WASHINGTON - The United States and South Korea have reached an agreement on America's largest trade pact in more than a decade, a highly coveted deal the Obama administration hopes will boost U.S. exports and create tens of thousands of jobs at home.
After a week of marathon negotiations, representatives from both countries broke through a stalemate Friday morning on outstanding issues related to the automobile industry, which have been a sticking point in the talks. The agreement would be the largest U.S. trade deal since the 1994 North American Free Trade Agreement with Canada and Mexico, and would bolster U.S. ties with the fast-growing South Korea economy.
South Korea is agreeing to allow the United States to lift a 2.5 percent tariff on Korean cars in five years, instead of cutting the tariff immediately. The agreement also allows each U.S. automaker to export 25,000 cars to South Korea as long as they meet U.S. federal safety standards, and allows the United States to continue a 25 percent tariff on trucks for eight years and then phase it out by the 10th year. South Korea would be required to eliminate its 10 percent tariff on U.S. trucks immediately.
President Barack Obama hailed the agreement as a "landmark trade deal" that would support at least 70,000 U.S. jobs.
The White House had hoped to strike a deal last month during Obama's trip to Seoul for the G-20 economic summit, but both countries were unable to broker a compromise on issues pertaining to trade of autos and beef.The agreement must still be ratified by lawmakers in both countries. It has been widely supported by those in the private sector and the U.S. Chamber of Commerce.