
The auto provisions won immediate support from the current chairman of the House Ways and Means Committee, Michigan Democratic Rep. Sander Levin, and his likely successor in the next Congress, Michigan Republican Rep. Dave Camp.
"The changes announced to the U.S.-Korea Free Trade Agreement today are a dramatic step toward changing from a one-way street to a two-way street for trade between the U.S. and South Korea", Levin said in a statement.
The agreement also won President Barack Obama rare praise from the U.S. Chamber of Commerce.
"This agreement will create thousands of new jobs, advance our national goal of doubling exports in five years and demonstrate that America is once again ready to lead on trade", said chamber CEO Thomas J. Donohue. "The administration has done its part. Now it's time for the new Congress to make passage of (the trade deal) a top priority in January. We will do everything in our power to round up the votes."
Obama took heat for not sealing the deal with South Korea during his recent Asia trip. Senior administration officials, speaking on the condition of anonymity to comment freely, suggested Friday that the final deal justifies the decision to hold out for better terms than they could've gotten then.
"The agreement has been improved dramatically", insisted one official, noting that final talks began Tuesday and ended Friday morning. "We think we put together a package which business and labor, Democrats and Republicans can support."
South Korean automakers Kia and Hyundai sell freely into the U.S. market, with low tariffs on their exports. Ford, General Motors and Chrysler have complained that South Korean tariffs and other barriers have effectively disadvantaged U.S. carmakers in their attempts to sell there.
Under the side accord, South Korea would cut its 8 percent tariff on U.S. automobiles immediately to 4 percent, while the U.S. would maintain its 2.5 percent tariff on Korean-made autos for four years. In the fifth year, both nations would eliminate the remaining tariffs.
Light trucks also were a thorny point. In the original stalled deal, the U.S. would've had to start reducing its 25 percent truck tariff immediately. The side accord maintains the status quo for eight years, then eliminates the tariff over the following two years. South Korea must eliminate its 10 percent tariff on light trucks immediately.
The U.S. also demanded a number of safeguards allowing it to impose new tariffs if U.S. automakers show that Korean products are causing them harm.
U.S. beef and pork producers also won key concessions.
White House officials said that South Korea also agreed to open up investment and its services sector. The administration estimates that annual U.S. exports to South Korea, the world's 12th-largest economy, should increase by $10 billion or more.
Not everyone was pleased, however. Sen. Max Baucus, D-Mont., the chairman of the Senate Finance Committee, said the agreement doesn't do enough to protect American cattle ranchers.
"I am deeply disappointed that today's deal fails to address Korea's significant barriers to American beef exports, which President Obama identified this June as one of the critical outstanding issues that must be resolved before moving this free trade agreement forward", he said.
The agreement also drew the wrath of liberal groups, which claim that such trade deals hurt U.S. workers. Public Citizen's Lori Wallach called it "a slap in the face to the majority of Americans who, according to repeated polls, oppose the same old trade policy that has cost millions of American jobs."
The American Manufacturing Trade Action Coalition, representing textiles and apparel firms, also opposed it.
"If the flaws that industry identified in the agreement were not fixed, then this deal could offshore tens of thousands of additional U.S. manufacturing jobs", said Auggie Tantillo, the trade group's executive director, in a statement.
Obama has been missing in action on trade matters for the first two years of his presidency, effectively adopting the "pause" that had been advocated by his Democratic primary rival and now Secretary of State Hillary Clinton. Prior negotiated trade deals with Colombia and Panama still languish.
After midterm elections that returned the House of Representatives to Republican control, political analysts expected Obama to begin moving trade deals as a means of gaining support from the GOP.
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