President Obama was supposed to waltz into Seoul ready to mark an agreement with South Korea on a trade pact, with enough changes to win over key constituencies. But while this was widely expected, it didn’t happen, with the South Koreans balking at some of the proposed changes.

In a sharp setback, the United States and South Korea failed to reach agreement on an elusive free-trade deal but will continue pressing for an accord in the weeks ahead, President Barack Obama said Thursday. [...]

“We need more time to reach an agreement in detail,” (South Korean President) Lee said. “We asked our trade ministers to reach an agreement as soon as possible.”

At issue is a pact to slash tariffs and other barriers to trade, one that was signed in 2007 when previous administrations were in power.

The pact 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.

The Administration’s changes on opening up Korean markets to US autos and beef were relatively modest, but the South Koreans didn’t want to go along. So now the self-imposed deadline will pass, and those opposed to this agreement will have another opportunity to throw out the whole agreement and start over to ensure labor and environmental standards and end the outsourcing of American jobs that is in some ways encouraged by this agreement. Public Citizen released this statement:

That the administration would not move forward with the same NAFTA-style Korea trade agreement that President Bush signed in 2007 is understandable, especially given the recent election showed perhaps the one issue that unites Americans across diverse demographics is opposition to more-of-the-same trade policy, a recent study showing that export growth under past U.S. FTAs was less than half of that to non-FTA U.S. trade partners and Bush-era reviews of this pact showing it will increase the U.S. trade deficit.

Hopefully, the reason the administration is not yet ready to present a final trade agreement is that it has gotten the message that more than “cars and cows” need fixing in Bush’s 2007 NAFTA style trade pact text. By not locking into the current text today, the Obama administration has the opportunity to make the fundamental reforms President Obama promised during his election campaign, including to remove the investment rules that promote offshoring.

The only constituency for this trade agreement is the Chamber of Commerce and the bipartisan fetishists who think that taking ownership of a Bush-era FTA can show the parties “working together.” If you look at where the Democrats lost big last week – the Rust Belt – it would be political suicide to pass the type of agreement that the core constituencies in that region detest. And it would only harm, not help, the agenda of creating more exports and more American jobs.

UPDATE: AFL-CIO President Rich Trumka takes the bright-side view:

President Obama showed today that he is not willing to settle for an inadequate deal that doesn’t address the very real concerns of working people and small business. Given the precarious state of our economy, President Obama is exactly right in holding out for a deal that puts working people’s interests first. President Obama should keep fighting for a balanced and workable trade deal that will protect the interests of American and Korean workers.