US-Korea Trade Agreement

When approved by Congress, the Republic of Korea - United State Free Trade Agreement will be the first U.S. trade agreement with a major Asian country, and the largest American free trade agreement enacted since the North American Free Trade Agreement (NAFTA) in 1993.

The U.S. auto, agricultural and financial services industries are expected to be among top beneficiaries of this trade agreement which will facilitate higher sales of and lower trade tariffs on sales of U.S. products and services to the 49-million residents of South Korea.

Background of Korea - U.S. Free Trade Agreement

President George W. Bush completed negotiations of Korea-U.S. trade agreement on April 2, 2007. However, neither the U.S. Congress nor the National Assembly of South Korea ever approved or passed the agreement, due to inequities and deficiencies perceived by both parties.

When running for the White House, candidate Obama refused to support the Korea - U.S. free trade agreement because it didn't provide enough advantage for U.S. sales, particularly for the American auto industry.

On December 4, 2010, the Obama administration announced completion of renegotiation of numerous elements of the Republic of Korea - United State Free Trade Agreement, and boasted of environmental and labor standards and correction of the "large disparity between Korean auto sales to the U.S. and American car sales in Korea" per the White House.

Per Businessweek magazine on December 9, 2010:

"President Barack Obama has hailed the trade accord as a 'win-win' for both countries that offers more choices for Korean consumers and more jobs for American workers...

"(AFL-CIO President Richard) Trumka said the Korea pact... has lax provisions for determining where products are made in order to determine tariff liability. The deal doesn’t resolve human-rights concerns and 'does nothing to improve or strengthen the provisions negotiated by President George W. Bush in those key areas.' "

FACT SHEET SUMMARY - Republic of Korea - U.S. Free Trade Agreement (Source - White House)

"The agreement is an integral part of the President’s efforts to increase opportunities for U.S. businesses, farmers and workers through improved access for their products and services in foreign markets, and supports the President’s National Export Initiative goal of doubling of U.S. exports in 5 years."

"The U.S. International Trade Commission has estimated that the tariff cuts alone in the U.S.-Korea trade agreement will increase exports of American goods by $10 billion to $11 billion. The Obama Administration is moving this agreement forward to seize the tens of thousands of American jobs supported by those exports – as well as the additional American jobs that will come from by breaking down non-tariff barriers keeping U.S. exports out of Korea, and by requiring stronger protection and enforcement of intellectual property rights in Korea."

Auto Industry
"The agreement improves market access for U.S. auto companies by addressing ways Korea’s system of automotive safety standards have served as a barrier to U.S. exports. Similarly, the agreement addresses proposed Korean environmental standards that could serve as a barrier to U.S. exports – striking a balance that respects our shared desire to reduce the environmental impact of automobiles...

"Progress was made in several additional areas of automotive policy including on regulatory transparency and an acceleration of tariff reductions on electric cars that will encourage the development of green auto technologies."

Manufacturing
"Under the agreement, U.S. exports of aerospace, automotive, consumer goods, electrical/electronic goods, metals, scientific equipment, and shipping and transportation equipment will gain duty-free access to the Korean market. Beyond tariffs, the agreement establishes strong new protections on intellectual property rights (IPRs)."

Services
"The agreement’s provisions on cross-border services, telecommunications, and electronic commerce offer particular advantages to the information and communications technology service sector – an area where the United States excels – benefitting small- and medium-sized American enterprises without the resources to establish an office in every market they serve."

Agricultural Products
"The U.S.-Korea trade agreement creates new opportunities for U.S. farmers, ranchers and food processors seeking to export to Korea’s 49 million consumers, giving American agricultural producers more market access in two ways – by getting rid of tariffs charged when U.S. exports come into Korea, and by laying out a framework to tackle other barriers to U.S. exports –even those that might arise in the future."

Financial Services
"The financial services chapter in the U.S.-Korea agreement provides significantly improved market access into Korea for American financial services firms... Under the agreement, Korea also commits to treat U.S. financial institutions comparably to their competitors in the Korean market."

Procurement
"The U.S.-Korea agreement expands U.S. firms’ access to the $100 billion Korean government procurement market, creating new opportunities for exporters, and ensuring that U.S. firms will get to bid on contracts on a level playing field with Korean firms... The agreement’s procurement obligations also maintain American environmental and labor safeguards."

Labor Rights
"The agreement sets high standards for protection of workers’ rights in trade agreements – including obligations for Korea to respect fundamental labor rights, not to weaken the laws that reflect those rights in any way, and to effectively enforce labor laws designed to ensure a level playing field for American workers to compete."

Environmental Commitments
"... the U.S.-Korea agreement contains groundbreaking environmental elements that were first outlined in the bipartisan, Congressionally-led May 10 initiative to incorporate high environmental standards into America’s trade agreements. Under the agreement, the Korean government... will be held to the same level of accountability for meeting environmental commitments as it is for meeting other commitments in the agreement."

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Clock ticking on U.S. debt agreement

Congressional leaders meet to discuss a two-step approach, Democratic sources sayThe leaders are reportedly split over how a second ceiling increase would be approvedBoth sides blame each other for the stalemateWithout a deal, Americans could face rising interest rates and a declining dollar

Washington (CNN) -- Leaders from both parties are eager to reach a deal on the nation's debt-ceiling crisis Sunday to head off a negative reaction in Asian markets when they open for the week, according to both Democratic and Republican aides.

