Image: Barack Obama
Charles Dharapak  /  AP
President Barack Obama arrives to attend the G-20 Summit in Seoul, South Korea on Wednesday.
msnbc.com news services
updated 11/10/2010 10:50:38 PM ET 2010-11-11T03:50:38

President Barack Obama was meeting Thursday in Seoul with his South Korean counterpart, Lee Myung-bak, to haggle over details of a free-trade deal between their two nations, officials said.

On the sidelines of the G-20 summit, Obama and Lee were said to be working on final negotiations, which got stuck in lower-level meetings on the issues of beef and autos, sources said.

The two leaders earlier this year set a deadline of resolving remaining concerns by the summit. Trade officials are tight-lipped about the fate of the deal, refusing to say if the drawn out negotiations between working-level officials had resolved outstanding issues.

"As we have said previously, if we can reach the standard for a fair trade agreement that the president has set out on particularly autos, we will move forward. We hope to continue making progress," a White House official said.

South Korea's Yonhap news agency quoted a senior government official as saying things were looking very difficult.

"We can't rule out the possibility that we won't reach a complete agreement today and will have to continue discussions," said the official.

The deal, signed in 2007, has been criticized in the United States for not doing enough to open South Korean markets to U.S. cars and beef. It remains unratified by lawmakers in both countries, and trade between the nations has slipped.

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A failure to resolve differences could embarrass Obama, who, coming off a mid-term election setback last week, hoped to advance the pact and send a signal on U.S. commitment to greater trade.

On Wednesday, Obama told global leaders the burden is on them as well as the U.S. to fix trade-stifling imbalances and currency disputes that imperil economic recoveries everywhere. The president promised the United States would do its part but declared "the world is looking to us to work together."

On the eve of an economic summit, Obama landed in Seoul hoping to close an elusive trade deal with South Korea, the kind that could potentially mean jobs and markets for frustrated businesses and workers back home. Yet the deal was still in the balance in the last hours, slowed by U.S. demands over South Korea's auto trade and its market for American beef.

Obama was also to make his economic case directly to Chinese President Hu Jintao after lavishing attention on China's rising rival, India, for three days. The U.S. and China enjoy an economic partnership but continue to clash over currency, with the U.S. contending that China's undervalued yuan gives it an unfair edge in the flow of exports and imports.

The U.S. president made the point again in a letter to fellow leaders gathered here for the G-20 summit of established and emerging economies. Warning of unsustainable balance sheets, with some countries holding surpluses and other swimming in debt, Obama pushed for exchanges rates based on the market and no more "undervaluing currencies for competitive purposes."

In less than two years on the job, Obama has become a familiar face at such summits, a sign of the enormous global effort to contain and reverse economic erosion.

He shows up this time on the defensive about the recent $600 billion intervention by the U.S. Federal Reserve, and weakened by a congressional midterm election that will give much greater power to the opposition Republican Party.

Obama's message is that the United States cannot be the world's consumer, propping up others by borrowing and spending. He is pitching for a balanced recovery across the globe — tougher to achieve when national interests collide.

"The foundation for a strong and durable recovery will not materialize if American households stop saving and go back to spending based on borrowing," the president wrote.

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Ahead of his trip, the Federal Reserve announced plans to purchase $600 billion in long-term government bonds to try to drive down interest rates, spur lending and boost the U.S. economy. Some other nations complain that gives American goods an unfair advantage in competition with theirs.

Already pressed about that once on his trip to Asia, Obama said the Federal Reserve acts independently, but he still threw support behind the action. "I will say that the Fed's mandate, my mandate, is to grow our economy," Obama said. "And that's not just good for the United States, that's good for the world as a whole."

The president came into Seoul quietly on Wednesday night after his latest long flight across Asia, this one from Indonesia, where he had given a speech renewing his outreach to the Muslim world. His upcoming agenda is packed with economic sessions and one-on-one meetings, in South Korea through Friday and this weekend in Japan.

