USTR Kirk says Korean trade pact needs new auto deal

WASHINGTON, Nov 5 - South Korea must do more to open its market to U.S. cars before President Barack Obama will send a free trade agreement signed in June 2007 to Congress for a vote, the chief U.S. trade negotiator said on Thursday.

The remarks offered little hope of a breakthrough during Obama's trip to Asia this month that might lead to congressional action on the pact, which is strongly opposed by many lawmakers from auto-producing states.

"Our market is open to Korean autos. All we are asking for is for our own auto companies to be able to compete on a level playing field in the Korean market," U.S. Trade Representative Ron Kirk said in the prepared text of a speech.

Kirk, who will meet with South Korea's trade minister next week in Singapore, told the U.S.-Korea Business Council his office was developing proposals to address concerns about Korea's barriers to U.S. autos, beef and other products.

"Precisely because our political and economic relationship is so important, we have to get this right. And we need the broadest political support to move forward," Kirk said, adding he had a commitment to his Korean counterpart to see the free trade agreement through to its conclusion.

Obama opposed the U.S.-Korea free trade agreement during last year's campaign, but also pledged in his meetings with South Korea President Lee Myung-bak this year to work to remove obstacles to approval of the pact.

Trade agreements are unpopular with many of Obama's fellow Democrats in Congress, whose support he needs for his top domestic priority of passing healthcare reform.

South Korea has repeatedly refused to renegotiate the auto provisions of the agreement.

Officials in Seoul point out the country will immediately eliminate an eight-percent tariff on U.S. autos under the agreement, while the United States is allowed to phase out its remaining 2.5 percent tariff on gasoline and diesel-powered cars over three years.

The agreement also requires the United States to phase out a 25-percent tariff on pickup trucks over 10 years.

Ford , Chrysler and the United Autoworkers Union say the pact fails to tear down non-tariff barriers that have kept American cars off the Korean market for years.

But defenders say it does make progress in those areas and also includes an expedited dispute settlement procedure that allows U.S. tariffs on Korean cars to "snap back" into place if expected market openings do not occur.

Obama will visit South Korea at the end of a 10-day Asian trip starting next week in Singapore, where he will attend the annual APEC (Asia Pacific Economic Cooperation) summit.

Seoul is pressing for U.S. congressional approval of the agreement by the end of June. Otherwise, it fears the November 2010 congressional elections could delay action on the pact until 2011 at the earliest, South Korea's ambassador to the United States Han Duk-soo said on Wednesday.

Kirk said congressional leaders have told Obama "time and again" that they see approval of the pact as one way to strengthening ties with South Korea, but they still have concerns over specific elements of the deal.

However, many business groups argue it has become more urgent to pass the agreement now that the 27-nation European Union has struck its own free trade pact with Seoul.

"As the economy struggles to rebound, this agreement is an immediate job-creating stimulus," Myron Brilliant outgoing president of the U.S.-Korea Business Council said.