US, South Korea to sign free trade pact

December 4, 2010 21:04
1 minute read.

WASHINGTON — The Obama administration is looking abroad to create thousands of jobs at home, with a newly forged trade deal with South Korea that could mean a big boost for the US auto industry. The pact would be the largest since the North American Free Trade Agreement with Canada and Mexico in 1994.

The White House stated that the Korean agreement could put as many as 70,000 Americans to work, welcome news with the latest US unemployment figures showing nearly stagnant job growth. Exports of US goods to South Korea could soar to $10 billion, a prospect that cheered the US Chamber of Commerce as well as some Republicans. The deal is subject to congressional approval.After a week of marathon negotiations, representatives from both countries broke through a stalemate Friday morning on issues related to the automobile industry, clearing the way for closer economic ties with fast-expanding South Korea.

South Korea would allow the US to lift a 2.5 percent tariff on Korean cars in five years, instead of cutting the tariff immediately. The agreement would let each U. automaker export 25,000 cars to South Korea as long as they met US safety standards. The US could continue a 25 percent tariff on trucks for eight years and phase it out by the 10th year. South Korea would be required to eliminate its 10 percent tariff on US trucks immediately.

President Barack Obama hailed the agreement as a "landmark trade deal" that would support at least 70,000 US jobs.

"We are strengthening our ability to create and defend manufacturing jobs in the United States, increasing exports of agricultural products for American farmers and ranchers and opening Korea's services market to American companies," Obama said in a statement.

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