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Obama will meet with Lee and German Chancellor Angela Merkel before the G-20 gatherings begin late in the day.

No longer in the emergency mode of preventing economic collapse, the leaders are seeking ways to sustain reliable growth and speed up the creation of jobs for their people.

Obama defends the drastic actions the U.S. has taken on its own and with others to prevent further economic calamity, well aware of how anxious Americans are for new jobs and confidence.

Earlier Wednesday, Obama was in Jakarta, the capital of the world's most populous Muslim nation, issuing a call for trust and cooperation. He lived in Indonesia as a boy from 1967 to 1971 and found himself flooded with memories.

"Let me begin with a simple statement: Indonesia is part of me," he said in Indonesian language, drawing cheers from the audience of more than 6,000 mostly young people at the University of Indonesia. Obama took care in his remarks to note that he is Christian; back home in the U.S., he continues to fight erroneous perceptions that he is Muslim.

Reuters and The Associated Press contributed to this report.

Interactive: Obama in Asia

Video: Obama: 'Indonesia is a part of me'

Photos: Obama tours Asia

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  1. Barack Obama waves as he walks on the South Lawn of the White House upon his return on Nov. 14, in Washington, D.C. Obama returns from a 10-day Asian tour where he held bilateral talks with Russian President Dimitry Medvedev. (Getty Images) Back to slideshow navigation
  2. Barack Obama visits the Great Buddha statue in Kamakura, Japan, on the sidelines of the ongoing APEC Summit, Nov. 14. (Jim Young / Reuters) Back to slideshow navigation
  3. Barack Obama, left, talks with Russian President Dmitry Medvedev at The Asia Pacific Economic Cooperation (APEC) leaders retreat in Yokohama on Nov. 13. (Tim Sloan / AFP - Getty Images) Back to slideshow navigation
  4. U.S. President Barack Obama is escorted to his position by Japanese Prime Minister Naoto Kan and his wife Nobuko Kan at the APEC Summit in Yokohama, Japan, Nov. 13. (Jim Young / Reuters) Back to slideshow navigation
  5. German Chancellor Angela Merkel, center, speaks with President Barack Obama during the opening plenary session of the G20 Summit in Seoul on Friday, November 12. (Andy Rain / Pool via Reuters) Back to slideshow navigation
  6. President Barack Obama speaks during a news conference at the G20 Summit in Seoul on Nov. 12. (Jason Reed / Reuters) Back to slideshow navigation
  7. President Barack Obama gestures as he takes a seat at the G20 Working Dinner at the National Museum of Korea in Seoul on Thursday, Nov.11. Local beef and halibut from the Yellow Sea were on the menu as world leaders opened their G20 summit talks over a welcome dinner. (Yonhap / Pool via AFP - Getty Images) Back to slideshow navigation
  8. President Barack Obama is escorted to his position by South Korean President Lee Myung-bak as First Lady Kim Yoon-ok looks on during the official arrival for the G20 Summit working dinner at the National Museum in Seoul on Nov. 11. (Jim Young / Reuters) Back to slideshow navigation
  9. President Barack Obama lays a wreath at the Yongsan War Memorial during a Veterans Day event at the U.S. Army Garrison Yongsan in Seoul on Nov. 11, on the sidelines of the G20 Summit. (Jim Watson / AFP - Getty Images) Back to slideshow navigation
  10. President Barack Obama greets military personnel at a Veterans Day event at the U.S. Army Garrison Yongsan in Seoul on Nov. 11. (Jim Young / Reuters) Back to slideshow navigation
  11. President Barack Obama steps off Air Force One as he arrives in Seoul, Nov. 10. (Jason Reed / Reuters) Back to slideshow navigation
