U.S., South Korea reach free trade deal

The United States and South Korea reached a new free trade agreement Friday after a three-year stalemate on auto tariffs, President Barack Obama announced Friday.

Under the agreement, tariffs on 95 percent of goods between the two countries will be lifted within five years. The new deal would be the largest U.S. trade pact since the North American Free Trade Agreement with Canada and Mexico in 1994.

After nearly a week of talks in suburban Washington, negotiators cleared a key hurdle by letting the United States move more slowly on lifting tariffs on South Korean cars after U.S. automakers feared a flood of imports.

In a statement released by the White House, Obama hailed the agreement as a "landmark trade deal" that would support at least 70,000 U.S. jobs and it is expected to increase annual exports of U.S. goods by up to 11 billion dollars.

He said that the agreement is an integral part of his administration's efforts to open foreign markets to U.S. goods and services, create jobs for American people, and achieve the goal of doubling U.S. exports over five years.

The White House said that South Korea has an economy at close to 1 trillion dollars and already is the United States' eighth largest trading partner.

In 2009, bilateral trade between South Korea and the U.S. totaled 66.7 billion dollars. U.S. goods trade deficit with South Korea was 11 billion dollars in 2009 while the services trade surplus was 7.1 billion dollars in 2008.

The U.S. International Trade Commission estimates the U.S. trade balance with South Korea will improve by 3.3 billion dollars to 4 billion dollars under the agreement.

Source: Xinhua