U.S.-South Korea Trade Deal a Win-Win for Jobs, Economy

President Obama underscores past and present efforts to get the U.S. economy back on track.

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Promoting a new trade deal with South Korea, President Obama and South Korean President Lee Myung-bak toured a General Motors assembly plant in Michigan Friday, drawing attention to a prickly business relationship in a state humbled by Asian car imports, while also highlighting the president's efforts to revitalize the U.S. auto industry.

Congress approved the deal this week in a rare bipartisan achievement after negotiators overcame U.S. auto industry complaints that previous efforts at a deal failed to do enough to lift South Korea's barriers to U.S.-made cars, the Associated Press reported.

Both Obama and Lee hailed the trade agreement as a win-win for both nations, acknowledging the serious headwinds facing the global economy. "Times are tough and they've been tougher in Detroit than they have been just about anywhere else," Obama told workers gathered at the GM plant that produces the new Chevrolet Sonic subcompact. "Despite all the work that lays ahead, American industry is coming back to life and industries of tomorrow are taking root."

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In taking Lee to the nucleus of the American auto industry, Obama painted a picture of a region devastated by foreign auto competition but also underscored the resurgence he helped engineer with the $80 billion government bailout for GM and Chrysler in 2009.

"The auto industry is of enormous symbolic importance," says Michael Czinkota, associate professor of international business at Georgetown University's McDonough School of Business. "You saw the bankruptcy of Chrysler, GM, and the bare survival of Ford, so being in Michigan and saying 'We're back' and 'We can compete internationally' is a terribly important message."

The auto industry has recovered slightly, but at 11.2 percent Michigan still suffers from the third highest unemployment rate, making the state a likely battleground in Obama's 2012 campaign. Today's visit marks the president's ninth trip to the state this year, according to CBS, and Vice President Biden was in the state earlier this week.

Experts say Obama's re-election hinges on winning a broad range of states, including those closely tied to the auto industry such as Ohio, Wisconsin, and Indiana, where some of the biggest economic and political challenges exist.

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In the run-up to campaign season Obama has focused almost exclusively on jobs, and hammering out delayed trade agreements with South Korea, Panama, and Columbia is no exception. "We live in a global economy where most potential customers for American companies like GM won't be here in the U.S., they'll be all around the world," Obama said. "The more goods and services we sell abroad the more jobs we create at home. Every $1 billion in exports supports thousands of American jobs."

Obama has said the newly-brokered deal with South Korea will create 70,000 new jobs and increase U.S. exports by $11 billion. The agreement will boost the economy more than the last nine trade agreements combined, he added, emphasizing the deal between the U.S. and Korea is a balanced one. "They buy as much stuff from us as they sell to us," he said, taking a swipe at some of America's less-balanced trade relationships. "That's how a free and fair trade is supposed to be. It's not a one-sided competition."

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Despite relatively favorable ratings among voters in Michigan, White house campaign strategists aren't taking the state as a given. Obama won Michigan in 2008 with 57 percent of the vote, but could face difficulty in the state especially if former Massachusetts Gov. Mitt Romney (a Michigan native and son of former Michigan Gov. George Romney) is Obama's opponent in the general election.


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