  12. U.S. President Barack Obama and first lady Michelle Obama listen as Grand Imam Ali Mustafa Yaqub gives them a tour of the Istiqlal Mosque in Jakarta on Nov. 10. (Jason Reed / Reuters) Back to slideshow navigation
  13. Members of the audience cheer President Barack Obama after he delivered a speech at the University of Indonesia in Jakarta on Nov. 10. (Jason Reed / Reuters) Back to slideshow navigation
  14. President Barack Obama waves as he arrives to deliver a speech at the University of Indonesia in Jakarta on Nov. 10. Obama said Muslim-majority Indonesia's national philosophy of unity bewteen people of different faiths and ethnic backgrounds is an inspiration to the world. (Jim Watson / AFP - Getty Images) Back to slideshow navigation
  15. First Lady Michelle Obama and President Barack Obama pose for an official photo with Indonesian President Susilo Bambang Yudhoyono and his wife Mrs. Yudhoyono at the State Palace Complex Istana Merdeka in Jakarta, Indonesia, on Tuesday, Nov. 9. The two leaders began bilateral talks expected to focus on security and economic issues, on the second leg of Obama's ten-day Asian tour. (Jim Watson / AFP - Getty Images) Back to slideshow navigation
  16. President Obama walks with Michelle Obama along the red carpet with Indonesian officials upon arrival at the Halim Perdana Kusuma airport in Jakarta on Nov. 9. (Roslan Rahman / AFP - Getty Images) Back to slideshow navigation
  17. The official band runs to get out of the rain moments before the arrival of President Obama for an official arrival ceremony at State Palace Complex-Istana Merdeka on Nov. 9. in Jakarta. Obama made a much-delayed homecoming of sorts to Indonesia, seeking to engage Muslims and cement strategic relations on the second leg of his Asia tour. (Tim Sloan / AFP - Getty Images) Back to slideshow navigation
  18. President Obama and the first lady arrive in Jakarta on Nov. 9. (Jason Reed / Reuters) Back to slideshow navigation
  19. President Obama toasts alongside India's President Pratibha Patil, right, during a state dinner at Rashtrapati Bhavan in New Delhi, on Monday, Nov. 8. (Jason Reed / Reuters) Back to slideshow navigation
  20. White House press secretary Robert Gibbs, right, argues with an official from the Indian Prime Minister's office after the travelling White House press pool was refused entry to the bilateral meeting between President Obama and India's Prime Minister Manmohan Singh at Hyderabad House in New Delhi on Nov. 8. (Jason Reed / Reuters) Back to slideshow navigation
  21. The feet of President Barack Obama, right, and First Lady Michelle Obama, left, are seen as they participate in a wreath laying ceremony at Raj Ghat on Nov. 8. The Obamas were visiting the location where Mahatma Gandhi was cremated. (Jason Reed / Reuters) Back to slideshow navigation
  22. President Barack Obama reviews the honor guard during an official arrival ceremony at the Rashtrapati Bhavan in New Delhi, India on Monday, Nov. 8. (Pablo Martinez Monsivais / AP) Back to slideshow navigation
  23. President Barack Obama and first lady Michelle Obama sprinkle flowers after they laid a wreath at Raj Ghat, the Mahatma Gandhi memorial, in New Delhi, India, on Nov. 8. (Charles Dharapak / AP) Back to slideshow navigation
  24. Activists and survivors of Bhopal gas tragedy sit at a protest against visiting U.S. President Barack Obama in New Delhi, India, on Nov. 8, 2010. The 1984 gas leak from a Union Carbide pesticide plant in the Indian city of Bhopal killed about 15,000 people and sickened some 500,000. (Gurinder Osan / AP) Back to slideshow navigation
  25. President Barack Obama and Indian Prime Minister Manmohan Singh greet each other after a press conference at Hyderabad House in New Delhi, India, on Nov. 8. (Saurabh Das / AP) Back to slideshow navigation
  26. President Barack Obama and First Lady Michelle Obama are welcomed by Indian Prime Minister Manmohan Singh and his wife Gusharan Kaur as they arrive at Rashtrapati Bahavan in New Delhi on Nov. 8. (Jim Watson / AFP - Getty Images) Back to slideshow navigation
