Despite accord, ‘Made in the USA’ no driving force for South Koreans

SEOUL — If President Obama wants to sell more American-made cars to South Korea, nobody has told the average South Korean.

In a Starbucks in downtown Seoul, Shin Yoon-chu, 38, was asked for his opinion of automobiles made in the USA.

“Not that popular,” Mr. Shin said. “We have a feeling that they require a lot of fuel. And if you compare to the European cars, the design is not that great.”

Such sentiments here on U.S.-made goods could complicate the path for the Korean-U.S. free-trade agreement, which went into effect March 15, just before Seoul hosted Mr. Obama and more than 50 other heads of state and government at this week’s nuclear security summit. Mr. Obama, hoping to energize his union base and boost the economy, is fond of saying that the long-sought trade deal will help the U.S. auto industry by increasing exports.

“Thanks to the bipartisan trade agreements I signed into law with you in mind, there will soon be new cars on the streets of South Korea imported from Detroit, Toledo and Chicago,” he told a United Auto Workers convention in Washington in February.

South Korea each year exports more than 400,000 vehicles, mostly Hyundais and Kias, to the U.S. But the U.S. sells fewer than 10,000 cars per year to South Korea, the world’s 15th-biggest economy with a gross domestic product of nearly $1.2 trillion. Mr. Obama says the free-trade agreement will help correct that imbalance.

At a news conference in Seoul on Sunday with South Korean President Lee Myung-bak, Mr. Obama said the agreement “is a win for both of our countries - more jobs and opportunities for our workers and businesses on both sides of the Pacific.

“That includes supporting some 70,000 American jobs and keeping us on track to meet my goal of doubling American exports,” Mr. Obama said.

But Kim Dong-ho, a pasta importer, said he prefers cars made by Hyundai.

“In my opinion, American car is too large,” Mr. Kim said. “As you know, Korea is a small country.”

If Mr. Obama’s goal of doubling exports is attained, skeptics say, U.S. automobiles will be a tiny portion of that equation.

“I don’t think there’s going to be a massive increase in American cars in Korea,” said Victor Cha, chairman of the Korea program at the Center for Strategic and International Studies in Washington. “They like what they make over there. And they like BMWs and Mercedes, not Cadillac” among imported luxury vehicles.

An Yong-hin, who works in Seoul for a construction company, echoed that sentiment.

“I like the Kias,” Mr. An said. “For luxury cars, most people I know like the Equus by Hyundai.”

Under the trade agreement, tariffs on U.S. cars fell from 8 percent to 4 percent. That means, for example, that Ford Motor Co.’s Lincoln MKS costs about $47,500, down from about $51,100. General Motors Co., which owns GM Korea, cut the prices of all Cadillac models by up to 3.5 percent.

Opposition political parties in Korea are complaining that the revised agreement gives preferential treatment to U.S. auto manufacturers. But Mr. Lee, who won ratification, said the accord will create “jobs for our workers, expand trade and investments, and overall improve the lives of our peoples.”

Another looming result of the trade agreement that neither nation’s president is mentioning is that the U.S. will export more lawyers to Korea.

The agreement allows U.S. law firms to open up shop in Korea, and several top-100 firms are rushing to tap the market. Covington & Burling LLP, Washington’s largest law firm, is among them.

“That’s exactly because of the [free-trade agreement],” Mr. Cha said. “They could not open before the FTA. It’s going to take a few years for them to get up and running, but it’s certainly a big deal for them. It’s a new market. There’s a lot of business in South Korea.”

As much as Mr. Obama is talking up the agreement with autoworkers, trial lawyers are part of his political base, too.

U.S. food exports also are expected to rise as a result of the accord.

In a poll of 250 wholesalers and retailers released by the Korea Chamber of Commerce last month, 29.1 percent of respondents said they will increase imports of processed foods from the U.S. About 28 percent said they will import more fresh food.