G-20 Summit: Obama Faces Setbacks as Economic Meeting Begins

VIDEO: The president tried and failed to get South Korea to buy more American goods.PlayABCNEWS.com
WATCH Tapper on Obama's Setback at Economic Summit

At the Blue House presidential office and residence Thursday, where he appeared with South Korean President Lee Myng-bak, President Obama tried to put a positive spin today on his team's failure to push the South Koreans on a free-trade agreement.

Such an agreement, the president said, would have increased U.S. exports by $10 billion and supported more than 70,000 U.S. jobs.

"We believe that such an agreement, if done right, can be a win-win for our people," the president said.

So far, however, South Korea has not opened its markets in any meaningful way to American beef or -- perhaps most contentious -- U.S. cars.

According to the Korea Herald, U.S. automakers exported only 6,140 vehicles to South Korea last year because of trade rules. That same year, the Korean automakers Hyundai and Kia sold 735,000 cars and light trucks in the U.S.

Beef is such a dicey issue for President Lee that negotiators didn't focus on it much during this trip. Because of fears of mad cow disease, Lee faced public outrage -- including rallies and candlelight vigils -- after his decision to reopen imports of U.S. beef in 2008.

After meeting with Lee in June, Obama apparently hoped an agreement would be ready by now -- which, sources said, it is not.

"I want to make sure that everything is lined up properly by the time that I visit Korea in November," the president said back in June. "And then in the few months that follow that, I intend to present it to Congress."

Today the president urged South Korea to work with him.

"We don't want months to pass before we get this done," he said today. "We want this to be done in a matter of weeks."

U.S. trade representative Ronald Kirk told reporters that "President Obama has been up front in every conversation with President Lee about the disparity in terms of market access for the American automotive industry…as well as having more progress and full implementation of a separate beef protocol to resuming full sale of all beef products to Korea."

G-20 Roadblocks With China

Then-President George W. Bush and then-South Korean President Roh Moo-hyun signed the agreement in 2007, but the Democratic Congress refused to ratify the treaty. Members argued that it didn't do enough to reduce the trade imbalance or protect American workers. During the 2008 presidential campaign, then-Sen. Obama voiced the same concerns, but said as president his team would improve the treaty and push for its passage.

The failure of negotiators to come to an agreement with South Korea was not the only roadblock Obama faced as he attended the start of the Group of 20 summit, an economic meeting of world leaders.

"We've got a special obligation to deal with ensuring strong, balanced and sustainable growth," Obama said at the beginning of his meeting with Chinese president Hu Jintao.

But sources said Obama made no real progress persuading Hu to stop what the White House believes to be the artificial weakening of China's currency.

"China, its currency is valued lower than market conditions would say it should be," President Obama said in September during a CNBC town hall. "And what that means is essentially that they can sell stuff cheaper here and our stuff, when we try to sell there, is more expensive. So it gives them an advantage in trade."

That "advantage" translated to a $227 billion trade surplus last year alone.

"The currency manipulation has cost us 20 million jobs," said Peter Navarro, a professor of economics and public policy at the University of California, Irvine. "Ten million that we've lost by the Chinese destroying a lot of our manufacturing industries."

Continued President Obama in September, "What we've said to them is, you need to let your currency rise. In accordance to the fact that your economy is rising, you're getting wealthier, you're exporting a lot, there should be an adjustment there based on market conditions. They have said yes in theory, but in fact they have not done everything that needs to be done."

China Fights Back

In Indonesia this week, Obama said, "We do want to make sure that everybody is operating within an international framework and set of rules in which countries recognize their responsibilities to each other."

But China is fighting back, accusing the U.S. of currency manipulation, and pointing to a recent decision by Federal Reserve chair Ben Bernanke to inject $600 billion into the fragile U.S. economy to spur manufacturing and increase U.S. exports.

German Finance Minister Wolfgang Schaeuble said, "It doesn't add up when the Americans accuse the Chinese of currency manipulation and then ... artificially lower the value of the dollar."