  27. President Barack Obama, right, and first lady Michelle Obama tour through Humayun's Tomb in New Dehli on Nov. 7. (Jim Watson / AFP - Getty Images) Back to slideshow navigation
  28. Barack Obama bends down to shake hands with a young child as he tours through Humayun's Tomb in New Dehli on Nov. 7. (Jim Watson / AFP - Getty Images) Back to slideshow navigation
  29. Barack Obama, left, shakes hands with Indian Prime Minister Manmohan Singh as first lady Michelle Obama and Gusharan Kaur, right, watch after arriving in New Delhi on Nov. 7. (Prakash Singh / AFP - Getty Images) Back to slideshow navigation
  30. Barack Obama, left, watches on as first lady Michelle Obama dances with children during their visit to the Holy Name High School in Mumbai, India, on Nov. 7. (Jason Reed / Reuters) Back to slideshow navigation
  31. Barack Obama speaks during a town hall meeting with students at St. Xavier College in Mumbai on Nov. 7. (Tim Sloan / AFP - Getty Images) Back to slideshow navigation
  32. Barack Obama shakes hands with students at St. Xavier College in Mumbai on Nov. 7. (Tim Sloan / AFP - Getty Images) Back to slideshow navigation
  33. Michelle and Barack Obama view the 26/11 memorial Saturday at the Taj Mahal Palace and Tower Hotel, site of the 2008 attacks in Mumbai, India. Obama flew into India's commercial capital on Saturday aiming to boost ties and seal big-ticket business deals to secure jobs and exports days after voters punished his Democrats in mid-term elections. (Jason Reed / Reuters) Back to slideshow navigation
  34. Activists of the Communist Party of India and members of various other organizations stage a demonstration Saturday against Barack Obama's visit in Mumbai. (EPA) Back to slideshow navigation
  35. President Barack Obama waves to photographers through a window from backstage as he waits to deliver remarks at the U.S.-India business council and entrepreneurship summit Saturday in Mumbai, India. (Jason Reed / Reuters) Back to slideshow navigation
  36. President Barack Obama greets members of the audience after delivering remarks at the U.S.-India business council and entrepreneurship summit Saturday in Mumbai, India. Obama announced $10 billion in business deals. (Jason Reed / Reuters) Back to slideshow navigation
  37. Handwritten notes by President Barack Obama, top, and first lady Michelle Obama are seen in the guest book during their Saturday tour of the Mani Bhavan Ghandi Museum, where Mahatma Gandhi resided on his visits to Mumbai. (Jason Reed / Reuters) Back to slideshow navigation
  38. An Indian shopkeeper shows a cushion with a painting of Michelle Obama designed by Arpita Kalra, in New Delhi, India, Saturday. (Manish Swarup / AP) Back to slideshow navigation
  39. Michelle Obama plays a game while entertaining underprivileged children Saturday during her visit to the Mumbai University. (Solaris Images / Getty Images) Back to slideshow navigation
  40. Indian micro-artist Ramesh Sah, 47, shows the nail of his thumb painted with a miniature image of President Barack Obama on Saturday in support of Obama's visit to India in Siliguri. (Diptendu Dutta / AFP - Getty Images) Back to slideshow navigation
  41. Barack and Michelle Obama descend Air Force One as they disembark Saturday on arrival at Chhatrapati Shivaji International Airport in Mumbai, India. (Solaris Images / Getty Images) Back to slideshow navigation
  42. Indonesian Muslims wear slippers during a protest against the planned visit of President Barack Obama outside the presidential palace in Jakarta, Indonesia, on Sunday, Nov. 7. Obama is scheduled to visit the world's most populous Muslim nation next week. (Dita Alangkara / AP) Back to slideshow navigation
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