U.S., South Korea reach trade deal
By Ian Swanson - 12/03/10 05:03 PM ET

The Obama administration announced Friday it had agreed to a trade deal with South Korea, a development certain to set off a major new debate in Congress next year.

The U.S. secured concessions from South Korea on auto tariffs that won praise for the revised deal by Ford Motor Co., previously the agreement’s most vocal opponent. It also won the support of Rep. Sandy Levin (D-Mich.) the lead House Democrat on trade issues, who in a statement said the deal would help reverse a lopsided trade with South Korea on automobiles.

Yet the congressional debate will still set up a bruising battle within the Democratic Party between Obama and liberals who have criticized the agreement negotiated by President George W. Bush.

Rep. Mike Michaud (D-Maine), who with other Democrats met with Obama at the White House to discuss the deal just two weeks ago, said he would do "whatever I can to defeat it." He also said his concerns about the agreement were not addressed.

"I had hoped for more from this White House, which campaigned on a need to change the way we negotiate trade agreements so that they truly benefit American workers and businesses. The deal reached today, while beneficial to the auto industry, falls far short of that goal," Michaud said in a statement.

The administration highlighted the economic impact of the agreement, the largest to be negotiated by the U.S. since 1993’s North American Free Trade Agreement (NAFTA) with Canada and Mexico.

The International Trade Commission has estimated the U.S.-Korea deal could increase U.S. exports by as much as $11 billion through tariff cuts alone. On a day when the Labor Department reported the unemployment rate had jumped to nearly 10 percent, the administration said the Korean trade deal could sustain tens of thousands of U.S. jobs.

The Korean trade deal is also a priority for the U.S. Chamber of Commerce and other business groups that have soured on Obama since he took office. Moving the deal through Congress gives the White House a pro-business item to try to complete before the 2012 presidential election year, and Chamber President Tom Donohue urged Congress to approve it.

Obama pledged in his State of the Union address last year that he would seek to double U.S. exports over the next five years, and a deal with a country that is already the eighth-largest trading partner with the U.S. will go some way toward meeting that goal.

The deal also has national security implications, a point underlined by North Korea’s strike against a South Korean island last week that left four people dead.

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At the same time, it is likely to put Obama at odds with labor unions already disappointed in signs that the president is prepared to compromise and agree to extend all of the Bush-era tax cuts, at least temporarily.

Lori Wallach, the director of Public Citizen’s Global Trade Watch, said Obama was taking ownership of a Bush-style deal that would ship jobs overseas and put the president’s reelection in peril.

“Choosing to advance Bush’s NAFTA-style Korea free-trade agreement rather than the new trade policy President Obama promised during his campaign will mean more American job losses,â€