Angry Democrats rejected a proposal from Republicans Saturday for a two-step approach to raising the debt limit as congressional leaders raced against the clock to find a solution, Democratic sources said.

Congressional leaders met again Saturday evening to discuss the two-step approach put forward by House Speaker John Boehner, which would raise the country's debt ceiling in stages, the sources said.

Boehner; Senate Majority Leader Harry Reid; Sen. Mitch McConnell, the Republican Senate leader; and House Democratic Leader Nancy Pelosi, participated in the meeting.

Under the two-step plan, the nation's debt ceiling would be raised through 2011 in exchange for spending cuts totaling around $1 trillion, the Democratic sources said. The ceiling would be raised again, through 2012, after a special commission is set up to find ways to reduce the long-term debt through entitlement and spending cuts and tax reform, they added.

While Democrats and Republicans agreed on the first stage of the plan, they split over how a second ceiling increase would be approved, the sources said.

Specifically, Democrats do not like the idea of tying future debt increases to a commission, which could deadlock and thrust the nation back into the uncertain position it is in today, they said.

"The Democrats who run Washington have refused to offer a plan," Boehner aide Michael Steel said soon after the meeting.

"Now, as a result, a two-step process is inevitable. Like the president and the entire bipartisan, bicameral congressional leadership, we continue to believe that defaulting on the full faith and credit of the United States is not an option," he said.

Pelosi similarly found fault with her counterparts, in a Saturday-night statement issued after the latest meeting.

"The delay in bringing forth a solution springs from the Republicans' decision to walk away from 98 percent of the American people to protect the assets of the top 2 percent of the wealthiest people in our country," she said in a statement.

Reid was even more targeted in his criticisms.

"I hope that Speaker Boehner and Leader McConnell will reconsider their intransigence. Their unwillingness to compromise is pushing us to the brink of a default on the full faith and credit of the United States. We have run out of time for politics. Now is the time for cooperation," the Senate majority leader said in a statement.

Earlier Saturday, Boehner and other congressional leaders met with President Barack Obama in the White House, one day after Boehner broke off talks with the Obama administration on how to prevent a national default.

Boehner favors a plan to cut spending by $3 trillion to $4 trillion in the two-step process, a Republican aide said.

"He (Boehner) said he wanted to get something agreed to prior to Asian market trading (in the new week)," the aide told CNN.

Asian markets are the first major market group to open worldwide each day, with some opening for the work week Sunday night in Washington.

Obama held a special one-hour meeting Saturday morning with congressional leaders following the collapse of direct talks between him and Boehner.

Participating in that meeting were Boehner, Reid, McConnell, Pelosi and Vice President Joe Biden. Treasury Secretary Tim Geithner and Jacob Lew, director of the Office of Management and Budget, joined after media cameras left the room.

The negotiations -- necessary to stave off an unprecedented national default that could prove economically devastating -- are testing the ability of leaders on both sides of the aisle to legislate effectively in an era of increasingly shrill and unyielding partisanship.

Republicans, who have railed against the growth of government, remain staunchly opposed to any tax increases. Democrats are trying to protect some of their party's primary legacies -- entitlements such as Social Security and Medicare, programs forged at the height of the New Deal and Great Society.

One Democratic official involved in the talks said the meeting was not contentious, and the participants did not rehash what went wrong with the Obama-Boehner talks. Rather it was very focused on "just how do we fix it," and "everybody is pretty serious" about finding a way forward that prevents a default, the official said.

However, there was a recognition that the congressional leaders -- all of whom say they want to prevent default -- can only do so much about the opinions and actions of their caucuses, the official said.

"Different people put different ideas on the table" resulting in a mishmash of things that need to be sorted through to see what might be viable, the official said. Congressional staff will be sorting through the different ideas, the official added.

The president repeated his insistence that the debt ceiling be raised through the end of 2012, the source said.

Asked if Republicans pushed back on the idea of an extension through the end of 2012, the source said: "I just think it was an honest discussion about what might happen to this country if we default. It was like, everyone knows where everyone is at this point."

But a House GOP aide told CNN that Republicans are "considering calling the president's bluff" on his refusal to sign a bill that doesn't raise the debt ceiling beyond the November 2012 election.

The aide said that party members are "struggling to see how they reach an agreement with significant debt reduction without buying time to work out the details."

Boehner aide Steel had told reporters earlier that "it would be terribly unfortunate if the president was willing to veto a debt-limit increase simply because its timing would not be ideal for his re-election campaign. We want the most significant deficit reduction possible, but linking the full faith and credit of the United States to presidential campaign politics is not a defensible position."

Reid, the Democrat Senate majority leader, reiterated Saturday afternoon that he sided with the president on rejecting any short-term extensions on debt-ceiling discussions.

"I will not support any short-term agreement, and neither will President Obama nor Leader Pelosi," Reid said in a statement. "We seek an extension of the debt ceiling through at least the end of 2012. We will not send a message of uncertainty to the world."

If Congress fails to raise the $14.3 trillion debt limit by August 2, Americans could face rising interest rates, a declining dollar and increasingly jittery financial markets, among other problems.

A Republican source familiar with the negotiations said Boehner told Republican lawmakers Friday that to get the debt ceiling raised by August 2, the House must vote on legislation by next Wednesday -- and that means it must be posted online Monday.

CNN's Brianna Keilar, Jessica Yellin, Dan Lothian, Deirdre Walsh, Ted Barrett, Kate Bolduan, Alan Silverleib and Michael Martinez contributed to this report.

Quoting : CNN.com