Lee Myung-bak, the South Korean president, on Thursday assured Barack Obama, his US counterpart, that Seoul was willing to “talk again” about cars, the main sticking point to what stands to be the biggest US trade deal in more than a decade.
Speaking at a joint news conference, Mr Lee stopped well short of saying the bilateral deal, which was signed two years ago but has not been ratified by either country’s legislature, could be renegotiated as US congressmen demand, but his words appeared to soften Seoul’s previous position that the agreement could only go forward as written.
“President Obama and I reconfirmed the economic and strategic importance of the Korea-US free trade agreement and decided to make an effort to move it forward,” Mr Lee said. “If the auto issue becomes a problem, we are prepared to talk again.”
In spite of Mr Lee’s remarks, Seoul’s ministry of foreign affairs and trade said there had been no change of policy. “Our government stance is still that there can be no renegotiation and perhaps [Mr Lee] meant that we are willing to listen to what the US says,” said Moon Tae-young, a ministry spokesman.
Although US politicians have lambasted the trade accord as leaving in place non-tariffs barriers that effectively keep out American cars, Washington has not formally asked for a renegotiation. Mr Obama previously called the deal “badly flawed” and unfair to the car industry.
South Korean officials argue that talks on the issue could unravel the whole deal but they have left open the possibility of an addendum should the US specify its concerns.
Mr Obama admitted the trade deal had been turned into a political football by a misreading of the overarching trade relationship with South Korea.
“There is obviously also a concern within the United States around the incredible trade imbalances that have grown over the last several decades. Those imbalances are not as prominent with Korea, but there has been a tendency I think to lump all of Asia together when Congress looks at trade agreements and says it appears as if this is one-way street.”
Mr Obama told Fox News on Wednesday that he wanted to resolve remaining issues with Mr Lee on the landmark trade agreement and was looking to get the deal ratified sometime next year. However, political analysts doubt he can afford to sacrifice much political capital trying to push it through.
The European Union last month initialled a trade pact with South Korea which is now on course to come into affect before Washington’s.
After the end of the Korean war in 1953, the US was consistently the main trade partner of South Korea until about five years ago. China, Japan and the EU are now Seoul’s leading partners, so the US trade agreement would be an opportunity to rebuild Washington’s standing in Asia-Pacific’s fifth-biggest economy.
Meanwhile, Mr Obama said Stephen Bosworth, his special envoy for North Korea, would go to Pyongyang on December 8 in an effort to revive six-party talks aimed at dismantling the North’s nuclear programme.